Counting cost of council forays into private sector partnerships
LANCASHIRE County Council suffered an embarrassing blow in court last week when its decision to get a private company to run public health services traditionally provided by the NHS was blocked.
The decision to award the contract to Virgin Care was always going to be a controversial one, given it was a £100m contract to provide the Healthy Child Programme, which includes provision of school nurses and health visitors.
And it perhaps wasn’t a surprise that the two NHS organisations which normally provide such services, the Lancashire Care NHS Foundation Trust and the Blackpool Teaching Hospitals NHS Trust, decided to challenge the decision after they didn’t win.
The court found that the council’s own records of its moderation process fell short of the standards required to demonstrate how it scored the bidders.
As a result, Virgin will no longer deliver the service, and the existing NHS providers will continue to do so.
Some political voices have described this as a victory against the privatisation of the NHS.
The Conservatives who run Lancashire County Council insist the decision to award the contract to a private contractor over the NHS wasn’t politically driven.
But in reality, all talk of the political implications of the court’s ruling does is simply ignore the main problem here.
Yet again, Lancashire County Council’s foray into public-private working has failed and it’s about time someone asked why.
In 2014, the Labour administration, as it was then, pulled the plug on the public-private project with BT which was meant to save the council around £400m through the outsourcing of many back-office functions.
Labour’s decision saw hundreds of staff return to the county council’s payroll, with others moving fully into the private sector at the same time.
Lancashire County council leader Geoff Driver, who was in charge of LCC at the time of the One Connect deal and has since returned to office after the Tories won last May’s county elections, described the decision at the time as ‘political vindictiveness’ on the part of his Labour successors.
Labour pointed instead to the scheme not delivering the savings it was supposed to.
Police investigations into alleged financial irregularities around the project have now been running for more than three years, are being staffed by over 20 officers and have cost in excess of £2m to date. Then there was the £2bn - yes, £2bn - public private project led by LCC for the treatment of rubbish in the county, which LCC along with Blackpool Council brought back in house in 2014.
At the time, LCC said the move would have save money.
Two years later, it mothballed the two waste treatment plants, with 250 job losses. Of course, LCC will point to many examples of tendering work to the private sector which goes very well.
Taxis for school runs, firms to provide OAP care in home, funding care home places for the elderly and contracting out school dinner provision are all examples of that.
But it raises eyebrows when cabinet member for health and well being, Cllr Shaun Turner, describes himself as ‘being reassured’ that ‘the rest the procurement process was found to be ‘appropriate’ by the courts.
Not appropriate enough to negate the need to cancel the council’s decision though - and that surely is worthy of deeper investigation.
LCC is responsible for hundred of millions of pounds of taxpayers money being spent and it appears to have a poor track record when it comes to working with the private sector on largescale projects.
The public have a right to expect an investigation, and absolute transparency from the county council on how much this latest failing has cost.
For a start, how much have the NHS and the county council spent in legal fees going toe-to-toe in a court?
Labour, now in opposition at County Hall, has demanded answers be given at the next cabinet meeting, and external auditors be asked to investigate.
The leader of the county council, Geoff Driver, has the chance to set an example for local councils everywhere by agreeing to both demands, and making sure the county’s taxpayers can have faith in the way spending decisions are made.