News

01.01.18

Virgin Care wins £2m payout from NHS after losing contract to provide children’s medical services

 The NHS has been forced to pay Virgin Care £2m after losing a High Court ruling taken out over the awarding of a contract to provide children’s medical care in Surrey.

Richard Branson’s company — which won £1bn of NHS contracts between 2016-17 — took out the action following an NHS Providers team and a social enterprise firm being granted the three-year, £82m contract last year — and secured an out-of-court settlement in November.

Virgin Care claimed that there were “serious flaws” in the procurement process of the contracts.

The Daily Mail reported that Surrey County Council paid £440,000 to the private healthcare provider, with accounts from six CCGs and NHS England showing payments to Virgin Care for £1.565m.

An extra £243,000 was diverted from frontline NHS services to cover legal fees, according to the Mail.

The court case reflects a continuing trend of NHS disputes between public and private firms over contracts to provide care around the country. Earlier this year, the East of England Ambulance Trust revealed it was forced to turn to private ambulance services due to “extreme pressure” over winter.

Between 2016-17, the NHS spent £78m on private ambulances, a rise of 22% over the last two years.

A finance paper was published by NHS Surrey Downs last year, outlining that the liability for the case was £328,000 — the report was removed from its website after the Health Service Journal made inquiries about the settlement.

East Surrey commissioning group paid almost £200,000 of the overall settlement, and has been placed into special measures because of its financial position, the Mail reported.

In January, a Department of Health and Social Care spokesperson said: We are clear on how we expect every penny of British taxpayers money to be spent — on providing world-class care to patients — and we expect NHS England to ensure CCGs across the country are doing just that whilst abiding by the competition rules.”

A Virgin Care spokesperson said: "Our stated preference throughout remained not to be paid damages but that the process be re-run properly in the interests of local families and the frontline staff.

"Contrary to reports, no money has been pocketed by Virgin Group or Sir Richard Branson and we continue to invest funds in the frontline NHS services we deliver.

‘We took this action because we were concerned that there may have been serious flaws in the procurement process."

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Image credit: Robert Perry, PA Images

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