140. The nature of a public authority’s duty to consult (and, in particular, the relationship between that duty and public law fairness) has recently been considered in two cases, namely by the Supreme Court in R (Stirling) v Haringey London Borough Council [2014] PTSR 1317, para 23 and following, per Lord Wilson JSC, and, especially, at paras 34–41 of the judgment of Lord Reed JSC with which Baroness Hale of Richmond DPSC and Lord Clarke of Stone-cum-Ebony JSC expressly agreed (at para 44), and by the Divisional Court in the proceedings concerning the remains of Richard III (R (Plantagenet Alliance Ltd) v Secretary of State for Justice [2015] LGR 172 (the ‘ Richard III case’), paras 83–98). These cases emphasise that there is no general duty on a public body to consult, that duty arising only (i) by reason of statutory provision (including, of course, that imposed in statutory guidance), and (ii) if common law fairness requires it, ie if there has been a promise or established practice to consult, or where a failure to consult would result in conspicuous unfairness. However, if and howsoever the obligation to consult arises, the full panoply of the well known Gunning requirements apply, ie the requirements set out by Stephen Sedley QC in R v Brent London Borough Council ex p Gunning (1985) 84 LGR 168, approved in that case by Hodgson J, and specifically endorsed in innumerable cases thereafter including the Court of Appeal in R v North and East Devon Health Authority ex p Coughlan [2001] QB 213, para 112 and the Supreme Court in the Stirling case [2014] PTSR 1317, para 25.
141. In this case, Mr Purchase submitted that the LHBs owed a duty to the claimants as care home providers to consult on the proposed IUM, because (i) the 2004 Circular required such consultation, and (ii) the absence of consultation resulted in conspicuous unfairness to the claimants as care home providers.
142. With regard to the 2004 Circular, he relied on the direction in para 6 requiring LHBs to ‘work closely with key stakeholders’, including care home providers: quoted at para 40 above. However, this does not refer to ‘consultation’. A duty to consult may arise from statutory provisions that do not include the word ‘consultation’ (see, eg R (Breckland District Council) v Electoral Commission Boundary Committee for England [2009] PTSR 1611 in which the statutory scheme obliged the commission to inform persons interested of any draft proposals and take into account any representations they made). However: (i) Generally, the Welsh Ministers favour continuous engagement rather than formal consultation: see, eg, Guidance for Engagement and Consultation on Changes to Health Services issued by the Welsh Ministers, reflected to a considerable extent in the 2004 Circular. (ii) Where formal consultation is required, the statutory regime makes specific provision for it (eg section 183 of the 2006 Act requires a LHB to consult persons to whom services are provided in respect of planning and changes to those service; and regulation 27 of the Community Health Councils (Constitution, Membership and Procedures) (Wales) Regulations 2010 (SI 2010/299) (made under section 182(4) of, and Schedule 10 to, the 2006 Act) requires an LHB to consult its community health council in respect of relevant matters). In para 6 of the 2004 Circular, the Welsh Government steered clear of the concept of ‘consultation’. It has to be assumed that that was deliberate.
143. The courts will be slow to add to the burden of consultation which the relevant democratically elected or otherwise accountable body has decided to impose: see, eg, the Richard III case [2015] LGR 172, para 98. In my judgment, although para 6 of the 2004 Circular is in the form of a direction, rather than mere guidance, it does not impose an obligation to consult. It imposes an obligation to ‘work closely’ together, which is a far more nebulous and ill-defined concept.
144. With regard to a common law obligation, Mr Purchase accepted that, in relation to the IUM, there was no representation or established practice that would have obliged the LHBs to consult. However, he submitted that, in all the circumstances, it was conspicuously unfair to the claimants as care home providers not to have consulted them. Those circumstances included: (i) para 45 of the 2004 Circular requires annual reviews of the FNC rate (see para 42 above). Annual reviews were avoided by tying the rate to inflation. The IUM thus departed from this guidance. However, an ‘annual review’ is, in my view, capable of including a review each year on the basis of pre-determined criteria. It does not necessarily require the sort of full survey performed by Laing & Buisson. However, I return to this point below. (ii) The fact that the decision has direct impact on the existing private contractual interests of the providers, affecting the price they are paid for caring for residents already in their care for a substantial period, namely five years. However, the Stirling case [2014] PTSR 1317 makes clear that a public authority does not have a duty to consult simply because its decision will affect private interests; and, here, the only issue is how much to pay for identified services (in respect of which the LHBs have considerable discretion). The IUM was designed merely to fix the rate at which identified services were to be provided for a fixed period. At its highest, it was to confer a commercial benefit on care home providers, not remove or derogate from a right or interest. (iii) The evidence is that the LHBs did not have adequate information to make a decision. The equality impact assessment dated 16 July 2013 suggested that there was further work to be done to understand the market and the business impact of models being considered. In para 18 of her statement dated 23 December 2014, Ms Warner accepted that the LHBs generally do not have information from the providers in respect of the differentials of nurse pay between the NHS and private market. In fact, there is evidence that the inflationary pressure on the pay of care home nurses is greater than that on NHS nurse pay: see below. However, it was for the LHBs to determine whether they did have sufficient information about such matters to enable them to make an informed decision, and their discretion as to that matter was broad. In this case, in my judgment, there is no proper basis for the contention that the LHBs were under a duty to consult properly to acquaint themselves with information concerning the private market for nurses as submitted by Mr Purchase (relying on Secretary of State for Education and Science v Tameside Metropolitan Borough Council [1977] AC 1014 and R v Secretary of State for Education ex p Southwark London Borough Council [1995] ELR 308). Furthermore, prior to these proceedings, when CFW made representations about inflation, they were not on the basis that inflationary pressures were greater in the private market than in the NHS: see, eg, the 19 June 2012 submission. In my view, the LHBs were entitled to conclude that they had sufficient information before them as to the likely inflationary pressures and that these were closely aligned to such pressures in the NHS. (iv) The decision did not take into account the fact that NHS Wales had substantially increased the number of nurses it employed, which would inevitably have had an adverse impact on care homes’ ability to recruit and keep nurses at the same level of pay. But, again, it was for the LHBs to assess the nature of the market, and for it to determine whether it had sufficient information to make an informed decision. I am not convinced that they erred in law in deciding they had sufficient information to make such a decision. (v) Although the LHBs did not consult on the issue, they took a handful of random soundings, without full information, which compounded the sense of unfairness. Taking a random sample is of course not consultation; but I do not understand how it could compound any unfairness.
145. I am not greatly impressed by the submission on the basis of those factors. I deal with the substantive issue of whether the IUM was legally rational below; but I would have found it difficult to conclude that the claimants had suffered conspicuous unfairness by a failure to consult, on the basis of these elements alone.