SARCP, R (on the application of) v Stoke-on-Trent City Council

A local authority’s decision fixing care-home fees under a provider contract may be amenable to judicial review where it also exercises statutory market-shaping functions affecting providers and residents. Contractual context may limit the intensity of review, but does not exclude conventional public-law grounds.

The authority must comply with applicable Care Act guidance, have regard to statutory market-shaping factors, and comply with the Public Sector Equality Duty. A consultation generated by promise or established practice must satisfy the Gunning principles, including conscientious consideration of responses. Where a decision gives no adequate reasons and leaves a substantial evidential gap, it may be irrational even on light-touch review.

SARCP, a representative organisation for care-home providers, challenged Stoke-on-Trent City Council’s decision to increase standard residential care-home fees by only 1.4 per cent for 2024/25. The decision was made under a provider contract containing an annual indexation mechanism and followed a consultation.

The claim alleged inadequate consultation, failure to consider relevant matters, breach of the Public Sector Equality Duty, failure to follow statutory guidance, breach of residents’ article 8 rights, and irrationality. The Council argued that the dispute was contractual, that there was an alternative private-law remedy, and that the claim should fail or relief should be refused because of its effect on providers and residents.

1. Public-law character and alternative remedy. The claim was not excluded merely because the decision operated through a contract. The decision had both a contractual level and a statutory level, including the Council’s market-shaping duty under section 5 of the Care Act 2014. SARCP had standing and no suitable contractual alternative remedy. Ground 5 failed because SARCP was not a victim for section 7 of the Human Rights Act 1998.
2. Consultation. The Council had made a clear and unambiguous promise to consult SARCP. The consultation was sufficiently formative, allowed adequate time, and provided enough information for an intelligent response. However, the decision-maker failed to consider conscientiously the detailed consultation response. Ground 1 therefore succeeded in part.
3. Guidance and statutory considerations. The Council failed to follow the Care Act statutory guidance. It did not have regard to the actual cost of good-quality care, explain why the 1.4 per cent increase was consistent with the guidance, or address the risk that the fee level would threaten market sustainability. The decision also failed to consider matters required by section 5 of the Care Act, including provider variety, quality, market sustainability, workforce conditions and residents’ well-being. Grounds 2 and 4 succeeded.
4. Equality and rationality. The decision-maker gave no due regard under section 149 of the Equality Act 2010 to the impact on older and disabled residents. The decision also contained an unexplained evidential gap and inadequate reasons. Even applying light-touch review, this was a very clear case of irrationality. Grounds 3 and 6 succeeded.
5. Relief. The Council did not establish that the outcome would highly likely have been the same under section 31(2A) of the Senior Courts Act 1981. The decision was quashed and required to be retaken within 28 days. The consultation process did not have to be restarted. A declaration of unlawfulness was granted. The Council was ordered to pay the claimant’s reasonable costs, with £50,000 payable on account within 28 days.

First-instance judicial review decision. Permission to appeal was refused, but time for appealing was extended to 28 days from the order.