‘2. Where a local authority have … decided that accommodation should be provided pursuant tosection 21 of the National Assistance Act 1948 (provision of residential accommodation), the local authority shall, subject to paragraph 3 of these Directions, make arrangements for accommodation pursuant to section 21 for that person at the place of his choice within the United Kingdom (in these Directions called “preferred accommodation”) if he has indicated that he wishes to be accommodated in preferred accommodation. ‘3. …the local authority shall only be required to make or continue to make arrangements for a person to be accommodated in his preferred accommodation if – (a) the preferred accommodation appears to the authority to be suitable in relation to his needs as assessed by them; (b) the cost of making arrangements for him at his preferred accommodation would not require the authority to pay more than they would usually expect to pay having regard to his assessed needs; (c) the preferred accommodation is available; (d) the persons in charge of the preferred accommodation provide it subject to the authority’s terms and conditions, having regard to the nature of the accommodation, for providing accommodation for such a person underPart III of the National Assistance Act 1948 .’
‘… Parliament by section 7(1) has required authorities to follow the path charted by the Secretary of State’s guidance, with liberty to deviate from it where the local authority judges on admissible grounds that there is good reason to do so, but without freedom to take a substantially different course.’
‘2.5.4 …[The usual cost] should be set by councils at the start of a financial or other planning period, or in response to significant changes in the cost of providing care, to be sufficient to meet the assessed care needs of supported residents in residential accommodation… In setting and reviewing their costs, councils should have due regard to the actual costs of providing care and other local factors. Councils should also have due regard to Best Value requirements under theLocal Government Act 1999 .’ ‘3.3 When setting its usual cost(s) a council should be able to demonstrate that this cost is sufficient to allow it to meet assessed care needs and to provide residents with the level of care services that they could reasonably expect to receive if the possibility of resident and third party contributions did not exist.’
“15. In support of her submission that the respondent did not have "due regard", Ms Mountfield referred us to a number of authorities in which the nature of the obligation to have "due regard" to a particular matter or matters was considered in other statutory contexts, including thePublic Libraries and Museums Act 1964 , theDisability Discrimination Act 1995 , and theEquality Act 2010 . 16. While the court's conclusions as to what would constitute a sufficient inquiry for the purpose of having "due regard" to the relevant considerations in those cases, were entirely appropriate in those statutory contexts. It is not appropriate to "read across" and to seek to reply to the circumstances of this case. Thus, for example, the proposition that there should be a "structured attempt to focus upon the details of equality issues", see paragraph 61 of Bracking v Secretary of State for Work and Pensions[2013] EWCA Civ 1345 is readily understandable if the decision taker is having to demonstrate compliance with the statutory duty to have due regard to various factors as part of the public sector equality duty imposed bysection 149 of the Equality Act 2010 . It does not follow that it is necessary for a local authority to follow what Ms Mountfield described as a "structural approach" when it is following the guidance in the Circular to have "due regard to the actual costs of care" for the purpose of setting and reviewing its "usual costs". 17. The Circular contains guidance. It is not to be equated with a statutory duty imposed by an enactment and as would be expected in the case of guidance, it does not prescribe any particular methodology, whether "structured" or otherwise which local authorities must adopt in order to have had "due regard" to the actual costs of providing care. 18. The claimant’s submission that as a matter of law a "structured" approach (whatever that may mean, see below) is required, treats a single sentence in guidance in a circular as though it was a duty imposed by primary legislation. When we asked Ms Mountfield what the respondent had failed to do which it was under a duty to do as a matter of law, her reply was that the respondent had not focused on the question of actual cost and had failed to make a "sufficient inquiry" contrary to the well-established principle that a decision-maker must "ask himself the right question and take reasonable steps to acquaint himself with the relevant information to enable him to answer it correctly", see the Secretary of State for Education v Tameside[1977] AC 1014 , per Lord Diplock at page 1065.”
“20.The submission that there had been insufficient inquiry was coupled with a submission that the underlying fault in the respondent's approach was that it did not focus on ascertaining the actual cost of providing care because it never asked the correct question of the appellants: "What are your actual costs of providing care?", and instead asked them the wrong question: "Why are you not able to provide care at the lower fee levels being paid by neighbouring local authorities in the North West?". 21. There are two answers to that submission: first, it does not accord with the judge's factual conclusions in paragraphs 39 to 44 of the judgment as to what the respondent actually did against which there was no challenge in the grounds of appeal. Secondly, in any event, the difference between the two questions is a matter of semantics rather than substance. Looking at these two answers in turn, I will not repeat the details of the judge's factual findings which can be found in paragraphs 39 to 44 of his judgment. In summary, the judge found that the respondent had: (i) considered to what extent its existing rates of payment were leading to overcapacity in the market in its area; (ii) compared its own rates with those being paid by other local authorities in the region and considered whether there was anything to explain why the cost of providing care in Northumberland should be materially higher than elsewhere in the region; (iii) taken account of the position of those providers with whom it was able to reach agreement and the evidence that they had provided as to how they had determined that the proposed rates would enable them to meet the actual costs of care; (iv) sought information from the appellant and when management accounts were provided by one of the members of CNEN, Mr Macado(?), who had sought to explain why the provision of care in Northumberland costs more than elsewhere, carefully considered those accounts; (v) explained why it did not think it appropriate to accede to the appellant's request to use the PWC model before calculating its "usual costs"”
“In reality, the members of CNEN, save for Mr McArdle, were unwilling to disclose their management accounts because at that stage and, indeed, throughout the negotiations prior to the claim for judicial review, they were maintaining that the respondent should use the PWC model to ascertain the costs of care, see paragraph 66 of Mr Hunter's witness statement.” (i) considered to what extent its existing rates of payment were leading to overcapacity in the market in its area; (ii) compared its own rates with those being paid by other local authorities in the region and considered whether there was anything to explain why the cost of providing care in Northumberland should be materially higher than elsewhere in the region; (iii) taken account of the position of those providers with whom it was able to reach agreement and the evidence that they had provided as to how they had determined that the proposed rates would enable them to meet the actual costs of care; (iv) sought information from the appellant and when management accounts were provided by one of the members of CNEN, Mr Macado(?), who had sought to explain why the provision of care in Northumberland costs more than elsewhere, carefully considered those accounts; (v) explained why it did not think it appropriate to accede to the appellant's request to use the PWC model before calculating its "usual costs"”
“As I have already indicated, the decisions to which we were referred in very different statutory contexts do not support the proposition that such an analysis, or any particular form of analysis, is required in the present context. Nevertheless, we sought to explore the matter further and asked Ms Mountfield what the respondent should have done in order to carry out a "structured" analysis, given that the appellant accepted that local authorities are not required to use the PWC or any other form of model.”
“Each of these cases turn very much upon its own particular facts, thus in Sefton, the local authority had imposed a freeze on fees without any prior consultation with the care home providers. In EMCARE, the claimant had sent a report prepared by Laing & Buisson (consultants with expertise in ascertaining the cost of care) to the local authority but the local authority had made no attempt to respond to the detailed points that had been made in the report. In Newcastle the local authority had attempted to use the PWC model as a means to ascertain the actual cost of care but had fed inaccurate figures into the model. In Redcar the judge concluded that the local authority had simply "bench marked", ie looked at the fees paid by neighbouring authorities and said that while such information was no doubt useful, it had to be combined with some information which specifically related to the local authority's own area. In South Tyneside the judge distinguished the present case because the local authority in that case had not relied on its own judgment and experience but had instead undertaken what the judge described as "an arithmetical exercise", see paragraph 61 of his judgment, in which the authority had made a number of significant errors, see paragraph 75 of the judgment in that case.”
“A further point made by Mr Purchase is that, notwithstanding they did not complete the spreadsheets, the Claimants clearly put the Council on notice that the spreadsheet was not capable of capturing information on return of capital. He submitted that the Council could and should have written to providers at that point to see if there were other capital costs which they had not included on the spreadsheet. He submitted this was so even if the Council thought the spreadsheet was adequate to capture the information, since three of the spreadsheets returned to the Council contained no financing or other capital costs at all (References 3, 5 and 7 at B2, pages 539, 547, and 559). It was not in providers' interest to exclude such information and Mr Purchase submitted this supports the Claimants' arguments that the providers cannot have understood that capital cost information was being sought. Taken with the Claimants' complaints that the spreadsheets would not capture such costs, the Council was, submitted Mr Purchase, plainly on notice that the spreadsheet was, or might be, inadequate and a reasonable council would have checked the position. They could have written to check whether providers had put cost of capital in the spreadsheets and if so, what capital cost it was, and if not, to get such information.”
“Whilst Paragraph 3.3 of the Circular does not expressly mention "subsidisation", in my judgment it quite clearly requires a calculation to be done on the basis that the possibility of resident and third party contributions should be excluded. In my judgment on the facts of this case, where privately paying clients pay significantly more that the Council rate, taking those fees into account on a profit analysis is contrary to the guidance in the Circular, and results in a skewed calculation which does not pay due regard to actual costs. It follows in my judgment that this is a further significant error in the decision making process, the failure properly to pay due regard to actual costs and to disregard the effect of any payments from other sources such as privately paying residents.”
“30. For the reasons set out in the two reports of Mr Main [B/2/23-78; B/3/79-91], it is submitted that the Defendant’s calculations of the number of staff hours required per resident per week are simply wrong, on the basis of the Defendant’s own assumptions. 31. The Defendant’s assumptions comprise set ratios of the numbers of staff required to be present at a care home per resident during the ‘day’ and during the ‘night’, with a measure of overlap for staff handovers. They are as follows [C(2)/28/356]: (1) Standard nursing – nurses 1 member of staff is needed per 20 residents during the day (0800 – 2240) 1 member of staff is needed per 20 residents during the night (2200 – 0840) (2) Standard nursing – care assistants 1 member of staff is needed per 6 residents during the day (0800 – 2212) 1 member of staff is needed per 12 residents during the night (2200 – 0824) (3) Standard plus nursing – nurses 1 member of staff is needed per 18 residents during the day (0800 – 2236) 1 member of staff is needed per 18 residents during the night (2200 – 0836) (4) Standard plus nursing – care assistants 1 member of staff is needed per 5 residents during the day (0800 – 2210) 1 member of staff is needed per 10 residents during the night (2200 – 0820) (5) Standard residential – care assistants 1 member of staff is needed per 8 residents during the day (0800 – 2216) 1 member of staff is needed per 12 residents during the night (2200 – 0810) (6) Standard plus residential – care assistants 1 member of staff is needed per 5 residents during the day (0800 – 2210) 1 member of staff is needed per 10 residents during the day (2200 – 0820) 32. On the basis of these assumptions, the Defendant then purported to calculate the number of staff hours required per resident per week. It then multiplied that figure by a set hourly rate of pay, so as to produce the staff cost per resident per week for each of the above categories [C(2)/28/356]. 33. This ought to have been a straightforward arithmetical exercise. Take, for example, the assumptions applied to ‘Standard plus nursing – care assistants’. The calculation runs as follows. The Defendant’s staffing assumptions are: • 1 member of staff is needed per 5 residents during the day (0800 – 2210) • 1 member of staff is needed per 10 residents during the night (2200 – 0820) This calculation assumes a care home with a capacity of 50 beds (as the Defendant did when setting the Fees [C(2)21/230]) The size of the home should not and does not make any difference to the number of staff hours required per resident, because the ratios apply consistently to homes of all sizes. However, for the sake of convenience, this example proceeds on the Defendant’s assumption of a care home with 50 beds. . The day period This covers 14 hours and 10 minutes, i.e. 14.17 hours. During that period, 1 care assistant is required per 5 residents, so 10 care assistants will be required for 50 residents. This means that the care assistant hours required for 50 residents during the day period is 10 x 14.17 = 141.7 hours. The night period This covers 10 hours and 20 minutes, i.e. 10.33 hours. During that period, 1 care assistant is required per 10 residents, so 5 care assistants will be required for 50 residents. This means that the care assistant hours required for 50 residents during the night period is 5 x 10.33 = 51.65 hours. Totals Accordingly, over a single day, the total care assistant hours required for 50 residents is 141.7 + 51.65 = 193.4 hours. Over a week, the total hours required for 50 residents is 193.4 x 7 = 1353.8 hours. So the number of care assistant hours per resident per week is 1353.8/50 = 27.1 hours. 34. This figure is confirmed in appendix 2 of Mr Main’s first report [B/2/42] and – like Mr Main’s other figures – it is not challenged by the Defendant. It is irrefutable, based on pure arithmetical logic. Accordingly, although there may be different ways of performing the calculation, the result will always be the same. If a different methodology produces a different result, the methodology must be wrong. 35. For example, the same answer is reached if one takes the more direct approach of simply working out the number of care assistant hours required per single resident. The mathematics runs as follows: During the day period of 14.17 hours, the care assistant hours required per resident are 14.17 x 1/5 = 2.834 hours. During the night period of 10.33 hours, the care assistant hours required per resident are 10.33 x 1/10 = 1.033 hours. Accordingly, over a single day, the total care assistant hours required for a single resident are 3.867 hours. Over a week, the hours required per resident are 3.867 x 7 = 27.1 hours. This is the application of the formula set out in paragraph 2.6 of Mr Main’s supplementary report [B/3/83]. 36. However, the Defendant has calculated that only 24.1 hours of care assistant time is required per resident per week in a standard plus nursing home. That is a significant difference of 3 hours per resident per week, at a cost of£24.33 per resident per week. Extrapolated into a 50-bed care home over a year, this is a massive annual shortfall of£63,258 . 37. As noted above, the Defendant has rightly not challenged the accuracy or propriety of the Claimant’s calculations or results. It follows that the Defendant’s methods must be logically flawed. It is submitted that it is quite wrong to present this as a matter of ‘opinion’ on which different people could reach different conclusions. Using the Defendant’s own set assumptions about staff hours and staff ratios, there can only be one correct answer to the question as to how many staff hours are needed per resident. (There may be scope for judgment or discretion in setting the assumptions in the first place, but the Claimant does not challenge the assumptions; there is no scope for judgment or discretion in extrapolating those assumptions to produce weekly staff hours per resident.) 38. In any event, it is submitted that the Defendant’s approach is clearly flawed on its face. It is submitted that it is both obscure and overcomplicated. Further, the Defendant’s explanation for its conclusions has changed over time. 39. At first, the Defendant set out its calculations in Appendix 2 to the Report of5 February 2014 [B/6/267-273]. It is respectfully submitted that these are baffling. Taking the ‘Standard plus nursing – care assistants’ example [B/6/271], the Defendant purports to calculate the ‘number of Bed Hours covered per day’ by a single member of staff, which results in a figure of 170. This is plainly nonsense: quite apart from the fact that ‘Bed Hours’ is a completely obscure concept, a single member of staff could not possibly do 170 hours in a single day. The Defendant then purports to calculate the ‘Number of Beds Covered per staff Hour’, but this is illogical because the Defendant does not pay fees per member of staff; it pays fees per resident. In addition, it is unreal to think of members of staff actually tending to a given number of ‘beds’ every hour: caring is not so rigid or formulaic – the staff ratios are there to ensure cover as and when it is needed, not to be apportioned into hourly rations, and staff certainly do not spend all of their time at individual ‘beds’. 40. In any event, the Defendant now seeks to explain the positon by putting forward a complex ‘formula’ which it claims was used to calculate staff hours: see paragraphs 13-15 of the Detailed Grounds [A/7/45-46]. The formula is as follows: F _______________________________ (AxD)/(A+B) + (B-E)/(A+B) where: A = daytime hours 0800-2200 plus handover time, B = night hours plus handover, D = beds covered per staff member in daytime, E = beds covered per staff member at night and F = total hours paid per week (7 x 24 + handover time).”
“17. While the court's conclusions as to what would constitute a sufficient inquiry for the purpose of having "due regard" to the relevant considerations in those cases, were entirely appropriate in those statutory contexts. It is not appropriate to "read across" and to seek to reply to the circumstances of this case. Thus, for example, the proposition that there should be a "structured attempt to focus upon the details of equality issues", see paragraph 61 of Bracking v Secretary of State for Work and Pensions[2013] EWCA Civ 1345 is readily understandable if the decision taker is having to demonstrate compliance with the statutory duty to have due regard to various factors as part of the public sector equality duty imposed bysection 149 of the Equality Act 2010 . It does not follow that it is necessary for a local authority to follow what Ms Mountfield described as a "structural approach" when it is following the guidance in the Circular to have "due regard to the actual costs of care" for the purpose of setting and reviewing its "usual costs". 21. There are two answers to that submission: first, it does not accord with the judge's factual conclusions in paragraphs 39 to 44 of the judgment as to what the respondent actually did against which there was no challenge in the grounds of appeal. Secondly, in any event, the difference between the two questions is a matter of semantics rather than substance. Looking at these two answers in turn, I will not repeat the details of the judge's factual findings which can be found in paragraphs 39 to 44 of his judgment. In summary, the judge found that the respondent had: (i) considered to what extent its existing rates of payment were leading to overcapacity in the market in its area; (ii) compared its own rates with those being paid by other local authorities in the region and considered whether there was anything to explain why the cost of providing care in Northumberland should be materially higher than elsewhere in the region; (iii) taken account of the position of those providers with whom it was able to reach agreement and the evidence that they had provided as to how they had determined that the proposed rates would enable them to meet the actual costs of care; (iv) sought information from the appellant and when management accounts were provided by one of the members of CNEN, Mr Macado(?), who had sought to explain why the provision of care in Northumberland costs more than elsewhere, carefully considered those accounts; (v) explained why it did not think it appropriate to accede to the appellant's request to use the PWC model before calculating its "usual costs". 22. On the basis of those factual findings as to the steps that were taken by the respondent to acquaint itself with the relevant information, the judge's conclusion that the respondent did have "due regard" to the actual costs of care as required by the Circular was plainly correct. In reaching that conclusion, the judge followed the approach adopted by Singh J in R (on the application of South West Care Homes Ltd) v Devon County Council[2012] EWHC 1867 (Admin) , see paragraph 37 of the judgment below. 32.. I confess that I found the appellant's answer to this question less than clear unless it was in substance a submission that the local authority must produce some form of arithmetical calculation setting out the figures attributed to the individual cost elements of providing care, such as: occupancy, staff, operating costs, management and administration, capital values per bed and financing costs, to take the list of cost elements in the PWC model as an example. If that was the appellant's submission, then I do not accept it. Carrying out such an arithmetical calculation is one way of having "due regard for the actual costs of providing care" but it is not the only legally permissible way. 34. Each of these cases turn very much upon its own particular facts, thus in Sefton, the local authority had imposed a freeze on fees without any prior consultation with the care home providers. In EMCARE, the claimant had sent a report prepared by Laing & Buisson (consultants with expertise in ascertaining the cost of care) to the local authority but the local authority had made no attempt to respond to the detailed points that had been made in the report. In Newcastle the local authority had attempted to use the PWC model as a means to ascertain the actual cost of care but had fed inaccurate figures into the model. In Redcar the judge concluded that the local authority had simply "bench marked", ie looked at the fees paid by neighbouring authorities and said that while such information was no doubt useful, it had to be combined with some information which specifically related to the local authority's own area. In South Tyneside the judge distinguished the present case because the local authority in that case had not relied on its own judgment and experience but had instead undertaken what the judge described as "an arithmetical exercise", see paragraph 61 of his judgment, in which the authority had made a number of significant errors, see paragraph 75 of the judgment in that case.”
“It is well settled that ‘the grant or refusal of the remedy sought by way of judicial review is, in the ultimate analysis, discretionary’ (Lord Roskill in Inland Revenue Commissioners v National Federation of Self-Employed and Small Businesses Ltd[1982] AC 617 , 656.) But the discretion must be exercised judicially and in most cases in which a decision has been found to be flawed, it would not be a proper exercise of the discretion to refuse to quash it. So in Berkeley v Secretary of State for the Environment[2001] 2 AC 603 it was conceded, and the House decided, that the Court of Appeal had been wrong to refuse to quash a planning permission granted without the impact assessment required by the EIA directive on the ground only that the outcome was bound to have been the same. The relevant domestic legislation provided that in such a case the grant of permission was to be treated as not within the powers of theTown and Country Planning Act 1990 . Lord Bingham of Cornhill said (at p.608) that even in a domestic context, the discretion of the court to do other than quash the relevant order ‘where such excessive exercise of power is shown’ is very narrow. The Treaty obligation to give effect to European law reinforces this conclusion. I made similar observations at p. 616. But I agree with the observation of Carnwath LJ in Bown v Secretary of State for Transport, Local Government and the Regions [2004] Env LR 509, 526, that the speeches in Berkeley need to be read in context. Both the nature of the flaw in the decision and the ground for exercise of the discretion have to be considered. In Berkeley, the flaw was the complete absence of an EIA and the sole ground for the exercise of the discretion was that the result was bound to have been the same.”