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NHS contract challenged

The NHS is facing a legal challenge from private provider Care UK, after four GP-led clinical commissioning groups awarded an elective care contract instead to a local NHS Trust in East London.

The four commissioning groups – from Barking and Dagenham, Redbridge, Havering, and Waltham Forest – judged that the NHS bid would do a better job for a lower cost. Care UK, Britain’s largest private health and social care company, had previously supplied elective care services (pre-arranged, non-emergency care) in the area, but the commissioning groups opted for the bid from the Barking, Havering and Redbridge university hospitals NHS trust. The contract covers services such as general surgery, orthopaedics and ophthalmology for nearly a million local people.

Now Care UK has lodged a complaint, on the grounds of “discrimination”, with NHS economic regulator Monitor, claiming that the contract was improperly awarded. Monitor has launched an investigation, which puts the process on hold, potentially delaying the opening of new services.

The complaint is likely to lead to significant costs in legal fees for the NHS, as the commissioning groups must now prove that their assessment of the bids was “consistent with their obligations to act in a transparent and proportionate way and to treat providers equally”.

This is exactly what was predicted when the NHS was opened up to competition in 2012 by the last government’s Health and Social Care Act. Money which should be spent on patient care will now instead go towards defending the NHS in the courts. This case could be the first of many to drain the NHS of precious funds.

Care UK is owned by private equity firm Bridgepoint Capital. It made profits of about £53 million in 2014 from its national portfolio of hospitals, GP surgeries and mental health centres.

• In July 2014 the House of Commons Public Accounts Committee noted that only 21 of Monitor’s 337 staff had an NHS background – and just seven had a clinical background. This “damages Monitor's credibility in dealing with trusts and its effectiveness in diagnosing problems and developing solutions,” said the MPs.