Virgin to sue the NHS

Following MD’s revelation that Virgin Care was cutting up rough after losing the £82 million Surrey children’s services tender (Eye last), the Health Service Journal has discovered Richard Branson’s business empire is suing NHS England, Surrey County Council and the county’s six clinical commissioning groups after commissioners awarded the three-year contract to Surrey Healthy Children and Families Services Limited Liability Partnership.
A Virgin Care spokesman told the HSJ the company had concerns about “serious flaws in the procurement process which has led to an outcome that we strongly feel is not in the best interests of the children and families we support, or our valued colleagues.” A Virgin Care whistle-blower was less convinced the company deserved to retain the contract it had held for 5 years. ‘A lot was promised by Virgin when they won the contract, but very little materialised. We all got nice phones and new computers, but the recruitment needed into developmental paediatrics didn’t happen. There was lots of branding and leadership courses, but I don’t think the care of children with special educational needs, or the support for their families, improved. For example, a key receptionist was not replaced and it’s now very hard to navigate the system if you are not literate.’

This was backed up by Guildford and Waverley CCG’s Wellbeing and Health Scrutiny board, which said the complexity of commissioning and contracting arrangements has led to children and young people experiencing “service variation with differing access for families…a well as gaps in service provision and variation in waiting times.” A joint CQC and Ofsted report in October 2016 into the effectiveness of the Surrey area in implementing disability and special educational needs reforms resulted in a ‘Written Statement of Action’ because of significant areas of weakness in the local area’s practice. ‘Overwhelmingly, the parents and carers of children and young people who have special educational needs and/or disabilities, and who spoke with or contacted inspectors, lack confidence in the local area’s leaders and services. This is the result of parents’ continuing difficulties in obtaining the timely and accurate assessment of, and planning for, their children’s needs.’

None of this means that there weren’t faults in the commissioning deal that removed services from Virgin Care, and the company mounted a successful legal challenge in 2016 in Hull, forcing NHS commissioners to undertake a full procurement process for several GP services. In June 2016, the NHS took Virgin to court after Swale CCG and Dartford, Gravesham and Swanley CCG awarded a £127m community services contract to the private firm. The move was challenged by incumbent NHS provider Kent Community Health Foundation Trust. It argued the assessment was flawed and that transferring the work to Virgin Care would cause legal, IT and human resources problems affecting patient care. The High Court suspended the award of the contract. The Surrey spat could be payback.

MD predicted all this waste and mayhem when the Health and Social Care Act was introduced. Vast amounts of time and money are wasted on preparing bids and tenders, supported by costly legal and management consultancy advice, that often don’t succeed and even when they do, the process for rebidding in 2 or 3 years starts all over again. NHS Commissioning is generally poor, with repeated glaring errors that the private sector ruthlessly expose. The legal sour grapes exhibited by Virgin are an entirely predictable consequence of aggressive tendering, and if not successful may at least minimise Virgin’s losses. In Surrey, the company are demanding close to £1 million to ‘de-Virginize’ care records and extract the relevant information to pass onto the new providers on April 1. Staff who have suggested that the last reports and care records should be printed out and handed over as hard copy have been told nothing must be printed out. Staff have also been ordered not to speak to the press and to be vigilant about anyone trying to film on the premises.

Surrey children’s services and the NHS are unlikely to be free form Virgin Care’s lawyers for a long while yet. Meanwhile, the company has published its accounts to March 2016, with a loss of £10.5 million. The accumulated losses are now £84.1 million, while the share capital of the company is only £53.8 million. The company has a bank overdraft of £368,000 and has yet to balance its books in 7 years. If it was an NHS trust, it would be in special measures. So what game is Branson playing?