R (CARE NORTH EAST NORTHUMBERLAND) v NORTHUMBERLAND COUNTY COUNCIL (2024) EWHC 1370 (Admin) is about weekly fees paid by a local authority to care home operators. The Claimant is an unincorporated association of whom 24 of Northumberland’s 70 care home operators are members. The case features the interrelationship between the following: (1) a local authority’s general statutory duty of promoting diversity and quality in the provision of services (Care Act 2014 s.5) and applicable Statutory Guidance (2014 Act s.78); (2) central Government’s statutory power to pay conditional local authority grants; (3) provisions within an agreement (“the 2021 Agreement”) between a local authority and a care home operator; and (4) basic public law duties including legally sufficient enquiry and legally adequate reasons. This case also features an important distinction between fee level sufficient (a) to cover inflationary cost increases and (b) to sustain the efficient and effective operation of a care home market. The 2021 Act Agreement was a contract between the Defendant (“the Council”) and each relevant care home operator. It is an SP Contract Arrangement as described in the Statutory Guidance. It addresses the relationship between the Council and the care home operator, as to placements of individuals in care homes. It came into effect on 1 April 2021 and governed by a three-year relationship. It included an annual fee revision. The weekly fees had two elements. Element A was staffing costs. Element B was non-staffing costs.
By s.5(1) of the 2014 Act, Parliament imposed the general duty on a local authority to “promote the efficient and effective operation of a market in services for meeting care and support needs with a view to ensuring that any person in its area wishing to access services in the market has “three things: (a) “a variety of providers to choose from who (taken together) provide a variety of services”; (b) “a variety of high quality services to choose from”; and (c) “sufficient information to make an informed decision about how to meet the needs in question”. As a general duty (or target duty), this does not confer individual rights, but it is nevertheless capable of enforcement in an individual case.
By s.5(2)(d) of the 2014 Act, Parliament required a local authority, in performing that general s.5(1) duty to “have regard … in particular” to “the importance of ensuring the sustainability of the market”, both “in circumstances where it is operating effectively”, and also “in circumstances where it is not”. This mandatory relevancy has been described as the “sustainability factor”.
In the context of local authority care home placements and fee rates, notwithstanding that these rates are included within contracts between the local authority and the care home provider, conventional grounds for judicial review apply to a decision about fee increases, where sufficiency to sustain the efficient and effective operation of a care home market is legally relevant. This is a public function. Parliament has imposed important statutory duties, in the general duty (s.5(1)) and the mandatory relevancy of the sustainability factor (s.5(1)(d)). Parliament has provided (s.78) for Statutory Guidance for local authorities to follow (absent good reason for departure). That Statutory Guidance itself recognises SP Contract Arrangements, and decisions about fee levels in SP Contract Arrangements, as an important means of implementing and discharging the statutory duties. Fordham J said, at para 38:-
“There is then this question. How does the content of the provisions within an SP Contract Arrangement fit alongside the contextual shape of the conventional grounds for judicial review. The principled position is this:
(i) The contextual application of conventional judicial review grounds can be informed by the contents of an SP Contract Arrangement. This cuts both ways, where the agreement makes express provision for the local authority’s decision-making approach is settling care home fees. First, the judicial review court may need to ensure that conventional judicial review standards – contextually applied – do not go beyond an express provision for the local authority’s decision-making approach. Secondly, the judicial review court may need to ensure that conventional judicial review standards – contextually applied – do not fall short of an express provision for the local authority’s decision-making approach. No more; but no less…
(ii) If a local authority chose a policy or a strategy or a scheme or even write letters, if it gave clear and unambiguous and qualified representations as to what it would do, these would inform the conventional grounds for judicial review. Public law recognises the difference that a promise can make, through the principles of legitimate expectation…”
Fordham J said, at para 52:-
“In my judgment, a claim for judicial review which asks a judicial review Court to quash a decision as to local authority fees, decided as an allocation of local authority resources in the run up to a budget for a new financial year, should be challenged with (a) high degree of promptness and (b) a request for heavy expedition. Then, if the local authority slows down the process – because of its position in a letter of response or because it insists on a long time for a response or because it insists on a separate permission stage at which it fails to administer a clean knock-out blow – it brings any problems on itself if the proceedings are delayed. The rule of law applies to budget related decisions. The Administrative Court has mechanisms for expedited cases. Permission for judicial review can be refused in relation to some remedies and not others.”
None of the grounds of challenge succeeded.