Supreme Court rejects appeal over direct payment to disabled man

In a landmark community care case the Supreme Court has rejected a challenge to a local authority’s calculation of the direct payment required to meet the assessed eligible needs of a profoundly disabled man.

In R (on the application of KM) (by his mother and litigation friend JM) (FC) v Cambridgeshire County Council [2012] UKSC 23, 26-year-old KM was born without eyes and has a range of serious mental and physical medical conditions.

KM lives with his mother, brother and sister and is intelligent and articulate, with achievements including passes at GCSE in French and music. But he needs substantial support for daily living.

Cambridgeshire applied its Resource Allocation System (RAS), which calculates the payment due based on the average funding for people with specific needs in the local authority area, as well as an Upper Banding Calculator it uses in serious cases.

The county council concluded that the payment in discharge of its duties under s. 2 of the Chronically Sick and Disabled Persons Act 1970 should be £84,678 a year. This was only just over half the amount an independent social worker suggested was needed.

KM challenged Cambridgeshire’s decision on the basis that the council had failed to give adequate reasons and/or that its decision was irrational in that the amount was manifestly insufficient to meet his needs.

The Supreme Court pointed out that it did not reconsider the House of Lords ruling in R v Gloucestershire County Council, Ex Parte Barry [1997] AC 584, which sets out the extent to which local authorities can take their resources into account when meeting assessed needs for social care under s. 2 of the 1970 Act.

The decision not to reconsider Barry was based on the fact that Cambridgeshire had not relied on resource constraints to justify its decision.

The Supreme Court unanimously dismissed KM’s appeal in a judgment handed down today (31 May).

Giving the lead judgment, Lord Wilson set out three questions a local authority must ask itself when considering whether it is “necessary in order to meet the needs of that person for that authority to make arrangements for the provision of any of the matters on the service list”:

(i) What are the needs of the disabled person?

(ii) In order to meet the needs identified at (i), is it necessary for the authority to make arrangements for the provision of any of the listed services?

(iii) If the answer to question (ii) is affirmative, what are the nature and extent of the listed services for the provision of which it is necessary for the authority to make arrangements?

The judge added that the authority should ask the questions in three separate stages. The Health Secretary’s guidance, Putting People First: A whole system approach to eligibility for social care, “fits perfectly” with the stages he had identified.

Lord Wilson said a local authority can, when considering the question of eligibility, ask whether the presenting needs of the disabled person can reasonably be met by family or friends. The Barry ruling had also established that the availability of resources was relevant.

The judge said that where the needs of a disabled person are deemed eligible, the duty of a local authority to meet those needs is then absolute – and the Court of Appeal had erred on this point.

Lord Wilson added that a fourth stage of enquiry arises where a local authority is satisfied that a disabled person’s need for relevant services can be met with a direct payment to that person to allow them to make the necessary purchase.

The question then is: “What is the reasonable cost of securing provision of the services which have been identified at (iii) as being those for the provision of which it is necessary for the authority to make arrangements?”

Lord Wilson said: “To set about costing each of the services identified in answer to the question at the third stage upon, as it were, a blank sheet of paper would be unacceptably laborious and expensive. So a mechanism has been devised in order to give the exercise a kick-start. It is called a Resource Allocation System (a “RAS”); and many authorities, including Cambridgeshire, have developed one for their own use.”

Under a RAS the council ascribes a number of points, within a prescribed band, to each of the eligible needs in the particular case. It then calculates the total points and consults a table within the RAS which ascribes an annual sum to the total points.

“Crucial to a RAS is a realistic nexus both between needs and points and between points and costs,” the judge said.

Lord Wilson added that the contention that a RAS was an unlawful tool for an authority to deploy even only “as a starting point” had been rejected in the Savva case and was rightly not revived in this case.

The judge said it was “crucial” that, once the starting point (or indicative sum) has finally been identified, the requisite services in the particular case “should be costed in a reasonable degree of detail so that a judgement can be made whether the indicative sum is too high, too low or about right”.

He cited Maurice Kay LJ’s guidance in Savva that in many cases, the provision of adequate reasons could be achieved with reasonable brevity, and that it would be adequate to list the required services and assumed timings together with the assumed hourly cost.

Lord Wilson added that even in a more complicated case such as KM, “it may be enough for the authority, as here to attribute a compendious cost to a group of requisite services of similar character, particularly if there are reasons for concluding that general assumptions have been made which, if reflective of error, would reflect error in the service user’s favour.”

Cambrideshire awarded points to KM via its RAS in excess of the maximum, which equated to £61,000. Application of the Upper Banding Calculator brought the total to almost £85,000.

The judge said the costing exercise should preferably be carried out in conjunction with the service-user to make the support plan.

In the case of KM, Cambridgeshire accepted all of his presenting needs as critical and thus as eligible.

One of the council’s officers then completed a support questionnaire. Lord Wilson said KM’s mother had cooperated with this, but there was one negative feature in that she caused the officer to record that the unpaid support offered by the family was “none”.

Cambridgeshire made three significant mistakes in its analysis, and presentation to KM of the extent of its duty under the 1970 Act, according to the judge.

The first of these was in its treatment of the mother’s representations that KM would in future receive no natural support.

“Inevitably it did not accept the representations; but it never stated, whether in writing to the mother or orally to the appellant or otherwise, that it did not accept them,” the judge said. “It lulled the appellant and the mother into thinking that, for some extraordinary reason, it did accept them.”

Cambridgeshire should have put a marker down that it did not accept the representations, he added.

Lord Wilson said that had allowance been made for a reasonable level of support by the mother, the RAS figures would have been about £46,000 and so there would have been no Upper Banding Calculator addition at all.

The judge went on to criticise the independent social worker’s report, which arrived at costings of £157,000. “It was not an expert’s report: it was a presentation of what the appellant and his mother wanted,” he said.

“Unfortunately the uncritical endorsement of the wishes of the appellant and of the mother by Mr C [the social worker] in his addendum report led them to believe that he had become entitled to provision of such magnitude.”

The judge said Cambridgeshire’s second mistake was not to say that it considered the social worker’s presentation of the requisite services and their cost as manifestly excessive.

In a letter to KM’s solicitors in January 2010, the council explained how its offer of £85,000 might be deployed, but it failed to explain how it had been computed.

Lord Wilson said the authority’s third mistake was not to explain the different basis of the two elements of the computation (the RAS and the UBC).

A full explanation was not provided until June 2010. “The process of its arrival at an intelligible explanation of the offer had been, as the Court of Appeal observed, tortuous,” the judge said.

Rejecting the appeal, Lord Wilson said it was rational for Cambridgeshire to use the RAS and the Upper Banding Calculator “provided that the result was cross-checked” in the right manner.

The judge also concluded that any flaw in the computation was likely to have been in KM’s favour.

Lord Wilson suggested that the appellant’s challenge to the adequacy of reasons for the offer was more arguable.

“Cambridgeshire should have made a more detailed presentation to him of how in its opinion he might reasonably choose to deploy the offered sum than in the plans put forward in January and April 2010,” he said.

“In particular Cambridgeshire should have made a presentation of its own assessment of the reasonable cost of the principal item of the appellant’s future expenditure, namely the cost of paying for carers for him.”

The council’s belated explanation in June 2010 did not repair the deficit.

Lord Wilson said that nevertheless, in the light of the amplification of Cambridgeshire’s reasoning in response to the judicial review, it would be “a pointless exercise of discretion to order that it should be quashed so that the appellant’s entitlement might be considered again, perhaps even to his disadvantage”.

Responding to the judgment, Cllr Martin Curtis, Cabinet Member for Adult Social Services at Cambridgeshire, said: “The county council has always tried to provide the highest level of service and support to this young man and we will continue to do so by working closely with him and his family.

“We are glad that the Supreme Court has agreed that the funding provided by the county council is sufficient to meet all of his assessed needs and the process by which the funding was calculated was rational.”

Irwin Mitchell, the law firm acting for four charities that intervened in the case, claimed that the Supreme Court judgment had clarified whether a local authority can take its financial resources into account when they are assessing someone’s needs.

“Although the court ruled against KM, the judgment has made it clear that ‘resources are not to be taken into account’ [at stage (i) above] when establishing the needs of disabled people,” it insisted. “Some councils restricted assessments on the grounds of costs and some did not, which in the past resulted in a postcode lottery for social care.

“Importantly, the court also made it clear that when social care support is provided by direct payments to the individual it is ‘crucial’ that local authorities provide ‘a reasonable degree of detail so that a judgement can be made whether the indicative sum is too high, too low or about right’.”  

Yogi Amin, a partner at Irwin Mitchell said: “This is potentially the biggest community care ruling in 15 years. Although KM’s appeal has not been successful, we are pleased that the Supreme Court has now clarified the law with regard to local authorities taking their resources into account when assessing a disabled person’s needs.

“The previous judgement providing direction on this issue was Barry which is 15 years old, so it is great to now have further clarity and potentially see thousands of people get access to social care across the country.”

Irwin Mitchell also claimed that the Supreme Court judgment meant that every local authority in England and Wales might have to reconsider how it assesses the needs of disabled people. 

Philip Hoult