- Company challenges decision by two trusts to abandon procurement
- Ryhurst wants £2m in compensation
- Estates partnership procurement stopped after Grenfell Tower fire
Two NHS trusts have been taken to court after pulling out of a multimillion pound estates partnership over concerns about an estates management company’s links to a Grenfell Tower contractor.
Ryhurst has submitted a claim for £2m from Countess of Chester Hospital Foundation Trust and Wirral University Teaching Hospitals FT after the trusts abandoned a procurement for a strategic estates partner.
As revealed by HSJ in December, the trusts scrapped the procurement due to “uncertainty and risks” in the wake of the Grenfell Tower fire.
Seventy-one people died and at least 70 more were injured in the fire at the tower last June.
Ryhurst is a subsidiary of the Rydon Group, which was the lead contractor overseeing the refurbishment of the tower between 2014 and 2016.
Shortly before the fire happened, Ryhurst was named as the preferred bidder to become the trusts’ strategic estates partner.
Under the partnership, capital projects between the value of £40m and £120m would be developed across the two trusts.
But at a hearing in the Technology and Construction Court on Friday, Sarah Hannaford, representing Ryhurst, said the company was told the trusts did not wish to contract with them because of the “link to Grenfell and the public criticism that might then arise”.
Ms Hannaford said Ryhurst believes this was an unlawful decision and said the trusts had breached the Public Contracts Regulations 2015.
Unless the parties agree a settlement, the case will go to full trial.
The Wirral trust, which has been mired in governance problems in recent months, reported a £20m deficit in 2017-18 and is forecasting a £7m deficit in 2018-19.
March board papers from Countess of Chester show the trust forecasting a £3.1m deficit for 2017-18.
Neither trust would comment while the case is active.
Stephen Collinson, managing director of Ryhurst, told HSJ: “We felt that the contract was awarded to us as a successful company operating in the strategic estates market and the actions of the trusts fell short of the standards we would expect in a procurement of this type.”
Ryhurst already works with several NHS trusts, including Whittington Health Trust, Lancashire Care FT, Isle of Wight Trust, and Cheshire and Wirral Partnership FT.
Several NHS trusts are turning to strategic estates partnerships with a private sector company in a bid to unlock capital funds for projects or deliver efficiency programmes.
The partnerships are established as joint ventures between NHS organisations and the private firm.