CCG cancels contract extension after private equity buys Virgin Care

5 Comments

Decision prompted “contractual and financial risks” concerns around contract following private equity takeover, CCG says
Virgin Care was bought by private equity firm last year and rebranded HCRG Care Group
West Country CCG was set to extend a seven-year contract before takeover
Company will “continue to operate as normal” while working with ICS “to agree and understand how we move forward together after 2024”

West Country commissioners will not extend their contract with the firm formerly known as Virgin Care, citing concerns about ‘ongoing contractual and financial risks’ arising from the firm’s takeover by a private equity firm.

Bath, North East Somerset, Swindon and Wiltshire Clinical Commissioning Group and Bath and North East Somerset Council announced their decision about the community services contract today.

The move follows Virgin Care being purchased by Twenty20 Capital in December last year and re-branded as HCRG Care Group.

The CCG and council said a review of the contract prompted by the takeover had “highlighted uncertainties arising from the change in ownership of Virgin Care, including ongoing contractual and financial risks”.

The commissioners said in a statement they had not been “aware of the potential sale of the provider, prior to making their decisions [about the contract]”.

They then “paused formal confirmation and notification of the extension decision” following the announcement of the sale and commissioned an independent review “of the implications of these changes to local services”.

The company has been providing NHS and council commissioned health and care services in Bath and North East Somerset since 2017. The contract will now end on 31 March 2024.

Virgin Care was a long-standing but controversial provider of NHS-commissioned services. Most recently the firm was part of a consortium with NHS providers that won a 10-year, £440m contract to provide community services in North East Essex.

It is not clear what impact, if any, BSWCCG’s decision will have on the Essex deal.

HSJ asked whether Suffolk and North East Essex ICS has changed – or was considering changes to – its contract following the takeover and BSWCCG’s action. The ICS declined to answer the question asked.

It did however provide the following statement. It said : “We note the decision by BSWCCG. We remain diligent and have continued oversight of all contracts to ensure ongoing effectiveness and probity.”

BSWCCG accountable officer and chief executive of the Bath and North East Somerset, Swindon and Wiltshire integrated care system Sue Harriman said the decision was been made “after carefully considering all the options available to us”.

“This decision offers an opportunity to create a new, exciting and integrated model for health and social care services for local people and allow us the opportunity to commission these services at scale,” she added.

Council leader Kevin Guy said: “Since we heard the news about the sale of Virgin Care Services Ltd we have worked closely with our CCG partners to gather the information we needed to make a considered, informed decision about the contract extension.”

A spokesperson for HCRG Care Group said: “We believe that we are well placed to continue providing the services to the high quality required and are proud of what we have achieved and what we will continue to deliver.

“We will continue to operate as normal while we work in partnership in B&NES to agree and understand how we move forward together after 2024.”

STORY UPDATED at 16:18 on 27 May to provide statements from Suffolk and North East Essex ICS and HCRG Care Group which were provided after the story was first published.