Chief executive says decision on UnitedHealth contract is a lesson for all PCTs

The chief executive of the primary care trust which had its contract with UnitedHealth Europe quashed by the Court of Appeal has urged the rest of the NHS to learn from the case.

North Eastern Derbyshire PCT chief executive Martin McShane said last week's ruling - that the PCT breached its duty to consult when it awarded a primary care contract to UHE - provided the service with clarification of how consultation should work.

He said the message from the judge was that under the Health and Social Care Act, organisations needed to be able to formally demonstrate that they had taken the views of stakeholders into account, which meant seeking input before setting the criteria for a tender.

Mr McShane said: 'If we had checked our criteria with the patient and public involvement forum, that would have made the difference.'

The chief executive pointed out that the 'genuine belief' of the PCT - that section 11 of the act did not apply in this case - had been backed by the strategic health authority and health secretary.

In June, the High Court concluded that section 11 did apply, but said that even if the PCT had considered the views of the claimant, Labour parish councillor Pam Smith, it would 'probably' have made the same decision. Last week's ruling agreed that section 11 applied; it went on to quash the contract award, saying the court could not determine what effect consultation would have had. The process will now start again and be taken over by the new Derbyshire County PCT in October.

Mr McShane said the courts' judgments on section 11 provided the NHS with clear guidance on the formal process for consultation. 'On behalf of the NHS we have clarified this'. He said the PCT had a track record of involving the community in planning services.

Mrs Smith told HSJ that she was 'over the moon' with the verdict - and would now urge the PCT to give residents a vote to decide who provides medical services in the villages of Creswell and Langwith.

She said: 'UnitedHealth have never even run a surgery before and they won the contract. I don't want our village to become a social experiment. Patricia Hewitt says we have choice and now we intend to use the right of choice.'

While the verdict is seen as a blow to UHE, the company last week won contracts to provide primary care services with neighbouring Central and Greater Derby PCTs. In a statement, UHE chief executive Dr Richard Smith said: 'We support public consultation and are pleased that we will be providing primary care services elsewhere for people in Derbyshire. We believe that we can make a significant contribution in the region to reducing health inequalities.'

Alex Nunns of pressure group Keep Our NHS Public said Mr Smith's statement was equivocal. 'It might be that UnitedHealth won't go for the tender [for North Eastern Derbyshire] again, given the level of opposition.'

UHE said it would 'wait and see' details of the new tender before making a decision.

Dr Elizabeth Barrett, a GP in Creswell and one of the unsuccessful bidders, said she would submit a new bid 'that hopefully will have the support of patients and the PCT'.

She said the UHE bid was designed to undercut other bids on price and act as a loss leader to position UHE in the lucrative commissioning market: 'The DoH rhetoric is that the alternative provider medical services contract means we are all the same - how can a small village GP and a massive multinational company be the same?'