A "massive funding deficit" has put local councils at risk of breaching legal duties they owe to vulnerable people who could be deprived of their liberty, the High Court has been told.
Four councils - Nottinghamshire, Richmond, Shropshire and Liverpool - are jointly seeking a judicial review and claiming that the Government's failure to provide adequate funding has created "a national crisis" for local authorities all over England.
The case concerns the Deprivation of Liberty Safeguards (DoLS) regime, a system that came into force in 2009 to protect people lacking capacity to act for themselves and liable to be detained in care homes or hospitals for their safety, treatment or care.
The regime deals with procedures for authorising the detention of individuals, including those with dementia and learning difficulties, and ensuring any deprivation of liberty is lawful under human rights legislation and the Mental Health Act.
A judge heard a funding crisis developed following a landmark judgment by the Supreme Court in 2014 in the "Cheshire West" case.
The ruling widened the definition of those subject to the regime, leading to a tenfold rise in cases.
Local authorities say Government funding for DoLS has been maintained at around £34m a year.
The Local Government Association has argued at least an additional £172m a year is needed.
James Goudie QC, appearing for the councils, said the Supreme Court justices had called upon the Government to address the "enormous practical implications" of the Cheshire West judgment but it had "singularly failed to heed this warning".
Mr Goudie told Mr Justice Garnham, sitting in London: "As a result local authorities across the country now face a massive funding deficit in delivering the mandatory human rights protections embodied in the DoLS regime."
The QC said the Law Commission estimated the shortfall to be in the region "of a third and two thirds of a billion pounds, the vast majority of which will recur annually to local authorities".
He said: "That shortfall has created a real possibility that local authorities will not be able to fulfil their legal duties."
Rather than allocate the funding needed, Health Secretary Jeremy Hunt had instructed councils to attempt to "prioritise" vulnerable people "most likely to benefit" from the safeguards to which all were legally entitled.
Mr Goudie said the experience of the four councils "is broadly representative of a national crisis caused by the (Health Secretary's) unlawful abrogation of his duty".
The QC asked the judge to declare that the Health Secretary had "created an unacceptable risk of illegality".
He also asked for a second declaration that the minister has breached the Government's "new burdens" doctrine by failing to increase funding in the wake of the Cheshire West ruling.
Jason Coppel QC, for the Health Secretary, urged the judge to dismiss the case because it had not been brought promptly.
Mr Coppel also said it was the Government's judgment "that it has provided sufficient funding to local authorities to meet their statutory obligations and to meet their discretionary functions satisfactorily".
He said that was reflected in the most recent spending review and successive local government financial settlements, which had additional money for adult social care factored into them.
"We say the total funds available (to each council) are plainly adequate, all the more so following the recent announcement of the 2017-18 settlement and the budget announcement of another £2bn for social care services in England," said Mr Coppel.
"The key point is that local authorities have to make decisions on how to spend the money available.
"Each of the four claimants has chosen to fund their DoLS in different ways. It is a matter for them. Local politicians decide how the money should be spent."
In reply, Mr Goudie said it seemed that Mr Coppel was suggesting adopting strategies like "closing the parks" to divert funds to DoLS.
But he said all possible cost savings had already been carried out and the case had to be seen against the background of local government funding being cut by almost a third between 2010-2015 with further cuts of upwards of 25% by 2020.
He said: "It is a breathtaking submission that central government has allocated sufficient additional funding and there is no shortfall as such.
"There is simply not enough money overall. It is not a question of moving the deckchairs on the deck of the Titanic."
Reserving judgment, the judge said he would give his decision as soon as possible.
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