Ryhurst, the development arm of Rydon, has lost a High Court battle against an NHS Trust, which abandoned a hospital procurement where Ryhurst was preferred bidder due to its parent company’s involvement in the Grenfell fire.
The subsidiary of Rydon Group was named preferred bidder for the £300m, 10-year strategic estates partnership (SEP) by Whittington Health NHS Trust in London’s Islington on 2 June 2017. This was just 12 days before the disaster at the Grenfell Tower, where Rydon had previously acted as the contractor for the refurbishment of the building.
The selection of Ryhurst subsequently came under fire from local Labour MPs Jeremy Corbyn and Emily Thornberry, who highlighted Rydon’s involvement in Grenfell Tower.
The Trust eventually abandoned the procurement in June 2018, which led to Ryhurst taking legal action, claiming that it had broken procurement law.
Ryhurst claimed the central reason for the decision was due to pressure exerted on the Trust from “various individuals and entities” including Corbyn, Thornberry, and regulator NHS Improvement NHSI). Ryhurst argued that the “ostensible connection” with Grenfell was “illusory” and “in any event of no relevance whatsoever to this procurement exercise”.
It claimed damages for the loss it said it suffered as a result of the alleged breaches of procurement law.
Reasons for Trust abandoning procurement
But judge Stephen Davies ruled that Ryhurst’s case failed and found that there were four principal reasons why the Trust decided to abandon the procurement.
One of these was the Grenfell connection, which the Trust feared could damage stakeholder support for the project. But he also found that the Trust had an improved financial position and strengthened relations with other partner organisations.
Finally, he also found that the need for NHSI to approve all projects under the SEP was a “genuine and a proper and rational reason” for abandoning. That was because NHSI approval “could be a time-consuming process with the risk of approval not being given”, with the Trust already having failed to convince NHSI not to treat the SEP as “novel or contentious”.
Judge Davies concluded: “I agree with the Trust. In my judgment the duty of transparency requires a contracting authority to notify a bidder in relation to specific occurrences of significance to the procurement. Here, as I have found, there was no change of real significance until the Trust Board formally decided to abandon the procurement at the June 2018 meeting…Ryhurst took the risk, like any other bidder, that the Trust might decide to abandon the procurement at any time before the SEP was formally entered into.”
