Members of the Committee of Care North East Northumberland (R on the application of) v Northumberland County Council & Anor

Guidance requiring a local authority to have due regard to the actual costs of providing residential care does not prescribe a structured, arithmetical or model-based methodology. Provided the authority makes some inquiry into actual costs, it generally decides the manner and intensity of that inquiry. It must nevertheless ask the right question and take reasonable steps to obtain relevant information.

An authority may consider local market capacity, regional fee comparisons, local cost differences and evidence supplied by providers. Authorities concerning fee-setting decisions are highly fact-sensitive and should not be treated as establishing a universally required method.

Care-home proprietors and managers sought judicial review of Northumberland County Council's decision fixing its usual care-home rates for three years from April 2012. They principally alleged that the council had failed to comply with guidance requiring due regard to the actual costs of providing care and an ability to demonstrate that its rates were sufficient to meet assessed care needs.

Supperstone J dismissed the claim in [2013] EWHC 234 (Admin), finding that the council had considered actual costs. The proprietors appealed, contending that the council had failed to make sufficient inquiry or conduct a structured analysis. A further challenge to the judge's alternative conclusion that any departure from the guidance was justified arose only if the principal ground succeeded.

1. Appeal dismissed. Sullivan LJ, with whom Sir Stanley Burnton and Aikens LJ agreed, held that the council had given due regard to the actual costs of care. Its inquiries satisfied the relevant guidance, and no prescribed structured or arithmetical methodology was required.

2. The guidance in the relevant circular could not be equated with a statutory duty imposed by primary legislation. It prescribed no particular methodology. The structured attention appropriate to the public sector equality duty under section 149 of the Equality Act 2010, as discussed in Bracking [2013] EWCA Civ 1345, could not simply be transferred to this different context.

3. A decision-maker must ask the right question and take reasonable steps to acquaint itself with the information needed to answer it. Once some inquiry has been made into a relevant factor, however, the manner and intensity of that inquiry are generally matters for the decision-maker.

4. The council had considered market capacity, rates paid by neighbouring authorities, possible reasons for higher local costs, evidence from providers who had accepted the proposed rates, and the management accounts supplied by one provider. It had also explained why it declined to use the PWC model. These were relevant means of investigating actual costs. An itemised calculation of occupancy, staffing, operating, administrative, capital and financing costs was one permissible approach, but it was not the only lawful approach.

5. The judge was right to follow South West Care Homes [2012] EWHC 1867 (Admin). Authorities concerning Sefton, Leicestershire, Newcastle, Redcar and South Tyneside turned on their particular facts and established no generally applicable methodology. To the extent that their approach differed from that adopted in South West Care Homes and by Supperstone J, the latter approach was to be followed. In particular, EMCARE's statement that an analytical or arithmetical response was required arose from the authority's failure to answer a detailed consultants' report; it was not a rule for every fee-setting case.

6. The earlier non-statutory Building Capacity guidance added nothing material to the later circular. Any material difference was resolved in favour of the later guidance. The remaining grounds therefore did not affect the result.

1. Court of Appeal (Civil Division): The appeal was dismissed in [2013] EWCA Civ 1740. The court upheld the conclusion that the council had given due regard to actual care costs.

2. High Court, Queen's Bench Division: Supperstone J dismissed the judicial review claim in [2013] EWHC 234 (Admin).