The care home sector continues to see demand.  The average lifespan in the UK has increased considerably in the last forty years and the need for residential and nursing care continues to grow.  That being said, funding in current financial climates is proving to be a battle for service providers as the squeeze on local authority and NHS budgets has translated into frozen or reduced fees for placements.  Combined with minimum wage increases, upwards-only rent, and higher service demands, the financial pressures faced by the sector are mounting.

The case of R (Sefton Care Association and others) v Sefton Council [2011] shows that all is not lost in the battle for a fair price for care.  The High Court ruled Sefton Council's unilateral decision to freeze payments to care homes for 2011-12 unlawful, as the decision was made without proper consultation with care providers and the Council had failed to consider the actual cost of care.  The statutory obligation to provide residential accommodation is set out in the National Assistance Act 1948.  The Council argued that under supporting statute, they were not obliged to pay more than they would usually expect to fund residential care, and claimed they could obtain services for the fees at frozen level.  However, the High Court rejected this argument. The Council were under an obligation to have regard to the needs of the service user when assessing payments to be made, and fees should therefore reflect an amount sufficient to meet the costs of care under proper consultation - fees therefore could not simply be fixed at a level which the Council was used to paying on an argument that care had been provided at that cost previously.

A more recent ruling in East Midlands Care, R v Leicestershire County Council [2011] also found that Leicestershire Council's frozen rates for care home fees were unlawful, closely following the same reasoning as Sefton.

This is a positive outcome for service providers struggling to provide good quality care at unsustainably low rates.  Similarly, service users can take comfort from the ruling which emphasises local authorities’ duty to focus on their needs above budgetary constraints.  We may see more cases of this nature if local authorities do not correctly assess their fee levels to ensure service standards can be met at workable costs.