Torbay Quality Care Forum Ltd, R (On the Application Of) v Torbay Council

The claimant sought judicial review of the defendant local authority's decision of 5 February 2014 setting the "usual cost" for care home fees for 2014-2015. The court applied public law principles bearing in mind the statutory framework (section 21 and section 26 of the National Assistance Act 1948) and governmental guidance in Circular LAC (2004)20 which requires local authorities to have due regard to the actual costs of providing care.

The issues were narrowed to two grounds: (1) that the mathematical model used by the council to calculate staff hours per resident was flawed and produced an irrational result; and (2) that the model unlawfully took into account private/top-up fees and other third-party income when setting the usual cost contrary to the Circular. The judge found both grounds made out. The staffing-ratio calculation was based on an inexplicable and unreasonable weighted averaging method which no reasonable decision-maker could properly adopt for a mathematical model. The council also failed to comply with the clear effect of the Circular by taking into account third-party and top-up payments in a way that did not pay due regard to actual costs. The decision was quashed and remitted for redetermination.

The claimant is an association of independent care home operators. It challenged the defendant local authority's decision of 5 February 2014 which set the "usual cost" the authority would normally pay for residential and nursing care places for 2014-2015. The authority had adopted an existing mathematical fee model (originally adopted for 2012-2014) adjusted for inflation and made the 2014-2015 determination after consultation. The claimant advanced judicial review on two narrowed grounds: an arithmetic/mathematical error in the staffing ratio calculation in the model, and unlawful consideration of private/top-up and third-party income in determining the usual cost contrary to Department of Health guidance in Circular LAC (2004)20.

The court framed the issues as (i) whether the staffing-hours calculation was irrational or demonstrably wrong given the authority’s own assumptions, and (ii) whether the authority had lawfully had due regard to cost by counting private/top-up income in the way it did in the model.

The court reviewed the statutory background (section 21 and section 26 National Assistance Act 1948; sections 7 and 7A Local Authority Social Services Act 1970) and the Choice of Accommodation Directions 1992 and LAC (2004)20. The judge considered recent authorities, notably the Court of Appeal in R (Members of the Committee of Care North East Northumberland) v Northumberland County Council, and first-instance decisions including South Tyneside.

On the staffing ratio ground the judge accepted that a local authority may choose among legitimate methodologies but where it adopts an arithmetical model the arithmetic must be coherent. The court concluded the council’s weighted-average formula for converting staff:bed ratios into staff hours per resident was opaque, inexplicable and produced a result inconsistent with simple arithmetical calculation based on the authority's own stated assumptions; that flaw rendered the decision unreasonable. On the second ground the judge held that the authority had not given proper weight to the Circular: taking private/top-up and third-party payments into account in the fee model produced a cross-subsidy effect and did not pay due regard to actual costs. The court therefore quashed the decision and remitted the matter to the authority for reconsideration, refusing to withhold relief on grounds of delay or administrative inconvenience.

The claim is allowed. The decision of Torbay Council dated 5 February 2014 as to the "usual cost" for 2014-2015 is quashed and the matter is remitted to the council for further consideration. Rationale: the mathematical model adopted for staffing ratios contained an unexplained and unreasonable weighted averaging method producing results that no reasonable decision-maker could accept; and the council unlawfully had regard to private/top-up and third-party income in a way inconsistent with the guidance in Circular LAC (2004)20.