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Private Care Home Owners Triumph in Local Authority Funding Dispute

A group of private care home operators have triumphed in their High Court fight to block local authority funding cuts that they claimed would jeopardise the viability of their businesses and the welfare of their residents. The court ruled that Redcar and Cleveland Borough Council had failed to have ‘due regard’ to the actual costs of providing care to the elderly and other vulnerable groups in its area.

The Redcar and Cleveland Independent Providers Association, which represents more than 80% of the area’s private care home operators, went to court after the council announced that, in 2012/13, it would be paying £14 less per week for each resident than it had done in the previous year.

Lawyers for the association argued that the council’s decision had been ‘driven purely and to an improper degree by budgetary considerations’ and that the fees on offer were simply insufficient to meet the council’s statutory obligations to care for the needy in its area.

Upholding the association’s challenge, the court ruled that, in setting fee levels, the council had ‘relied almost exclusively’ on ‘benchmarking’ what it pays against the level of funding given by other local authorities in the area. Whilst rejecting the association’s plea that its members had not been properly consulted, the court ruled that the council had ‘failed or failed properly to assess and have due regard to the actual costs of care in particular in relation to local factors’.

The council had ‘very fairly and with the benefit of hindsight, wisely’ agreed to withdraw its decision and to reconsider appropriate levels of private care home fees for the relevant financial year in the light of the court’s decision.