Northumberland County Council is facing a judicial review over the fees it pays to care homes, it has been revealed.
The council's director of adult social care, Neil Bradley, explained the situation to members of the cabinet at a meeting on Tuesday.
The action is being brought by Care North East, a body made up of local care providers, which has been fiercely critical of the county council in recent months.
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Mr Bradley said: "Care North East is the trade association representing around 24 of the 71 care homes in Northumberland. It has, for quite a while, expressed a quite strong disagreement with the council in its approach about setting care home fees.
"Care North East Northumberland have raised a judicial review against the council on the basis of the fee setting. It is primarily around how the council has approached the extraordinary inflation that was applicable to the sector and what we had done about that in terms of setting fees for this year."
Mr Bradley was speaking at the meeting after the Government allocated £3.6 million for the 2023/24 financial year as part of cash injections to support local authorities to make improvements to adult social care. The grant required a submission explaining how the money would be funded by May 24, meaning urgent approval was needed.
Coun Wendy Pattison, cabinet member for adult wellbeing, said: "Our biggest concern is home care, and we propose to use a substantial amount of this money to improve this part of the sector.
"A significant portion of the money will also be used to support the care home market with inflationary pressures and a smaller reserve will be ring-fenced for contingencies."
Mr Bradley said he had hoped the proposals would have "superseded" the judicial review brought by Care North East - however, the body had raised objections to the plans.
These were around the large amount of money for home care as opposed to care homes, the fact it was only consulted about the plans at a late stage and, most significantly, a fear that paying a higher hourly wage for home care workers, but not care home staff, could put additional pressure on care homes.
Mr Bradley said: "We explained in the report we feel the allocation to home care is appropriate. I have some sympathy with the consultation issues. However, the timescales has been placed on us by the Department for Health and Social Care.
"We have spoken to neighbouring authorities who do so (pay home care staff more than care home workers) and they have not reported any substantial issues."
Council leader Glen Sanderson commented: "This is a complex area. It is absolutely right to thank all of those who work in care homes and people who work at care in the home.
"it is also important that we don't forget that we have already made some substantial changes in the amount of money we allocate, because we're grateful and we respect everything they do.
"It is our job to balance the needs of our residents in the best way, but also be mindful of the fact that we need to make sure that every penny we spend is spent wisely.
"I for one am very happy with the recommendations."
The cabinet unanimously agreed to back the plans.
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