Any authority exploring closing a home down or transferring it will need to document the reasons, survey the market, consult widely and put a proposal to a committee or executive member for social services. It is necessary to have a detailed analysis of the available options and all other relevant considerations.
No decision must be taken in advance of the Council’s consideration of the various consultation exercises, as well as of the pros and cons of any viable alternatives.
Officers eventual recommendations need to be justified, objectively, and all inherent assumptions fully tested. Obvious factors to be addressed include:
consideration of whether there is any benefit to the Council/residents in the authority retaining some limited in-house resource for residential care (notwithstanding any lack of legal obligation to do so) or whether any such benefits would be outweighed by cost or other factors; an example might be that the authority which retains some in-house provision retains the right under s23(1) and (2) to regain possession of rooms occupied by its own clients, in a situation where this becomes necessary, whereas formal possession proceedings are necessary by the home’s proprietor, if a client in a private sector placement proves irremovable.
whether there is need for soft market testing in order to check the assumptions made about the cost of private sector provision and to establish the best deal which might be obtained by the Council, including the assumptions regarding the closure and ultimate disposal (for other purposes) of all the existing homes; checking the assumption which may have been made that the Council’s existing homes should not be made available to any private sector provider to assist in providing a solution and, if valid, whether these properties should be disposed of as surplus;
the implications for residents of the preferred options, in terms of their individual welfare as well as their benefit entitlements; their concerns about their right to choose accommodation under the Choice of Accommodation Directions 1992, subject to availability, suitability and price; and the extent of consultation required in the light of caselaw; whether any promises of a home for life have been given to individuals in relation to particular establishments; and if so, whether the circumstances behind proposals for closure outweigh the significance of that promise; whether any current residents are in fact s117 Mental Health Act patients being unlawfully charged in the light of the Richmond LBC ex p Watson case; whether the right to respect for privacy, home and family life in article 8 of the Human Rights Act 1998 will increase the weight which should be given to individuals attachment to their surroundings; whether article 2 (the right to life) could be invoked in cases where a decant or move pending refurbishment or final re-settling is very much expected to exacerbate mortality, etc.
the implications for Council staff and the associated cost implications, (eg in relation to redundancy if TUPE does not apply, and for private sector pricing if TUPE does apply) and checking the assumptions made to date as regards the application of TUPE in the light of the details of the preferred solution; Externalisation is likely to constitute a transfer of a relevant undertaking for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). If so, employees who are currently working in the homes will transfer to the new service provider, by operation of law.
generally, securing best value for the Council (consistent with meeting residents needs) in the short and long term;
considering any dangers or risks inherent in the preferred solution (eg the actual current capacity in the area; possible insolvency of providers and any long term impact on pricing or service provision if the Council has no in-house capability (particularly for special types of clients) – or whether the market is sufficiently strong to cope) and means of tackling or minimising any perceived risks.
One problem in particular, which must not be under-estimated is the effect on market forces of reducing spare capacity in an area. Given that providers might be brave enough, (independently of any unlawful price-fixing cartel) to make the most of the new scarcity, in increasing their prices, once there is no direct provision, and given that the Choice Direction requires the authority’s cost ceiling for the private sector placement to be based on what it usually expects to have to pay, and given the absolute nature of the statutory duty to provide accommodation once need has been acknowledged regardless of availability of beds at or below that usual cost, authorities abandoning direct provision altogether do lay themselves open to abuse;
the optimum means of (and legal requirements concerning) selection of private sector providers initially (eg inviting price submissions) and the long term arrangements for ensuring a sufficient amount of private sector provision of the appropriate quality (eg a select list of approved providers? a star rating system?);
administrative arrangements flowing from the preferred solution, eg in-house staff to monitor the efficacy and adequacy of arrangements with private sector providers;
consultation obligations regarding all interested parties, including private sector providers and residents of the homes under scrutiny as to:
a) their views as to the implications, advantages and disadvantages of the Authority ceasing to provide directly managed residential care homes in the area, and
b) on the assumption that consultation might result in the outcome that one or more homes should be retained, their views as to which particular home should be retained. In order to do that a council has to be relatively open with everybody about the respective conditions and popularity of each of the properties,
c) the views of residents, carers and families about closure of the particular home in which they are placed. This much is required by the Durham CC ex p Curtis and Broxson case.
(See the related question Does each resident have to be individually re-assessed before a decision to close a local authority’s residential home can be made? for fuller discussion of the need for risk assessment as an aspect of care management, in this context.)
If a Council does decide to close down all its homes and simply sell off the properties then there will be an obligation to obtain the best consideration reasonably obtainable unless the consent of the Secretary of State is obtained (or is available in a general form) or the Council disposes only of a short leasehold interest (see s123 LGA 1972).
The Council will wish to take advice on the most effective means of marketing the properties, including whether there is any benefit in securing planning permission for any alternative use prior to disposal.
On the other hand, if there is any suggestion that properties might be made available to a private sector provider at less than their market value, or that any other gratuitous benefit or financial assistance for the private sector provider is envisaged, then consent under s25 of the LGA 1988 would be required, in specific or blanket form (such consent may include a consent for the purpose of s123 LGA 1972).
It is important to ensure that any report to Members presents the full position fairly, not just in terms of Council’s fiduciary duties and best value, but also the impact on residents and their relatives because of the Human Rights implications, and that it addresses the long term position if the Council is to be entirely dependent upon the independent sector for meeting its mandatory statutory duties.