Inquiry call over Lancashire County Council £105m Virgin Care health contract

Whitehall has been urged to step in to sort out the 'chaotic' running of Lancashire County Council.

By The Newsroom
Monday, 9th July 2018, 7:00 am
Updated Monday, 16th July 2018, 4:53 pm
County Hall
County Hall

Opposition politicians have demanded an urgent inquiry into the way the authority awarded a £105m child health contract to Virgin Care, only for the decision to be blocked in the High Court.

County Hall is continuing to consider its options after the ruling two weeks ago, one of which could be to re-run a part of the procurement process which the judge ruled fell short of the standards required.

But the authority looks likely to face a hefty legal bill for defending the action brought by the two NHS Trusts which currently run the Healthy Child Programme 0-19 across the county.

“We are in a real mess and the Government needs to intervene,” said Labour leader Coun Azhar Ali.

“I have written to Local Government Secretary and to all our Lancashire MPs asking them to put party politics to one side for the good of this county.

“LCC is in crisis and we will go bust in two years time unless something is done.”

The High Court blocked the award of the contract to Virgin two weeks ago after ruling the final part of the procurement process, where the two bidders were evaluated using a marking formula, had not been handled correctly.

Labour has now written to the council’s external auditor asking for an “urgent” meeting and an investigation into the process. The party has also called for the matter to be examined by the health scrutiny committee and the cabinet.

“We have had Lancashire Fleet Services, One Connect and now Virgin Health Care all stopped due to a lack of sound legal process,” said Labour’s deputy leader John Fillis.

“We have demanded the Conservative Government steps in to sort out this chaotic Conservative council.”

Labour claim the authority faces a “tide of mounting legal costs, which the people of Lancashire will have to pay for.”

Coun Fillis added: “The Conservatives in Lancashire have been stopped once again from privatising public services, in this case our children’s health services.

“Unfortunately the Government is turning a blind eye to this mess which will cost the people of Lancashire millions of pounds at a time when services are being cut and council tax is going up.”

Labour says it has asked the external auditor for an investigation “as there appears to be an emerging pattern resulting in legal action against the council.”

The party is also pushing for the current contract, run by the Lancashire Care Trust and Blackpool Teaching Hospitals Trust, to be extended beyond its completion date next year.

In response to the Labour demands, council leader Coun Geoff Driver issued a statement saying: “Lancashire County Council had no option but to defend the challenge by Lancashire Care NHS Foundation Trust and Blackpool Teaching Hospitals NHS Foundation Trust and we are disappointed that the court found against us on a relatively narrow aspect of the procurement process.

“We are currently considering our options. But, in view of the possible legal implications, it would not be appropriate to comment further at this time.

“However, in view of the ridiculous comments from LCC’s Labour group, it should be borne in mind that the decision to seek tender for the provision of health services for Lancashire’s children and young people was actually taken by cabinet in February 2017, and both Couns Ali and Fillis were members of that cabinet.”

Healthy Child Programme 0-19

The scheme is set to cost LCC taxpayers £105m over five years when it is renewed, either with the NHS or Virgin Care.

It is described as “the early intervention and prevention public health programme at the heart of universal services for children and families.”

It delivers an holistic programme to address all aspects of a child’s health and development from pregnancy through to 19 years.

The programme offers screening tests, immunisations and development reviews. It also provides health promotion, information and guidance.

The 0-5 years component is delivered by health visitors, while the 5-19 section is provided by school nurses.

The contract, currently shared between the two NHS Trusts, is worth £21m a year to the successful bidder.

Virgin care

Part of Sir Richard Branson’s business empire, Virgin has providing healthcare services since 2010 and has treated more than six million people.

Virgin says it “has been focused on delivering high quality care, good value and the fantastic customer service you’d expect from Virgin.”

A CQC report in August 2017 said Virgin Care “could demonstrate through documentary evidence that following acquisition of services, they had managed to bring about a sustained, significant improvement to patient care.”

Virgin Care has become a major player in the market for NHS services and has been awarded contracts worth more than £2bn, with several large contracts in community health. In 2016 the company made the move into adult social care.

In 2017, Virgin Care ran over 400 NHS services, but despite the scale of its business the company is said to have shown no sign of making a profit.

In 2016 the company won a £700m contract to run community services in Bath and Somerset, agreeing to re-invest any profits it made back into the service.

But when it failed to win a community health contract in Surrey last year it successfully claimed undisclosed damages, rumoured to be as much as £2.6m.