NHS trusts win legal challenge over contract award by council to Virgin Care

Two NHS foundation trusts have won a High Court challenge over Lancashire County Council’s decision to award a contract to Virgin Care for the provision of public health and nursing services to children and young people.

The procurement process challenged in Lancashire Care NHS Foundation Trust & Blackpool Teaching Hospitals NHS Foundation Trust v Lancashire County Council [2018] EWHC 1589 (TCC) was run under the Light Touch Regime last year. [The judgment has not yet appeared on Bailii]

According to law firm Hempsons, which acted for the claimants, Mr Justice Stuart-Smith decided that the trusts, the incumbent providers, had proved a material breach in the process, “namely that the reasons given by the council for the scores awarded to the trusts and the winning bidder for the quality evaluation questions were insufficient in law”.

The judge is said to have held that: “I am satisfied that the notes do not provide a full, transparent, or fair summary of the discussions that led to the consensus scores sufficient to enable the trusts to defend their rights or the Court to discharge its supervisory jurisdiction.”

Hempsons said the case highlighted “the importance of a contracting authority following their stated process and the need to ensure that there is a clear audit trail and rationale as to the reasons for the decision, which can ultimately be relied upon in Court if necessary”.

Andrew Daly, partner in the firm’s procurement team who led on the matter with solicitor Sam Stone, said: “This is a very satisfying result for the trusts following their difficult decision to challenge the county council. The case provides valuable lessons for commissioners and demonstrates that the quality of evaluation record keeping is just as important as having a clear and transparent procurement process."

Responding to the ruling, Lancashire County Council said it would not rerun its procurement process or retender for new bids for these services.

The local authority said Mr Justice Stuart-Smith had found in its favour on all issues bar one. It accepted though that the judge did find that the 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 at Lancashire, said: "Although we are 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.

"However, following this judgement, we accept that we cannot award the contract at this time."

Cllr Turner said the authority would now be considering our options about the next steps. "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."