Judge finds in favour of Essex in fees review
‘Councils’ care duties cannot be viewed in isolation’
Representative body Care England has lost a judicial review it brought against Essex County Council on behalf of local care providers who said the Council had breached its Care Act duties by setting fees too low.
In 2016, using a new commissioning framework in 2016, Essex offered private care home operators a maximum of £538.37 and £577.29 per week per resident for residential and nursing care respectively.
A costs of care analysis completed by the council a few months later set ‘ceiling fair market prices’ at £641.15 for residential and £665.35 for nursing care. Essex said raising all rates to these levels would be financially unviable and instead offered providers a weekly per-person uplift of just under £14 to compensate for increased costs incurred by the National Living Wage.
Care England argued that Essex had contravened Section 5 of the Care Act, which stipulates local authorities must promote an efficient and effective care market and “have regard” to ensuring its sustainability. But Mr Justice Lavender concluded that Section 5 duties “cannot be viewed in isolation” from other pressures on local authorities’ resources.
“It was the defendant’s responsibility to strike a balance between these different considerations,” the judge said.
Care England argued that providers had signed up to Essex’s new framework out of “commercial fear” and that they were “deeply concerned” that the maximum prices were well below their costs of care. Justice Lavender said this was “not supported by details” such as operators’ names or details of the funding gaps they faced. He drew attention to evidence from Essex councillor Dick Madden, who said that few care homes closed in the county because of financial distress.
John Spence, Essex council’s cabinet member for health and adult social care, said the council’s fees were on average higher than care providers’ costs. A “full enquiry” had taken place before any decisions were made based on the costs of care analysis, he added.
“There is no evidence to suggest an issue with market sustainability in Essex,” Spence said.
“Few homes are closing and if they do it is rarely for financial reasons. Any homes that may have closed are often taken over, demonstrating there is a viable market for providers.”
Care England chief executive Professor Martin Green said it was disappointing that the judge had formed the view that the Councillor who made the decision had carried out a sufficient enough enquiry into the sustainability of the Essex care home market; when that enquiry was based not on the information that had been presented to him by Council officers, but on his own knowledge and assumptions.
Prof. Green said national intelligence painted a bleak picture of an increasingly ageing population seeking assistance with their care needs within a heavily overburdened and financially stretched health and social care service. He added that the Competition and Markets Authority had only recently identified a funding shortfall of £1 billion a year across the UK because councils are paying fee rates for the residents they fund which are below the costs care homes incur.
“It is therefore deeply worrying that Essex Council is underfunding the care that it is required by law to provide and pay for,” said Prof. Green.
“The Council’s evidence that care homes can simply terminate the placements made by the Council if they believe the Council is not paying enough, pays cavalier regard to the risks this poses to those individuals involved and the distress this would cause to them and their relatives. It seems however that the only option being presented to care homes in Essex is to exit the market.
“At present, there seems to be a divide between the judiciary in their thinking and approaches to deciding cases where local authorities are challenged on how they decide the rates they will pay for residential social care for older people. Care England will of course reflect on the court’s decision and how it may further support our members and the much needed structure and clarity that is required in this area.”