Revealed: ‘COVID goldrush’ firms receiving millions under UK furlough scheme
Marketing company with PPE deal, pest control firm with £350m government contracts and politically connected suppliers among those claiming public funds
Companies awarded huge COVID contracts by the government have received millions in support payments through the furlough scheme, openDemocracy can reveal.
Among the firms given furlough payments are a digital marketing business that won an £19.5m contract to provide personal protective equipment, and a controversial science company once hired by Dominic Cummings and Vote Leave.
The revelations come amid growing concerns about COVID cronyism and lobbying in government and days after HMRC announced it was launching a clampdown on poor families who were mistakenly overpaid tax credits as long as 17 years ago.
openDemocracy’s investigation also found that Greensill Capital, the collapsed finance firm at the centre of the David Cameron lobbying scandal, has been receiving payments from the government’s wage subsidy scheme.
More than a dozen firms have furloughed staff after being awarded public contracts worth hundreds of millions of pounds.
Kau Media, a digital marketing agency based in Hammersmith, claimed at least £25,000 a month from the Coronavirus Job Retention Scheme in December and January. Last April, the firm was awarded a £19.5m contract to supply medical gowns to the NHS despite apparently having no prior experience in PPE.
The contract was awarded without an open competition under emergency pandemic guidelines.
Earlier this year, a court ruled that health secretary Matt Hancock had broken the law by failing to publish COVID contracts on time.
Randox Laboratories won £479m in COVID-testing contracts, and paid former government minister Owen Paterson £120 an hour to act as a consultant. Randox received at least £10,000 through the furlough scheme in January alone, according to official data.
French firm Sodexo won more than £227m in government COVID contracts, including a £221m deal to run rapid-testing sites. But the firm also claimed at least £1m a month through the furlough scheme in December and January. Sodexo has previously been accused of spending millions of taxpayer money on snacks for staff at their private testing facilities.
These furlough payments beg the question: how much generosity is enough?
Pestfix, a West Sussex-based pest control supplies company that landed contracts worth nearly £350m to fight the pandemic, has claimed thousands of pounds in furlough through its official company name Crisp Websites Ltd.
Pestfix was in a “VIP lane”, in which politically connected firms were ten times more likely to win lucrative COVID contacts. A National Audit Office report in November found that Pestfix had been added to the high-priority lane “in error”.
A PestFix spokesman told openDemocracy: “Like many other small businesses, PestFix briefly furloughed four staff members to comply with government social distancing guidelines and protect the safety of our employees, their family and the community.”
The controversial AI company, Faculty Science Ltd also received the support funding, after winning a series of lucrative contracts linked to the pandemic. The firm worked for the Vote Leave campaign during the Brexit referendum, and has been linked to Dominic Cummings.
Cabinet Office minister Lord Agnew, who oversees the Government Digital Service, owned £90,000 worth of shares in Faculty. Agnew sold his stake last year following criticism.
Faculty said it had furloughed four staff since the start of the pandemic either because their work could not be performed remotely or they were not needed because the office was closed.
Bluetree, a printing company based in Rotherham, claimed thousands in furlough payments. Last year, the company announced that it was doubling its workforce after agreeing a £64m contract to supply 352 million medical masks to the NHS.
The Department of Health and Social Care also awarded Urathon Europe Ltd, a wheelchair and mobility firm, a £52.5m contract to supply face masks. The company, based out of the Wiltshire village of Hilmarton, made furlough claims.
Details of furlough payments received before December are being kept private by HMRC, due to confidentiality rules.
Jolyon Maugham, director of the Good Law Project, which has successfully pursued legal challenges over a number of COVID contracts, said: “Surely there are better places for public money to go than distinctly odd PPE enterprises who have already been given lucrative government contracts? These furlough payments beg the question: how much generosity is enough?”
The Scottish National Party’s spokesperson for Health and Social Care, Philippa Whitford, said: “There seems to have been so many contacts handed to people with connections to the Tory party. What is so shocking now is to find that as well as millions from the public purse being given to companies with connections to the Tories, they have been claiming furlough money as well.”
There seems to have been so many contacts handed to people with connections to the Tory party
In one case, Manchester-based firm Lowry Trading Ltd made a claim for furlough support in January. It has donated £215,000 to the Conservative Party since 2016 and owns an IT business called ANS Group Ltd that has won a string of contracts to work on the contact-racing app.
G4S Secure Solutions was awarded more than £66,500,000 for border quarantine security and support services. It claimed more than £250,000 furlough in January, and at least £50,000 the month before.
British multinational Specialist Computers Centres claimed at least £200,000 on the furlough scheme having previously won a £2.1m contract to supply laptops to schools during the pandemic. Byline Times revealed that the firm’s parent company, Rigby Group PLC, has donated £105,000 to the Tories in recent years.
A company called Teleperformance Contact Ltd also received furlough payments. The company – which is ultimately controlled by a company in Paris – lists the same website in its accounts as Teleperformance Limited, which has received hundreds of millions of pounds in COVID contracts, including a £258m testing contact centre deal that is due to last until next January.
Another company, Medicine Box (London), claimed furlough in December and January. The firm – a pharmacy based in Wembley which filed dormant company accounts last year – shares a company director with a firm called Medicine Box Ltd, which was given a £40m contract to supply PPE last April. At the time that company had less than £50,000 in assets and just three employees.
A spokesperson for Medicine Box Ltd said the company had “made a great contribution during this pandemic by supplying PPE to the UK government” and had not claimed any financial support through the furlough scheme.
DnaNudge, a start-up that won a £161m order from the government to supply COVID test kits, also made furlough claims for the two months for which data has been released. DnaNudge said: “All furlough claims made were necessary and for the minimal amount and the shortest duration possible,” with staff salaries topped up to full pay at the company’s expense.
Companies have been urged by MPs to return furlough funds if they can afford to do so.
Some 125,000 firms have repaid some or all of their furlough grants, including Ikea and house-builders Barratt Developments and Taylor Wimpey.
A Treasury spokesperson said: “Over the last 12 months, the furlough scheme has helped pay the wages of millions of workers across the UK - and it would be wrong to deny anyone that support.
“We’ve been clear the scheme should be used in the spirit in which it was intended, but will not apologise for protecting the jobs of millions of British taxpayers.”
openDemocracy has contacted all the companies named in this story.
This article was amended on April 14 to reflect that a National Audit Office report exonerated Lord Agnew of any role in the contracts Faculty Science Ltd was awarded during the pandemic.
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