Did Richard Branson sue the NHS? Dispute explained as Virgin Atlantic cancels Gatwick flights and billionaire sells Virgin Galactic stake
The carrier has announced that it will end all flights out of Gatwick airport, and will cut more than 3,000 jobs.
The airline plans to reduce its workforce by 3,150 people, which is equivalent to more than a 30 per cent cut.
In an effort to save the airline, Branson is also selling a stake in Virgin Galactic, his space tourism business.
Virgin Group said it will use the proceeds to support its "leisure, holiday and travel businesses" hit by "the unprecedented impact" of Covid-19.
Virgin Atlantic has also reportedly asked for up to £500m of public money, with Sir Richard writing in an open letter to employees that the company would seek a commercial loan similar to that offered to easyJet.
He said: "We will do everything we can to keep the airline going - but we will need Government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for."
It came as the Virgin Australia airline entered voluntary administration after failing to secure a government bailout of £710m, with Sir Richard telling that company's staff it "is not the end for Virgin Australia, but I believe a new beginning".
However, his appeal for government support has been met by opposition from some quarters, due to a past legal dispute between the health service provider Virgin Care Ltd and the NHS.
Did Richard Branson sue the NHS?
It isn't the first time that the legal battle between Virgin Care and the NHS has been in the headlines.
Last year, the then Labour leader Jeremy Corbyn raised the matter in response to Sir Richard - whose net worth was last year estimated by the Sunday Times at £4.05bn - insisting he was not motivated by wealth and possessions.
The Virgin founder had tweeted a photo of himself and his wife Joan Templeman with the caption: "I truly believe that ‘stuff’ really does not bring happiness. Family, friends, good health and the satisfaction that comes from making a positive difference are what really matters."
In response, Mr Corbyn replied: "Perhaps our NHS could have the money back from when you sued it?"
Mr Branson’s Virgin Care Ltd has gradually expanded its provision of NHS services since it 2010, with its website stating it has invested at least £75m to assist the health service - but its bids have also been rejected.
It sued six clinical commissioning groups (CCGs) in Surrey, Surrey County Council and NHS England after it lost out on a £82m contract to run children's services in the area in 2016.
The contract was instead given to Surrey Healthy Children and Families Services and two social enterprises.
At the time, Virgin Care, which previously had a contract in Surrey, said it was "concerned that there may have been serious flaws in the procurement process".
“Never before have we been so concerned with the whole process that we have needed to make a challenge of this nature."
The six CCGs paid Virgin an undisclosed sum to settle the case out of court in November 2017.
It was later reported Surrey Downs CCG had a liability of £328,000 to a private company. The reference to the figure was later removed from the financial report.
What has Branson said?
Sir Richard referred to the matter in his letter: "Much has been written about Virgin Care’s dispute with a commission over a contract a number of years ago.
"Some will say it was unwise for Virgin Care to do this, but the most important thing is that Virgin Care was never intending to profit from it and 100 per cent of the money awarded went straight back into the NHS."
In response to Sir Richard's letter, Greenpeace climate campaigner Fiona Nicholls said: "Richard Branson's letter failed to convince us that suing the NHS wasn't bad for the health service, moving his money to a tax haven wasn't to avoid tax, or that emitting millions of tonnes of pollution wasn't bad for the environment.
"There are still no justified grounds to give Virgin an unconditional bailout."
Dr Vivienne McVey, co-founder and chief executive of Virgin Care, told iNews in a statement last year that any money won had gone towards "developing services to NHS patients which we’re commissioned to deliver".
“In addition, Virgin Care has never made a profit and the Virgin Group has actually invested more than £60m across the UK in people and technology, supporting doctors and nurses in their jobs and significantly reducing waiting lists.
“Richard Branson has also pledged that if we do make any future profit over that investment, he will not take a dividend and instead invest this in NHS and local authority services, with frontline colleagues deciding how," she added.