R v Gloucestershire County Council, Ex p Barry (Barry, Ex parte, R v Lancashire County Council, Ex p Royal Association for Disability and Rehabilitation, Royal Association for Disability and Rehabilitation, Ex p, R v Islington LBC, Ex p McMillan, R v Gloucestershire CC, Ex p Mahfood, R v Gloucestershire CC, Ex p Grinham)

Under section 2(1) of the Chronically Sick and Disabled Persons Act 1970, a local authority may take its financial resources into account when assessing a disabled person's need for listed services and framing eligibility criteria. Need and necessity are relative concepts. The cost of assistance cannot sensibly be evaluated without considering the means of the authority which must pay.

This occurs before the statutory duty crystallises. Once the authority is satisfied that arrangements are necessary to meet an individual's assessed needs, the duty is enforceable and a shortage of resources does not excuse non-performance.

An elderly and disabled man received home assistance from Gloucestershire County Council under section 2(1) of the Chronically Sick and Disabled Persons Act 1970. After its government funding was reduced, the Council withdrew his cleaning and laundry services without first reassessing his needs.

The Divisional Court declared that withdrawal unlawful because no lawful reassessment had occurred. It nevertheless decided that resources could be considered when needs were assessed. The Court of Appeal, by a majority in [1996] 4 All E.R. 421, held that available resources could not be considered in assessing or reassessing whether arrangements were necessary.

The Council and the Secretary of State appealed. The central question was whether a local authority may take its financial resources into account at the assessment stage under section 2(1).

1. Appeal allowed by a majority of three to two. Lord Nicholls of Birkenhead and Lord Clyde delivered the majority's substantive reasons. Lord Hoffmann agreed with both speeches. The order of the Divisional Court was restored.

2. Per Lord Nicholls, a need for a particular type or level of service cannot sensibly be assessed in a vacuum which excludes cost. The local authority must establish standards or eligibility criteria for its area. Relevant considerations may include current standards of living, the nature and extent of the disability, the benefit which assistance would provide, the cost of that assistance and the significance of that cost in light of the authority's resources. Eligibility criteria may therefore properly become more or less stringent as resources change.

3. Per Lord Clyde, section 2(1) of the Chronically Sick and Disabled Persons Act 1970 must be construed in the context of section 29 of the National Assistance Act 1948 and the wider community-care regime. The expressions “necessary” and “needs” are relative. Criteria are required to determine the level at which necessity is reached, and the severity of a condition may properly be matched against available resources. Cost and resources need not always be considered, but the statute does not invariably exclude them.

4. The assessment stage must be distinguished from performance of the resulting duty. Per Lord Clyde and Lord Nicholls, once the authority is satisfied that arrangements are necessary to meet an individual's needs, section 2(1) creates a personal and enforceable right to those arrangements. Lack of resources then provides no excuse for failure to perform the duty. Lord Nicholls added that an authority must assess needs responsibly and that an assessment displaying Wednesbury unreasonableness remains reviewable.

5. Lord Lloyd of Berwick dissented, with Lord Steyn agreeing. Lord Lloyd considered that section 2 established three separate stages: assessment of individual needs, determination whether authority-arranged services were necessary, and performance of the resulting duty. In his view, resources were external to the individual and could not reduce needs assessed against contemporary standards. Permitting resource-based eligibility thresholds would collapse the statutory duty into a power.

1. House of Lords: By a majority of three to two, allowed the appeal, displaced the Court of Appeal's declaration excluding consideration of resources and restored the Divisional Court's order.

2. Court of Appeal: In [1996] 4 All E.R. 421, allowed the appeal by a majority, Hirst LJ dissenting. It declared that resources could not be considered when assessing or reassessing whether arrangements were necessary under section 2 of the Chronically Sick and Disabled Persons Act 1970.

3. Divisional Court: Declared that the Council had acted unlawfully by withdrawing services solely because resources were exhausted and without lawfully reassessing the applicant. It nevertheless held that resources could be considered when assessing needs and deciding whether arrangements were necessary.