Care homes Judicial Review highlights consultation risks for Councils struggling with under-funded services

This is Blog no 93

In January, judgment was handed down in the case of R (SARCP) v Stoke-on-Trent City Council. It ruled that a decision to increase fees for residential care placement by only 1.4% was unlawful.

It declared that the consultation process was flawed, that the Council had ignored statutory guidance, was in breach of the Public Sector Equality Duty (PSED) and was irrational.

The Council in Stoke made many mistakes, but before members and officers of other Councils dismiss the case as unlikely to affect them, there are many issues and learning points that emerge from the events that led to this judicial review. And they show once again the immense challenges that arise when Parliament legislates with the best of intentions – and Governments subsequently fail to provide the resources for effective implementation.  As ever, even brilliant consultation cannot make up for poor public policy!

One of the saddest facts to emerge in the hearing was that out of 181 care home providers in the area, 156 had either signed or otherwise reluctantly accepted the new contract, and that only a small number supported the claimant and his group – the Staffordshire Association of Registered Care Providers. According to Judge Tindal, the Council’s position was that the claimant was “a ‘noisy minority’ which does not speak for the ‘silent majority’”.  Experienced consultation specialists will instantly recognise this as a favourite formulation to describe campaigners and others who try to insist on their rights to a fair and lawful consultation. The Judge rightly dismissed this as any sort of defence – and so should we all!

As the provision for annual indexation fees paid to care homes by the Council was enshrined in a commercial agreement, much of the case turns on whether this was a matter of contract law – or whether there were sufficient public law elements as would enable an aggrieved party to pursue a judicial review. This is important in an age where Government agencies and regulators can hand over significant elements of public services to arms-length bodies and where the contractual terms of their contracts have a considerable bearing upon the quality of services that are delivered. Parliament, for these purposes had anticipated this in the Care Act 2014and provided for statutory guidance that told Councils very clearly that they had to consider such factors as ensuring a sustainable market for care providers and the ‘actual cost of good quality care’.

The Court found that the Council had “utterly failed” to take account of this and other factors. Neither had it adequately met the Section 149 ‘due regard’ requirement of the Equality Act 2010. The relevant Chief Officer had not conducted Equality Impact Assessments (EIAs), but this would not have mattered had the Council complied with the PSED “in substance”. On the facts, the Judge said that there was no evidence that decision-makers had considered the impact upon providers – nor the residents on the care homes. 

Hence irrationality.

On consultation, there are some interesting issues:

• The applicability of the Gunning Principles

There was no statutory duty to consult. Any requirement to do so would be the result of a legitimate expectation.

Stoke Council had, in fact, written to the claimant in the following terms:

        “There will be a period of consultation when reviewing the pricing structures that will be reasonable,  

          proportionate and fair where SARCP will be able to make submissions and within the Gunning

          principles.”

The standard used by the Courts is that there needs to be a “clear and unambiguous  promise” to consult. In addition, there was a long-established prior practice which the Council did not dispute. Mentioning the famous rules - the Gunning Principles - only served to underpin the Council’s intentions.

Of course they applied …!

On this point, however, the case is a welcome confirmation of what most of us understood to be settled law until the Court of Appeal unnecessarily muddied the waters in last year’s judgment in the Eveleigh case (See my Blog 67). It hinted – but did not rule  - that non-statutory consultations might not attract the protection of the Gunning Principles. As this case demonstrates, local authorities and public bodies of all kinds would be better advised to assume they apply. The most important judgment on consultation law remains the seminal decision of the Supreme Court in R (Moseley) v LB of Haringey in 2014, where Lord Wilson stressed that however a duty to consult is generated, the same common law duty of fairness and Gunning Principles apply.  

• Well-informed consultees

The claimant argued that the Council breached all four Gunning Principles, but Judge Tindal disagreed. Under Gunning Two, he claimed that more should have been volunteered by the Council about alternative solutions or discarded options. On this, the Court relied on the fact that this was not a public consultation, and that the consultees could be presumed to be experts on the subject and well aware of the issues and the constraints affecting the Council. At least here is a finding that will help public bodies decide who needs to know what – something much assisted by the use of effective stakeholder-mapping techniques.

• Conscientious consideration

What made the consultation unlawful was the failure to adhere to Gunning Four and give the consultee’s response conscientious consideration. He had made an extremely-detailed 15 page submission, focusing upon the contractual aspects and the ‘actual costs of care’. He also referred to inflation, increases the National Living Wage, the impact of squeezing costs on standards, and the way other comparable authorities had offered higher fee increases. In the event, the decision acknowledged none of these factors.

The Judge quotes the decision letter – which is basically a re-statement of the Council’s unchanged position. To be fair to the Council, it then goes on to  talk about ‘developing a package of support for care home providers’ as a set of potential mitigation measures – admittedly somewhat vague. Maybe Councillors thought this was a sufficient acknowledgment of the claimant’s submission. The Judge did not.

Here is an important takeaway for public engagement professionals. It has become common practice for hard-pressed organisations to admit to difficulties making existing policies and services work. but to respond to consultations with a promise to co-produce something better. What this case shows is that this is not sufficient. It is ALSO necessary to respond fully to consultee responses – and there must be evidence that decision-makers (not their advisers or subordinates!) have conscientiously considered what’s been said.

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To look at the wider picture, this is yet another example of the problems arising from a failure to address important areas of public policy – particularly social care. One must have sympathy for hard-pressed local authorities given the responsibility but often without the resources. Special Educational Needs and Disability (SEND) services are a comparable case in point. This does not, however excuse Councils from observing the right guidance and taking proper account of the impact on hundreds of elderly care home residents whose interests seem not to have been adequately considered in this regrettable sequence of events.

Once again, the messages are clear. Do not short-change your suppliers. And if you consult, you MUST do it properly

Rhion H Jones LL.B

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Commentaries are prepared primarily to help consultation practitioners take account of developments in the law and to guide them on situations where legal advice should be sought. They are no substitute for reading Court judgments or studying statutory provisions or associated Guidance.

Rhion has monitored and written commentaries on the Law of Consultation since 2007 but does not provide legal advice. He will, however, be happy to discuss the content of this or any other commentary.

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