Will High Court decision be a turning point for care home fee setting in Wales?
The High Court’s decision in Heart of Wales Care Ltd & Ors v Swansea Council [2026] is one of the most significant recent judgments affecting adult social care providers in Wales. It provides clear judicial scrutiny of local authority fee setting and reinforces the legal framework underpinning commissioning decisions
What happened?
The case concerned a group of residential care providers contracted by Swansea Council. The arrangements provided that fee rates were reviewed annually. For 2025–2026, the Council set a 6.1% uplift, relying on “affordability”, despite its own internal modelling indicating that providers’ costs had risen by closer to 9%.
Providers challenged the uplift by way of judicial review, arguing that the Council had failed to comply with its statutory duties under the Social Services and Well being (Wales) Act 2014 and the associated Code of Practice on commissioning.
The Court’s findings
The High Court allowed the claim and held that the Council’s decision was unlawful. The core criticisms will resonate with many providers:
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Failure to understand the cost of care
The Court found that the Council had not properly analysed or evidenced the actual costs of delivering care, despite clear requirements in the Welsh Code of Practice.
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Inadequate collaboration and consultation
The Council had not meaningfully engaged with providers before setting the new fee uplift, even though its own processes envisaged consultation.
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Lack of transparency and reasoning
The basis for the 6.1% figure was not clearly explained by the Council and there was insufficient justification for departing from higher cost modelling.
Significantly, the Court rejected any suggestion that the Code of Practice is merely guidance, confirming that where the Code imposes requirements on local authorities, those requirements are mandatory and capable of enforcement through judicial review.
The Court granted a declaration that the decision was unlawful and ordered the Council to re-determine the fee uplift in accordance with its statutory duties.
Why does this matter for providers?
This judgment strengthens the position for providers in several important ways:
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A clear route to challenge fee decisions
The Court has confirmed that failures to follow the Welsh commissioning framework are challengeable and that providers are not limited to commercial negotiation: public law remedies are available.
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Affordability is not enough
Councils cannot justify fee rates solely on budget constraints. They must demonstrate a proper understanding of the actual cost of care and aim to secure fair and sustainable fees.
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The Code is enforceable by law
The decision confirms that key elements of the National Framework and Code of Practice are binding rather than aspirational, a point likely to be central in future disputes.
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Process matters as much as outcomes
Even where a council reaches a defensible figure, failure to consult, collaborate and explain its reasoning to providers may render the decision unlawful.
Practical implications
For providers, this case is a powerful reminder to scrutinise fee‑setting processes closely. Key steps include:
- Preparing robust cost evidence ahead of annual reviews
- Engaging actively in consultation processes and documenting concerns
- Challenging opaque or affordability‑led decisions at an early stage
- Taking legal advice at the earliest possible opportunity
More broadly, the judgment is likely to increase pressure on Welsh local authorities to adopt more transparent, evidence‑based approaches to commissioning. For a sector already under significant financial strain, it provides a welcome and much‑needed lever to ensure that fee rates reflect the true cost of delivering safe and sustainable care. Providers who have concerns about fee increases, consultation processes, or the legality of commissioning decisions should obtain specialist advice as soon as possible.
RWK Goodman’s Health & Social Care team is a recognised market leader with extensive experience advising providers on local authority fee-setting and funding disputes. We understand the significant financial and operational pressures facing the sector, and we work closely with care providers to challenge unsustainable fee decisions, scrutinise commissioning processes and identify potential legal remedies where necessary.
Our team advises a wide range of providers, including nursing and residential homes, homecare agencies, supported living providers, hospices, specialist colleges and children’s services. We combine deep sector knowledge with practical, strategic advice to help clients assess their position, engage effectively with commissioners and, where appropriate, pursue robust challenges to unlawful or unfair fee decisions.
