Care North East Northumberland v Northumberland County Council v Northumberland Care Trust [2013] EWHC 234 (Admin)

The Claimants (Care North East Northumberland) owned and/or operated care homes in the area of Northumberland and the North East of England.  The Claimants challenged two decisions made by the Defendant (Northumberland County Council) to fix care home rates in the Northumberland area for a period of three years.

There were four grounds of challenge:

1) That the county council failed to comply with it’s duties of consultation;

2) That the council failed to inform itself of the costs to care home operators of providing services before setting it’s rates and acted contrary to the relevant guidance;

3) That the county council acted irrationally and/or failed to take into account relevant considerations, including by imposing “efficiency savings” on care home providers in certain bands without making any assessment of how those efficiency savings might be generated, assumed that any inflationary rises in the cost of care would be offset by these “efficiencies”, and providing no inflationary uplift in the case of Band 2-4 homes;

4) By refusing to make new placements with care home providers who had not signed the contract terms issued, the council had abused it’s dominant position in the market and acted contrary to paragraph 3 of the National Assistance Act 1948 (Choice of Accommodation) Directions 1992 and Local Authority Circular LAC (2004) 20.

Mr Justice Supperstone ruled in the county council’s favour.  He rejected the ground that the county council had not complied with it’s duties of consultation.  After considering the evidence he was satisfied that the defendant had engaged genuinely and properly in the consultation process. He was entirely satisfied that the county council did have due regard to the actual costs of care as required by the circular.  He stated that the sentence in the Local Authority Circular on which the claimant relied – “In setting and reviewing their usual costs, councils should have due regard to the actual costs of providing care and other local factors.” must be read in its context [Paragraph 36].  He also concluded that the council was entitled to depart from Building Capacity, non-statutory guidance issued by the Department of Health.  “The guidance was taken into account and clear reasons were given by the Council for departing, in so far as it did, from it.  The reasons given for the departure are plainly rational.” [Paragraph 53].

Finally the judge said that the allegation of abuse of dominant position and that the county council had acted in breach of the Directions and the Circular had not been made out.

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