DPBIHE (I'm sure you don't!!) Thanks for your post. I won't have covered everything but I think I've made some of the main issues. I haven't heard anything about comments made by a High Court Judge - can you advise where you read this? Was it Lord Justice Wall by any chance, as he has been quite vocal in the past about child care issues.
I note your para about the parent who is loving and caring but whose medical condition prevents them from caring for the child. To be honest I think this kind of situation is highly unlikely to end up as a contested case in care proceedings. It does of course depend on what the medical condition is, but the wording of the legislation in relation to removal of children against the wishes of the parents states "The child must be suffering from significant harm, or likely to suffer significant harm" (the likely bit is there to cover cases where several other children have been ill treated by the parents or someone with a severe enduring non-treatable psychiatric disorder e.g. personality disorder, or parents with severe Learning Difficulties)
I think in such a case it would be essential for the LA to put in whatever support was needed to enable the mother to care for the child, and build in respite care, or shared care with either a relative/friend or foster carer. I honestly feel that any LA would be loathe to take such a case to court against the parent's wishes (again it's difficult to comment on hyperthetical issues) but lawyers do have to be very careful in court, and this is in relation to the mother in the circumstances you mention and indeed in respect of any birth parenting contesting the case.
The thing is that the vast majority of birthparents are unable to cope with cross examination, and get upset or angry or make contradictory statements etc., and all lawyers know that if they go in too heavy with cross examination they will lose credability with other lawyers and more importantly the Judge. To be honest the birth parents quite often condemn themselves because they can't cope with the court arena (which is intimidating to many, and yes sws too) and so there is no great need for heavy cross examination. That is reserved for the sws and quite rightly as this is a child's future that is being decided. At the risk of repeating myself this is why every social worker and manager and LA lawyer know that they must be able to present evidence to support the allegations they are making about the birth parent.
On occasions the guardian (who is very influential in court)even though she is no more qualified than a LA sw, but works for CAFCASS (Children & Family Court Advisory Service) will disagree with the LAs case to the court and these final hearings can last around 5 days. Ones where everyone is "barking up the same tree" take on average 4 days, which gives some indication of how complex these cases are in reality.
You ask about residential assessments in centres set up for this specific purpose. Yes they are extremely expensive, and this is one important reason why they are not routinely used. However the other thing is that these parents have to be referred to these centres (most are outside of the LA - private ventures) and the centre will only take parents where they think there is a good chance that they will be able to make use of the assessment and possibly get a favourable recommendation. In all honesty many of the parents can't stand these centres and leave without the child/ren and then there is no contest - end of matter and sws have all the evidence they need for court.
In the LA that I worked in we recruited foster carers for "mother and baby" placements and these were of course far far less expensive than residential centres, and proved very successful, but the same thing often happened, the young mum would clear off and leave the baby with the carer. I can see the problem really for any struggling birth parent, that they don't like being monitored. Sorry about length of reply!