The judicial review is due to be heard at the High Court this week and was launched by a parent of a child who uses the service.
The review was launched on the grounds that ‘insufficient regard was taken of the public sector equality duty and that internal policies and procedures relating to this were not followed’.
Virgin Care won preferred bidder status for the contract in July. The contract includes services for children with physical, sensory and learning disabilities, emotional health and wellbeing services and public health nursing.
Rebecca Harriott, director of commissioning development for the cluster of NHS Devon, Plymouth and Torbay, said she believed the commissioners at Devon PCT had no case to answer.
‘Judicial review proceedings have been issued to challenge the process by which the re-commissioning of a contract to run integrated children's services across Devon has been conducted,' she said.
‘The proceedings are being brought by a private individual on the grounds that insufficient regard was taken of the public sector equality duty and that internal policies and procedures relating to this were not followed.
‘We firmly believe that there is no case to answer and will strongly defend the action.
‘Both authorities together, are continuing to progress the current process to award a final contract and transfer staff by 31 March 2013.
‘The decision to work with Virgin follows an exhaustive tendering process that has involved a large number of parents and carers, professionals and young people themselves as well as affected staff.
‘We know that these are important and sensitive services and it has been vital to ensure that everyone was confident that a winning bidder would be able to keep services together whilst continuing to innovate and develop our integrated community-based approach.
‘Our aim throughout the process has always been to secure the best possible service to meet the needs of children and their families.’
Devon LMC chairman Dr Mark Sanford-Wood said the LMC had concerns about services being outsourced to providers outside the NHS but said it wasn’t involved in the legal challenge.
He said: ‘Devon LMC is naturally concerned that the best possible service is delivered to the children of Devon. We had no involvement in the procurement process and can only assume that the Devon PCT cluster and the local authority ran it fairly and competently.
'Competitive tendering across a range of services is stated government policy and is set to increase into the future. It remains to be seen whether the policy will deliver on its aims to provide better and more responsive services.’
A spokesman for Virgin Care said: ‘We have a very strong track record of providing NHS care to vulnerable groups including children for many years now, strengthened with extensive expertise through our contract to provide community services in Surrey.’
GP revealed last month that the DH plans to allow 39 service areas to be put out to tender under any qualified provider this autumn.