KM, R (on the application of) v Cambridgeshire County Council

A local authority may use a resource allocation system as an indicative starting point for community-care funding and may take account of relative need and finite resources. It need not establish a finite mathematical link between the allocation and the cost of every service, or explain the resource allocation system in every case. It must, however, assess eligible needs rationally, give sufficient and coherent reasons, and demonstrate that the personal budget is capable of meeting those needs. Where specialist care is assumed, the authority should identify the assumed services, timings and rates sufficiently to make the assessment intelligible. A personal budget may leave the recipient free to choose the precise services.

KM, a young man with serious physical and mental disabilities, challenged Cambridgeshire County Council’s assessment of the direct payment required to meet his community-care needs. The Council accepted an independent assessment of his needs but disputed the proposed services and costs. It ultimately explained the annual payment of £84,678 by reference to its Resource Allocation System and additional specialist-care provision.

HH Judge Bidder QC refused permission to bring judicial review proceedings: [2010] EWHC 3065 (Admin). Arden LJ granted permission to appeal. The central issues were whether the Council had given adequate reasons and whether the assessed amount was irrational or inadequate.

The Court of Appeal dismissed the appeal. The Council’s eventual explanation of the £84,678 payment was sufficient, coherent and rational, and demonstrated that the payment met the statutory requirements.

1. The assessment of needs was adequate because the Council accepted the independent assessor’s assessment of KM’s needs, while being entitled to reach its own view on the services required and their cost. There had to be a rational link between the assessed needs and the direct payment, but no finite or absolute mathematical link was required.
2. The statutory scheme did not require an authority with limited resources to calculate each person’s funding in isolation. The authority could take account of the relative severity of needs and available resources. The use of a Resource Allocation System as an indicative starting point was lawful. The £61,000 starting point did not require a separate mathematical justification, and the authority did not have to explain the Resource Allocation System in detail in every case. These principles were applied from R (Savva) v Royal Borough of Kensington and Chelsea [2010] EWCA Civ 1209.
3. Reasons for a personal budget should identify the required services, assumed timings and assumed hourly costs. More expansive reasoning may be required for complicated arrangements, but the resulting calculation need not be a finite mathematical exercise where the starting point itself is derived from a resource allocation system.
4. The Council’s letter of 3 June 2010 explained the £61,000 starting point, the additional 14 hours per day of specialist care, and the further two-to-one care allowance. The Council had not accepted that specialist care cost £18.10 per hour. On the Council’s supported rate of £14.68 per hour, £75,015 would meet the assumed care requirement and leave more than £9,500 for social, leisure and therapeutic activities. The personal budget also left KM free to choose the precise services.

The rationality challenge therefore failed, and the appeal was dismissed.

• Court of Appeal (Civil Division): dismissed KM’s appeal against the refusal of permission to bring judicial review proceedings.
• Queen’s Bench Division: HH Judge Bidder QC refused permission on 26 November 2010: [2010] EWHC 3065 (Admin).