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County Council £104m healthcare contract dispute

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A recent ruling by the High Court in London has resulted in a decision to award a health services contract to a private company being blocked.

Lancashire County Council wanted to outsource children’s health services to private provider Virgin Care, in a contract worth £104m. However, a combined challenge to the contract from Blackpool Teaching Hospitals Trust and Lancashire Care NHS Foundation Trust (LCFT) succeeded in arguing that Lancashire County Council had not followed the correct procurement process.

The contract for the Healthy Child Programme, which includes school nurses and health visitors, had originally been put out to tender in the autumn of 2017, with Virgin Care Services Ltd eventually being awarded the contract. However, the Court found that the councils approach to record keeping as part of its moderation process, including how it scored the responses to the tender, was not up to the required standard. In delivering his judgement on the dispute, Mr Justice Stuart-Smith ruled that "the decision of the council to award the contract to Virgin must be set aside".

The bodies currently delivering the services, LCFT and Blackpool Teaching Hospitals NHS Trust, stated that their decision to dispute the contract in the courts had been fully vindicated. A spokesman commented:

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."

Whilst the Council has accepted the ruling, confirming that although they are disappointed in the decision, they accept that the new contract cannot currently be awarded. Cllr Shaun Turner, cabinet member for health and wellbeing, added:

We will not be re-running the procurement or inviting new bids as only the moderation, the final step in the procurement process, was considered to be flawed. We are now considering our options about the next steps."

Virgin Care Services Ltd has declined to comment on the judgement.

If you are thinking about taking legal action over a contract dispute or other commercial issue, but are worried about the costs involved, Advantage Litigation Services have the skills and expertise to help you find a way of funding commercial litigation without risking your personal finances or those of your business. Click here to contact us today or call 0800 160 1298 to see how we can help.

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