The High Court has ruled that Swansea Council acted unlawfully when it set a 6.1% fee uplift for residential care homes for 2025/26, finding that the local authority failed to understand the full costs of care and did not properly collaborate with providers.
The decision follows a judicial review brought by eight commercial care home operators who contract with the council to provide adult care places. They argued that while their own modelling suggested costs had risen by around 9%, the council set the uplift at 6.1% on grounds of ‘affordability’ without proper transparency or consultation.
His Honour Judge Jarman KC, sitting as a High Court judge, found that the council breached statutory requirements under the Social Services and Well-being (Wales) Act 2014 and the associated Code of Practice. Crucially, the judge ruled that the council failed to assess the impact of changes to employer National Insurance contributions announced in the autumn 2024 budget—a factor that could have significantly increased providers’ costs.
‘Where those statutory requirements are not complied with, public law issues arise and breaches are amenable to judicial review proceedings,’ Judge Jarman stated.
The council had argued that the Code was merely aspirational and that breaches were not a matter for judicial review. The judge rejected this, emphasising that the Code explicitly distinguishes between non-binding guidance and mandatory requirements with which local authorities ‘must’ comply.
The judge also found that the council had failed to act transparently, noting that the 6.1% figure was not adequately explained and that officers had discussed a 9% uplift internally before settling on a lower figure based on affordability rather than cost analysis.
However, the judge refused the claimants’ application to add an additional ground challenging whether the decision was made with proper delegated authority, ruling that the application came too late – nine months after the claim was filed and just weeks before the substantive hearing.
While finding the decision unlawful, the judge declined to quash it outright, instead granting a declaration that the decision was unlawful. He noted that the council must now redetermine the fee uplift and must fully understand the costs of care, collaborate with providers, and be transparent in its processes.
The ruling is likely to have significant implications for care home fee-setting across Wales, reinforcing that local authorities must comply with statutory codes and cannot rely on affordability alone when setting rates. The parties have 14 days to agree a draft order reflecting the judgment.
Photo: Georg Arthur Pflueger
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