PLC Public Sector reports:
In this post we look at the recent reports concerning a successful challenge to the decision of Devon County Council and NHS Devon to appoint Virgin Care Ltd as their preferred bidder for a contract to provide front line children’s services in Devon. The challenge was brought by way of judicial review by a parent of a child requiring such services.
The PSED and the accompanying specific equality duties and their application to public procurement
Equality duties and the public procurement regime have had something of an on/off relationship in recent times. The Equality Act 2010 received Royal Assent on 8 April 2010. As well as seeking to harmonise, simplify and improve the existing discrimination legislation, section 149 of the Act (which came into force on 5 April 2011) introduced the public sector equality duty (PSED), which requires public sector organisations to have due regard to the need to eliminate unlawful discrimination, advance equality of opportunity, and foster good relations across all of the protected characteristics under the Act.
In addition, section 153 of the Act permits the government to introduce secondary legislation requiring public bodies to use procurement to drive equality. In June 2009, the Government Equalities Office (GEO) commenced a consultation that proposed placing specific requirements on contracting authorities to take account of equality issues when planning procurements and to also consider promoting equality through the use of award criteria and contract terms.
Despite the GEO reporting broad support for its proposals in January 2010, in August 2010, the GEO published a further consultation stating that the coalition government did not intend to introduce specific equality duties relating to public procurement.
Contracting authorities in Wales and those advising them should note that the National Assembly for Wales has taken a different approach, and included requirements relating to public procurement in the specific equality duties that it has introduced. While those in Scotland should be aware that the Scottish Government elected to pursue a third option.
So, in short, the application of the specific equality duties under section 153 to public authorities through the UK has been something of a mess. However, this muddled approach risks overshadowing the key point: throughout the process of the implementation of the specific duties, the sensible advice for contracting authorities was always that they should not take the absence of specific duties to mean that they do not need to take equality issues into account in their procurements, as the general public sector equality duty under section 149 will still require this.
Judicial review and public procurement
Judicial review is being increasingly seen as a viable option to challenge public procurement processes. This can be for many reasons, one of the most obvious is where the potential claimant does not have the standing to bring a claim under the Public Contracts Regulations 2006, for example, they are a service user. It has also previously been successfully argued in Hereward & Foster Llp and another v The Legal Services Commission that a procurement process could breach the requirements of an equality duty (in this case the gender equality duty which has since been replaced by the PSED).
The Devon case
On 19 October 2012, it was reported that a decision of Devon County Council and NHS Devon to appoint Virgin Care Ltd as their preferred bidder for a contract to provide front line children’s services in Devon had been declared unlawful, as they had failed to meet the requirements imposed by the PSED, including not properly assessing the impact of the decision on the children of Devon. However, the High Court ruled that the decision taken by the authorities to award preferred bidder status for the £132 million three-year contract to Virgin Care Ltd could stand because:
- The claimant had failed to prove that her child or any other would suffer under the proposed new model.
- Delaying the handover process would be detrimental to service users.
- The timescale for the introduction of clinical commission groups (April 2013) meant that delaying the process was not possible.
Therefore, while this procurement process has been allowed to proceed, a clear message has been sent that public procurement processes can and will engage the PSED irrespective of whether a requirement to comply any specific duties exists.
Scoping the criteria or a operational decision?
The extent of how interesting this decision is remains unclear (if anyone is able to share a copy of the transcript we would be interested to read it). If it relates to the design of the procurement process as a whole, then the fact that the PSED applies is nothing new (as the decision in Hereward highlights). However, if it goes further and actually relates to operational decisions taken by procurement officers to implement a strategy, then it could have wider implications with greater pressure being placed on those carrying out procurement exercises (which as the West Coast franchise debacle shows is not something that will be welcomed). You could argue that it is difficult to separate the two issues, but there is undoubtedly a subtlety which could (will) lead to numerous disputes in the future.
And don’t forget…
Also in the same area, it should not be forgotten that on 8 March 2012, the Public Services (Social Value) Bill received Royal Assent to become the Public Services (Social Value) Act 2012. The Act requires public authorities to consider the economic, social and environmental well-being of their area when undertaking public procurements. The Act sets out a number of requirements that public authorities must comply with before starting the procurement process, including considering:
- How what is being procured might improve the economic, social and environmental well-being of its area (section 3).
- How that improvement might be secured (section 3).
- Whether to have a consultation on the potential improvements themselves or how they might be secured (section 7).
For more information on the steps that should be taken to ensure compliance with the Act, see Ask the team, What steps should my authority take to prepare for the enactment of the Public Services (Social Value) Bill 2010-11?.
The Act is not yet in force, that will require a statutory instrument. Previous indications have been that this will happen at the start of 2013, but as can be seen from the changing approach to the inclusion of specific equality duties, there can be no guarantees.
PLC will shortly be publishing a new suite of materials on the PSED and the specific duties in England, Wales and Scotland.