O, R (on the application of) v London Borough of Lewisham

MR JUSTICE BURTON: This has been the hearing of an application made on behalf of O, who is 19 and unfortunately suffers from severe autism with associated social communication difficulties, and has no spoken language. His needs are so severe that he requires constant adult care and supervision 24 hours a day. His mother, MO, has been very closely involved with his care and supervision, and in particular is supervising as his litigation friend this litigation.

The London Borough of Lewisham has accepted responsibility for him for many years, having maintained a statement of special educational needs for him, and having funded his attendance at the Priory Horizon School in Rugeley on a 42-week residential basis until July 2007. There is no doubt at all that both his mother, on the one hand, and his local authority, on the other, have had nothing but his best interests at heart, and this case has involved no suggestion of criticism of either party in that regard. The only matter of criticism that MO has put forward is that, by virtue of her determined insistence that the arrangements being offered by the London Borough of Lewisham were not appropriate, she has kept her son at home, no doubt to her own considerable inconvenience and detriment, rather than accepting the offer of arrangements made by the defendant, and has thereby prevented what the defendant concludes would have been the better option being more fully explored and implemented. This action seeks to prevent its implementation.

The issue has come down to a choice between the continuation of residence on a full-time basis at a Priory Horizon home, which is associated with the school, and is up in Yorkshire, and his assignment on a full residential basis to a placement at 27 Bellingham Road in Lewisham, which is a house run by an organisation called 3Cs. The reason why the claimant's mother supports the Horizon home in Yorkshire is because she feels that it would be best for him to continue, albeit there has been now been a break by virtue of this litigation, the kind of assistance that he was given at the school and by associate teachers, if not the same staff as those who supervised him when he was at the school in Yorkshire, while the defendant concludes that it would be better for him to be local to his mother in London and at a home well known to and approved by them.

In this case the issue is a clash between parental choice. I say "in this case" because it is common ground that the claimant is not able to express a preference of his own and, by virtue of the guidance to which I shall refer, the guidance on the National Assistance Act 1948 (Choice of Accommodation) Directions 1992 ("the Guidance"). Not surprisingly, by paragraph 5, individuals who are unable to make their own choices are approached by considering the preferences expressed by their carer or legal guardian, in this case the mother, and cost. In most cases, as a result of that guidance, and the directions themselves, the National Assistance Act 1948 (Choice of Accommodation) Directions 1992, particularly at paragraph 3, preference can, and very often does, trump cost.

The unusual feature of this case is that, on the face of it, the cost of the two homes is almost identical. If I disregard, as I am encouraged to do by Miss Anne Lawrence of counsel for the claimant, who disavows any argument to the contrary, the extra cost by virtue of special night care which, it is common ground, would be necessary for the early months of his starting, if he did start, at 3Cs, the figures that both homes put forward as their estimate is, on the face of it, almost identical. The figure for complying with the claimant's needs put forward by the Horizon Group is £2,630 per week, and that put forward, on the face of it, by 3Cs is £2,632 per week.

Permission was given by Bean J for this case to go forward, by way of judicial review, to challenge the decision of the defendant that the claimant should be accommodated at 3Cs, which was a decision it made in September 2007, limited to only two grounds:

There was, at an earlier stage, an issue as to the greater suitability of one home over the other, but that point was not pursued by the claimant, and in any event permission was not given for it to be pursued. So it is common ground that cost is the only question before me. On the face of it, as I have indicated, the weekly cost at the 3Cs home is £2 more expensive. It is rare, I am sure, that this kind of argument can range where there is such a small difference in the cost, because there is the facility under the Directions whereby, if the preferred accommodation is more expensive than the cheaper accommodation, there is power for the person expressing a preference to pay the difference. In this case, if that were the question, and if the 3Cs home were £2 cheaper than the Horizon home, albeit that the claimant's mother in this case no doubt has very few resources, she would undoubtedly be able to cover £2 per week difference. Normally there is a much greater difference in cost, and it is common ground, not only that the Directions enable a council to choose the more cost-effective remedy, and that cost can trump preference, but that they are obliged to pursue the concept of "best value", as a number of decisions of this court and the Court of Appeal have made clear.

The two issues before me have been whether in fact it is right to say that the preferred choice is cheaper than the choice that has been preferred by the local authority. As I have indicated, if the preferred choice is cheaper, then preference trumps cost. On the face of it, that is the case here. However, Mr McGuire for the local authority does not accept that the Horizon cost is cheaper than 3Cs'. He does not accept the analysis that I have indicated, of £2,632 per week, as against £2,630. There are two bases on which he does not accept it.

The first relates to the second matter, permission for which was given by Bean J (the block contract point). On the facts of this case, there is a block contract between the London Borough of Lewisham and the 3Cs organisation. What a block contract means is common ground, namely that there will be booked by the local authority, with a particular home, a certain number of places with a pre-paid part-payment in respect of that booking made in advance. That enables local authorities to be able to claim priority over the place, and assists people who need the place, by making it the less likely that in emergencies the local authority will be unable to find somewhere for them to go. From that point of view, it is plainly of great advantage to the public. It is also of advantage to the public and the local authorities, because the organisations with whom the block contracts are entered into have been vetted and pre-chosen, and their track record is thus well established. There is plainly nothing to be said against block contracts and everything to be said for them.

It is unfortunate here that, by virtue of the claimant's mother's reluctance to comply with the request, or suggestion, of the local authority, it has been the case that the place at 3Cs, thus pre-paid by the local authority, has remained vacant pending today, in the expectation, so far as the authority is concerned, that it will now be filled by the claimant, so their money from September until today has been wasted. But that is only a matter relating to the particular facts of this case and does not in any way affect the overall question.

The existence of a block contract is thus not usual, and is no doubt nationally the case. There will also be cases in which there are no block contracts but pre-approved lists. There will be specifically favoured homes, and there will, as I have indicated, be homes which have a track record of which the local authority approve. This was addressed in the Directions to which I have already referred, given by the Secretary of State, and which, by virtue of Sections 7 and 7(a) of the Local Authority Social Services Act 1970, have statutory effect so that local authorities are required to comply with the Guidance, unless there is good reason to the contrary.

In the Guidance to which I have referred, there is paragraph 6.1, which I have mentioned by virtue of its incorporation into Bean J's order. It reads as follows:

The financial effect here is that, set against the amount of money per year (approximately £140,000 a year) which it will cost at either of these two homes, there must be set the £70,000 which the authority has already committed to pay in respect of the place at the 3Cs home, which it is proposing that the claimant fills. He puts that on two bases. One is that, as a straightforward matter of accounting, the saving that is made by there having already been a prepayment should be credited against the £140,000, so that all that will now have to be paid out if the claimant goes to the 3Cs home is approximately half of that which the authority will have to pay if he went to the Priory home. Alternatively, he would submit, the £70,000 will be wasted unless it is expended on the claimant, given that there is a place available, so the cost of the wasted place ought to be added to the cost of placing the claimant in the Priory home, thus making the Priory home £70,000 more expensive than the easy availability of a place at the 3Cs home.

On the face of it, those are powerful arguments, although Miss Lawrence has drawn my attention to two authorities, of which the clearer is Coventry City Council v Sendist [2007] EWHC 2278 (Admin), a decision of Underhill J sitting in the Administrative Court, in which, in an entirely different setting, he was persuaded that one could conclude that the expenditure of £11,000 on private school fees for a child with special needs was less than the £13,000 which, it was estimated, was in any event being spent as part of the educational budget in respect of costs for special need places in the maintained area. It is unclear to me whether the argument which is now being made by Mr McGuire was made in that case. But I do not need to consider that authority, or the interesting accounting questions as to whether there is either, on the one hand, a saving, or, on the other hand, a waste.

I prefer to consider the terms of paragraph 6.1 itself. I am not persuaded by Mr McGuire's submissions that the second and third sentences of paragraph 6.1 limit or illustrate the first sentence. At a time earlier in this hearing, when I had not appreciated that, as is common ground, a block contract was a term of art, and that in all block contracts there will be a prepayment of part of the price, I found that argument more persuasive. However, now it is clear to me that a block contract always anticipates that a substantial payment will have been made up front, I can see no other meaning whatever for that first sentence than that there is to be ignored the fact that part of the payment has been made up front.

I see no support for an argument that one can ignore the clear words of the Guidance that any block contract should not serve to limit choice. There will be, or may be, block contracts which, not only by their existence, could be said to limit choice, as is now suggested, ie by the prepayment that means that the eventual assignment is reduced by the amount of the prepayment. But there may be block contracts which, together with a prepayment, negotiate an agreed discount in the cost of the services to be provided thereafter by the provider. In those circumstances, it seems to me that it would not be every block contract, but only some block contracts, which would, in those circumstances, not by virtue of their very existence but by virtue of their particular terms, have an effect on choice, simply by the fact that a provider whose fees are reduced, either as a result of some pre-contract or for some other reason, is indeed more cost effective for the local authority to choose.

In my judgment, the local authority would be entitled to select a provider who was offering a lesser fee by virtue of some pre-contractual arrangement, and that that would not be the block contract which would be limiting the choice, but the lower fee, which might be the consequence of that particular block contract.

But that is not this case. This case is simply a situation in which a block contract has involved part of the fee being paid up front, and no reduction in the overall total of the fee. I agree with Miss Lawrence that in calculating the cost to the local authority, there must be added back the part-payment in advance that has already been paid. In those circumstances, it is not right to say that from the £2,632 payable to 3Cs there should be deducted the £1,400 up-front part-payment in comparing it with the £2,630.

I turn to the second argument which Mr McGuire put forward. He submits that in order to decide that £2,632 is more expensive than £2,630, one must be satisfied that like is being compared with like. Miss Lawrence points out, as a matter of interest, that this is a late argument that is being made: not simply in the sense that it has only developed recently by way of legal argument at its most powerful in the skeleton argument of Mr McGuire: but that in the letter from Ms Hughes on behalf of the defendant, on whose evidence, in substantial part, Mr McGuire now relies when justifying why the local authority chose the 3Cs home rather than the Priory home, the case rested entirely on the block contract point that £70,000 of the figure was already being paid, so the figures should be compared on that basis. There was no suggestion that, like, otherwise, was not being compared with like.

The case that is put forward is that in fact it was not Wednesbury unreasonable of the defendant to choose the figure which was, on the face of it, £2 a week more, because, just as any other client considering a tender, for example in a building contract situation, the client was entitled to say that in reality the slightly higher figure was the lower. The first basis upon which this was put forward was by way of considerable concentration, in the evidence and in the submissions of Mr McGuire, on the suggestion that the Horizon figure of £2,630 per week was a fixed-cost contract. That was put forward in reliance on evidence that the defendant had sought to negotiate the Horizon Group down, and had failed to do so, and that consequently that was the figure that they were stuck with.

3Cs, on the other hand, it was suggested, were much more flexible, and would be prepared, in certain prescribed ways, to reduce their figures, quite apart from the night care mini-reduction, to which I have already referred, as the months went by. So that, even accepting, as Mr McGuire does, that the assessment must be taken as of today, in accordance with Section 21 of the National Assistance Act 1948, and Section 47 of the National Health Service and Community Care Act 1990, it could be seen that that assessment included the likelihood of change in the defendant's needs, and thus a figure which was more flexible in terms of its reducibility was more cost effective.

In principle, I accept the proposition that Mr McGuire puts forward, but that would need it indeed to be the case that, whereas 3Cs' figure was flexible, the Horizon School Priory Group figure was not. I am not satisfied that that is the case on the evidence. First, the very letter which is in the evidence in which the figure of £2,630 was put forward by Horizon explains that this is a figure part way between their Band A and Band B, and included these words:

Secondly, in any event the local authority is obliged and entitled to carry out regular reviews, and I have no doubt at all that if the reviews are carried out withHorizon School, and it becomes apparent that a lesser requirement than is presently being offered by Horizon is necessary, then they will reduce both the support offered and the cost thereof. If they do not, then the local authority will be able to give the 1 month's notice, which I understand from what I have been informed by Mr McGuire would be necessary to terminate the services of Horizon and, subject to any legal challenge to the contrary, to transfer him to 3Cs, who would, on this analysis, have been prepared to be more flexible and to reduce their costs. Therefore, I am not satisfied that on this ground, namely that there is a material difference in the nature of the two figures, that the evidence supports Mr McGuire.

The alternative basis on which Mr McGuire put forward his case, which was, if I may say so, with respect to him, the more persuasive, was that the estimates were not put forward on the same basis. The figures clearly have to apply to the needs, as assessed in the very clear and helpful document that I have before me, dating back to September 2007 when the decision was taken. The crucial part of that assessment relates to the claimant's needs, which are described as follows:

Mr McGuire submitted that whereas it would appear, on his submission, by reference to the e-mail of 23rd August 2007 from the Horizon Group, to which I have already referred (when they settled between Band A and Band B), the Horizon Group was putting forward its figure, large though it would appear to be, on the basis of the needs as described, on his case 3Cs are putting forward their estimate on a higher need for support than is in fact the present case. He so submitted because 3Cs had not been in a position to give any assessment of the needs of the claimant, other than by reference to the assessment carried out in August 2007. Whereas the Horizon Group have the benefit of previous experience which they have drawn at school, 3Cs have had to overestimate an oversupply of support, which is more than is in fact required by his present needs. If that is right, then they have included in their costs an extra amount, which in fact, it is almost certain, will not be required. That would have been much more sensibly provided for had there been evidence and, even better, an express estimate or tender from 3Cs which expressly so said, namely, in order to supply support in accordance with the assessment of last August, £X: in addition, an oversupply of support to cope with the early months of our accommodation of the claimant who will need time to get used to us, which will not be necessary after X months, of £Y: on that basis, it would only be £X, which would fall to be compared with the £2,632-tender from 3Cs. Once again I see the very considerable force of that submission. The problem is that not only does Mr McGuire not have that estimate in that shape from 3Cs, but he does not have any evidence, in my judgment, either. In an extremely helpful schedule, headed up "3Cs costings", he has dawn my attention to such evidence as there is in this regard, but the problem is it all, or almost all, comes from the innermost thoughts, and very proper too, of the defendant's staff, and not from 3Cs.

At paragraph 6 of the very clear and helpful witness statement of Ms Heather Hughes, the author of the letter of August 2007, to which I have already referred, she explained the thinking of the panel of 6th September 2007. She referred to the fact that negotiations with 3Cs had been undertaken by Mr Hopkinson, who had had ongoing verbal discussions with 3Cs senior management team about their original costings, and she records what Mr Hopkinson reported as being his belief at paragraph 6.38:

That is supplemented by the evidence of Mr Hopkinson himself, who says this in his witness statement, which does not have numbered paragraphs, at page 3:

If one looks at the assessment to which I have already referred, as to what was required as at August 2007 and continuing, he needed 24-hour staff intensive service, at least 1:1, and 2:1 in some community settings. 3Cs have expressly said that they have given the cost to include 2:1 for outside activities, but we do not otherwise know what breakdown 3Cs have offered. We do not know what breakdown Horizon School have offered, but the thought process of the defendants, as indicated, was that they had seemingly offered 16 hours at 2:1. That would not, it seems, be necessary in order to cope with the presently assessed needs of the claimant. "At least 1:1" would suggest that there would be a need for some hours at 2:1 in any event, and then "2:1 in some community settings" suggests that there would be such a need, for example every time he went out, which might be, in the summer months, as much as 12 hours or more a day, but in the winter months would be unlikely to be anywhere near that. So it would, in my judgement, be right to say that to allow for 16 hours a day with respect to 2:1 intensive service would be an overestimate of the present assessment.

If there were before me evidence that the figure put forward by 3Cs was based upon an allowance for 16 hours at 2:1, on the basis that 4 of those hours would be only in place for a maximum of X months, and would certainly be dropped because they went way beyond anything required, other than as an introduction to new surroundings, I would have been persuaded that the basis on which I was being asked to look at these two figures was not comparing like with like. However, on the evidence that I have referred to, in which there is almost no evidence, even hearsay, as to what was said by 3Cs, certainly nothing in writing from them, and nothing anywhere near sufficiently like what I have just indicated I would have needed in order to have been persuaded, I cannot be satisfied that the 3Cs' tender is put forward on a basis which is anything other than a conservative estimate of what is now required, as opposed to being a basis which is wholly different from that which was being assessed by the Priory.

In those circumstances, I am not persuaded that there is anything in the argument that like is not being compared with like, such as to disturb the conclusion that 3Cs is more expensive in its tender than the Priory. I have no doubt at all that there is a real possibility that when an assessment is made in a few months' time, it will become much clearer as to whether, on the one hand, too much is being offered by Horizon, or on the other hand, on a realistic assessment and a realistic tender, if there is still a place available, 3Cs could offer a much cheaper price. But as of now, I am not persuaded that that is the case, and in my judgment the evidential onus is on he who supports the higher figure to persuade me that it is in fact the lower figure, to persuade me in that regard. In those circumstances, I conclude that the London Borough of Lewisham ought to have disregarded the block contract aspect, did not, and are not now in a position to contest the fact that preference trumps cost, because the Priory figure is lower than the 3Cs figure, and therefore ought to have been accepted. In those circumstances, this application is allowed.

MISS LAWRENCE: My Lord, I am grateful. By way of remedies, this has taken an awfully long time. Expedition was asked for a long time ago and it was only with Bean J that we got expedition, unfortunately. The claimant has been out of placement for a year, in the next 2 months, and we have submitted, in our skeleton argument, not only that the decision of the London Borough of Lewisham be quashed, but in its place, given that this really turned on the facts, and the facts are before this court, that a mandatory order be made that he is placed --

MR JUSTICE BURTON: Yes. Well, I will hear from Mr McGuire, but there is no point in going through this exercise again.

MISS LAWRENCE: Exactly, my Lord. It would take another 6 months if we start reassessing --

MR JUSTICE BURTON: But, of course, this is entirely appropriate to the fact that, although of course no doubt all parties will bear in mind whether it is or is not a good idea to change him from where he will have been, and/or in any event there may not be a place at that stage at 3Cs, I have no doubt that at any assessment the position can be looked at again.

MISS LAWRENCE: Exactly. There is only one placement -- at Highfield -- we do know that, and the mother has spent considerable time and energy ensuring that both placements actually stay open.

MR JUSTICE BURTON: Highfield is still available?

MISS LAWRENCE: Highfield is still available.

MR JUSTICE BURTON: Mr McGuire, should I not simply make an order that he be placed at Highfield?

MR MCGUIRE: Well, the starting point is that one should only make a mandatory order if only one result --

MR JUSTICE BURTON: Yes.

MR MCGUIRE: That is not the case here.

MR JUSTICE BURTON: Is it not?

MR MCGUIRE: No.

MR JUSTICE BURTON: But we have been such a long time here that there is no suggestion of anywhere else, is there?

MR MCGUIRE: The way forward would be to order a reassessment, but to impose a time limit, say within 21 or 28 days. But, given the claimant's mother's conduct in the matter, the appropriate way forward would be to make such an order on her undertaking to co-operate in the assessment process.

MR JUSTICE BURTON: What are we going to gain by reassessment? I mean, the assessment has been done, we know that this place is still available, it might not be available for very long: what are these other options?

MR MCGUIRE: The other option is to allow 3Cs lawfully to conduct the assessment it was required to do by Lewisham in order to see whether it is cheaper or more expensive, and not to have to have a stab at it and reduce --

MR JUSTICE BURTON: It would not be 3Cs who would carry out the assessment, it would be Lewisham that would carry out the assessment, and Lewisham has carried out an assessment. I mean, there is no suggestion that the position -- in fact, he may have got worse since August 2007 because he has been at home, although I notice that she has had some help from various institutions, but if anything, his assessment is likely to be worse than it was, not better.

MR MCGUIRE: But the question we are concerned with is one of price. One party who has quoted, having seen him; the other having --

MR JUSTICE BURTON: You would be entitled to be extremely aggravated that your choice is being stymied, but the fact is if it had been the cheaper choice, and I am satisfied it was not, it would not have mattered how stymying she would have been being, you would have still won. It is not dependent upon the behaviour of the claimant's mother, one way or the other.

MR MCGUIRE: It has to the extent that it has had to guess what figure to put forward rather than to base it on an assessment.

MR JUSTICE BURTON: I am not being critical of anybody, but I do not accept that. Given that your side knew ever since Bean J's order that the whole case was about cost, there would have been nothing to prevent, without a further assessment by 3Cs, your getting in a statement or an invoice from 3Cs to say that which I have just indicated in my judgment, namely to provide the basic for the assessment, as per page 56, £X, and "we will need 3 months' introductory top-up". That could have been done. The obstinacy of the claimant's mother could not have prevented you doing that. I do not at the moment see what is to be gained by another assessment.

MR MCGUIRE: The benefit would be that 3Cs would be able to put forward a figure on an equal footing so that the authority could --

MR JUSTICE BURTON: That opportunity has been and gone.

MR MCGUIRE: No, that opportunity has never been presented because the claimant --

MR JUSTICE BURTON: No, the opportunity of putting forward a figure on the basis of August 2007's assessment has gone. Now, what would be the point of a fresh assessment? It might well, as I have indicated, show he is in a worse condition, but where is that going to take us? The fact is, on the basis of August 2007's assessment, on the basis of my judgment, he should have been at Horizon in October 2007, and he has not been. I do not think we should string this out any longer. However, of course the position is that there is nothing to stop you carrying out an assessment, and no doubt you will do. I have been saying "2 months", but it has been more than 2 months since the last assessment. So why can he not go off to the Priory and another assessment be taken while he is there?

MR MCGUIRE: Well, your Lordship has my points.

MR JUSTICE BURTON: It would not suit you, because any other course would give you the opportunity of rearguing this case. I do not think that is necessary. I have been given a choice today between two. If you had trailed a third option, then I would have understood what you are saying.

MR MCGUIRE: I have trailed a third option.

MR JUSTICE BURTON: What is the third option?

MR MCGUIRE: The third option is to deny relief, even in the event it is successful, because the opportunity to conduct an assessment of what the costing --

MR JUSTICE BURTON: As I have already indicated, I do not conclude that the, I agree obstinate, behaviour of the claimant's mother has in any way prevented the proper argument of this case, or a proper consideration of whether he should be at 3Cs or at the Priory. As of today, there is no alternative as between two places, and I have concluded that you should have decided that he should go to the cheaper one, which is the Horizon one, and that is where he should go.

MR MCGUIRE: I am obliged.

MR JUSTICE BURTON: So I will direct that he should, as soon as is conveniently possible, be admitted, at the defendant's expense, to Highfield, is it?

MISS LAWRENCE: Highfield, my Lord, yes.

MR JUSTICE BURTON: But I make it entirely clear that it is without prejudice to what may happen hereafter, when any further assessment is carried out, which it may well be. We all know that there is a month's notice that can be given at Highfield, and that may happen.

MISS LAWRENCE: Exactly, my Lord. I mean, the point that the claimant's mother has been precise throughout this process, and clearly it was not the best of situations between the two, but this matter really only came about -- I really do want to have this on record -- because the local authority failed to put in place a proper transition plan before this young man actually left accommodation.

MR JUSTICE BURTON: Well, that is all past history.

MISS LAWRENCE: But I think it is part of the problem.

MR JUSTICE BURTON: I quite understand, but the one thing that she could not do is agree for him to go to 3Cs, because that would have scuppered her chances in these proceedings. So I have no doubt at all that I have no blame of her.

MISS LAWRENCE: Indeed.

MR JUSTICE BURTON: What she could have done, if she had not been confident that she could succeed, was to let 3Cs get on with it, to which purpose they would have been left to themselves. He could have had a summer posting at 3Cs. Anyway, he did not.

MISS LAWRENCE: No.

MR JUSTICE BURTON: There we are. I conclude that the position now is that, whatever the past history, he should go to Highfield pro tem.

MISS LAWRENCE: My Lord, the indication as to timing is as soon as that can possibly be arranged.

MR JUSTICE BURTON: Yes, as soon as reasonably practicable he should be admitted to the Horizon Priory program. So can you draw up an order to that effect?

MISS LAWRENCE: We can, my Lord. The only other issue is as to costs.

MR JUSTICE BURTON: Yes.

MISS LAWRENCE: We ask for the costs of this case.

MR JUSTICE BURTON: Are you legally aided?

MISS LAWRENCE: We are legally aided.

MR MCGUIRE: I cannot oppose that.

MR JUSTICE BURTON: Thank you both very much for your assistance and your very careful arguments.

MISS LAWRENCE: My Lord, do we send in the draft of the order to your clerk?

MR JUSTICE BURTON: Yes, please, that would be kind. If that could come in tomorrow that would be very helpful. Thank you.