Independent living when a care home might be ‘cheaper’

Can local authorities refuse to fund a home care package if it is cheaper for the person’s needs to be met in a care home?

Where there is more than one way of meeting someone’s care and support needs, cost will be a factor in how these needs are best met.  That said, this principle is subject to a number of significant limitations: particularly if the ‘alleged’ cheaper option involves placing a person in an institutional setting against their wishes.

In 2001 the Court of Appeal[1] referred to the:

very fundamental aim of preserving the independence of elderly people in the community and in their own homes for as long and as fully as possible’ and that in this respect a ‘certain degree of risk-taking is often acceptable, rather than compromise independence and break family or home links.

In similar vein, in 2009 the High Court cited with approval the assertion that the ‘promotion of independent living has been a core – perhaps the core – principle underpinning the community care legislation’.[2]

However, in the 2001 judgment the Court accepted that where an authority concluded that the only one way to meet a person’s needs was for them to go into a full-time residential care home, then that was a different matter.[3]

Since these judgments, the Care Act 2014 has come into force – and the obligation on authorities to support disabled people to live as independently as possible, for as long as possible, has been reinforced.  Authorities now have a statutory duty to promote ‘individual well-being’.[4]  The Statutory Guidance to the Care Act states (para 1.19):

The well-being principle is intended to cover the key components of independent living, as expressed in the UN Convention on the Rights of People with Disabilities (in particular, Article 19 of the Convention). Supporting people to live as independently as possible, for as long as possible, is a guiding principle of the Care Act.


Article 19, among other things, affirms the ‘equal right of all persons with disabilities to live in the community, with choices equal to others’ and requires that disabled people ‘have the opportunity to choose their place of residence and where and with whom they live on an equal basis with others and are not obliged to live in a particular living arrangement‘.

Where a local authority decides – for cost reasons – that it will meet a person’s assessed needs in a way that conflicts with their ‘views, wishes, feelings and beliefs’,[5] the first consideration will be to check that the cheaper option does in fact meet all their assessed needs.[6]  The local authority will then have to demonstrate how it has arrived at its ‘less expensive’ calculation (not least because it may have misunderstood the costing implications[7]). In doing this, it will also have to make clear whether it is a net or gross costs (to the local authority) calculation. A care option that is more expensive in gross terms (ie to UK plc) may be less expensive in net cost terms to the authority (because, for example, part of the cost is met by another state funding stream, or by the individual). This difficulty was identified by the Audit Commission in 1996:

The financial incentive for authorities to use residential care remains strong. In nearly all situations it is substantially cheaper for local authorities to place people in residential care, even where there is no difference between the gross cost of residential care and care at home.[8]


As I state in ‘Community Care and the Law’:[9]

In such an analysis it would presumably be unreasonable for an authority to take into account the service user’s likely financial contribution. Although there appears to be no authority on this point, to permit this could have a seriously distorting influence: for instance, the net cost to an authority of placing a person with capital into residential accommodation could in many situations be nil.

An authority would then have to demonstrate that in making the decision, it has not fettered its discretion[10] and has considered the person’s views, wishes, feelings and beliefs’ Statutory Guidance to the Care Act 2014 para 1.18.  It must also be able to identify its proposed care and support package – in the sense that such a package must actually exist, rather than being a hypothetical alternative.[11]

Where authorities have adopted rigid policies favouring institutional placements on cost grounds – the courts have been reluctant to hear challenges that are largely theoretical – ie procedural challenges that do not involve an actual ‘victim’ (where someone can actually demonstrate that the authority is (for example) denying them the right to live independently in consequence[12])

The Equality and Human Rights Commission (EHRC) has not, however, shown such hesitancy.  In 2017 it expressed concern about a number of NHS Clinical Commissioning Groups (CCGs) that had imposed ‘cost ceilings’ for the funding that they were prepared to make for those eligible for NHS Continuing Health Care support.[13] The EHRC took the view that such policies could conflict with CCGs obligations under the European Convention on Human Rights Article 8, the UN Convention on the Rights of Persons with Disabilities Article 19 and the Equality Act 2010 s149 and instigated decisive action to ensure these policies were amended.



[1] R (Khana) v Southwark LBC [2001] EWCA Civ 999, (2001) 4 CCLR 267 para 56.

[2] R (B) v Cornwall CC [2009] EWHC 491 (Admin), per Hickinbottom J at para 6 – the judgment being upheld on appeal – see R (B) v Cornwall CC [2010] EWCA Civ 55.

[3] R (Khana) v Southwark LBC [2001] EWCA Civ 999, (2001) 4 CCLR 267 para 60.

[4] Section 1 Care Act 2014.

[5] Section 1(3)(b) Care Act 2014.

[6] See for example R v Avon CC ex p M (1999) 2 CCLR 185, QBD and R v Sutton LBC ex p Tucker (1997–98) 1 CCLR 251, QBD

[7] R (Alloway) v Bromley LBC [2004] EWHC 2108 (Admin), (2005) 8 CCLR 61.

[8] Audit Commission, Balancing the care equation, HMSO, 1996, para 40.

[9] L Clements Community Care and the Law (2019, 7th ed Legal Action Group) para 2.64.

[10] See L Clements Cerebra Accessing Public Services Toolkit (2021 Cerebra) pages 11 & 24see also and the Statutory Guidance to the Care Act 2014 para 10.27 which makes clear that authorities are ‘not obliged to choose the cheapest option’.

[11] R (LH and MH) v Lambeth LBC [2006] EWHC 1190 (Admin), (2006) 9 CCLR 622 (in this case the choice of the parent carer) and see also Local Government and Social Care Ombudsman report on complaint no 22 015 198 against Essex County Council 25 May 2023, para 50.

[12] See for example R (D) v. Worcestershire CC [2013] EWHC 2490 (Admin).

[13] Letter dated 24 October 2017 from the Legal Director EHRC to the Chief Executives of 43 CCGs. This was followed in March 2018 by a threat to judicially review 13 CCGs over their policies (that imposed arbitrary caps on funding). In May 2018 the EHRC reported that these CCGs had ‘demonstrated that they are in the process of revising their policies, meaning further legal action is not necessary at this time’ – see EHRC NHS u-turns on discriminatory policies, 31 May 2018.

Uploaded 24 September 2023

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