Bevan & Clarke LLP & Ors v Neath Port Talbot County Borough Council

A local authority’s decision to set fees paid to residential care providers under arrangements made pursuant to statutory social-care functions is amenable to judicial review. The contractual setting does not, by itself, make the decision private. The authority must take account of legally relevant considerations, including relevant statutory guidance, provider sustainability, legitimate current and future costs, service-user welfare and available resources. Guidance issued under a statutory duty is not mandatory, but the authority should give it great weight and depart from it only for cogent reasons. The court does not re-weigh competing factors or micro-examine complex economic assessments. Provided relevant matters are considered, the weight and intensity of inquiry are principally for the authority, subject to conventional public-law grounds.

Nine operators of residential care homes challenged the defendant local authority’s decision to set the 2011/2012 fee at £426 per resident per week, with a dementia supplement, and to offer guaranteed minimum increases for three further years. They argued that the Council had misunderstood future demand, failed to account properly for provider costs and sustainability, misused the Laing and Buisson toolkit, acted unfairly in seeking business plans, failed to follow Welsh commissioning guidance and reached an irrational outcome.

The Council argued that fee-setting under its provider contracts was a private function, that the guidance was aspirational, and that the claim challenged the merits and weight of its decision. The central issues were whether the decision was amenable to judicial review and, if so, whether the Council had committed any public-law error.

1. Amenability. The fee-setting decision was susceptible to judicial review. The Council’s wider statutory function under the National Assistance Act 1948 was public. Fee-setting was not purely incidental or supplementary to that function, and the statutory and regulatory framework constrained the Council’s freedom to use its bargaining power as a private individual might. The contractual context did not alter that conclusion.
2. Scope of review. All conventional public-law grounds were available, subject to judicial caution where the authority was engaged in contractual negotiation and where the case involved complex economic or technical questions. The court would not substitute its view on the merits, re-weigh factors, or undertake micro-examination of the evidence. Officials could sift material before it reached the decision-maker, and the authority could determine the manner and intensity of its inquiry.
3. Guidance and statutory duties. The Commissioning Guidance, issued under section 7 of the Local Authority Social Services Act 1970, was not merely aspirational. It required active consultation with providers and informed the public-law framework. It did not, however, require a fee that fully reimbursed providers’ costs. The Council had regard to the guidance, including sustainability, costs, resources, quality and welfare.
4. Application. The Council lawfully balanced projected demand against its policy of reducing reliance on residential care. Its treatment of business plans was neither irrational nor procedurally unfair. It had considered provider evidence, toolkit calculations, occupancy, quality, capacity, available resources and the need for sustainable provision. The toolkit was a relevant consideration, not a binding methodology, because the Council had never decided to use it as the determinative basis for fees.
5. The Council could take its resources into account in setting provider fees. That was distinct from using lack of resources to avoid a specific duty to provide accommodation under section 21 of the National Assistance Act 1948 once an individual’s need had been established. The 5.7% increase, coupled with guaranteed future increases, was not Wednesbury unreasonable. The application was dismissed.