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The Defendant had carried out proper consultation and had considered the actual costs of care in setting the rates of fee for the period of 1 April 2012 to 21 March 2015.
15 February 2013
(1) The Claimants, members of an unincorporated association whose members own or operate nursing homes and care homes in the North East, brought this claim. The Defendant local authority is under a duty to provide accommodation and social care services. The Claimants challenged the Defendant's decisions to fix care home rates for the period of 1 April 2012 to 21 March 2015.
(2) The Claimant brought four grounds of challenge
a. The Defendant failed to comply with consultation duties;
b. The Defendant had not identified the cost of the provision of services before setting the rates, and therefore it had acted contrary to the relevant guidance.
c. The Defendant had acted irrationally and/or failed to take into account considerations including:
(i) how efficiency savings might be generated
(ii) that it had assumed that inflationary rises in the cost of care would be off-set by efficiency savings;
(iii) there had been no inflationary uplift in the case of some bands of homes.
d. The Defendant had acted contrary to the relevant directions by refusing to make new placements with providers who had not signed the contract terms issued by the Defendant.
(3) HELD: The Court addressed the principle issue first: whether the Defendant had failed to have due regard to the actual costs of providing care.
(4) The Claimant alleged that the guidance required the Defendant to pay ‘due regard' to the actual cost of care, and the failure to understand these costs meant that the Defendant could not claim to have had the due regard required.
(5) The Court relied upon R (South West Care Homes Ltd) v Devon County Council  EWHC 1867 (Admin) in finding that a determination of the cost of care is not a precise science, but a matter of judgment based on experience and what it knew the actual cost of care to be. The Court held that due regard to actual cost had been had, based upon evidence showing that account had been taken of the position of providers with whom the Defendant had been able to reach agreement. Various meetings had also taken place during which accounts had confirmed that two of the relevant homes were generating a significant profit, and that efficiencies could be made.
(6) In relation to the allegation that there was no consultation in relation to the assessment of actual costs, the Court determined that the Defendant did not have to quantify costs in the way contended for by the Claimants. It was found that there had been consultation when proposals were at an early stage. The Court held that the Defendant genuinely and properly engaged in the consultation process.
(7) Further, the Claimant's allegation that the Council had unlawfully departed from the relevant guidance was rejected. The Court held that the guidance had been taken into account and, when departing from this, clear reasons had been given and these reasons were entirely rational. The Court held that the Defendant had also had regard to the relevant considerations, and had reached a conclusion that it was entitled to reach.
(8) There was also found to be nothing irrational about the Defendant exercising a policy that it would not normally place individuals in homes that did not accept the normal terms and conditions. However, in a case that was not ‘usual', the Defendant had not excluded the possibility of making a placement on differing terms. This ground was therefore also dismissed.
(9) The grounds having all been dismissed, the claim therefore failed.
 - Grounds for challenge.
 - South West Care Homes.
- - Due regard.
 - Did have due regard.
 - Guidance.
 - Relevant considerations.
 - Consultation at formative stage.
 - Terms and conditions.
- - Contract with those who agree to terms.
 - Conclusion
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