Independent care homes who won a landmark High Court victory may have to resort to a second court battle.
They warn that local authorities are still failing to meet legal obligations in the aftermath of the case.
The judge ordered Pembrokeshire County Council to recalculate what it pays to privately-run care homes supporting elderly and vulnerable residents.
As a result, the council has increased the fees by £58 per person per week, from £390 to £448, after a High Court judge in Cardiff said that the way the council worked out fees in Pembrokeshire were “unlawful”.
Barry Latham (pictured), policy advisor for Care Forum Wales, which represents the care sector in Wales, said: “This is a first step towards ensuring a long term sustainable future for the providers of residential and nursing services in Pembrokeshire.
“We will be looking closely at the rationale used by the Council in arriving at its new fee levels to establish whether they have fully taken account the implications of the Judicial Review Judgement.
“We are however deeply concerned that many local authorities in Wales have set their fee levels substantially lower than Pembrokeshire County Council have considered necessary in order to comply with their statutory duties and Welsh Assembly Governments Commissioning Guidance.”
The four homes which took the legal action were Pen-coed, in Saundersfoot, Langton Hall, in Fishguard, Woodfield Care Home, in Narberth and Woodland Lodge, in Tenby.
Mike Davies, a director of the four homes, said: “It is a good result and a positive step forward but we now have to analyse our current situation. For example, fuel and food costs have gone up considerably.
“I have spoken with other providers who worked closely with the legal team and none of us is flying the flag and saying this is a fantastic result in terms of keeping our homes going for the medium to long term.
“We are having to look to the future and ask is this enough to make sure companies are safe?
“The legal team, and Barry Latham, I know are looking to see how Pembrokeshire County Council came up with the increased figure.
“The figure of £450 a week was the figure the banks said homes needed to operate at break even back in April last year, and we thought the figure was nearer to £480 a week.”
Mr Latham added: “We have, for many years now, asked local authorities to take account of care homes legitimate costs when setting fee levels rather than making arbitrary decisions on the amount they are prepared to pay.
“When local authorities set their fees at a level which underfunds the true cost of care homes have to find additional income in order to remain viable and to meet the needs of their residents. Often this means that homes have to ask the relatives of residents to pay the difference between the amount the council is prepared to pay and the true cost of providing the service to cover the statutory funding shortfall.
“We believe that this is grossly unfair and that the fee paid by the council should be sufficient to meet the full cost of meeting their relatives assessed needs.”
“We now call on all local authorities in Wales to consider the implications of the Pembrokeshire Judgement and make sure that the fee levels they set for the 2011/12 financial year complies with Welsh Assembly Governments Commissioning Guidance and that their decisions are lawful.”
Mr Davies warned: “If the way Pembrokeshire council have set the fee at £448 is not in accord with the way the court wished, we would have to consider a second judicial review.”
Mr Kreft added: “It is now clear that it is no longer acceptable for local authorities to adopt an arbitrary approach to determining the amount they are prepared to pay for care services.
“Local authorities across Wales need to reconsider their position in working genuinely with the sector which is in line with the Welsh Assembly Government commissioning guidance so that we can continue to deliver community-based services that meet the needs of vulnerable people.
“Care Forum Wales is already seeking to work in partnership with the Welsh Local Government Association and the Association of Social Services Directors and we hope that the independent sector can now move forward with a partnership rather than having confrontational approach.
“Our over-riding concern is the need to provide high quality, sustainable services for the people for whom we provide care. We must all work together to make sure this happens.”
