A campaign group has vowed to take the NHS to court to block a £14m contract extension to community health provider Locala.

Health chiefs from North Kirklees and Greater Huddersfield CCGs recently agreed to give the controversial social enterprise a one-year deal without any public tender or consultation exercise.

Locala, which was set up by managers at the now defunct NHS Kirklees, is a not-for-profit company which runs district nursing and a number of community health services such as Kirklees’ stop smoking service.

But its founding in 2011 has angered some who see its creation as unethical.

Many of the NHS Kirklees executives who authorised Locala and handed it a £120m contract went on to become Locala employees and some are now leading other NHS organisations that provide it multi-million contracts.

Locala’s contract expires on September 31, but the Batley-based organisation has now been granted a one-year extension.

At February’s board meeting of Greater Huddersfield CCG, contracting chief Martin Pursey told board members the plan was in the “best interests of patients”.

Mr Pursey said they did not yet feel ready to launch into offering out a contract for community health to the open market.

“We think this option avoids destabilising our local health economy and any unintended consequences for other providers,” he said.

“We don’t yet have clarity on what it is we want to procure for our services in the future.

“It’s difficult to go out to procure something for the next three to seven years when you don’t know what it is you want.”

Chairman of the CCG, Dr Steve Ollerton, indicated members had no choice but to agree.

But the move has angered campaigners from Save Our Community Health Services (SoCHs), who have said they will file an injunction at Huddersfield County Court within the next month or two.

Spokesman Alan Girvan said he had taken legal advice and had the funds to take it to court and as far as a judicial review if necessary. A judicial review typically costs in excess of £40,000.

Mr Girvan said: “The people who said let’s create Locala are now on the same boards that are giving it money.

“They are ignoring their own procurement laws and EU laws.

“You have to be transparent – you can’t just give contracts to your friends.”

The injunction brought by Mr Girvan will accuse North Kirklees CCG of breaching EU regulations for the commissioning of NHS services.

The Heckmondwike-based TV and film producer said he had recruited lawyers that had already exposed and won a similar case in Gloucester.

He added: “We’re doing this to let the genie out of the bottle.

“There’s a conflict of interests in how Locala was set up and now with its ongoing operation.

“If this was Kirklees Council or an MP they would be dragged over the coals.

“If we don’t challenge on this, the situation with contracts could get worse.”

In a joint statement Carol McKenna, Chief Officer of NHS Greater Huddersfield CCG and Steve Brennan, Chief Finance Officer of NHS North Kirklees, said: “The CCGs in Greater Huddersfield and North Kirklees, together with their partners in the local authorities, are in the process of improving health and social care services for local people. 

"We don’t yet know precisely how we want community services provided in the future so we need to take some time to reach that point before these services are re-commissioned. 

“That cannot be rushed and it would be a big mistake to tie ourselves to a community services provider for a minimum of three years from October, 2014, whilst that work is in progress.

“However, there is a need to protect services currently being provided so that people continue to get the care they need. 

"This is why we have taken a pragmatic decision to agree to a continuation of the current arrangements with Locala CIC for one year from October 1. 

"This time frame will also allow enough  time for proper engagement with service users and local people about the kind of service that should be commissioned in the longer term.”

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