Date of decision: 12 August 2025
Summary
This report concerns a complaint brought by a care provider’s representative regarding Bristol Council’s refusal to pay what the provider considered to be the correct fees for an adult social care placement. The care provider claimed to be incurring a loss due to the Council’s stance on current fees, and requested both an increase and backdating of fees over a two-year period. The Ombudsman declined to investigate, directing the provider towards the civil court as the correct forum for this contractual dispute.
What happened
The complaint was submitted by Ms B on behalf of a care provider supporting an individual drawing on adult social care. The complaint was focused on Bristol City Council’s alleged failure to pay sufficient fees for the placement, below the cost required by the care provider. Ms B argued that the Council’s payments did not cover the actual cost of supporting the client, leading to financial losses for the provider. She sought both an adjustment in line with the required fees for the current placement and backdating of these fees for the past two years.
The Ombudsman considered the information provided by Ms B, alongside the Ombudsman’s Assessment Code. The Ombudsman considered whether it would be reasonable for Ms B to pursue the dispute through court action rather than through the Ombudsman’s office.
Upon review, the Ombudsman determined that the dispute over fees constituted a contractual matter that the courts are best equipped to adjudicate. The Ombudsman terminated the complaint process, given the availability of legal recourse through the courts.
What was found
The Ombudsman found that the dispute was a contractual issue over social care fees which could reasonably be brought before the courts, citing one of the aspects of its statutory discretion to decline to investigate provided under the Local Government Act 1974, section 26(6)(c).
The report noted the practical consequence for the provider which was ongoing financial loss pending court action unless the provider chose to terminate the contract.
Points to note for councils, professionals, people using services and their carers, advocacy groups and members of the public
The Ombudsman’s report frames the dispute entirely as a contractual matter, directing the provider to court for resolution and not investigating whether Bristol City Council has breached any public law duties under the Care Act 2014.
However, community care case law and public law principles stress that fee-setting is not a matter of pure contract alone.
Local authorities remain bound by a duty to decide the fees they are willing to pay set and pay fees at a level sufficient to meet individuals’ eligible needs and to ensure sustainability of the local care market.
That is a public law duty requiring councils to take account of all relevant considerations. Public law duties require councils to take into account the actual cost of care, market evidence, and sufficiency, and set rates that are rational, transparent, and capable of being justified if challenged. It would seem that the provider had not heard of the Stoke City case from January 2025, but neither had the investigator.
We were surprised that there was exploration of whether there was even a written contract in place and if so whether terms allowed for an increase in fees based on a specific process of considering inflationary factors. It is that kind of term in a contract that has been given more force in civil or in public law proceedings by the Stoke City case because the Judge emphasised the need for a genuine consideration and engagement with the evidence of providers as to why the rate currently paid should not be regarded, defensibly, as sufficient.
Judicial review is available when providers, representative trade bodies or individuals allege that a council’s fees are “irrationally low,” arbitrary and not set in light of proper consideration of the requests of the provider, or inadequately evidenced in relation to local market rates—particularly if such rates affect the authority’s ability to secure provision to meet assessed needs.
Failure to set lawful, needs-sufficient care fees could itself amount to maladministration or breach of statutory duty, which the courts are empowered to remedy. Leaving providers to the impression that there is only a civil court remedy for breach of contract ignores the more nuanced duties of public authorities as decision-makers under the Care Act, let alone giving the impression to the public that judicial review and public law is of no relevance to the work of the ombudsman where providers’ difficulties are involved.
We can well understand why the Ombudsman would not, as a question of policy, wish to engage in this kind of work, at the behest of providers. The Ombudsman’s approach, however, by excluding any investigation of the facts or the statutory context, misses important legal questions about the authority’s processes when setting care fees. Leaving such disputes purely to the courts potentially exposes both individuals and providers to avoidable court costs and delay, contrary to public law principles of access to justice and administrative fairness in the delivery of statutory functions. The Ombudsman is obliged to take account of principles established in public law cases and the investigators should be well briefed in this aspect of good administration, In our view.
Councils should carefully document their fee-setting rationales, consult meaningfully with the sector, offer transparent calculations, and ensure that their contract rates meet both statutory requirements and market reality—or risk challenge and possible liability for underfunded provision. Public law remedies are an important safeguard against insufficient funding decisions that go beyond mere contract law.
Please use the following link if you want to read the original Local Government and Social Care Ombudsman’s Bristol City Council (25 002 076) report. If you are affected by the issues in this report, please consider asking a free, one-off question, anonymously, at a level of principle, here. Our experts’ response will give you an opinion which may then help you and the broader community, when posted.
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