Sir Richard Branson's bid to run children's health and social care services in Devon is being challenged at the High Court / Getty Images


Sir Richard Branson's expansion into the NHS could falter next week when his bid to run children's health and social care services in Devon is challenged at the High Court.

Virgin Care Ltd was controversially named as the preferred bidder to run Devon’s integrated children’s services in July this year by the NHS Devon, Plymouth and Torbay Primary Care Trusts cluster and Devon County Council.

Lawyers acting for a mother whose disabled children use the health and social care services are seeking a judicial review on the grounds that the council and primary care trusts failed to properly assess the impact of the move into the private sector on vulnerable young people reliant on the services.

Virgin saw off two other bids to secure the £132m three year contract to run all frontline children’s including mental health care, school nursing, health visitors and services for children with disabilities and long-term health conditions.

The application for judicial review, which will be heard next Monday and Tuesday, will allege that health and council leaders failed to carry out an impact assessment as required under the Equality Act 2010.

The Devon PCT cluster has always insisted that the transfer of services to Virgin will have no impact on patients as it merely a change of management.

But lawyers at Deighton Pierce Glynn, the firm acting for the mother, will argue that all management changes inevitably have an impact and the must be properly assessed to ensure vulnerable people do not suffer detriment.

The deal, if it goes ahead, will see Virgin Care take over around 1,100 staff employed by NHS Devon and Devon county council from March 2013, and care for as many as 2,400 children. Virgin will also be responsible for providing complex services for children with eating disorders and substance misuse issues, as well as a low security mental health unit, social services and psychotherapy – everything apart from child protection.

The services were put out to tender following the Labour government’s national Transforming Community Services directive in 2009, banning PCTs, which are soon to be abolished, from providing services directly.

Solicitor Adam Hundt, representing the mother who has been granted anonymity, said: “This is a service for one of the most vulnerable groups in society and they are going to a company with no established track record in this area.

“Extra care needs to be taken to assess the impact of this move, particularly when you are introducing the profit motive. It is not good enough to say there will be no impact.

Virgin has expanded fast in England since 2006 and currently provides 120 community and intermediary health services such as GP surgeries, sexual health clinics to neurological services. Its biggest single NHS contract is worth £500m for which it provides all community health services including diabetes care, sexual health services, prison healthcare, community nurses and end of life care across two parts of Surrey.

Its latest victory came last month when NHS Dorset named Virgin as preferred provider of medical and community services at Lyme Regis medical centre in a contract worth up to £8.5m over five years.

A spokesman for Virgin Care, Russell Elliott, told The Independent that the company had a proven track record in caring for children as it had been running health centres, out of hour clinics, walk in centres and minor injury units for six years. Mr Elliott said the company had been providing services for children with complex needs in Surrey for seven months.

Rebecca Harriott, director of commissioning development for the Devon cluster, said: “We firmly believe that there is no case to answer and will strongly defend the action. We are continuing to progress the current process to award a final contract and transfer staff by 31 March 2013.”