Trust accused of dropping estates deal after pressure from Corbyn

Ryhurst, a subsidiary of construction firm Rydon Group, has argued in the High Court that it lost out on a contract with the Whittington Hospital Trust because of political and public pressure in relation to the parent company’s links to the Grenfell Tower fire.

Ryhurst was not involved in any refurbishment on Grenfell Tower, but another part of the Rydon Group was the lead contractor.

The trust rejected the firm’s claim it dropped the deal because of pressure stemming from the association with the Grenfell fire. It said its financial situation had improved and it no longer needed to enter a joint venture to manage its estate. The trust said it also based its decision to abandon the contract on “industry developments”, referring to the “industry ramifications” of both the Grenfell Tower fire and the collapse of Carillion.

Ryhurst wants the court to order the trust to award it the contract. It is also seeking as yet unspecified compensation for loss of profits from the contract and the costs of going through the tender process.

The dispute hinges on events in 2017, when the company alleges the trust came under pressure from “a number of people and/or entities campaign[ing] to persuade [the trust] not to award the contract to the claimant as a result of its perceived connection with the Grenfell Tower tragedy”.

Ryhurst’s submission said the source of the pressure included a local campaign group “and a number of MPs, including Jeremy Corbyn”.

The company alleges the campaigners were aware of the decision to abandon the procurement process on 22 June, five days before the decision was made at a private board meeting. The trust denies this.

The contracting process began on 10 October 2016 when the trust put the SEP contract to tender. On 2 June 2017, Ryhurst was named preferred bidder. On 14 June, the Grenfell Tower fire killed 72 people.

On 24 July, the trust decided to pause the procurement process. It then decided to continue with Ryhurst as the preferred bidder, defending this decision publicly “up to and including January 2018,” Ryhurst told the court.

However, on 23 February 2018, an unnamed representative of the trust said it would be “politically impossible” to sign the contract, Ryhurst said. The trust’s evidence claims that “to the best of [its] knowledge, no such statement was made”.

By 28 June, the trust announced it would be abandoning the process, after the board took the decision in a private meeting the day before.

The trust said it had entered the contract because it did not have enough capital to invest in its estate and did not have in-house expertise to manage the land and buildings.

In a letter to Ryhurst informing the firm of the board’s decision, the trust said it withdrew from the tender because, by then, it had improved its financial position as well as relationships with key neighbouring organisations, including local councils and the north central London sustainability and transformation partnership.

It argued it no longer needed to enter a SEP as it could “access additional support from a range of partner organisations”. The trust also said there were new risks that its “stakeholders” would not support its masterplan or “business plans developed through the SEP”.

Both parties declined to make any substantive comment.

As revealed by HSJ in March, Ryhurst has made a similar claim against the Countess of Chester Hospital Foundation Trust and Wirral University Teaching Hospitals FT after the trusts abandoned their procurement for a strategic estates partner.

In a leaked procurement memo, the trusts said they decided to abandon the procurement “due to uncertainty and risks arising out of the tragic events at Grenfell Tower”.