The care sector’s pursuit of fair and realistic fees took a huge leap forward this month following the ground-breaking Judgment in The Sefton Care Association & Others v Sefton Council. The background facts will resonate across the sector. Sefton Council froze care fees in response to budgetary pressures without consulting care providers or taking into account the actual cost of providing care. The Sefton Care Association, and several of its member care homes, challenged the decision through judicial review.
The High Court roundly criticised Sefton’s approach and quashed the decision. The Court analysed Guidance for local authorities and an Agreement between the Statutory and independent sector titled “Building Capacity and Partnership in Care”. The Guidance and Agreement made it clear that local authorities should work in partnership with providers, should consult meaningfully with them and, crucially, should set usual rates of fees to reflect the actual cost of providing care.
The Pembrokeshire judgment last year was very fact specific. In that case, the Council had used a particular tool to determine fees and much of the Judgment was concerned with a forensic examination of the tool and how it was used. The principles of the Sefton Judgment set out above, in contrast, are of far more general application.
A further point of note is that in the Pembrokeshire Judgement, the Court acknowledged that a Council was entitled to take into account its financial resources when making decisions about entitlement to social care services. Sefton repeats that whilst that might remain the case, Councils are not thereby licenced to set fee levels below the true cost. Once service users are assessed as eligible care and accommodation, local authorities are bound to ensure that the care is adequately funded.
Following the Judgment, providers should be more optimistic about challenging attempts to reduce or freeze fees. To do so most effectively, providers should follow the Agreement and be prepared to provide detailed information about the actual cost of providing care if requested to do so. On one analysis, that is an uncomfortable requirement for care providers. It is not in the usual course of business to share such commercially sensitive information with clients. Realistically, however, the only way for providers to maintain fee levels is to justify the fees being claimed.
The sector should be alive to possible unintended consequences of the Judgment. If local authorities are no longer free to impose fee freezes, they may have to look for savings elsewhere. In particular, there may be more pressure for local authorities to commission from care homes only for the most dependent of service users who are unable to stay at home even with intense daily support from domiciliary care services. As a result, the coming years may prove profitable for high dependence nursing homes and large scale domiciliary care services whilst standard residential care homes may find the gap it occupies between the two narrowing.
The Judgment is, however, a victory for the vulnerable service users of care services. Local authorities can no longer use the economic downturn as an excuse to reduce fees below the actual cost of care. Fair fees at last.