A decision by Lancashire county council to award a £104m contract for children’s healthcare services to Virgin Care has been thrown out after a legal challenge by NHS trusts.
A high court judge found the local authority’s process was flawed and the contract for services for children aged 0-19 should not have been awarded to the private provider late last year.
The case hinged on the scoring system used by the council when it reviewed rival bids for the deal, which the trusts claimed had been applied incorrectly.
The contract for delivering the Lancashire’s healthy child programme, which includes providing health visitors and school nurses, was advertised in September.
After the tender process, the local authority announced its preferred bidder was Virgin Care, part of Sir Richard Branson’s Virgin Group.
It was chosen over the existing providers – Lancashire Care NHS foundation trust and Blackpool Teaching Hospitals NHS foundation trust.
On Friday, the judge, Justice Stuart-Smith, upheld the trusts’ legal challenge, saying the council’s decision to score Virgin’s bid more highly than theirs was not adequately supported in its notes of the scoring procedure.
After reviewing them, he said he had “come to the conclusion that the reasons given were not sufficient in law in the circumstances of this case”.
A spokesperson for both trusts said: “As public bodies, the trusts are always reluctant to resort to legal action, in particular against other public bodies. However, we felt that we had submitted a strong bid and wanted to gain clarity on why we had not been successful.
“We believe the connectivity with other wider NHS services is important in terms of being able to fully meet the needs of the children and families who access these types of services in a joined-up way.
“We are proud of the services within this contract and our teams that deliver them.”
Virgin Care had been due to begin the five-year contract in April. However, after the legal proceedings began, the trusts were granted an extension until April 2019.
The council said this would stay in place while it considered its options.
Shaun Turner, the local authority’s 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 judgment, we are reassured that 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.”
Turner said the council would not be rerunning the procurement process or inviting new bids, as only the final part of the process had been judged as being flawed.
“Our existing contract with LCFT and Blackpool NHS Teaching Hospitals trust runs until March 2019, so there will be no disruption to these services,” he said.
“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 has been a growing provider of healthcare contracts awarded by NHS bodies and county councils, and offers similar child health services in other parts of the country.
The company was awarded £1.6m by NHS commissioning groups this week after legal action over a children’s services contract it missed out on in Surrey.