201606.14

NHS Privatisation Raises Its Head in Contract Tendering Dispute

Privatisation of NHS services is always a controversial subject and that was certainly so in one case in which an NHS trust was stripped of a contract to provide adult community services after losing out to a private company in a tendering exercise.

The services provided by the trust had drawn some complaints and, despite remedial action having been taken, the contract was put out to tender by NHS commissioning groups who were responsible for procuring services in the relevant area. Although the trust scored better than the company in quality terms, the latter did better on price and was awarded the contract.

The trust launched proceedings against the commissioning groups under the Public Contracts Regulations 2015 (the regulations) on the basis that something had gone wrong with the way in which tenders were scored. By operation of the regulations, the award of the contract to the company was automatically suspended pending a resolution of the dispute.

The commissioning groups applied to the High Court to lift that suspension. In resisting the application, the trust argued, amongst other things, that it is a not-for-profit body, that exists solely to serve the public good, and that damages would not be an adequate remedy for the loss of the contract.

The Court recognised that there was a serious issue to be tried in respect of the trust’s criticisms of the tendering process. In lifting the suspension, however, the Court found that, on the assumption that the trust won its case at trial, its financial losses could be readily quantified and fully compensated. The trust had also not established that the balance of convenience lay in favour of maintaining the suspension. The ruling opened the way for the commissioning groups to award the contract to the company forthwith.

Kent Community Health NHS Foundation Trust v NHS Swale Clinical Commissioning Group & Anr. Case Number: HT-2016-000046

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