Members of the Committee of Care North East v Northumberland County Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Sullivan,Sir Stanley Burnton,Lord Justice Aikens |
| Judgment Date | 27 November 2013 |
| Neutral Citation | [2013] EWCA Civ 1740 |
| Docket Number | C1/2013/0628 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 November 2013 |
[2013] EWCA Civ 1740
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand
London WC2A 2LL
Lord Justice Aikens
Lord Justice Sullivan
Sir Stanley Burnton
C1/2013/0628
Professor A McColgan (instructed by David Collins Solicitors) appeared on behalf of the Appellant
Mr N Griffin QC, Ms H Mountfield QC, Mr T CrossandMr M Purchase (instructed by Northumberland County Council) appeared on behalf of the Respondent
This is an appeal against the order dated 15 February 2013 of Supperstone J dismissing the appellant's claim for judicial review of the respondent's decision to fix care home rates in its area for a three year period from 1 April 2012.
The appellants are members of the committee of Care North East-Northumberland, CNEN, an unincorporated association which represents the interests of its members who are proprietors and managers of care homes in the North East and in particular, in Northumberland.
Since there is no challenge to the judge's description of the legislative framework and the factual background to the judicial review claim in paragraphs 1 to 24 of his judgment, which is reported at [2013] EWHC, 234 (Admin), I will not repeat the detail of those matters in this judgment.
In summary, local authorities such as the respondent have a duty under section 21 of the National Assistance Act 1948, the 1948 Act, to make arrangements to provide residential accommodation for certain persons who are in need of care and attention. Much of that accommodation is in practice provided in care homes and by section 26 of the 1948 Act, local authorities may discharge their section 21 duty by contracting with private care home providers, such as the appellants, who operate for profit. The relationship between the local authorities commissioning the accommodation and the private care homes providing it is a contractual one but in discharging their duty to provide accommodation under the 1948 Act, local authorities are required to act in accordance with directions given by the Secretary of State under section 7A(1) of the Local Authority Social Services Act 1970 (the 1970 Act). The National Assistance Act 1948 (choice of accommodation) Directions 1992 (the directions) are concerned with the rights of individuals to choose where they receive residential care and are intended to ensure that people have a genuine choice over where they receive residential care arranged for them by local authorities.
Paragraph 2 of the Direction provides in effect that arrangements will be made for accommodation at a person's place of choice (if he has a preference) but this is subject to paragraph 3 which sets out a number of conditions, one of which is:
"b) The cost of making arrangements for him at his preferred accommodation would not require the authority to pay more than they would usually expect to pay having regard to his assessed needs."
When making such arrangements, local authorities must act under the general guidance of the Secretary of State, see section 7(1) of the 1970 Act. The relevant guidance in the present case is contained in Local Authority Circular, LAC, 2004(20) ("the Circular"); paragraph 2.5.4 of which states:
"One of the conditions associated with the provision of preferred accommodation is that such accommodation should not require the council to pay more than they would usually expect to pay, having regard to assessed needs (the 'usual cost'). This cost should be set by councils at the start of a financial or other planning period, or in response to significant changes in the cost of providing care, to be sufficient to meet the assessed care needs of supported residents in residential accommodation. A council should set more than one usual cost where the cost of providing residential accommodation to specific groups is different. In setting and reviewing their usual costs, councils should have due regard to the actual costs of providing care and other local factors. Councils should also have due regard to Best Value requirements under the Local Government Act 1999."
Paragraph 3.3 of the guidance provides:
"When setting its usual cost(s) a council should be able to demonstrate that this cost is sufficient to allow it to meet assessed care needs and to provide residents with the level of care services that they could reasonably expect to receive if the possibility of resident and third party contributions did not exist."
In their judicial review claim, the appellants challenged the respondent's decision on four grounds. The principal ground of challenge (ground 2 below) was that the respondent had failed to "have due regard to the actual costs of providing care…", contrary to the guidance in paragraph 2.5.4 of the Circular, and was unable to demonstrate that "its usual costs" were:
"Sufficient to allow it to provide assessed care needs and to provide residents with the level of care services they could reasonably expect to receive if the possibility of resident and third party contributions did not exist."
Contrary to paragraph 3.3 of the Circular.
The judge dealt with this ground in paragraphs 27 to 46 of his judgment. He concluded that the respondent did have due regard to the actual costs of care as required by the Circular, see paragraph 46, and rejected ground 2 of the claim. He also rejected the other three grounds.
Before this court, Ms Mountfield QC submitted in her first and principal ground of appeal that the judge had erred in rejecting ground 2 of the claim, that the judge had further concluded, see paragraph 54 of the judgment, that even if the respondent had departed from the Circular, it was justified in doing so. In her second ground of appeal, Ms Mountfield challenged this further conclusion but she accepted that this issue arose only if she was successful in her first ground of appeal. While there was a third ground of appeal, it was not pursued in Ms Mountfield's oral submissions as a freestanding ground, rather the complaint was advanced in support of the principal submission — that there had been a failure to have due regard to the actual costs of providing care — that the respondents had simply plucked figures for inflation rates and efficiency savings out of the air when setting its "usual costs".
Before turning to the principal ground of appeal, I should mention that as part of ground 2 below, the appellant alleged that there had been a failure to comply with paragraph 6.2 of "building capacity and partnership in care" which is described as "an agreement between the statutory and the independent social care, health care and housing sectors" published by the Department of Health in October 2001, ("Building Capacity").
Paragraph 6.2 of that document states:
"Providers have become increasingly concerned that some commissioners have used their dominant position to drive down or hold down fees to a level that recognises neither the costs to providers nor the inevitable reduction in the quality of service provision that follows. This is short-sighted and may put individuals at risk. It is in conflict with the Goverment's Best Value policy. And it can destabilise the system, causing unplanned exits from the market. Fee setting must take into account the legitimate current and future costs faced by providers as well as the factors that affect those costs, and the potential for improved performance and more cost-effective ways of working. Contract prices should not be set mechanistically but should have regard to providers' costs and efficiencies, and planned outcomes for people using services, including patients."
The judge said that Building Capacity was non-statutory guidance which the respondent had to take into account but from which it was treated upon, provided it gave clear reasons for doing so, see paragraph 49 of the judgment. It was not in issue that the respondent did have regard to Building Capacity, see paragraph 50, and the judge concluded that the respondent had been entitled to depart from the guidance in Building Capacity for the reasons the respondent gave.
In my judgment, the non-statutory guidance in Building Capacity adds nothing of substance for present purposes to the guidance in the Circular. When the Direction was given in December 1992, it was accompanied by guidance. That 1992 guidance and further guidance which had been issued in a circular in 2001 was replaced in October 2004 by the Circular. In these circumstances, if there is any significant difference between the non-statutory guidance in Building Capacity in 2001, and the later guidance in the Circular in 2004, then the latter must prevail and if there is no significant difference between the guidance in 2001 and the guidance in 2004, then the former adds nothing of substance to the obligation imposed by the Circular to "have regard to the actual costs of care".
In support of her submission that the respondent did not have "due regard", Ms Mountfield referred us to a number of authorities in which the nature of the obligation to have "due regard" to a particular matter or matters was considered in other statutory contexts, including the Public Libraries and Museums Act 1964, the Disability Discrimination Act 1995, and the Equality Act 2010.
While the court's conclusions as to what would constitute a sufficient inquiry for the purpose of having "due regard" to the relevant considerations in those cases, were entirely...
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