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Transfer of contracts for residential care

13 July 2020

We look at the law and our experience of transferring contracts from a local authority to the deputy.

The health & care team have recently been made aware of cases where an individual has had a Deputy appointed and following this the funding of the individual’s care in residential care has moved from a local authority to the individual by their Deputy. This has resulted in the ending of the contract for residential care between the local authority and the care home leading to negative financial consequences for the individual.

The Scenario

A Deputy is appointed from the panel.

Prior to the Deputy being appointed the individual is already a resident in a care home, having been placed there by the council. The council has contracted for the care on the basis that the individual lacked capacity to contract themself, even though they had resources above the financial limit.

The individual is settled in the home, it meets their needs and is convenient for family/friends to visit. It is not in their best interests to move elsewhere.

The council rate agreed by the care home was originally £X per week.

Following appointment of a Deputy the local authority terminates their contract with the care home as they believe it is now for the Deputy to contract with the care home. They do not consult with Deputy over this decision.

In due course the Deputy receives invoices from the care home charged at their private rate which is much higher than that which the council had been paying.


Where an adult has funds above the social services financial limits and is assessed as having eligible care needs that are not being met, if they lack capacity to commission their own care, the council has a statutory duty to commission the care if there is no attorney under an LPA or Deputy able to make the contract. (The council do not have this duty if the Deputy or attorney is already appointed at the time the contract needs to be made.)

Even if a council does not have a statutory duty to commission care, it retains a discretion to commission care in most circumstances.

Councils operating an existing package must always carry out an assessment before changing that package. Such an assessment must include consideration of the best interests of the adult.

Once the Deputy had been appointed, the council no longer has a statutory duty to enter a contract with the care home, but the fact that the council is already contracting with the care home has legal consequences that they should deal with.

The council are obliged to:

 - Consider the individual's best interests when deciding whether to terminate the contract. This would include the consequences of doing so which in these cases often will mean that the care home will charge a much higher price for the care.

 - Consult with the Deputy. If they do not do so they risk leaving the individual with no contract at all and with little or no bargaining power with regard to price increases.

 - Exercise their discretion, given under section 19 Care Act on whether to continue to contract with the care home. It is a principle of public law that when a council is given discretion over a matter, they must make a decision on the use of that discretion.


- Where a council is already providing care, upon the appointment of a Deputy, a council should consult with the Deputy and consider the client's best interests as well its own duties, before deciding what to do with the care contract. The Office of the Public Guardian, the body that supervises deputies, has a website facility which allows councils to find out whether there is a legal representative appointed and councils can be expected to use that.

 - There is a real risk that the ending of a council contract will result in a significant price increase for the resident. This price increase is a material consideration which the council must take into account when deciding what to do.

 - If the ending of a council contract prejudices the individual, including in relation to the price of care, the council should explain its reasoning and the Deputy may wish to dispute that decision.

 - This process may result in a decision that the council should continue with the contract.  The Deputy will reimburse them the cost.

 - Staff should not assume that the bureaucratic processes of a local authority are lawful. They are often designed for council convenience and with other imperatives, including financial and purely administrative concerns. Public bodies are generally expected to act reasonably. If a council action feels unreasonable, it may be capable of challenge.

If you would like to discuss any aspect of this article further, please contact Hywel Jenkins or any other member of the Health and Care team 0114 267 5300.

You can also keep up to date by following Wrigleys Health and Care team on X

The information in this article is necessarily of a general nature. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors




Hywel Jenkins View Biography

Hywel Jenkins


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