Community care policy thrown into confusion: Fees ruling may mean return of 'grim' institutions. Rosie Waterhouse reports

THE GOVERNMENT'S Care in the Community policy was thrown into confusion by a court decision yesterday which exposed a dispute over which government department should pay for nursing home care for discharged psychiatric patients.

The Department of Social Security won an appeal which means it does not have to pay Income Support to help pay for nursing home fees for former patients discharged before April when new arrangements came into force. The Court of Appeal decided nursing homes are effectively hospitals 'or similar institutions' and, therefore, the cost must fall on the NHS.

After the judgment, the mental health charity Mind said at least 10,000 former psychiatric patients in nursing homes could lose Income Support payments. And if the cost of private nursing homes was higher than hospital care, many discharged patients may be sent back to 'grim Victorian' mental institutions. This would undermine a key element of the community care policy of closing asylums and caring for mentally ill people in the community.

In an important test case, the three judges upheld an argument by the DSS that income support is not payable to 14 residents of an East Sussex home because they are receiving nursing care and are, therefore, still the responsibility of Mid-Downs district health authority.

Ian Bynoe, Mind's legal director, said: 'The decision is a bombshell bound to send shock waves through many nursing homes and health authorities providing top-up finance.

'If the DSS uses this decision to discontinue Income Support to residents of other homes, it must make the money it saves available to health authorities so as to secure continuing care.

'If this does not happen and residents are forced to return to grim Victorian hospitals, then community care will yet again be seen as a charade.'

The guardian representing the resident involved in the test case, Percival White, 71, is considering an appeal to the Lords.

Mr Bynoe said social security adjudicators around the country must take the court's decision into account and would therefore have to review Income Support payments in similar cases.

Since April, when part of the community care policy came into force, hospital patients cannot be discharged until assessed by local social services and future arrangements agreed with the health authority.

Mr Bynoe warned that, as a result of yesterday's decision, social services departments could argue that psychiatric patients who still needed nursing care after discharge must be paid for by the NHS. This could result in 'bed blocking' which would restrict access for new patients.

'This case is about who pays for the needs of former hospital patients. If social services won't that only means another department of state must pay.'