Earlier on this year, Care England brought judicial review proceedings against Essex local authority regarding the introduction of new fees under a commissioning framework introduced in 2016.
Under the commissioning framework, care home and nursing providers were offered a maximum of £538.37 and £577.29 per week per resident. This rate was allegedly offered without any enquiry into the provider’s actual costs of care or question on specific individual’s personalised care plan.
Care England argued this breached section 5 of the Care Act 2014. Section 5 stipulates that a “local authority must promote the efficient and effective operation of a market in services for meeting and support need”. Their argument was focused on section 2(d) which states that a local authority should have regard to “ensuring sustainability of the market”.
Care England argued the local authority had breached its duties by setting fees too low and this had the ability to threaten the whole Essex care system as some care homes heavily depend on council-funded residents and as a result they are having to close down or provide a poor service. Care England further argued that care home and nursing providers had signed up to the framework out of “commercial fear” and that they were deeply concerned that the maximum prices were below their costs of care”.
Had the action succeeded for Care England, there were hopes for a powerful precedent as many care home and nursing providers over England and Wales form the view that providers are struggling due to the low fees set by local authorities. However, the action was dismissed in December 2017.
Justice Lavender decided that the local authority’s duty to ensure the sustainability of the market “cannot be viewed in isolation” from the other considerations set out in section 5 of the Care Act. A balance between the different considerations needed to be struck and according to the Judge the Councillor had succeeded in doing so. It was held that promoting efficiency in the market means ensuring that fees aren’t set too low but also that fees aren’t set too high.
Moreover, Judge Lavender formed the view that the councillor who calculated such fees carried out a sufficient enough enquiry into the sustainability of the Essex care home market. John Spence, a cabinet member from Essex council contended the council’s fees were on average higher than care provider’s costs. In addition, John Spence held the view that “few homes were closing and if they do it is rarely for financial reasons”.