Care Fees Hit the Courts Again: A Landmark Case for Care Home Funding

A recent High Court ruling has brought fresh scrutiny to the issue of local authority funding for care homes. 

The SARCP v Stoke-on-Trent City Council [2025] EWHC 18 (Admin) case looked at whether the Council was providing care homes with enough funding to look after elderly residents.

The Problem

Care homes in Stoke-on-Trent operated under a contract with the Council, which stipulated an annual funding increase of at least 1.4%.

However, in 2024, faced with financial difficulties, the Council initially refused any increase at all. Following protests from care homes, the Council revised its position but only agreed to the lowest possible increase – 1.4%.

Care providers argued that this was inadequate in light of rising inflation and wage costs. Without further funding, care homes might be forced to pass on additional costs to residents and their families in the form of “top-up” fees.

What the Court Considered

The care homes challenged the decision on several grounds:

The Council, however, defended its position, stating that budgetary constraints left no room for a more significant funding increase and that most care homes had accepted the decision without objection.

The Court’s Decision

The judge found that the Council had failed to properly justify how it arrived at the 1.4% increase. Specifically, the ruling concluded that the decision:

  • Did not fully consider the actual costs of providing care
  • Failed to align with government guidance 
  • Lacked transparency and did not adequately assess the impact on residents

Why This Matters

This ruling serves as a stark warning to councils across the country: care home funding decisions must be made with due process, proper consultation, and full consideration of legal obligations.

The case also empowers care providers, demonstrating that unfair funding decisions can be challenged in court.

For families, this case highlights a critical issue – when councils underfund care homes, the financial burden often shifts to residents through increased fees.

With many local authorities struggling financially, could this case set a precedent for further legal challenges?

Get In Touch

If you are concerned about how care home funding decisions may impact your family or require assistance with estate planning and legal matters, ELM Legal Services is here to help. 

Our expert team can provide guidance tailored to your circumstances. Call 0117 332 5701 or submit a free, no-obligation enquiry to discuss your needs and secure peace of mind for the future.

 

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