South West Care Homes Ltd & Ors, R (on the application of) v Devon County Council & Anor

A local authority setting the usual cost of publicly funded residential care must comply with the public sector equality duty. The duty applies to the fee-setting exercise because it may affect residents’ choice of accommodation, inclusion and quality of care. Individual needs assessments do not discharge that separate duty.

Compliance requires substantive, rigorous and open-minded consideration of the impact on elderly and disabled residents, including appropriate mitigation of risks such as care-home closures and inadequate dementia care. A consultation is fair where, viewed as a whole, it gives consultees sufficient information and opportunity to make an intelligent response. On rationality, the court must respect the decision-maker’s expertise and may not substitute its own professional view.

The claimants operated private care and nursing homes used by Devon County Council to discharge its statutory residential-care obligations. They challenged the council’s fee rates for 2012–13 on three grounds: breach of the equality duty under the Equality Act 2010, unfair consultation, and irrationality in the financial methodology.

The claim followed an earlier judicial review concerning the council’s fees for 2011–12, in which Singh J had found inadequate consultation but had rejected other grounds. The central issues were whether the equality duty applied to setting the usual cost of care, whether the consultation was sufficient, and whether the council’s financial assumptions were irrational.

1. Equality duty. The claim succeeded on ground 1. The immediate exercise was the review of the usual cost of accommodation for persons assessed under section 47 of the National Health Service and Community Care Act 1990. That exercise determined whether the council had to arrange a person’s preferred accommodation under the 1992 Directions. It was therefore sufficiently connected with the provision of care and potentially affected disabled residents’ choice, inclusion and protection from segregation.
2. The council’s duty under section 149 of the Equality Act 2010 was additional to its duties to assess individual needs. Individual assessments could not remove the obligation to consider equality impacts when setting fees. The council had failed to exercise the duty with substance, rigour and an open mind. It had not properly considered mitigation or management of possible closures, had not reconsidered its equality impact assessment after identifying homes at risk, and had not properly investigated the staff costs of engaging with residents with dementia.
3. Consultation. Ground 2 failed. Although the initial financial presentation was complex and oversimplified, the consultation process had to be assessed as a whole. It provided a substantial invitation for advice and information, and the providers’ written feedback demonstrated that they had been able to make an intelligent response. The requirements stated in [2001] 1 QB 213 were therefore satisfied.
4. Rationality. Ground 3 failed. The intensity of review was high given the potential impact of the decision, but the court had to respect the distance between the decision-maker’s function and its own reviewing role. The competing expert views concerning depreciation, taxation, capital gains, returns on capital and volume purchasing disclosed professional disagreement, not irrationality. The council’s approach was based on tenable reasoning.
5. The fee-setting decision could not stand because the equality duty had not been fulfilled. The precise form of relief was reserved for further submissions.

This was a first-instance judicial review. The judgment records an earlier claim concerning the council’s 2011–12 fees, in which Singh J made a declaration of inadequate consultation and refused other grounds: [2012] EWHC 1867.