CARE BILL SHORTFALL COULD DOUBLE TO £2 BILLION AS JUDGE RULES COUNCIL FREEZE ON CARE PAYMENTS TO ELDERLY IS UNLAWFUL.

SEFTON CARE ASSOCIATION

PRESS RELEASE

November 9, 2011.

CARE BILL SHORTFALL COULD DOUBLE TO £2 BILLION AS JUDGE RULES COUNCIL FREEZE ON CARE PAYMENTS TO ELDERLY IS UNLAWFUL.

Copies of judgment and solicitor’s summary available on request.

The potential shortfall in the budget for care of the elderly in England and Wales could well have instantly doubled to £2 billion after a High Court judge ruled that Sefton Council broke the law when it froze payments covering the cost of care for elderly people in care homes.

The landmark decision could affect 140 local authorities which froze or reduced care payments to thousands of care home residents, but it could mean care support justice for older people who have been forced to raid their savings or assets to cover the cost of good quality and dignified care.

His Honour Judge Raynor QC ruled in the High Court in Manchester on November 9, 2011, that Sefton Council - a typical middle-sized authority - should not have frozen payment levels to 1,600 elderly people in care in the borough, and that it did not pay due regard to the actual cost of covering care in making its unilateral decision.

The claimants against Sefton Council’s decision to freeze payments were Sefton Care Association, Melton Health Care Limited, Westcliffe Manor Nursing Home, Benridge Care Homes Limited and Craignair Care Home. The financially-constrained action brought backing by both independent and charity-based providers in the local community.

Elderly residents, many with dementia, and their families, have been forced to top up the growing difference between Sefton Council’s frozen payment contribution level and the actual cost of care. The last time Sefton increased fees was April 2009. That means they have been frozen at the April 2009 rates ever since.

The judicial review and judgement relates specifically to the current year freeze, April 2011 to March 2012. Sefton Council claims to have saved £1.5m by not increasing fees by the proposed 2%. The claimants will now seek to reclaim the lost portion of fees to meet the actual cost of care which could be significantly higher, and at the very least in line with inflation of 4.5%. That alone will cost the Sefton around £3.4m, and, with the next year's budget now in sight, the cost may not stop there - inflation is now over 5% so next year this will climb to £3.75m, meaning a total of £7.15m additional cost to Sefton.

The King’s Fund recently suggested care funding would have a £1 billion shortfall by 2014. But if each of the 140 local authorities affected receives claims for similar shortfalls – Sefton appearing to have an average-sized population of elderly in care - then this could mean around an additional £1 billion would need to be found.

Judge Raynor said that care homes in the Sefton area should have been allowed to substantiate their concerns over the two-year payment freeze, and that the local authority in question was under a duty to consult with residential care providers locally. Failure to do so made the payment freeze decision unlawful.

Dan Lingard, Chairman of Sefton Care Association, and owner of Birch Abbey Care Home in Southport, said: “This win gives us no great pleasure – but it does provide a tremendous sense of justice for the most vulnerable of people. It is an action which should not have had to be taken out in the first place, but clearly has massive implications for care. It may well be the tipping point which re-prioritises the way care is funded and provided in this country.

“We may well be living and operating in a very tough economic environment, but the Judge has effectively ruled that the financial environment is not a good enough reason for a council to impose a freeze on payments to massively vulnerable people.

“The courts have ruled that the council’s decision to freeze payments is unlawful, and we await an urgent and positive response from Sefton Council confirming that they will now re-make this decision with an increase in funding.

“There are hundreds of vulnerable people affected and the council needs to act swiftly.

“A key issue, given the state of care funding in the UK, is that many people and their families may have had to sell assets to pay for the inflation-affected widening gap between what the local authority paid and what the cost of care actually is.

“We’re now looking for Sefton Council to respond with some sort of offer in terms of increased fees for 2011/12. We also expect Sefton Council to agree to implement the findings of an independent assessment of the actual cost of care in Sefton. The Sefton Care Association is prepared to raise funds to contribute towards this. But, crucially, we want to see a new and meaningful consultation process replacing the current now discredited approach.”

Dan Lingard is chairman of Sefton Care Association, Chief Executive of Melton Health Care Limited - which operates Birch Abbey Care Home in Southport - and a nationally-noted dementia care innovator. He founded the iPersonally approach to dementia care, and is a regular speaker on dementia care innovation and technology development.

Further quotes from Dan Lingard:

“Critical budget savings at the NHS are being put at risk by a rising tide of elderly needing admission to hospital due to a withdrawal of social care services.

“The elderly and their families are falling victim to a vicious circle of neglect as the NHS and local authorities struggle to provide anything but emergency care for the most vulnerable.

“Inflation is killing the elderly and the vulnerable as services are being cut to providing for only the most needy as Local Authorities up and own the country fight to resolve budget cuts made worse by high inflation.

“Many care home owners up and down the country are hanging on by a thread as the third year of freezes and cuts in fees start to take their toll. In financial terms, this ruling could dwarf the Southern Cross bankruptcy; there is real concern local authorities in their dominant, near-monopoly buying position may have pushed charity as well as commercial operators too far for too long.”

Ends

For further information:

Iain Macauley

07788 978800

im@pressrelations.co.uk

@Press_Relations