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NHS Trust puts transfer to social enterprise on hold after threats of legal action

Plans by an NHS trust to transfer services and more than 3,000 health staff to a social enterprise have been delayed after campaigners threatened legal action.

NHS Gloucestershire was expected to transfer the services – including nine hospitals – to a community interest company on 1 October.

But law firm Leigh Day & Co, representing 75-year-old local resident Michael Lloyd, wrote to the trust on 22 September warning that it would seek an injunction blocking the move.

Leigh Day argued that the PCT had failed to meet a legal duty to offer the opportunity to bid for the contracts to other economic operators, including NHS trusts which operate primary and community care services in counties near to Gloucestershire.

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The trust’s attempt to enter into a contract with the community interest company, the chosen vehicle for the social enterprise, constituted an unlawful procurement process, it added.

Campaign group Stroud against the Cuts (SATC) said NHS Gloucestershire was examining its legal position and had agreed not to transfer services without providing Lloyd and Leigh Day with three days’ notice.

Leigh Day solicitor Rosa Curling said: “Our client believes the proposed transfer would be highly detrimental to the NHS services which he and other Gloucestershire residents receive. NHS Gloucestershire has a number of options open to it, two of which would not result in a competitive process and do not appear to have been properly considered by the Trust.”

According to Curling, NHS Gloucestershire could decide to continue to provide the services itself as there is no statutory obligation for it to outsource its services. Alternatively, if NHS Gloucestershire transferred services to another NHS body, it would not need to competitively tender the services.

“It is only if NHS Gloucestershire decides that it wants to outsource its services and outsource them to a non-NHS trust, that the Procurement Directive applies,” she said. “In those circumstances the law requires them to hold a proper and transparent, competitive process, by which a new service provider is chosen.”

SATC said: "Offering Gloucestershire's NHS services to a social enterprise opens those services to privatisation, it does not save them from privatisation. The legal action will open those services back up to the NHS. NHS Gloucestershire can and should keep these services in the NHS and avoid any need for any tendering process."

NHS Gloucestershire’s chief executive Jan Stubbings said: “We are continuing to respond to the correspondence received. In deciding on the future management of our community services to meet local needs and circumstances, we have followed all applicable policy and guidance. We have always been committed to engaging with our communities on the opportunities and challenges ahead.

“Through this process, we believe we have identified the most appropriate solution for the future. We now have a clear direction with the majority of our community health services becoming part of a social enterprise – working in the community interest and for the social good.”

Stubbings said the new organisation, with its membership model, would give staff and service users a stronger voice on how services are run for the benefit of local communities.

“It is important to stress that NHS patients will continue to access NHS funded community services, close to home, run by an organisation responsible for delivering the NHS values,” she added.

Stubbings said NHS Gloucestershire remained committed to the transfer of services to Gloucestershire Care Services CIC, and would be doing all it could to achieve this as quickly as possible.

“We wish to resolve outstanding matters to ensure a seamless transfer and therefore we have support to take additional time to do this if required,” she said. “We would like to minimise any uncertainty for staff and patients at this time and everyone can be confident that access to high quality care and treatment will continue to be available as matters relating to the transfer of services are resolved.”

SATC denied the Trust’s reported claims that the legal challenge could accelerate what it was trying to prevent – the services being provided by a body outside the NHS.

James Beecher, a co-ordinator of SATC, said: “Firstly, without the legal challenge, the transfer to Gloucestershire Care Services CIC on 1 October would have resulted in the services being provided by a body outside the NHS – the CIC is a private limited company outside the NHS. Rather than accelerating this process, the legal challenge has delayed it.”

He added: “More importantly, the Primary Care Trust appear to being ruling out and refusing to consider several options which would keep services and staff within the NHS, without involving a legal requirement to competitively tender. If successful, our challenge will force them to consider these options, all of which have successfully been implemented elsewhere in the country”.

Philip Hoult

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