Birmingham City Council acted unlawfully when it cut care provision to disabled people, the High Court has ruled.
Mr Justice Walker said councils must follow disability discrimination legislation even where that would mean that disabled people are treated more favourably than others.
They admitted that this interpretation placed “significant and onerous” obligations on local authorities.
Birmingham had said council-funded care would be available only to those whose needs were judged critical, as part of a package to save £300m over four years. An interim judgement in April went against the council.
The judicial review was taken by the families of four severely disabled. Their solicitor Karen Ashton said Birmingham’s proposed policy would have had “devastating” results.
A Unison statement said: “The council should rightly be condemned for defending the indefensible. Thousands of vulnerable people in the city would have been put at risk if it were not for the intervention of the courts.”
Peter Hay, Birmingham’s strategic director of adults and communities, said: “We welcome the judgement, which has given us greater clarity with regard to the Disability Discrimination Act, and we will now need to re-run the consultation and make decisions about adult social care consistent with the need to analyse the potential impact on disabled people and our compliance with the equality principles set out in law.
“In the meantime, people will continue to receive services to meet needs that have been assessed as substantial and critical.”
But he said the judgement still left Birmingham with financial problems unresolved.
“The original dilemma between reducing services in different areas remains,” Mr Hay said. “There is no new money as a result of the judgement and hard choices about meeting growing needs with fewer resources will have to be made by local authorities.
“As this judgement clearly acknowledges, councils can only control spending by setting eligibility criteria. We will now have to review our criteria and sadly other aspects of our new offer will have to be withdrawn so that we consider all resources that are available to the council.
“We are particularly saddened that our agreement to spend £10m in supporting people with substantial needs in community and voluntary services will cease whilst we review our options.”
Mr Hay noted the judge said the council had been considerate and thoughtful of disabled people, and had consulted extensively.