Councils across England could be forced to spend hundreds of millions of pounds extra on care for the elderly after a landmark High Court case.
Local authorities across the country had hoped to save money by cutting or freezing the rates paid to privately run care homes to house frail residents.
Senior council representatives said that 120 authorities, representing 80 per cent of councils in England, would be forced to review their budget decisions.
Campaigners for older people welcomed the ruling, which they said exposed the “outrage” of targeting cuts at the most vulnerable in society and threatening lives with poor quality care.
Private care home managers have complained that the dwindling rates from councils fail to cover the cost of good quality services. They have warned that, after Southern Cross, more companies could collapse.
Sefton decided to freeze fees to care homes after cuts in funds from central government. At the High Court in Manchester, Judge Philip Raynor ruled the decision illegal because Sefton had failed to engage in any meaningful negotiation with care providers.
“Inadequacy of central government funding” could not excuse a failure to properly consult care home managers, or “properly assess the risks of its decision to care homes and to residents, contrary to its duties under common law”.
He quashed Sefton’s decision to freeze rates for 2011-12 and ordered the council to rethink by Feb 9 after consulting properly with representatives of care homes.
Sefton Care Association, one of five organisations that pursued the case to judicial review, suggested that the ruling could leave councils facing a bill of an additional £1 billion for care services across the country.
The association said its victory had provided “justice” for pensioners.
Sarah Pickup, the vice-president of the Association of Directors of Adult Social Services, said: “A lot of authorities have frozen fees this year, partly, of course, because their actual budgets have gone down.
“The ruling means an additional financial pressure on councils at a time when budgets are already under the cosh.”
A spokesman for Sefton Council said: “The judgment does not say that we have made the wrong decision. It is merely critical of some elements of the process we went through.
“It shows that the speed at which we needed to make cuts last year has meant we did not consult with care home providers early enough about the possible freeze in their fees. We accept that.”
Dr Ros Altmann, the director-general of Saga, called council cutbacks in care funding an “outrage” and said they had now rightly been declared illegal.
“Inadequacy of central government funding” could not excuse a failure to properly consult care home managers, or “properly assess the risks of its decision to care homes and to residents, contrary to its duties under common law”.
He quashed Sefton’s decision to freeze rates for 2011-12 and ordered the council to rethink by Feb 9 after consulting properly with representatives of care homes.
Sefton Care Association, one of five organisations that pursued the case to judicial review, suggested that the ruling could leave councils facing a bill of an additional £1 billion for care services across the country.
The association said its victory had provided “justice” for pensioners.
Sarah Pickup, the vice-president of the Association of Directors of Adult Social Services, said: “A lot of authorities have frozen fees this year, partly, of course, because their actual budgets have gone down.
“The ruling means an additional financial pressure on councils at a time when budgets are already under the cosh.”
A spokesman for Sefton Council said: “The judgment does not say that we have made the wrong decision. It is merely critical of some elements of the process we went through.
“It shows that the speed at which we needed to make cuts last year has meant we did not consult with care home providers early enough about the possible freeze in their fees. We accept that.”
Dr Ros Altmann, the director-general of Saga, called council cutbacks in care funding an “outrage” and said they had now rightly been declared illegal.
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