O, R (on the application of) v London Borough of Lewisham

Under the National Assistance Act 1948 (Choice of Accommodation) Directions 1992 and associated guidance, a person’s expressed accommodation preference generally prevails where the preferred placement is no more expensive than the authority’s alternative. A block contract must not limit that choice merely because the authority has prepaid part of the provider’s fee. The prepayment must therefore be added back when comparing costs. A lower fee resulting from particular contractual terms may, however, be taken into account if it represents genuine cost-effectiveness rather than the mere existence of the block contract. Where competing tenders are said not to be comparable, the party relying on the higher apparent figure must provide sufficient evidence to establish the difference.

The claimant, a 19-year-old person with severe autism and no spoken language, required continuous adult care. His mother preferred continued full-time residential accommodation at the Priory Horizon programme in Yorkshire. The defendant local authority preferred a residential placement at 3Cs in Lewisham, partly because it held a block contract with that provider.

Bean J granted permission for judicial review on two costing issues: whether the authority had breached regulation 3(b) of the National Assistance Act 1948 (Choice of Accommodation) Directions 1992, and whether it had failed to have regard to paragraph 6.1 of the associated guidance. Suitability was not in issue. The central question was whether, after properly accounting for the block contract and the evidence concerning the competing tenders, the preferred Horizon placement was cheaper.

1. The application was allowed. The authority had unlawfully treated the 3Cs placement as cheaper by taking account of the block contract’s prepaid element. The claimant was directed to be admitted to the Horizon Priory programme at the defendant’s expense as soon as reasonably practicable, without prejudice to any later reassessment and possible notice-based change of placement. The claimant was awarded his costs.
2. Paragraph 6.1 of the guidance stated that a block contract should not serve to limit choice. Its first sentence was not qualified or merely illustrated by the later examples. In a block contract involving an advance part-payment but no reduction in the overall fee, the prepaid sum had to be added back when comparing the actual costs of the placements.
3. The position could differ where the particular contractual arrangement produced a genuinely lower fee for the services. In that situation, the authority could select the lower-fee provider because of the resulting cost-effectiveness, rather than because the provider held a block contract.
4. The authority could in principle compare tenders by reference to whether they were based on the same level of assessed need and could take account of genuine flexibility in future costs. However, the evidence did not establish that Horizon’s figure was fixed or that 3Cs’ figure was based on materially greater, temporary support. The 3Cs tender was therefore treated as a conservative estimate of the assessed requirements, and the figures were sufficiently comparable.
5. Because Horizon’s figure was £2,630 per week and the properly calculated 3Cs figure was £2,632 per week, the claimant’s preference prevailed. The authority was not entitled to rely on the block contract or the unproved contention that the higher apparent figure was in reality cheaper.

Bean J granted permission for judicial review on two limited costing grounds. The present court determined the claim at first instance.