NHS trust refuses to publish advice on £1bn contract involving firms guilty of corruption

Martin Shipton

A Welsh NHS trust has refused to publish legal advice it says gave it the go-ahead to award a major construction contract to a consortium that included two firms with criminal convictions for corruption.

The near £1bn contract to build and maintain the new Velindre Cancer Centre in Cardiff was awarded to the Acorn Consortium, two of whose members – Sacyr and Kajima – have convictions for bid-rigging.

Members of the Sacyr group have been fined for infringing competition law by bid rigging in Portugal (Sacyr Neopul S.A. in 2018, fine of 360,000 euros) and Spain (Sacyr Construcción SA on 7 July 2022, fine of £16.7m). Bid rigging is a serious competition infringement and one specifically aimed at distorting or removing competition in the procurement process and thus increasing costs to the taxpayer.

Kajima Corporation was also found guilty of bid rigging in a criminal prosecution in Japan on 1 March 2021.

The Velindre University NHS Trust has argued that it was lawful to award the contract to Acorn because the convictions of Sacyr and Kajima were being appealed.

But a legal opinion given to the Colocate Velindre campaign group by barrister Simon Taylor stated: “In summary, my view, based on the limited information available, is that there are reasonably good arguments that Velindre/NHS Wales have made manifest errors and acted in breach of their duties under the Public Contracts Regulations 2015 in concluding and/or relying on the conclusion that there has been no ‘final binding judgment’ in relation to both the Competition Ground and the Criminal Conviction Ground.

“Those errors appear to have led to their failure to conduct further investigations and, in particular, require evidence of self-cleaning before making a final decision as to eligibility and awarding the Contract to Acorn in late July 2022.”

Regulations

A spokesperson for Colocate Velindre told Nation.Cymru: “The Velindre trust has claimed to Nation.Cymru that it followed UK regulations on procurement and rules for the exclusion of bids.

“But Velindre’s own account to a Senedd all-party committee in November 2024 was different. It said at that time that the procurement crisis-handling was determined by something other than UK regulations. It rested rather on adherence to specific regulations found in Wales’s Mutual Investment Model (MIM). MIM is a recast of the private/publicpartnership known originally in the UK as PFI (Private Funding Initiative).“Hence it was the MIM’s own designers and regulating lawyers that sanctioned continuation of the procurement with the company shown to have a conviction for bid-rigging.

“Such an eye-catching escape route hinged on three words found only in MIM rules and in Wales, namely: ‘by final judgment’. MIM lawyers took this phrase to mean that only a conviction finally exhausting every possible appeal could warrant the excluding of a company from tender.“These lawyers designing and managing the MIM process, then, interpreted the phrase to mean ‘after exhausting all court appeals’. The mesmerising result was that until the last throw, a lower court’s decision on serious fraud could just be passed over, for even multimillion-pound procurement and tendering purposes.

“The barrister Simon Taylor, however, shed a quite different light on the matter. For one thing, he reports that neither the EU Directive on which the UK Regulations are based nor regulation 57(8)(d) of the UK Regulations, require something called a ‘final judgment’ in relation to the Competition Ground.

“In addition, he advised: ‘There is a reasonably good argument that a conviction by final judgment just means a conviction, ie a finding of guilt by a presiding court for a particular offence and that the lodging of an appeal does not make the lower court’s determination any less final. That seems to be the interpretation used by the CPS in the UK.

“We urge the Trust to follow our example and in the public interest publish its own legal advice, to confirm or otherwise its claims, seemingly made also to Audit Wales.

“If the Welsh Government’s MIM approach to guilty verdicts really were a UK legal principle, logic surely says that an accountant convicted of multi-million pound fraud may remain free and join the Board of the Bank of England until the failure of all legal appeals. Similarly, a crime boss exploiting children could remain at large, until all court appeals were exhausted.”

Due diligence

A spokesman for Velindre University NHS Trust said: “As outlined previously, the procurement process for the new Velindre Cancer Centre (nVCC) was undertaken in line with the regulations in place at the time, alongside UK and Welsh Government policy, and with appropriate due diligence throughout.

“We do not publish legally privileged advice. However, Audit Wales had full access to all relevant documentation, including legal advice, as part of its extensive review. This comprehensive access allowed Audit Wales to reach its conclusions in its report examining decision-making on the nVCC.

“Audit Wales concluded that the Trust followed due process, was well governed and arrived at sound decisions. In relation to the procurement process specifically, Audit Wales stated that ‘the procurement process followed the regulations in place at the time, informed by extensive legal advice’ and that ‘the Trust followed legal advice and took appropriate steps in response to concerns about anti-competitive practices that emerged after Acorn’s appointment’.

“The Trust is clear that the procurement was carried out appropriately and in full accordance with the relevant legal and regulatory framework.”