Northumberland wins review over care costs

Northumberland county council has successfully defended its decision to fix care home rates from 1 April 2012 in the High Court. The council had presented providers with two options. The first involved a three-year contract in which the then current inflator’ (2.16%) would be applied in each of the years but this would be offset by efficiencies’ of 3%, 1.5% and 0% in the first to third years of the contract in Grades 1-3 homes. The second involved placing all homes on the current Grade 4 rates, applying the 2.16% inflator in each of the three years and allowing for a 1% quality bonus’. Provider group Care North East Northumberland (CNEN) had claimed that the council failed to inform itself of the costs to care home operators of providing services before setting its rates and so acted contrary to the relevant guidelines. They argued that the council failed to have due regard to the actual cost of providing care’ , contrary to the Local Authority Circular LAC (2004) 20, by not adopting some means to determine what it would be, for example, by conducting a survey of a sample of providers. The decision comes a month after providers operating in Redcar and Cleveland successfully argued that their local authority did not have due regard to the actual cost of care (CCMn February 2013). CNEN’s barrister also argued that the county council had erred in setting fees in 2012 on the basis of a benchmarking exercise by which it decided that the fees paid were relatively high in Northumberland by comparison with those of other local authorities and imposed a three-year contract designed to reduce in real terms the fees paid in respect of provision without reference to considerations of actual costs.