England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT,
QUEEN'S BENCH DIVISION,
ADMINISTRATIVE COURT
(HIS HONOUR JUDGE PEARL, SITTING AS A DEPUTY JUDGE)
REF NO:CO5342010

		Royal Courts of Justice Strand, London, WC2A 2LL
		28/10/2010

Lord Justice Maurice Kay :

1. By section 2 of the Chronically Sick and Disabled Persons Act 1970:

"Where a local authority … are satisfied in the case of any [disabled] person … that it is necessary in order to meet the needs of that person for that authority to make arrangements for all or any of the following matters [a list of services is set out] … then … it shall be the duty of the authority to make those arrangements."

2. Initially, local authorities carried out the duty by providing or procuring the provision of the relevant services. The disabled person was simply the recipient of the services. However, in recent years central government, through the Department of Health, has encouraged local authorities to discharge the duty by providing a disabled person with money in the form of a personal budget, thereby enabling the person to purchase the services required to meet his or her eligible needs. This is thought to enhance personal autonomy.
3. Mrs Rafaela Savva is a disabled person with a number of serious health problems. She lives alone in a basement flat in Earls Court. She is unable to go out without assistance and is virtually housebound. The Royal Borough of Kensington and Chelsea (the Council) is the local social services authority. It has assessed Mrs Savva's eligible needs from time to time. On 21 December 2009 it decided to meet those needs by providing her with a personal budget of £170.45 per week. She applied for a judicial review of that decision. The grounds of challenge included (1) a challenge to the lawfulness of the Council's method of calculating personal budgets and (2) a complaint that the Council had not provided adequate reasons for its calculation of her personal budget.
4. In a judgment handed down on 11 March 2010, His Honour Judge David Pearl, sitting as a Deputy High Court Judge, quashed the decision of 21 December 2009 on the basis of a failure to provide adequate reasons. However, he rejected the ground of challenge which asserted that the method of calculation was unlawful. His judgment bears the neutral citation number [2010] EWHC 414 (Admin). The case now comes before this Court as an appeal by Mrs Savva on the unlawfulness issue and a cross-appeal by the Council on the reasons issue. I should add that, at first instance, there was a further ground of challenge asserting that the particular calculation was irrational but the judge rejected it and Mrs Savva does not seek to appeal by reference to that.

Statutory provision and guidance

5. Section 57 of the Health and Social Care Act 2001 provides for regulations to be made authorising local authorities to make direct payments to persons who are owed a duty under section 2 of the Chronically Sick and Disabled Persons Act 1970. This led to the Community Care, Services for Carers and Children's Services (Direct Payment) (England) Regulations 2009. By regulation 14, the duty owed under section 2 of the 1970 Act is discharged by the making of a monetary payment "as long as [the local authority] are satisfied that the need which calls for the provision of the service will be secured by … the payee's own arrangements".
6. The statutory provisions have been followed by guidance issued by the Department of Health, building on documents produced by the Association of Directors of Social Services. It is not necessary to set out extensive extracts from these sources. I simply refer to two recurrent features. First, there is an emphasis on "transparency" in the decision-making process – "clear, upfront allocation of funding", providing recipients with clarity on how decisions are made. Secondly, there is encouragement of the use of resource allocation systems (RASs). No single RAS is prescribed. Several are described. It is clear that they are not seen as being in themselves precise methods of producing a definitive personal budget in an individual case. They produce a provisional or indicative figure. Thus, the Department of Health's Guidance on Direct Payments – For Community Care, Services for Carers and Children's Services (September 2009) states that a RAS

"should be applied as a means of giving an approximate indication of what it may reasonably cost to meet a person's particular needs according to their individual circumstances. It is important for councils to ensure that their resource allocation process is sufficiently flexible to allow for someone's individual circumstances to be taken into account when determining the amount of resources he or she is allocated in a personal budget."

7. It is axiomatic that local authorities do not have a bottomless pit of funds at their disposal. It is permissible for them to take account of the relative severity of individuals' needs and the availability of resources when determining whether it is necessary to make arrangements to meet an individual's needs. However, once a local authority has decided that it is necessary to make such arrangements, it has an absolute duty to provide the individual with the services or the personal budget with which to meet the assessed needs: see R v Gloucestershire County Council, ex parte Barry [1997] AC 584.

The facts

8. Mrs Savva has been in receipt of care services from the Council for about ten years. In the course of 2009, the Council carried out a review of her care plan on 25 February. On 20 July, with the assistance of her social worker she completed a self-assessment questionnaire (SAQ). This gave rise to a score of 16 points in accordance with the Council's system. The point score was then fed into the RAS which converted it into an indicative personal budget of £82.91 per week. On 29 July, the social worker completed a functional assessment of care environment (FACE) which recorded a number of moderate and substantial needs. The SAQ, the RAS indicative budget and the FACE assessment were then considered by the Resource Allocation Panel (the Panel) which, having considered the totality of the material, decided upon a personal budget of £170.45 per week.
9. There was some deterioration in Mrs Savva's health between July and November. On 19 November, again with the assistance of her social worker, she completed a fresh SAQ which generated a points score of 22. When this was fed into the RAS it produced an indicative budget of £112.21 per week. The social worker then completed another FACE assessment, recording a number of eligible needs. The assessment indicated an increase in the needs since July. On 21 December the Panel, having considered the FAQ, the RAS indicative budget and the FACE assessment, again decided upon a personal budget of £170.45 per week. The Council later explained (and the judge accepted) that the fact that the personal budget remained the same in the July and December allocations, notwithstanding increased needs, was because the July figure had been overgenerous.
10. On 22 December, the Council wrote to Mrs Savva notifying her of the decision. The letter was in the following terms:

"I write further to the recent reassessment to advise you that your allocated budget for the purchase of support to maintain your independence and wellbeing is £170.45 per week.

This budget is the amount of money you, together with your social worker or support broker, are able to spend each week when planning and purchasing support. You may be required to contribute to the cost of your care, you will be given more information on how much this will be when the amount has been confirmed with the Financial Assessment Team.

The details of your support plan need to be agreed by the manager of the social work team that undertook your recent reassessment.

This allocation is subject to review at least annually or at any time that it is felt that your needs have changed. Please let us know if your needs change in order that we can ensure that you can receive the appropriate level of support.

I have also enclosed a copy of your Assessment and Care Plan and the original copy of your Supported Self-Assessment Questionnaire."

11. The Assessment and Care Plan was the December FACE assessment. It included details of the assessed eligible services, including the times at which they were required. The total time per week was stated to be 11hrs 15mins. Some correspondence immediately ensued between Mrs Savva's solicitor and the Council. In a sense, it was the continuation of correspondence which had been going on for some months. It included requests for information, some of which have since been satisfied, but the stance of the Council in this litigation is that it was not under a duty to give reasons for the decision conveyed in the letter of 22 December and in the course of the hearing in the High Court the Council conceded that it had not given reasons. Ms Lieven did not appear in the High Court but she does not seek to withdraw the concession that no reasons were given prior to the commencement of proceedings.
12. In the course of these proceedings the Council has served two witness statements by Thomas Brown, Head of Assessment in its Adult Social Care Department. In the first, he describes in general terms how an indicative budget is calculated with the assistance of the RAS, after which "the Panel then reviews the budget generated by the RAS in the light of other information (specifically from the formal assessment process) and agrees a final budget which, in the judgment of the professionals involved, will reasonably meet the eligible needs of the service user. There is no cap on the allocated budget." In his second witness statement, Mr Brown describes how the Panel went about its task in the present case and explains why the RAS indicative figure was increased to £170.45. In neither witness statement does Mr Brown condescend to such matters as hourly rates, although given the specificity of the number of hours and the final figure of £170.45, an average hourly rate may be inferred.

The Appeal: unlawful methodology

13. In its guidance to local authorities the Department of Health provides a number of RAS models. The one used in the present case is described as "a non-linear relationship between points and price, based on the current distribution of care packages". It involves a consideration of the relationship between the assessed eligible needs of a particular applicant and the assessed eligible needs of others in the same local authority area. In its guidance to local authorities, the Department of Health contrasts this method with the other two linear methods and states:

"The advantage of this approach is that it enables you to manage the budget and achieve a closer relationship between needs and money. This is because it allows a wider range of personal budgets, reflecting the range of needs, and allows budgets to match the distribution of needs. However, it is more complex as it does not provide a fixed price per point."

14. In his judgment, the Deputy Judge recorded the submission made on behalf of Mrs Savva in these terms:

"The decision of the Panel does not constitute a discharge of their legal duty … the manner in which the [Council] used the RAS tool is impermissible and cannot be used as a starting point because it imposes an unlawful cap on the budget."

15. He described the submission on behalf of the Council and expressed his own conclusion in these terms:

"As I understand [counsel's] submission, on behalf of the [Council], if the use of a non-linear RAS tool had been the sole basis for the decision, then there would at least be a persuasive argument. However, [counsel] submits that the RAS tool is not the sole basis for the decision but it is simply a starting point in the assessment process. I agree … the RAS has been championed by the Department of Health and certain local authorities have been encouraged to develop RAS as indicative tools in order to discharge their duty so as to meet all of the service users assessed needs. The [Council] has not taken the indicative budget and said that that is the final figure. Rather, it has used a relative and non-linear approach, which it considers provides, as a starting point, a better reflection of the way in which care needs and costs are distributed to all those service users across the authority … These are matters for the local authority. I agree … that the use of the RAS by the [Council] is not unlawful."

16. In this Court the ground of appeal in relation to the use of the RAS is expressed in these terms:

"The Learned Judge erred in deciding that the [Council] were entitled to rely upon a figure generated by their Resource Allocation System, based on [Mrs Savva's] need for community care services in relative terms, as the starting point for calculating how much money they would pay [her] for the purchase of community care services because section 2 of the 1970 Act and Regulation 14 of the 2009 Regulations requires an individual's eligible needs to be met in absolute terms."

17. The submission is that because section 2 requires the eligible assessed needs to be met in absolute terms it is wrong for the Council even to consider what an individual's needs are in relative terms or to use relative needs as the starting point for the calculation of the personal budget allocated to meet the individual's needs.
18. I do not accept this submission. It is very clear that the figure generated by the RAS was not used as anything other than a starting point or indicative allocation. It is, as the written submission on behalf of the Secretary of State for Health puts it, "the start rather than the end of the process". I have already described how the process developed thereafter and how the FACE assessment and the earlier SAQ, when considered along with the RAS figure, resulted in the Panel determining an allocation of £170.45 per week as against the indicative RAS figure of £112.21 per week. Mr Brown's second witness statement describes the process in more detail. I do not think it can be said that the Council ever lost sight of the fact that, once Mrs Savva's eligible needs had been assessed, it was under an absolute duty to provide her with the services that would meet those needs or a personal budget with which to purchase them. The Council was entitled to use methodology recommended by the Department of Health which, in my judgment, did not have the effect suggested on behalf of Mrs Savva. It has never been suggested that the Department of Health's guidance is unlawful. For these reasons, I consider that the Deputy Judge was correct to refuse a declaration that the RAS is an unlawful basis for determining a personal budget. Its deployment as a starting point was lawful.

The cross-appeal: reasons

19. This is not a case in which the statute or the Regulations impose a duty to provide reasons for the decision of the Panel. Nor does any of the guidance refer in terms to the provision of reasons. The question is whether the context is one in which the common law requires reasons to be given. It does so where fairness requires it and there is a recognised trend in the direction of requiring reasons: see Stefan v General Medical Council [1999] 1 WLR 1293, per Lord Clyde at page 1300F; de Smith's Judicial Review, 6^th ed, page 413.
20. In the present case, the Deputy Judge concluded that fairness required the provision of reasons. He emphasised the consistent theme in the guidance emanating from the Department of Health and the Association of Directors of Social Services – the need for transparency in the decision-making process. In my judgment, he was right to do so. When a local authority converts an established right – the provision of services to meet an assessed eligible need – into a sum of money, the recipient is entitled to be told how the sum has been calculated. It is submitted on behalf of the Council that the imposition of such a duty is excessively onerous for a local authority. By way of illustration, there are some 5000 recipients within the area for which the Council is responsible. It is said that to require the Council to provide each of them with written reasons would be unduly costly. I accept that the burden would not be insignificant but it is what simple fairness requires. If a local authority were entitled to notify a bald figure without any explanation, the recipient would have no means of satisfying himself or herself that it was properly calculated. As the guidance from the Association of Directors of Social Services puts it, explanations of decisions "make it possible for people and families to challenge these decisions". Or, to put it the other way round, an absence of explanations may make it impossible to mount such a challenge, whether by way of complaint or by way of litigation.
21. In many cases, the provision of adequate reasons could be achieved with reasonable brevity. In the present case, I would consider it adequate to list the required services and assumed timings (as was actually done in the FACE assessment), together with the assumed hourly cost. That would not be unduly onerous. I appreciate that some recipients require more complicated arrangements which would call for more expansive reasoning but if that is what fairness requires, it must be done. In the course of these proceedings it seems to have been suggested on behalf of Mrs Savva that the provision of adequate reasons would extend to every decision having to include an explanation of the Council's RAS. That suggestion goes too far. Recipients and their advisers are entitled to know about the RAS but, as the Association's guidance recommends, this can be achieved by publishing the RAS on the Council's website in a user-friendly format.
22. It is submitted on behalf of the Council that, if Mrs Savva wanted an explanation of how her personal budget had been calculated, she would have had every opportunity to seek and receive one after receiving the decision letter in the course of her meetings with her social worker or support broker. I do not accept that that would be sufficient. It is for the Panel to provide or approve the reasons in a document. Any other means of communication would lack the necessary authority and consistency.
23. At the conclusion of the hearing in this Court we invited counsel to make further written submissions dealing with the question whether a duty to provide reasons may be satisfied by notice in the decision letter that reasons will be provided on request. Discharge of the duty in that way is attractive to the Council because of the possibility that relatively few recipients would make a request. There is a dearth of authority on this point in English law. Such as there is seems equivocal: see Fordham, Judicial Review Handbook, 5^th edition, paragraph 62.2.12. However, it seems to me to be a matter of common sense that, in a case such as this, if a recipient is made a timely offer of the provision of reasons on request, the court would reject an application for judicial review based on a failure to provide reasons where no such request had been made. Whether or not a local authority would in fact lessen the burden of administration by adopting a notified "on request" approach is difficult and inappropriate for a court to predict.
24. It follows from what I have said that I would dismiss the cross-appeal (for which we nevertheless grant permission). In one sense, the point has become academic because, after the Deputy Judge quashed the decision for a failure to give reasons, the Council revisited the matter and produced a new decision, supported by reasons. That was some months ago and has not been challenged by way of an application in the Administrative Court. In these circumstances, having dealt with the issue as one of principle, it is unnecessary to delve into the question whether reasons provided in Mr Brown's evidence cured the initial failure. It is also unnecessary to deal with submissions relating to Article 6 of the ECHR in view of the demands of the domestic law of procedural fairness.
25. I would dismiss both the appeal and the cross-appeal.

Lord Justice Longmore:

26. I agree.

Lord Justice Patten:

27. I also agree.