Judicial review of care fee uplifts: Care Northeast Northumberland v. Northumberland County Council – Case review

Introduction

This is the first reported case on care fee judicial review challenges since the Care England v Essex CC case in 2017. The claim was brought by Care Northeast Northumberland (the care association) against Northumberland County Council (the council or local authority). The context of the claim was the council’s standard contract for residential care covering 2021 to 2023 which obliged the council to confirm the following by January each year:

‘whether it has become aware of any information which suggests that the banding rates may not be sufficient to sustain the efficient and effective operation of a market in care home accommodation for older people in Northumberland.’

This wording mirrors that of section 5 of the Care Act 2014. It was the care association’s challenge that the council had failed to follow the statutory obligations applicable to it and failed to come to the right decision by not following the correct process. They also claimed that the council had misapplied the MSIF Grant it received in 2023.

The resulting judgment provides some useful reminders of how fee review decisions should be reached.

To read our full case review which covers the case in more detail, please click the button below.

The decisions of the court

There were three elements to the challenge of the fee review itself:

1. Did the council ask the right questions when carrying out the review?

Decision makers must make the decisions required to fulfil their duty rather than something else. The judge formulated the question the council needed to answer in the following terms:

‘would the [inflationary contract mechanism], without an additional uplift, be sufficient to sustain the efficient and effective operation of a care home market?’

The court decided that the council had answered the question positively, however, there was nothing in the council’s decision-making process directly answering the specific question.

2. Had the council undertaken a sufficient inquiry to enable them to answer the first question?

The courts generally have adopted the view that they cannot make their own decision on what reasonable inquiry involves. It is for the decision maker to decide on the manner and intensity of the inquiry. To succeed a claimant would need to establish objectively that the decision-making process was unreasonable.

The judgment concluded that the council had taken reasonable steps to determine whether the fee level proposed was able to sustain the efficient and effective operation of the market.

3. Did the council provide legally adequate reasons for its decision?

When making decisions, public bodies are obligated to do so rationally with reasoning which is sufficient, adequate and intelligible. This is so that the people affected can understand the basis of the decision and can challenge it if they have grounds to do so.

The court decided that the council had given proper reasons and took a broad view of the substance of the communications issued by the council during the decision-making process.

Decisions made by the council in connection with the application of the MSI Fund were also challenged. Although the court indicated that there were circumstances in which grant conditions could form the basis of a judicial review, those would be relatively rare and did not apply in this case. It is possible that the decision would have been different had the local authority been one of the 70% of local authorities who were not paying the fair cost of care.

To read our full case review which covers the case in more detail, please click the button below.

What can we learn from the judgment to help make successful fee challenges?

Some of the points made below are of general application. It is always wise to consider the specific facts and circumstances of any situation particularly where, as in this case, there are agreed contractual terms binding the parties.

• The court was happy to endorse the care association’s right to bring the proceedings based on the local authority’s general duty being capable of enforcement in individual cases.
• Where contractual provisions mirror duties set out in the Care Act, such clauses should be read accordingly. They can form the basis of a judicial review challenge as well as private law challenges based purely on the contractual terms agreed.
• The judgment includes a useful reminder that contracts with providers are recognised in the Care Act statutory guidance as a means by which the local authority can implement its statutory duties.
• The decision may have been different in other circumstances. For example, there appear to be several local authorities which have acted in such a way as to cause the gap between private and local authority fee rates to widen rather than narrow since the fair cost of care exercise was initiated. To mitigate this issue, providers would need to prepare well in advance of the next round of decision-making and be prepared to act immediately upon the publication of any decisions they wish to challenge.
• The case does not answer the question as to whether local authorities must consider the obligation to maintain a sustainable market and other similar general Care Act duties in a private law context where they have discretion regarding fee uplifts generally. However, the argument that it should do so appears stronger as a result of this case.
• Local authorities have wide discretion in terms of how they conduct inquiries into their market-shaping duties, however, they cannot ignore evidence and therefore how the provider’s evidence is developed and presented is of crucial importance if there is to be a successful fee challenge.
• The case only touched upon one of the many duties of local authorities under the Care Act. It is often the case that there will be other grounds to challenge decision-making which can have the same effect as challenging fee setting directly.

Conclusions

The case continues the theme of previous cases, namely that a judicial review is a blunt instrument and difficult to pursue. Although judicial review still has a place when considering how best to challenge poor commissioning practice the position offered by an analysis of a contractual argument is almost always preferable.

It can be misleading to only consider reported cases as many challenges will have been settled by local authorities on acceptable terms to the provider because they had a weak defence to the judicial review being brought.

Collective action on the part of local care associations remains an important element of the legal landscape which deserves support from all providers.

Providers should carefully monitor the progress being made by each of the local authorities toward the achievement of the fair cost of care.

To read our full case review which covers the case in more detail, please click the button below.

For more information, contact John Wearing or Liam Fitzgerald.

• Share this