R (Care England) v Essex County Council

The claimant, a representative body for care home operators, sought judicial review of the defendant council's 22 July 2016 decision to increase some care home fees. The claimant relied on breach of subsections 5(1) and 5(2) of the Care Act 2014 (in particular the "sustainability" factor in s5(2)(d)), departure from or failure to follow Secretary of State guidance, failure properly to consider compliance with that duty and guidance, and Wednesbury unreasonableness.

The court held that the council had had regard to the sustainability factor and had taken relevant information into account, including a cost of care analysis, the results of a recent tender exercise, market intelligence and its own experience. The judge found that the council had not acted inconsistently with the statutory guidance in a way that warranted intervention, and that the July 2016 decision was not irrational. The claim was dismissed.

This is a first-instance judicial review. Care England challenged the defendant local authority's decision of 22 July 2016 to apply modest uplifts to fees under old framework agreements and certain spot contracts with care home providers. The claimant sought relief on four grounds: breach of subsections 5(1) and 5(2) of the Care Act 2014 (with emphasis on the requirement to have regard to the "importance of ensuring the sustainability of the market" in s5(2)(d)); failure to follow or have regard to the Secretary of State's statutory guidance; failure properly to consider whether the decision complied with that duty and the guidance; and Wednesbury irrationality.

The factual background included the introduction of the National Living Wage (April 2016), a tendering exercise that established a new framework in February 2016, a Costs of Care Report (producing higher "ceiling" fair market price figures), and a Pricing Report recommending modest uplifts capped well below the cost of care figures. The Council chose option 2 in the Pricing Report: modest uplifts of approximately 13-14 per week (with caps) and backdated to 1 April 2016. Subsequent decisions in February and October 2017 further adjusted tender ranges and uplifts; the October 2017 decision was filed late and the court did not assume it lawful.

The court framed the central legal issues as (i) whether the local authority had had proper regard to the sustainability factor in s5(2)(d) when making the July 2016 decision, (ii) whether the authority had failed to follow or had unjustifiably departed from the statutory guidance (in particular paragraphs 4.31 and related provisions addressing fee levels and assurance), and (iii) whether the decision was Wednesbury unreasonable. The judge analysed the statutory duty as a general market-shaping duty to be performed for specified purposes and observable in light of competing duties such as obtaining value for money and finite resources.

The court found that the authority had taken relevant steps to inform itself (cost model, Cost of Care Report, tender results, Pricing Report, confidential financial appendix, equality impact assessment and cabinet member's experience), and therefore had had regard to the sustainability factor. The judge rejected the claimant's submissions that the authority had failed to follow guidance, observing that the guidance does not prescribe a single numerical outcome and that the Cost of Care Report's "ceiling" figures were not themselves minimum fee levels that the council was obliged to adopt. On irrationality, the court concluded that the evidence did not establish that the only rational course was a larger uplift and that the authority had properly balanced competing considerations. The application for judicial review was dismissed.

The application for judicial review is dismissed. The court held that the defendant had had regard to the sustainability factor in s5(2)(d) of the Care Act 2014, had not acted unlawfully in relation to the statutory guidance, and the July 2016 decision was not Wednesbury irrational; the council was entitled to strike the balance it did in light of competing duties and limited resources.