Latest Public Sector News

25.06.18

Council loses High Court case over £100m Virgin Care deal

A children’s health services contract due to be awarded to Virgin Care from a major county council has been blocked by the High Court.

Lancashire County Council (LCC), who aimed to award the £104m contract to the private company, was prevented from doing so after Lancashire Care NHS Foundation Trust (LCFT) and Blackpool Teaching Hospitals Trust (BTHT) challenged the council’s decision.

During the procurement process, LCC selected Virgin Care to provide its Healthy Child Programme ‘0 to 19,’ but the two Lancashire trusts contested the decision, arguing that the council had not followed the procurement process properly.

The trusts claimed that the evaluation process used by the council when reviewing bids for the contract in September last year had been applied incorrectly.

Mr Justice Stuart-Smith ruled that the scoring of Virgin’s bid more highly than its rivals did not match up with relevant notes, adding that “the decision of the council to award the contract to Virgin must be set aside.”

The court did find that the county council's records of its moderation process fell short of the standards required to evidence the reasons for the scores awarded to the bidders. Consequently, it had no choice but to rule that the council cannot proceed with awarding the contract to Virgin. 

Cllr Shaun Turner, cabinet member for health and wellbeing, said: "Putting services out to the market is not a political decision, it is simply part of what the County Council is required to do in order to meet its legal obligations. 

"Although we're disappointed in the outcome of this judgement, we are reassured with the exception of the moderation element the County Council's procurement processes was appropriate and that individual panel members were not found to be at fault.” 

The council has accepted the judgement, and will not be re-running the procurement process or inviting new bids as only the final step of the procurement process was considered to be flawed.

Turner added: "Our existing contract with LCFT and Blackpool NHS Teaching Hospitals Trust runs until March 2019 so there will be no disruption to these services. We recognise this is a stressful time for our health visitors and school nurses. We value the vital role they play and will continue to support them in delivering the best outcomes for our children and families." 

Virgin Care said the ruling is a council matter and not for the company to comment on.

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