Category Archives: Contracting, commissioning and market failure

Top Up trials – will somebody actually use their legal remedies, please?

The news this week has been featuring sums paid for care home care being characterised by councils as top-ups in situations where there is probably no right to treat them as such, or where they have been properly regarded as lawful top-ups but the charging of them has been beset by maladministration.

The Local Government Ombudsman issued a report highlighting all sorts of shenanigans by unnamed authorities and it can only be a matter of time until PPI recovery sorts of services set themselves up to reclaim the dosh on behalf of all the relatives who shouldn’t have had to pay these sums! Click here for the 2015 LGO top ups report

However, the online comments back by care home providers and social services leaders have been to the effect that it’s the government’s fault for underfunding social care.

I would like to be more explicit, if I may – from the perspective of the service user’s and their relatives’ legal rights under the Care Act!

A council’s characterising an element of the charge for care home services, as a top up, so that the relative pays that sum, on top of the basic charge for the council commissioned package – or getting a service user to promise to repay something called a top up, in the context of a deferred payment agreement, when there is no legal right to do so, constitutes the following legal wrongdoing:

  • If done innocently, because of top down ignorance of the legal framework on the part of the council’s staff – then that’s maladminstration, based on lack of awareness something that is essential to the proper discharge of the care home placement function. The remedy for the injustice sustained by that maladministration is via the local government ombudsman – where it appears a lot of people have been going recently, to get their money back.
  • If done with an awareness that the so-called going rate for care of the relevant degree and nature, in the local area, is not in fact even feasibly sufficient to pay for the care, then – potentially – misfeasance in public office – a wrong that should only have to be alleged very rarely indeed, against council officers, if the council’s senior management is competently supervising its staff. The remedy is a claim for damages against the officers and even sometimes the elected Members if they were made aware of the facts, in person, for which damages, no-one can be indemnified by their council, so exceptional and shocking is the wrongdoing regarded as being.

The best way of telling the Members, as a whole, what is going on, is to write a one paragraph letter with your evidence, to the council’s health and wellbeing Board and the council’s Monitoring Officer, usually the head lawyer, who owes independent governance duties under the 1989 Local Government and Housing Act.

  • If this practice is done or colluded in by a public authority Deputy managing the affairs of a self-funding incapacitated person, whilst being employed by the same council charging the top-up, there’s probably an inexcusable conflict of interest and a breach of fiduciary duty going on – the deputy may not know that the council’s rate is not the going rate, but a Deputy should know enough law to be able to check and once dubious, should not be helping the council stay financially afloat on the back of the client’s equity.  The remedy is an application to the Court of Protection to get the public authority deputy removed, and a claim for restitution of any money actually paid thus far, under a mistake of law, and rectification of the Deferred Payment agreement.

In all three cases, the practice is unlawful, in a public law sense, because of the Choice of Accommodation provisions in the Care Act and the content of the guidance in the statutory Care Act guidance. The remedy is judicial review proceedings for failure to abide by the law, and to accord Choice of Accommodation rights, in the course of which proceedings, the repayment can also be claimed.

Councils are only obliged to pay for appropriate care and accommodation, under the Care Act, and people can choose to pay for better than merely appropriate packages, if they or their relatives can afford it, even though still having council-funded services, rather than privately contracted for services – but councils do have to figure out what the going rate IS, for that concept, rationally, and only treat as a top up, fees that are above that rate.

It has always been the law that not all homes that are registered as fit, are necessarily suitable for person’s particular needs; and councils have to be prepared to say ‘Choose from these homes, all of which are open, but remember we only think that THESE ones are suitable for your relative.’

What councils have been pulled up for is telling people to go choose, when in fact on the day in question there is NO SINGLE AVAILABLE APPROPRIATE CARE HOME PLACE TO BE HAD, at the rate that the council asserts to the world is an evidence based going rate for a basic standard care home placment that will do the job adequately for the person in question. In that case, the law has always been that the council must find and pay for a bed, in full, unless or until it can move the needy person to a cheaper bed that is still appropriate.

What about care homes charging top ups that the council doesn’t know about?

Any care home doing business with a council should have a written contract for the package, made up of the provision of accommodation and the provision of the necessary care to deliver the person’s care plan.

The care home can set whatever price it likes for that package, but the council need only pay what it believes standard appropriate care together with accommodation should cost. It may have tendered for a fixed price, for instance, to get a feel for whether the market would provide enough placements at the fee asked for; and homes may have agreed to charge council clients ONLY that fixed price; or may have agreed to treat the fixed price as the council’s contribution to the fee, whilst transparently charging top ups for admission of council clients – thereby taking the commercial risk that there will not be enough demand from people with either sufficient equity or well-off enough relatives, to keep the home viably full.

Councils have a right to refuse to put a person in a care home where a top up is needed, if the topper upper is not apparently good for the money, for the foreseeable future, but they can’t require homes NOT to charge top ups if the home believes from its low vacancy rates that it is doing more than providing merely appropriate packages or clearly offers rooms (or services) of differing standards, albeit all are adequate.

What a care home is NOT legally able to do is to charge relatives, or the service user, privately, around the side of the council contract, as it were, any sum on top of what has been agreed in the contract as constituting the package contents – the accommodation and the care. That would be double charging, and fraudulent. So, in a basic room, there can be no top up in play. In a room that is agreed to attract a top up, there can be no EXTRA top up charged, IN the contract, or outside it. The only exception is a sum agreed with the service user or relatives for a purely personal extra, such as hairdressing, etc.

Who’s driving this within councils? Commissioners, I believe, under a duty to contract for quality, sustainability and diversity, and to keep the market functioning….

Some councils are using ‘dynamic purchasing systems’ whereby homecare service users get offered an indicative personal budget based on a RAS, but where the figure gets reduced after the person’s care needs have gone out for local bidding. In these areas, for those needing care home care, it’s done differently and they are not being given a personal budget by reference to a RAS. Pre-qualified providers (in terms of quality) all bid to be given upcoming placements, after Care Act care planning has commenced, and the council running the system says then that the cheapest willing provider’s offer constitutes the evidence of the going rate, and that any other placement offered and preferred by the person or their family, thereby constitutes a choice of more expensive care than the authority’s legal funding obligation, by way of the personal budget. I can’t wait for someone to challenge this as the most obvious dilution of what Choice of Accommodation Rights used to mean – when the home’s fees were compared to the usual rate, not that of the cheapest willing provider! The guidance may well say that councils MUST be able to show ONE home at the rate offered as the Personal Budget but SHOULD be able to show more – but what these systems mean, to my mind, is that no filter for person centred suitability is being made by way of care planning staff, and the person or the family is just being made to pay a top up, in most cases, to access any choice at all,  by dint of market forces, and how desperate care homes are, currently, to remain as full as possible.

What does the sector leadership say?

Ray James, president of the Association of Directors of Adult Social Services, said there were “probably colleagues in local authorities feeling between a rock and a hard place” as more people were needing care in the face of funding cuts.

“Even where that is the case, we should always make sure that individuals and their families are clear about the information that they need,” he apparently said.

When you actually read what he has said, he’s not even saying that councils should tell the legal truth or give clear answers about the evidence basis for their ‘sufficient, timely and transparent’ rate for the person’s personal budget. He may be being misquoted, but if you read it again, you will see that it’s people – the service users and their relatives – who should apparently be being supported to be ‘clear’ about the information they are asking for.

How much longer is this double-speak going to be allowed to go on for?  If social care is underfunded so massively, why don’t local councils simply say “We can’t do it for this amount of money”, and make it a political issue? The only reason I can think of is that the Local Government Association (a limited company, part funded by the Department of Health by way of a memorandum of understanding for its Care Act work) and ADASS (a charity, in part grant funded by the Department of Health) and SCIE (a charity, almost wholly grant funded by the Department of Health) have to lobby the government, for more money, within in the above-mentioned ‘purse strings control’ context – and within a political context where party politics, at local, as well as at central government levels, must inevitably constrain what is really being said behind closed doors – all under the auspices of ‘stakeholder consultation’.

I would make a plea to all political leaders, but particularly to Jeremy Corbyn – do you have the integrity to be honest about that, please? That would be a real vote winner, I feel!




Judicial reviews of fees discussions – are Members and commissioners reading them?

It would be almost impossible to work in the adult social care sector and not have heard about the roll call of wins and losses in the judicial review courts as between provider associations and councils.


And yet my team trainers keep hearing from councils the Members’ position as follows: ‘It doesn’t matter what the law says, or how many providers tell us they won’t do business with us – we haven’t got the money’.

We are thinking that someone needs to explain to elected councillors and Head Finance officers that they work under the rule of law in this country. The nature of the enforceable ‘corporate’ duty to meet needs regardless of resources is one that means that reserves have to be spent. Knowingly disobeying clear legal principle amounts to misfeasance in public office, for which even Members can be personally liable in damages. So this kind of legal risk does have to be managed!

The score in these cases is about 9 wins to providers, to 4 wins by councils, at the last count.

The claim is always based on failure to have proper regard to the providers’ representations about what the price of care services should be, due to the cost to them of delivering the services properly.

Councils contend that they have no more money; that we’re into deflation, now and that the contract they’ve imposed on providers allows for unilateral determination by the council anyway; that it’s easy to reconfigure the content of the provider’s plan because of outcomes and personalisation leading to greater customer satisfaction anyway, etc etc., and that providers can’t expect proper consultation if they won’t do open book accounting and share their management accounts with accountants in the council.

Providers point to the National Minimum Wage, the developing case law on sleep ins; the new employer pension oblgations, and the counting of working time, the impact of the new standards from CQC and the management implications for the DoLS/Cheshire West saga.

What these disputes are really all about is profit/margin/reinvestment in charities’ reserves – councils think that they can tell providers how well their businesses should do, and providers think that the fact that the council is starved of money by central government – and social services is starved within the overall division of resources within the council, should not make any difference. I tend to favour the providers’ approach in legal terms, because what gets lost in these disputes is the notion of the eligible client’s public law rights to have their needs met in the first place, and to be met suitably and appropriately. I lose sympathy with providers, however, when they fail to have the courage of their convictions and just capitulate in the end. They do not have to bid, or sign up to contracts that will cripple them, and they cannot form a cartel but they can all decide individually that Hell No, They just won’t Go that Low – if they appreciate that they are responsible for admission decisions and their own business model.

The Care Act makes the client’s rights clearer: every person must now have a statutory care plan, as a result of a Care Act assessment, and the plan must indicate which needs are eligible (and therefore which are not) and how the eligible and not informally met ones are to be met through a personal budget or direct payment. The amount of the budget is the council’s rational, transparent estimate of how much the council needs to spend to meet the needs, and that IS the cost of the care – either as provided by the council, or if commissioned, the fee charged by the provider, if the budget is for a traditional managed commissioned package, in a care home, for instance. It is constant capitulation by providers that drives the market rate down, and down to the point where it affects sustainability and quality of an appropriately sized market. Chapter 4 of the statutory guidance contends for a better relationship with contractors, no bullying, and a council’s looking to its own procurement and commissioning behaviour – not a minute too soon, in my view. But providers may not even be reading that chapter…if they’ve had no Care Act training. Ho hum.

Where councils have won, it is because of over-supply in the area, which has meant that in order to get business at all, homes have to make a commercial choice to go for a lower price than they want. That is how competition works. If the council signals for instance that it will put its resources into Extra Care settings, then home owners need to think about deregistering and diversifying: any business in this economic climate simply must get ahead of a trend if it expects to remain viable.

When councils have won, it is because care home owners have capitulated ultimately because new businesses have been formed to provide dom care at lower rate, or because the willingness of 70% of the market is all the council needs in terms of anticipated placements in the course of the fee setting period.

Councils have been successfully challenged for

a) thinking only of their internal budget, and ignoring what the providers had to say;

b) freezing fees without any prior consultation at all;

c) agreeing a cost of care exercise and then not applying the scheme that has been adopted;

d) getting the figures mathematically wrong regarding staff resident ratios on the assumptions of the council itself, by reason of knowing absolutely nothing about how care businesses actually work;

e) simply taking a benchmarking approach and looking at other surrounding councils’ fee rates where the evidence was that the others were just more effective at bullying providers;

f) taking CHC payments and top ups paid for wants and not needs, into account as part of the income of the home;

g) apparently ignoring the detail of a report sent in by providers by not addressing the points at all.


In the Torbay case in 2014, (currently under appeal, as far as we know) the judge said this:

“…the intensity and nature of the inquiry which is required of the local authority is primarily a matter for the decision maker. But if the local authority chooses to adopt a mathematical model, some scrutiny of this is available on general public law principles. Those principles require.., that wherever possible the merits of the decision remain with the decision maker. But here the merits of the decision are so fundamentally flawed by adopting the unnecessary weighting which no-one can explain as being necessary that the decision to employ this falls fairly and squarely within the scope of judicial review as being a decision which no reasonable decision taker properly directing themselves on the facts could take.

Provider Associations out there: get reading, and get networking, would be my suggestion. It is not anti-competitive simply to care about your own residents and staff to the point where you put your foot down and just say no.