• Central Surrey Health gets integration contract halted with legal challenge
  • Community services social enterprise said it was “marginalised” from provider alliance including hospital trust and GP federations
  • CSH’s chief executive left for role with hospital trust two months before challenge to CCG procurement process

A large social enterprise has taken legal action against a CCG after a dispute with its former collaborators in a £100m community services contract.

Central Surrey Health began legal proceedings to halt the Integrated Dorking, Epsom and East Elmbridge Alliance going ahead with a contract it had won from Surrey Downs Clinical Commissioning Group.

The alliance had won the contract with Epsom and St Helier University Hospitals Trust as lead provider, alongside CSH and three GP federations.

But a court last month granted an injunction against the start of the contract in October, after CSH brought a claim that it had been “marginalised” within the IDEEA – and as such the contract agreed by the CCG was invalid. CSH was the incumbent provider.

In an interview with HSJ, CSH chief executive Steve Flanagan and contracts director Faiza Rasheed said the conflicts between their organisation and the rest of the IDEEA had been over:

  • which body held the formal CQC registration – CSH felt it should retain this, rather than cede it to Epsom and St Helier;
  • clinical control and leadership of the workforce;
  • and; integration of IT systems.

Epsom and St Helier would not comment on the disputes within the IDEEA. CSH said its former partners claimed it had left the alliance, which they deny.

In a statement, Mr Flanagan said: “After significant efforts to negotiate a satisfactory outcome, we have been left with no choice but to launch legal action against Surrey Downs CCG, who decided it was appropriate to continue with the contract award without CSH.

“Launching legal action was done with a heavy heart and absolutely as a last resort - we are still committed to resolving the situation as quickly as possible and have made numerous attempts to continue negotiations with the CCG and IDEEA partners.”

CSH has instructed international law firm Gowling WLG and the challenge was brought under the Public Contracts Regulations 2015.

A spokeswoman for Surrey Downs CCG said: “Since February, members of the IDEEA partnership have been in discussions to formalise their relationship ahead of entering into the contract to deliver the new service.

“Following these discussions, in July 2018 the CCG was advised by the trust that the IDEEA partnership would continue without CSH Surrey’s involvement.

“After further discussions, the CCG took the decision that it was appropriate to continue with the contract award, subject to the completion of a satisfactory due diligence process.”

The joint bid was the only one the CCG received.

Asked if any of the blame for the breakdown in the relationship should be attributed to CSH, Mr Flanagan told HSJ: “Absolutely not” – but he stressed “my door is open” to the CCG and IDEEA members. He also said he had no doubt that if CSH had submitted a rival bid, instead of a joint one, it would have won.

Central Surrey Health’s previous chief executive Stephen Cass left in May this year and took up a role with Epsom and St Helier University Hospitals Trust.

Mr Cass’s Linkedin page lists his current employment since September 2018 as interim director of the South London Renal Operational Delivery Network. From June to August 2018 he is listed as “programme director” at the trust.

Mr Flanagan had been a non-executive director at CSH for five years before taking up the chief executive role in August this year. In June and July, the organisation was led by Bill Caplan as executive chairman.

Mr Cass had taken over as chief in June 2017, succeeding Jo Pritchard, one of the founders of the social enterprise. Ms Pritchard had been chief executive for two years, and joint managing director with another founder for eight years prior to that.

CSH’s most recent accounts show a 2017 turnover of £32m and an operating profit of £322,000. It employed 801 people and paid its highest paid director £162,000.