Surrey Council Refuses To Explain Procurement Failure And Virgin Payment

Late last year, Virgin Care took legal action against a group of public sector health-related organisations in the county of Surrey (five commissioning health trusts plus the county council), following a procurement exercise in which Virgin, previously the incumbent provider, lost out to a public-sector bidder made up of in-house NHS providers and a social enterprise. The three-year £80 million deal covered health visitors, school nurses and speech and occupational therapy for children.

One of the six public bodies involved accidentally disclosed that the cost to them was some £300,000. (More in our Public Spend Forum article here). The other five have said nothing, and in one report in the local Epsom Guardian, a Surrey County Councillor refused to give details of the settlement or the reasons behind it, saying:

“The proceedings have now been settled on terms that are confidential to the parties. Disclosure of those terms by any of the parties could lead to enforcement action against that party. I am therefore not able to provide the information that the councillor has asked for.”  

Surely this is not acceptable. There is understandably a lot of negative public reaction to Virgin taking money away from the National Health Service, but if the procurement was genuinely unfair or incompetent, then it is their right to challenge it and seek damages. But what is more worrying is that we may never know what happened, and how or why Virgin were able to successfully win the legal case.

The desire to understand this is not primarily to allocate blame, although it would be interesting to know if any external advisers were involved; we have seen in other cases where public-sector procurement exercises have gone badly wrong that lawyers or consultants were at least in part to blame. More important though is the need to learn from this. There are dozens of major health service tenders of a similar nature going on at any point in time, and if we don’t understand what went wrong in this case, then how can we make sure it doesn’t happen again?

Hiding behind the legal settlement in terms of confidentiality is not good enough. This is taxpayers’ money that has gone to Virgin (indeed, I personally pay a significant amount of Council Tax to Surrey) so at the very least we deserve to know what caused the loss and what is being done to make sure it doesn’t happen again. If Surrey Council and the health bodies involved won’t tell us, then perhaps we need the National Audit Office to take a closer look.

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