Redcar and Cleveland Independent Providers Association & Ors, R (on the application of) v Redcar and Cleveland Borough Council

A local authority setting usual care-home fees must first determine, at least by a broad estimate or bracket, the actual cost of providing care in its locality. It must then give that cost and other local factors due regard, as required by statutory guidance. Benchmarking fees paid by other authorities may provide useful information, but it cannot ordinarily establish local costs by itself.

The court decides whether the due-regard threshold has been met. Only after that threshold is crossed is the weight given to the relevant factors reviewable on ordinary Wednesbury grounds. A local authority may use standard contractual terms and usual fee rates, but it cannot exclude a chosen care home from consideration solely because the provider has not signed a framework agreement.

The claimants, representing care-home proprietors in Redcar and Cleveland, challenged the defendant council’s 2012/13 usual fee rates and its proposal to remove providers who did not accept a new contractual framework from its provider list.

The central issues were whether the fee-setting decision was amenable to judicial review; whether the council had complied with its obligation to have due regard to actual care costs and local factors; whether consultation was adequate; and whether the Choice of Accommodation Directions permitted a closed provider list.

1. Amenability and standing. The fee-setting decision was amenable to judicial review. Although the arrangements had a contractual aspect, fee setting was undertaken pursuant to public law powers and statutory guidance. Care-home providers had sufficient interest because the decision affected placement arrangements, residents’ potential top-up payments and providers’ regulatory financial viability obligations.
2. Due regard. The duty to have due regard required a two-stage approach. First, the court determined whether the authority had actually given due regard to the relevant matter. If it had, the weight given to that matter and competing considerations was for the decision-maker, subject to ordinary public law review.
3. The council had not properly assessed or determined the actual local cost of care. It had relied almost exclusively on regional benchmarking and had used previous fee rates mainly to identify an acceptable reduction and avoid litigation. Benchmarking could be part of a lawful methodology, but it needed to be combined with information specifically relating to the authority’s own area. The council therefore failed to comply with Circular LAC (2004) 20.
4. Consultation. The council had consulted at a formative stage, provided adequate opportunity for representations and conscientiously considered responses on numerous contractual and fee issues. Ground four therefore failed, even though the consultation did not cure the separate failure to assess local care costs.
5. Provider list. The Choice of Accommodation Directions required the council, subject to the stated conditions, to make arrangements with any care home chosen by a prospective resident. The council could insist on standard contractual terms and the usual fee, but could not exclude a provider from any list of homes with which it was prepared to contract merely because the provider had not signed the framework agreement.
6. The claim succeeded on ground one and, to a limited extent, ground five. The Article 8 and long-term viability grounds were not conclusively determined. The fee-setting decision was declared unlawful, and the council was ordered to make a new decision for 2012/13.