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The Defendant had failed to consider the level of rates paid to care home providers in the previous year, prior to determining the ‘actual level of costs'. Further, providers who did not agree to the new rates could not be excluded from the list of available care homes.
17 January 2013
(1) The Claimant, an association representing those managing care homes, sought to challenge two decisions. The first was the decision to set the rates that would be paid for different types of care at a level which effectively reduced the rates below that paid the previous year; and the second was the decision to remove from the provider list all operators who failed to accept the new contractual framework by 23 April 2012.
(2) HELD: The Claimant's grounds of challenge were:
(i) that the Defendant had failed to take into account the actual cost of care;
(ii) the Defendant was unable to properly assess the risks to care homes and residents due to it not knowing the actual cost of care, and this was contrary to its Article 8 ECHR obligations;
(iii) despite stating long term financial viability to be a consideration, the Defendant had not considered this as it had not known the actual cost of care;
(iv) there had been a failure to properly consult care home providers; and
(v) the Defendant was not entitled to maintain a closed list of care homes in which it would place residents.
(3) The Defendant contended that the combination of three methods it used to calculate costs, was a reasonable way of estimating actual care costs and giving due regard to the actual costs of care.
(4) HELD: The decision makers had been aware of the rates that had been applied from 2007 to 2012, but had not used the 2011/12 rates and a Fair Cost of Care model to ascertain a fair rate to set and have due regard to the actual cost of care. In order to determine the actual rate of care, the Court held that the Defendant should have been required to first consider what the current cost was.
(5) Further, the Defendant should have had regard to ‘other local factors', but it had only considered information from other local authorities, and not factors within its own area. The Court therefore found that the Defendant had failed to properly assess and have due regard to the actual costs of care.
(6) The Court considered that as the Claimant had succeeded on ground one, it was not required to make a finding on grounds two and three.
(7) The Court held that the Defendant had complied with its duty to consult, and there was evidence of this in minutes from meetings that had been held. As such, the challenge under this ground was dismissed.
(8) As to the remaining issue as to whether the Defendant was entitled to remove those who did not agree to the new rates from the list of approved providers, the Court considered that the Defendant was entitled to insist that a provider enters into a contractual arrangements on standard terms and that only the usual fee might be recovered unless exceptional arrangements were made. The Defendant was not however permitted to exclude the Claimants from the list of care homes with which it would contract. Instead, it could only choose not to contract with them if the framework agreement was not signed up to.
(9) The Court thus declared that the decision to set the rates in the manner applied by the Defendant was unlawful, as was the exclusion of any care home from the list of providers with which the local authority would contract.
- - Slow to interfere.
 - Current cost relevant.
 - Failure to consider local information.
 - Due regard actual costs of care.
- - Ground two.
 - Duty to consult.
 - List of providers.
 - Declaration.
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