Heart of Wales Care Limited & Ors v The Council of the City and County of Swansea

The Claimants are commercial providers of residential adult care homes in the area of the defendant council (the Council). Each is contracted to the Council to provide places for adults in need of care in furtherance of the Council’s statutory duty to provide such care. The agreements provide for an annual review of the rates to be paid by the Council for the provision of such care “using the normal consultation process” with the Claimants. For the year 2025-2026 the rate was set at a 6.1% increase over the previous years on the grounds of “affordability” even though modelling used by the Council suggested that the costs to the Claimants of providing care had risen in the same period by about 9%.

The Claimants challenge that decision by way of judicial review on three grounds. First, the Council did not, in setting that rate, comply with the National Framework for the Commissioning of Care and Support in Wales: Code of Practice (the Code). In particular it is alleged that the Council in doing so did not understand the full costs of care, did not set rates which are fair and sustainable, and did not act transparently in the process. Second, the Council did not consult with the Claimants before setting the rates, as required by the agreements and/or by the serious implications of setting the rates. Third, the Council failed to take into account material considerations, including guidance that the Council should take steps to reduce discrepancies in pay and benefits between care staff employed in the private sector on the one hand and by local authorities on the other. There is an outstanding application by the Claimants to add another ground, that the challenged decision was made without proper delegated authority. That application was hotly contested, as indeed were most aspects of claim before me. I heard argument on whether to grant the amendment, and on the substance of the additional ground if granted and will deal with these arguments as appropriate later in this judgment.

As well as contesting each of the grounds, the Council raise issues of delay, whether the consultation ground is amenable to judicial review rather than a private contractual issue, alternative remedies, and whether it is highly likely that the challenged decision would have had the same outcome for the Claimants even if any of the alleged errors had not been made.

A fundamental difference between the parties is whether breaches of the Code, if proved, amount to grounds of a public law challenge, as submitted by Mr Purchase KC and Ms Iveson for the Claimants, or do not, as submitted by Mr Oldham KC for the Council.

The Code was issued in 2024 by the Welsh Ministers under the Social Services and Well-being (Wales) Act 2014. It is section 35 of the 2014 Act which places upon local authorities in Wales a duty to meet certain adults’ needs for care and support as part of their social services functions. The preceding section provides that a local authority may fulfil such duty by arranging for the provision of accommodation in a care home. The power of the Welsh Minister to issue the code is contained in section 145. Subsections (3) and (4) provide:

Section 147 provides that a local authority may exercise social services functions in a way that does not comply with the requirements of codes under certain conditions. The code at [1.07] does specify that that section does not apply, so section 145(3) applies and local authorities must act in accordance with any relevant requirements within it.

The pre-amble to the Code is fairly lengthy. Given the fundamental dispute between the parties as to the effect of the Code, it may be helpful to set it out verbatim and at length here, with the original emphasis:

It is not in dispute that the Code sets out various standards, which contain both requirements and guidance. The standards relied upon by the Claimants are 6, 7 and 8. Standard 6 refers to supporting ethical and fair work practices and provides that statutory partners should support employers to improve status, well-being and working conditions in social care to achieve parity across statutory, private and third sectors. It also provides that “Commissioners should ensure that providers are paying at least the Real Living Wage to their social care workers”.

Standard 7 deals with the requirement to understand the costs of care and provides that statutory partners “must demonstrate that they understand the full costs of directly provided and contracted care in their area” and “must work collaboratively to understand fair and sustainable costs of delivering care to inform decisions relating to fee setting”. Further, there “must be a consistent and transparent approach to fee setting processes.”

Standard 8 deals with setting fair and sustainable fees, and provides that statutory partners “should use local, regional and/or national methodologies or benchmarks to determine a fair and sustainable prices for quality care and support” and “must be transparent and consistent when setting fee rates ensuring that they are assessing fair and sustainable costs of care and support and ensuring public value”. It is further provided that contractual uplift mechanisms “must include appropriate inflation mechanisms to keep pace with rising cost.”

The Welsh Ministers have issued a toolkit called “Let’s agree to agree” for commissioners and providers to agree the cost of residential and nursing care for older people in Wales. It is not in dispute that this is not a code issued under the 2014 Act, but the Claimants rely on it as a material consideration which the Council ought to have taken into account in setting the rate under challenge.

The agreements between the parties and between the Council and other providers in its area are in a standard pro-forma issued by the Council and known as pre-placement agreements. As indicated above the weekly rate for placements are set by the Council. Clearly, the level of rates impact on such matters as standard of care, staff pay and sustainability of the business. Additional funding, known as top ups, is sometimes provided by others. The rates are set on a three-year cycle, in which the Council in the first year of the cycle undertakes a detailed analysis of the costs of care. In the second and third years the analysis is not so detailed and may comprise inflationary uplifts to the previously set rates.

The Council held finance sub-group meetings in mid 2024 with providers and the Interested Party, Care Forum Wales (CFW). Concerns were raised about the adequacy of the rates which had been at that time set and about the lack of transparency of the process. In one of these meetings on 8 August that year providers stated that the uplift of 6% then current did not reflect the increase in the cost of care. The Council’s principal officer for commissioning adult services, Peter Field, responded that he did not disagree. For the 2025/26 uplift, it was agreed to undertake an interim data gathering exercise to allow the Council to gain a better understanding of the costs of delivering care.

About two weeks later CFW provided a proposed template to collect such data from providers, which, after they had agreed it, was sent out a few days later. When sending it out, the Council’s contracting officer Ian George stated that the responses would be extremely valuable. 18 providers out of some 36 in the area did respond. CFW sought an update on 28 October 2024. Mr George replied that budget modelling had been done and that there would be a finance sub-group meeting soon to share feedback on both matters. On 1 November 2024, the Council’s group accountant, Chris Davies, e-mailed Mr George and Mr Field setting out a first attempt to calculate what fees he would recommend “were budgets not a concern,” coming to a figure of about 9%. This included reference to an adjustment to national insurance (NI) because of changes announced in the autumn budget increasing employers’ contributions from 13.8% to 15% and reducing the threshold for payment from £175 per week to £96 per week. Mr Davies in his email said that the figure he had used to reflect such changes may be an underestimate and that the Council would not know the effect of the changes “unless we ask.”

Some two weeks later Mr Davies met to discuss his calculation with Mr Field, and with Dave Howes, the director of social services and Jane Whitmore the interim chief officer commissioning and resources. There are no notes of that meeting and no direct evidence of it. In her first witness statement, the head of adult services, Amy Hawkins, who was not present, says she had spoken to those who were and who say that the 9% figure was discussed, but Mr Howes and Ms Whitmore said that 6% was “the upper limit of affordability.”

On 19 December 2024 CFW asked Mr George for an update. Mr George replied that this would be provided at the next finance sub-group meeting on 9 January 2025. Again, there is no direct witness evidence of that meeting, but again, Ms Hawkins states what she was told by those present. She says that Mr Field shared on screen a brief analysis of the data collected. Mr Davies stated that the model used suggested a 9% uplift but that that was aspirational and was unlikely to be affordable.

The next day a report of Mr Field was circulated to the CMT, but not to the Claimants. It did not refer to the interim exercise or to Mr Davies’ figure of 9%. It did refer to increases in the real living wage (RLW), in the national living wage (NLW), and in inflation. It stated that projected cost of increases was based on forecast spend for 2024/25. As for NI changes, the report said this:

It proposed a 6.1% uplift to all residential services. Mr Field proposed the lower figure to a meeting of the CMT on 15 January 2025, when the Council says that that figure was decided upon. Ms Hawkins, who was present, says this figure was agreed by the CMT. The minutes of that meeting record that Mr Nicholls, the chief executive officer, confirmed that he was happy to proceed due to “affordability” in respect of all “fees paid for commissioned services and direct payment rates.”

On 5 February 2025, providers were sent an email with data analysis. The next day at a meeting of a finance sub-group with the providers, some of the providers’ representatives stated that the figure of 6.1% felt more like 3% because of underpayment in 2024/5 and when RLW, salaries and NI were taken into account. it was indicated the higher staffing levels were on the basis that these figures lacked integrity, although it was not clear on what basis. The figure of 6.1% was confirmed. Mr Field’s report was not copied to the providers. On 27 February 2025, Mr Field wrote to providers setting out the uplift of 6.1% to be applied to all categories of residential and nursing care from 7 April 2025. It was pointed out in the letter that that was more than the increase in the Council’s revenue which had been increased by only 4%. On 4 April 2025 the Council sent to providers a further spreadsheet from which it appears that the only data used from the interim exercise was that dealing with the cost of food, utilities and insurance, which amounted to some elements only of overall costs. Mr Field agreed to a request that this should be escalated to a director or Cabinet members, but it appears nothing came of that.

I deal first with the fundamental dispute between the parties as to whether any alleged breach of the Code is appropriately dealt with in judicial review proceedings. It is clear and not in dispute that the Code contains many aims which are aspirational and medium to long term. A few citations will suffice to illustrate this.

At [1.46] it is provided that the standards are intended to facilitate the intended rebalancing of care and support by moving current commissioning practices. Five processes are then set out. At [1.47], reference is made to the aim of the transformation of commissioning and delivery of care. At [1.51], it is stated.

At [1.49] it is stated:

At [1.20] the Code refers to the National Office for Care and Support (NOCS) as having a role in ensuring that the Code remains current and aligned to the aspirations of commissioning practices. However, I was not referred to any provision which gives NOCS power to ensure compliance.

NOCS’s annual report for 2024/25 states: -

The White Paper, which preceded the 2014 Act, is entitled Rebalancing Care and Support. At page 32, this is stated:

Mr Purchase KC accepts that the Code contains much guidance and that interpretation of the Code is a matter for the Court. It is not in dispute that guidance should not be read as a statute, but as a whole and in a practical and commonsense way, see Gillick v West Norfolk and Wisbech AHA [1986] AC 112 at 180F. However, he submits that the 2014 Act and the Code made under it makes a clear distinction between guidance on the one hand and requirements on the other. One way of fulfilling long term aims is to lay down requirements which must be complied with at the outset. If guidance is ignored that may amount to a breach of statutory duty. In R (Brown) v Secretary of State for Work and Pensions [2009] PTSR 1506, the Divisional Court dealt with duties under the Equality Act 2010 and said this:

Mr Oldham KC relies on the terms of the 2014 Act, the provisions of the Code as exemplified above, the White Paper and the annual report of NOCS in submitting that the clear intention was that the Code does not give rise to duties on the part of local authorities to set any particular uplift at any particular time but should be construed in the context of long terms aims and oversight and assessment by NOCS. This is especially so when consideration of uplifts takes place during a three-year cycle when very detailed consideration has already taken place at the start of the cycle.

In R (Bevan & Clarke LLP) v Neath Port Talbot CBC [2012] EWHC 236 Admin Beatson J, as he then was, dealt with a challenge by way of judicial review to a local authority’s setting of fees for care under the National Assistance Act 1948. There, as in the present case, the authority had entered into agreements with private providers for the provision of care. It was submitted on its behalf that the contractual relationship meant that the setting of fees was not amenable to judicial review at all. Mr Oldham KC in the present case does not go quite that far, except on the issue of consultation, which he submits is a contractual matter only. Beatson J said this at [48]:

In the following paragraph, he referred to guidance issued in that case, and to a submission by counsel for the local authority that the only effect of that guidance was to provide a framework of standards by which effectiveness could be measured by annual reporting and local authority scrutiny. That submission has similarities to Mr Oldham KC’s submissions in the present case as to the effect of the Code and the role of the NOCS. Beatson J said this:

Beatson J also dealt with the issue about how much information needs to be provided by officers to the officials or members who make the decision. At 58 he said this:

At [58] Beatson J also observed that a judicial review court will be particularly circumspect in engaging with the conclusions of the primary decision-maker in relation to complex economic and technical questions.

Fordham J in R (Care Northeast Northumberland) v Northumberland CC [2024] 1370 (Admin) dealt with care homes fees set pursuant to the Care Act 2014 which in England superseded the 1948 Act, as does the Welsh legislation which is relevant here in Wales. Fordham J cited Beatson J, in Bevan with approval, as did HHJ Tindall sitting as a judge of the High Court in R(SARCP) v Stoke-on-Trent CC [2025] EWHC 18 (Admin). Fordham J at [38ii] of Northumberland said this:

In my judgment, the submissions of Mr Purchase KC are more consistent with the clear language of the 2014 Act and with the Code when dealing with requirements, than are the submissions of Mr Oldham KC. They are also more consistent with the clear distinction which the Code itself makes in [1.10] between requirements on the one hand and guidance on the other. Furthermore in [1.12] reference is made, albeit in the context of contractual provisions, to compliance with the statutory requirements in the Code.

In my judgment, where those statutory requirements are not complied with, public law issues arise and breaches are amenable to judicial review proceedings.

In the summary grounds of challenge, five particulars of failures are set out under ground 1, in respect of which there is some overlap. The main points in the submissions of Mr Purchase KC and Ms Iveson may be summarised as follows:

It is convenient to take i) and ii) above together. At the time Mr Davies was undertaking his modelling, significant adjustment to employers NI contributions had been announced. The threshold of when such contrubutions were payable was to be reduced from 14.5 hours per week to 7.6 hours. This potentially increased the amount of such contributions but this depended on how many staff at any given provider fell within the increased threshold. As Mr Davies acknowledged that was something the Council did not know “unless we ask” but it did not ask. Further, the earning threshold for such contrubution was to be lowered from £9100 pa to £5000 pa thus again potentially bringing more employees in scope and potentially higher contributions, but no questions were asked about this.

Mr Oldham KC submits that issue relating to the changes in NI were not pleaded. In my judgment sufficient reference to them was made in the summary grounds of challenged at [42.5]. Next, he submits that collaboration is a vague concept. Finally, he submits that in any event the changes were referred to in emails and in the minutes of the meeting on 15 January 2025 and the subsequent report to Cabinet and Council. These were taken into account and so there was no breach.

I accept that latter submission as far as it goes, but what was not known was how that would impact on the full cost of care of any given provider, which in turn would depend on the number of employees brought into scope by the changes in the thresholds. As Mr Davies acknowledged, the officers did not know this and could only know by asking the providers, but this was not done. In my judgment this failure clearly amounted to a lack of collaboration within the meaning of the Code.

In my judgment, this failure meant that the Council did not understand the full cost of care and did not collaborate with providers in this regard to understand a fair and sustainable cost of care.

I next turn to particular iii) above. The way this is put in the summary grounds of challenge and in submissions is that the setting of the uplift was not transparent as the figure of 6.1% is not explained, beyond a reference to affordability, and there is no analysis of how this figure relates to the actual cost of care.

Mr Oldham KC submits that standard 8 is about consistency rather than provision of information and does not deal with sufficiency of the uplift and that the Council’s approach was consistent. As Mr Purchase KC accepts, the Code is not directed at achieving a certain figure.

Nevertheless, in my judgment the setting of 6.1% is not transparent and there is a failure to explain sufficiently how that figure was arrived at in light of the information on the actual cost of care.

As for iv), Mr Purchase KC repeats that the Council’s choices of inflation figures are unexplained and unsupported and did not keep pace with rising costs. As referred to above, in the summary grounds of challenge particular reference is made to the failure to take account the announced increases to NI contributions.

Mr Oldham KC repeats the points made above but goes further and points out that standard 8 requires that contractual uplift mechanisms must include appropriate inflation mechanisms to keep pace with rising costs. He submits that the agreements in the present case do that in clause 10.5. The relevant clauses are as follows:

In my judgment it is questionable, at least, whether those provisions do amount to “appropriate contractual mechanisms to keep pace with rising costs.” The representative agreement included in the hearing bundle is signed by a director of the Second Claimant on 10 October 2025. No direct challenge has been made in these proceedings to its provisions, and accordingly I do not consider this matter further.

However, the other conclusions expressed above are sufficient that ground 1 is made out. Insofar as the Claimants rely on other particulars under this ground, I shall say more about this if appropriate when dealing below with the question of relief.

I next turn to ground 2 and to the alleged lack of consultation. Circumstances where a duty to consult arises are now well established in authorities. In R (Plantagenet Alliance Ltd v Secretary of State for Justice [2014] EWHC 1662 (Admin), the Divisional Court (Hallet LJ, Ouseley and Haddon-Cave JJ) said at [98(2)]:

Mr Purchase KC relies on two bases for the duty to consult. The first is the agreements between the parties, which provide for what is called the “normal process” of consultation in clause 10.2 as set out above. The second is that it would be conspicuously unfair in the circumstances of this case if the Council did not consult with providers before setting the uplift.

Mr Oldham KC also relied upon the agreements, in submitting this is a private law issue and not a public law issue. He makes the point that in R (SARCP), the claimant was not a contracting party, and that it was for that reason it was held that a consultation claim could be brought-see [65]. He submits that the consultation challenge in the present case is not independent of the agreements.

I do not accept that latter submission. In my judgement, as in such cases as Bevan and Northumberland, there is a sufficient public law element in the issue of consultation about care home fees. The statutory requirements of local authorities include an understanding of the full cost of care, collaboration, and transparency. In my judgment an important element of those requirements will be achieved by consultation with providers. Further or in the alternative, the fact that in the present case the Council proceeded to set the uplift when it did not know of the impact of the NI changes makes the failure to ask providers about such impact conspicuously unfair. To that extent, ground 2 is made out, on the same basis as this aspect of ground 1. I do not consider that the contractual position can obviate the need to ask about this.

Under ground 2 however, the claimants’ submissions go much wider and include criticisms that consultation should have been carried out at a formative stage, should have set out proposals, and should have given sufficient time to respond. They also submit the toolkit required negotiation, and that responses were not taken into account and that the Council made up its mind at the meeting of 6 February 2025.

On the facts of this case, I do not accept that those criticisms are well founded. As Mr Oldham KC submits, what is appropriate consultation depends on all the circumstances. In my judgment, apart from the point about NI changes, there was appropriate consultation on the facts of this case. Providers were engaged from early August 2024. It was known by all concerned that as part of the three-year cycle, the object of the exercise was to set a figure for the uplift in 2025/26. A template for information, prepared by CFW, was sent out to providers in early September 2025 and chasers sent some two weeks later. There was no complaint about lack of time. The responses that were received were taken into account in the modelling of Mr Davies. The figure thereby produced, namely 9%, was then discussed by Council officers but was not accepted. In my judgment that process (apart from the issue of NI changes) was fair.

I turn next to ground 3, the failure to take material considerations into account. To some extent, the issues which arise under this ground overlap with those under ground 1, and to the extent indicated above and for those reasons are also made out under ground 3. Additional points are made by the Claimants under ground 3 that material considerations were not taken into account. These include guidance in the Code to support employers to improve status, well-being and working conditions in social care to achieve parity across private and public sectors, and to ensure that providers are paying at least the RLW to care staff. It is further alleged that the Council failed to take into account the toolkit guidance for local authorities to attempt to agree fees, or the data produced as part of the interim exercise. Mr Purchase KC relied on irrationality under this ground, albeit that permission to proceed on a free-standing irrationality challenge has been refused.

Mr Oldham KC submits that as a rationality ground has been refused, then it cannot be relied upon under this ground either and so this ground must fail. Alternatively, he submits that RLW, NLW and inflation increases were taken into account in Mr Field’s report to CMT. There was no evidence then or now that wages could not be paid by the Claimants, who are ultimately responsible for pay and conditions. It is not in dispute that the fees set by the Council were not the only potential source of income for the Claimants but also included potentially what is known as top ups from others, including NHS funding.

In my judgment, it does not follow from the refusal of permission on a free-standing ground of irrationality that it cannot be relied upon in the context of material considerations. I accept that these matters in principle were material considerations, but I am not satisfied that there was a failure to take them into account, over and above my conclusions under ground 1 above. This must be judged in the context of a three-year cycle and an iterative process. In my judgment such matters were adequately referred to in the report of Mr Field. Just how much detail was needed was a matter of judgment, and Mr Purchase KC accepts that the report need not cover every detail. The details did not figure largely in the data gathering exercise.

Before me, some time was spent in the evidence and in submissions about the financial conditions of the Claimants. However, as Mr Purchase KC ultimately accepted that may not be relevant to the decision which the Council took, given that it acted, as it was entitled to, on the information then before it.

That leaves the application to add ground 4, a lack of authority to make the decision under challenge. The claim is dated 22 May 2025. Permission was given by order sated 29 December 2025 on all but a free-standing irrationality ground. The application to amend was made on 6 March 2026, that is some nine months after the claim and some three weeks before the substantive hearing. There is a dispute between the parties as to when the decision challenged was made. The Council says it was taken by CMT on 15 January 2025 and notified to the Claimants on 6 February 2025. The Claimants say it was made and/or notified on 27 February 2025.

Correspondence between the parties from the summer of 2025 raised the issue of when and how the challenged decision was taken. The Council stated in its summary grounds of resistance that the uplift of 6.1% was agreed by the CMT at the meeting on 15 January 2025. By application dated 4 September 2025 the Claimants applied for specific disclosure of documents concerning the making of the decision. The grounds included this:

On 5 September 2025 the Council wrote to confirm this position and stated that the decision fed into the annual budget which was approved by the Cabinet on 20 February 2025 and by the full Council on 6 March 2025.

On the 16 September 2025 the Claimants’ solicitors wrote requesting details of the lawful authority by which the decision was made. The next day the Council replied that there was no public record of the decision, which it repeated was made by the CMT on 15 January 2025. On 27 October 2025 the Claimants’ solicitors wrote referring to the application for specific disclosure and saying that if there was no record that the application would not be proceeded with. It was also pointed out that the Council was obliged under its Constitution to record the decision. No further reference was made until 17 February 2026, when the Claimants’ solicitors wrote to say that as the Council was aware, there was a concern about whether the challenged decision was properly made under delegated authority. The application to amend then ensued.

In considering that application I have regard to the overriding objective, the balance of fairness, and the need to proceed promptly with challenges to public decisions. The following factors seem to me to be particularly relevant. Whether the decision was made with authority is clearly an important issue not just for these parties but also in the public interest. The absence of a public record of the challenged decision, and the lack of clarity about who took the decision and when, may explain initial confusion. However, by 5 September 2025 at the latest the Council’s position was clear. The Claimants’ solicitors by the middle of that month were aware of the issue of lawful authority. They then seemed to focus on the issue of whether the decision was recorded. By their letter of 27 October 2025, it is clear that they were aware of the provisions of the Constitution. Yet no application was made until three weeks before the hearing. The decision has fed into the annual budget for the year in question which was approved by Cabinet and the full Council. The decision, as I have already found, was not made in accordance with statutory requirements. I have come to the conclusion, weighing all these factors into the balance, that it tips against allowing this very late amendment which could have been made in the autumn of 2025.

The next issue raised on behalf of the Council is that the claim was not made promptly or in any event within three months of when the decision was made. I have already mentioned the confusion relating to the timing of the decision. Mr Purchase KC points out that the only direct evidence of that is the hearsay evidence of Ms Hawkins but accepts that I can give it due weight. In the absence of a record of the decision, as there should have been, what scant contemporaneous documentary evidence there is not conclusive one way or the other. Mr Field says that the decision was made on 6 February 2025 and there is some support for this in the minutes. The Council accepts that the meeting on the 6 February 2025 was a notification of a firm decision and submits that that is when the decision was taken, albeit qualified with “at the latest.” On balance, in my judgment, the evidence as a whole shows that the final decision is likely to have been taken on the date when it was notified.

I accept that as this decision fed into the annual budget which fell to be approved within the next couple of months or so, the need to bring the claim promptly was high. However, in my judgment it would be too onerous to expect the Claimants to file the claim, in a matter which is not straightforward, in good time before the budget was set. In my judgement, that factor, together with understandable uncertainty in the absence of a proper record of when the decision was made, excuses some of the delay and amounts to sufficient reason to extend time. I accept that it is important for a decision affecting the budget to be brought promptly, but so too is it important to decide if a decision has been lawfully made, in circumstances where the Council is denying that it must satisfy statutory requirements.

Once the claim was filed, the Claimants sought agreement from the Council that the claim should be expedited but this was not forthcoming. On balance, in my judgment extending the time limit by some 3 weeks will not cause substantial hardship or be detrimental to good administration. If anything, by making a determination that the Council are bound to comply with the statutory requirement, it is likely to promote good administration. It is fair and proportionate to extend time, pursuant to CPR Part 3(1)(2)(a) for bringing the claim to the time when it was filed. The Claimants do not accept that lack of promptitude can be revisited, this not having been dealt with at permission stage, but submit that it is not appropriate to refuse relief under section 31(6) of the Supreme Court Act 1981on the basis of undue delay. I accept that submission.

The next point taken by Mr Oldham KC is that judicial review is a remedy of last resort, and the Claimants have alternative remedies of arbitration under clause 20 of the agreements and for breach of contract, by making representations to NOCS, and/or taking advantage of the Council’s open door policy or requesting a review when needs have intensified as explained in the witness statement of Ms Hawkins.

The law on this point has recently been reviewed by the Supreme Court in Re an Application for Judicial Review [2024] UKSC 31. At [50-51], the Court said this:

There is no appeal or complaint or review procedure in the present case. I do not consider that any of the alternatives are conveniently or effectively available so as to justify refusal of relief in the present case. Arbitration or breach of contract proceedings are likely to have been lengthy and may well not have dealt fully with the public law element where the Council was denying that it had to comply with statutory requirements. Representations to the NOCS or the Council are unlikely to have ensured compliance.

The next point taken by Mr Oldham KC is that it is highly likely that the outcome for the Claimants would not have been substantially different had the conduct complained of not occurred, so that relief must be refused under section 31(2A) of the Senior Courts Act 1981. I do not accept that submission. In particular, had NI been properly taken into account the outcome may well have been different. The fact that the decision was subsequently approved by the Cabinet and by the full Council, without further inquiry into the details or the lawfulness of the decision, does not justify such a conclusion.

That leaves the question of remedy. I have considered whether it is necessary to quash the challenged decision because it is unlawful, especially in light of the Council’s refusal to accept that it had to comply with the statutory requirements. A declaration does not have coercive effect, but public bodies are expected to comply with the law as declared by the court (see Craig v HM Advocate [2022] UKSC 6). In my judgment it is appropriate to grant a declaration that the decision is unlawful. That means it must be taken again. It is not desirable, in my judgment, that I should set out here the matters which the Council should take into account in re-determining the appropriate uplift for 2025/25. The Council is under a statutory duty to demonstrate that it fully understands the cost of care, must collaborate with the providers to understand fair and sustainable costs, and must be transparent in that process.

I am grateful to counsel for their assistance. The parties should file, within 14 days of hand down of this judgment, a draft order agreed as far as possible, including suitably worded declarations to reflect this judgment. Any consequential matters not agreed should be the subject of written submissions, to be filed at the same time, which will then be determined on the basis of those submissions.