Success for care homes across North Yorkshire

Award winning law firm Hempsons is delighted to announce the successful court proceedings in favour of the Independent Care Group (ICG) and Care Home Providers across York and North Yorkshire. Our advice and support assisted the providers in achieving a fairer price from York City Council and North Yorkshire County Council for the provision of care in care homes.

Issues raised by providers

The claim was based in North Yorkshire and was raised by residential and nursing homes together with the ICG, their representative. The Claimant challenged the decision of North Yorkshire County Council which was announced on 24 February 2012, to set the fees for Council placements at residential and nursing homes for 2012/13.

The issue in question which led to the proceedings was that the Claimant asserted that the Council had mistaken the law by failing to consider the actual cost of care when setting the fees for residential and nursing home placements. The Council alleged that they had consulted with the Providers although failed to provide them with sufficient information to enable them to properly engage. Having failed to calculate the actual costs of care, the Council was unable to comply with its public sector equality duty.

ICG and its members had strong concerns about the levels of the Council’s fees for a number of years and had constructively raised the issue year on year. In 2004 the ICG and Council worked together on the Joseph Rowntree Foundation model, (Laing & Buisson) Fair Price for Care, but the work was ignored and left a legacy of distrust. Fee increases also reduced year by year, culminating in a 0% increase for 2010/11 at a time when costs were increasingly significantly.

The level of consultation for the 2012/13 fee was so poor that the ICG and its members – being mindful of success in Judicial Review’s in other areas of the country –  issued Judicial Review proceedings against North Yorkshire County Council in May 2012, shortly after Hempsons’ instruction in March 2012. Almost immediately, the Council came to the negotiating table and an extensive mediation led to a detailed settlement agreement whereby both parties secured an independent sector provider to carry out a formal cost of care exercise which resulted in significant uplifts for Providers in fees.

Solving the issues – Hempsons’ involvement

The process involved a Judicial Review, a full day mediation led and supported by Philippa Doyle and Richard Nolan from Hempsons, an independently commissioned Cost of Care exercise and extensive negotiations, resulting in the recent implementation of a new contract, coupled with new rates which more fairly reflect the significant costs faced by providers in delivering care to this ever increasing market. Philippa in particular advised throughout the whole process from the issue of Judicial Review proceedings to the eventual conclusion of the contract.

On the back of this, a new contract has now been negotiated between the Council and care home providers and the working relationship between the parties has benefitted from the candid discussions that have taken place and the level of engagement which it is hoped will be maintained in the future. Discussions are anticipated in the very near future regarding the next cost of care exercise for the next 3 year period.

A Local Authorities responsibilites

What is clear from all the case law is that when a local authority is going through the process of setting fees, it has to have regard to the guidance issued in 2004 to local authorities, one element of which describes; “this cost should be set….to be sufficient to meet the assessed care needs of supported residents in residential accommodation.”

It also states, “In setting and reviewing their usual costs, councils should have due regard to the actual costs of providing care….” A local authority can only depart from the 2004 guidance for good reason and it cannot be said to have had due regard to the actual costs in providing care when setting its rates, if it has not considered what the actual cost of providing care is.

Once Providers raise the issue that they believe they are underfunded, a local authority is required to undertake an analytical and arithmetical exercise in collaboration with the providers to establish the actual costs of care. Providers who work together can achieve far more than individuals in isolation. Having the benefit of the ICG (now in its 10th year), as an overarching supportive trade association for its members has allowed strength in numbers to secure a positive outcome. An increase in fees shows real recognition by the Council to the sector and to the hard work Providers put in to delivering quality care to North Yorkshire residents.

Outcome for the care home providers

There have now been sufficient Judicial Reviews so there is no need to take such issues to court as the position is so established. It was regrettable that ICG and its members had to issue court proceedings to secure the engagement of the Council but they are delighted with the eventual outcome.

Mike Padgham, ICG Chair and individual Claimant in his own right in the action said “The support and advice provided to the ICG by Hempsons was outstanding. They showed a dogged determination and tenacity that was inspirational and the eventual outcome was a fantastic result for both social care providers in the area and the many thousands of people who benefit from the care they provide.”

Adam Hartrick, Partner at Hempsons in Harrogate who led the team supporting ICG and its Providers said, “This was an excellent demonstration of what can be achieved when a group of Providers unite, and determine to challenge decisions made in relation to funding that affect them and those they care for. A Provider acting in isolation may have struggled, and the ICG are to be commended for their foresight and resilience in seeing the challenge through to a very successful conclusion. The Council were prepared to talk and entered meaningful discussion which was pleasing but perhaps inevitable when faced with a united challenge from Providers to their process. The whole process of fee setting has been put onto a platform for the future that should ensure fairness to all stakeholders. It was a pleasure to work with ICG in achieving this end.”



Relevant legal information:

A number of Judicial Reviews in recent years (R (Forest Care Home Ltd) -v- Pembrokeshire County Council [2010]; R(on the application of) the Sefton Care Association and Others –v- Sefton Council [2011]; R(East Midlands Care Ltd) –v- Leicestershire County Council [2011]; R (Mavalon Care Ltd and 6 others) –v- Pembrokeshire County Council and R(Bevan and Clarke LLP) –v Port Neath Talbot Borough Council [2012]) have seen challenges to local authorities on their decision making processes, citing poor evidence and a failure to properly consider the true cost of care.