A subsidiary of Rydon has lost a High Court challenge against an NHS trust it had accused of breaking procurement rules by bowing to political pressure.
Ryhurst, which forms part of the Rydon Group, had been named preferred bidder by Whittington Health NHS Trust in Islington, north London, to deliver a modernisation programme on 2 June 2017, just under two weeks before the Grenfell Tower fire. It was due to join a strategic estates partnership worth £300m, which would have seen it launch a subsidiary joint venture with the hospital.
Local MPs, including Labour frontbenchers Jeremy Corbyn and Emily Thornberry, called on the trust not to use the firm, because of both opposition to the estates partnership model in general and because sister company Rydon Maintenance had carried out the refurbishment of the Grenfell Tower in 2015-16. The trust abandoned the procurement after this, prompting Ryhurst to sue, accusing the trust of breaching the Public Contract Regulations 2015.
But His Honour Judge Stephen Davies found in the trust’s favour at the High Court on Friday, agreeing that the NHS body had other main reasons for abandoning the procurement. He also said that where stakeholders had taken Grenfell into consideration in not supporting the award, they had been “rational” to be aware of the risk that the Rydon Group could “fail”.
He noted the hospital board had an improved financial position and relationships with other public sector organisations in the time between the preferred bidder award and the decision to abandon procurement, which meant it no longer needed a single JV partner under the same model. These were “both genuine and proper and rational reasons for making the decision”, the judge said.
Ryhurst had not proven that political pressure contributed to the decision, Judge Davies added, even though it had taken Grenfell into account when assessing the support from stakeholders, including local MPs. He said there were “rational reasons” for the lack of support that may have been connected to Grenfell, including that the JV with the trust could be “compromised” if the Rydon Group were to fail due to issues relating to Grenfell.
After the judgement, Labour leader and Islington North MP Jeremy Corbyn said on Twitter: “I welcome today’s decision of the High Court to support our local hospital, the Whittington, against the ludicrous claim by the company Ryhurst that it should be paid millions for not getting a contract. Our NHS must never be ripped off by the greed of these companies.”
Whittington Health NHS Trust CEO Siobhan Harrington said: “We are very pleased at this outcome. We were always disappointed that Ryhurst chose to take legal action and we defended our decision to abandon the procurement robustly.”
A Ryhurst spokesperson said: “We are disappointed with the outcome and are considering our position.”
