Surrey Still Refusing to Explain Millions Paid to Virgin After Procurement Fail

You may remember that Virgin Care successfully pursued a court case against Surrey County Council and six Surrey health bodies (clinical commissioning groups).

That followed a procurement exercise for children’s health services in which Virgin was unsuccessful. Whilst the public bodies tried to keep the amount of settlement secret, it looked from some accidental disclosure that we were talking several millions.

A Freedom of Information request from Liam Ward has been pursued through the “What Do they Know” website, and after months of delay, Surrey has finally given answers to the questions around what happened and how much has this cost – or in reality, has failed to give answers. Their response is a classic of its genre, full of excuses and diversions. The old favourites come up, like this:

We do hold the information you have requested.  However, this information is exempt from disclosure under:   

  • Section 42 of the FOIA as it is subject to legal professional privilege 
  • Section 43(2) of the FOIA as it is likely to cause prejudice to the commercial interests of the Council and others

Now the council suggests that the total sum paid to Virgin will be disclosed – “a decision had been taken that the specific information requested would be published as part of our 2017/18 Statement of Accounts due to be published in July 2018”.

But really, we feel it is more important to know what happened in the procurement process. That’s what matters, not least because for all we know, other health bodies might be making the same mistake at this very moment. We need to spread good practice, which means understanding and learning from  bad practice too.

Instead, the response says this – “Publication of detailed information relating the analysis of risk and the commercial reason leading to the settlement would be likely to increase risks of challenges to other similar procurement exercises undertaken and ultimately lead to additional costs for commissioners”.

That’s pretty remarkable when you think about it – they’re saying that other public bodies might be screwing up in the same way and if we explain what happened, other suppliers might challenge too! But wouldn’t it just be better to make sure others don’t make the same mistakes?

There’s also just the aspect that this is public money. I’m a Surrey resident – don’t we have a right to know what went on that led to Richard Branson and his firm getting millions of our money?  As we said before, we don’t blame Virgin for challenging if the procurement process was flawed, but this secrecy does them no favours either.

So, we’ll have to see how much emerges in July. In the meantime, I will be writing to my local Surrey MP, Michael Gove, and a few other folk I think. I’d really like National Audit Office to take a look at this too …

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Voices (3)

  1. Trevor Black:

    This looks so familiar! Firstly I assume in defence of my profession that no qualified procurement professionals were involved in the ultimate decision. Secondly, I am picking up a smell of political influence mixed with in-house weak legal advice and thirdly involvement (at great expense) of an external legal advisor who doesn’t have a clue about EU procurement but the politicians will be no doubt be bowled over. Such is the state of procurement in local government in 21st century Britain. There is certainly a fine line between corruption and incompetence and the lessons learnt speeches rarely produce any lessons that have been learnt.

    1. Mr Grumpy:

      In this case Trevor, it wasn’t just SCC that were signed to the contract and also wasn’t them who led on this procurement exercise. There were other parties (namely CCG’s) who took a more active lead. So what you have is health and local government involved in this exercise and hence why the exemptions were utilised as further information could put those CCG’s at risk. I am not saying it’s justifiable or even correct.

      The procurement professional/s wouldn’t have the ultimate say on the outcome, however I would expect them to use some form of influence to prevent any potential legal risk implications as result of a decision or an award being made.

      The one element that trips up most procurement exercises under OJEU tends to be evaluation. It’s an area that needs urgent addressing. When I did competitive procurement exercises, when it came to project team selection, I would run them through scenario’s they could face eg debriefs and challenges against decisions based on misguided expertise and from that it would tell me if we had the right expertise or leads involved in procuring goods, services or works. Unfortunately in most cases, when external expertise is required, the public sector cannot afford it, so procurement professionals are backed into a corner in which they need to go above and beyond to bridge that gap.

      Procurement professionals are generally led by “subject matter experts” when it comes to defining requirements/specifications and importantly trust them to be able to define those requirements/specifications, however it can be difficult for a procurement professional to spot absolutely if a specification/requirement has been subject to bias or preferential favour of a particular supplier (especially in health services) and hence you are so far down the line before suppliers see that.

      In this case, it looks like too many chiefs and not enough Indians.

  2. Mr Grumpy:

    Peter, you are the proverbial dog with a bone with this particular subject 😉

    Whilst I agree in principle that yes knowing particulars of this project and where the procurement process become flawed could prevent others making similar mistakes, However I ask look at the amount of flawed public sector procurement exercises. Have lessons really been learnt? History doesn’t really teach us much given many of the mistakes are often repeated in other procurement exercises. This isn’t a slant on public procurement professionals, it’s just I am sure many (including myself in this) where we see cases such as the NDA or even Virgin Trains or Scottish Fire Service failures and say to ourselves “That’s something I wouldn’t do or be party to” and before you know it a project you are working on is headed in one of those directions and the cost failure weighs heavier sometimes against the risk of a fudge. I am proud to say I’ve never had the misfortune of being legally challenged, however I’ve seen many who have and even in the event they avoid being found of wrong doing, it can shatter confidence.

    Those projects above, yes the practice was shocking, however I can understand the factors that might lead a procurement professional down that path with mounting pressures that might accrue that happen outside of their scope of vision. My point is that such mistakes that led to this outcome with this project, will likely occur somewhere else despite flashing beacons.

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