Determining financial provision in adult social care

The Supreme Court’s decision in R (KM) v Cambridgeshire CC was keenly awaited. Jonathan Auburn examines its significance for local authorities.

The Supreme Court has recently handed down its judgments in the case of R (KM) v Cambridgeshire CC [2012] UKSC 23. The case deals with important issues such as the operation of Resource Allocation Schemes (“RASs”) and the issue of whether resources may be taken into account in determining needs and provision in adult social care.

The case was expected to determine far-reaching points on these issues. In the event it did not quite live up to its initial billing. However the case is almost as important for what it does not say, as for what it does say. While the case settled some points, particularly relating to RASs, it leaves other important questions open for future determination.

The facts giving rise to the case can be described briefly. KM was a young adult with a range of needs. Cambridgeshire assessed his needs as falling into the critical and substantial bands. Cambridgeshire’s eligibility criteria were structured so that it provided for these bands of needs and no more. Cambridgeshire used a RAS. It calculated financial provision for KM under its RAS as just under £85,000. KM challenged the decision to award that amount, on grounds of irrationality and inadequate reasons. In the Supreme Court another ground was added: that the House of Lords decision in R v Gloucestershire, ex p Barry was wrongly decided and so resources must not be taken into account in the local authority’s social care decision-making.

The Supreme Court rejected the irrationality argument in trenchant terms. This reflected the exchanges during oral argument in the Court, where it became plain that the Court considered that £85,000 was a very large amount of money for a person with such needs, and Cambridgeshire’s decision, while neither not well expressed nor well-reasoned, was still a generous one. During the oral argument Lord Walker went as far as to suggest that the local authority’s decision could perhaps be criticised for failing to pay sufficient heed to its fiduciary obligations to the ratepayers of Cambridgeshire.

The Court was particularly unimpressed by the jointly instructed social care expert who had written two reports, the culmination of which was a conclusion that KM “needed” the astonishing amount of £157,000 p.a. for his social care needs, which included paying for KM, family and carers to attend on a four-week skiing holiday, Reiki sessions for KM, aromatherapy and much more.

The next ground was the reasons challenge. This raised a wider point of the operation of RASs. Under most RASs the largest part of financial provision is not calculated in the sense of adding various elements together. Rather, the figures are the result of historical analysis of the local authority’s social care spending over time. This makes it difficult to explain the figures in a manner lawyers and judges can readily digest, and makes it difficult to fit into a legal framework which requires the giving of reasons for such decisions. This point arose in R (Savva) v Kensington & Chelsea RLBC [2010] EWCA Civ 1209, [2011] PTSR 761, but was not satisfactorily dealt with there. On one reading of that case, local authorities have to provide a breakdown of services to be provided, hours of provision of each service, and hourly rates of pay. However to require that under the RAS operated by Cambridgeshire (a) requires the giving of an explanation that does not exist, and (b) is contrary to the purpose of the personalisation agenda.

The Supreme Court struggled with this issue during the hearing, but fortunately got the point in the end. Lord Wilson, who gave the main judgment, recognised that the main RAS sum is not the product of an exercise of costing particular services. That was the key point, and once that was grasped the further points as to the scope of the reasons obligation followed. A decision-maker can only give as reasons those which were in fact reasons for the instant decision. If the decision was not made by an exercise of costing particular services, then there is little point in requiring reasons in that form. The manner in which the offer sum was arrived at under the RAS needed to be explained. Cambridgeshire’s explanation was problematic, but the full explanation was eventually provided, even if in the witness statements in the Administrative Court, and there was no reason to now grant any relief.

Prior to the hearing it was expected that the main issue in the appeal would be the issue of the correctness of R v Gloucestershire, ex p Barry, ie whether resources can be taken into account in deciding needs for the purpose of adult social care. That was the basis on which the Supreme Court had granted permission to appeal in the first place. However by the time the appeal had reached the Supreme Court and permission had been granted, Cambridgeshire realised that the issue in ex p Barry did not in fact arise in KM’s case. After all, all his needs had been assessed as critical and substantial, both being bands which Cambridgeshire provided.

For that reason the Supreme Court declined to rule on the issue in ex p Barry. Lord Wilson, with whom five other justices concurred, studiously avoided revealing his views on the issue. Lady Hale, who gave the only other judgment, indicated some support for the view that ex p Barry had wrongly analysed the issue under the rubric of needs, whereas it should be considered under the issue of provision.

Following R (KM) v Cambridgeshire CC the point as to whether resources can be taken into account remains open. If the point is to be raised in future litigation, it would have to be in a case in which the claimant has needs within bands which fall outside the relevant local authority’s eligibility criteria – for most local authorities this means low and moderate needs.

My own view is that should the issue come back before the Supreme Court, that court will decline to revisit ex p Barry on the basis that this is not an appropriate case for the Supreme Court to depart from one of its own or the House of Lords decisions. Alternatively or in addition the Court may say that the preferable analysis is that resources fall to be considered at the provision stage, but that as resources can be taken into account, the result is the same.

Therefore there is still probably some way to go in this issue, but the matter should be resolved in the not too distant future.

Jonathan Auburn is a barrister at 4-5 Gray’s Inn Square chambers. He was junior counsel for Cambridgeshire in the KM case.