Dark Money Investigations: Investigation

Tory donor Lord Ashcroft’s outsourcing firm lands £350m vaccination contract

Medacs Healthcare is part of a group whose largest shareholder is Michael Ashcroft – who has given millions to the Conservatives.

Peter Geoghegan Screenshot 2020-05-28 at 15.49.09.png
Peter Geoghegan Russell Scott
20 January 2021, 2.32pm
Lord Ashcroft (left) chats with Boris Johnson at an awards ceremony in 2012
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Stefan Rousseau/PA Archive/PA Images

A healthcare company ultimately controlled by leading Tory donor and former party chairman, Lord Ashcroft, has received a £350m contract as part of the government’s COVID-19 vaccination roll-out, openDemocracy has learned.

Last month the Department of Health and Social Care gave the lucrative contract to Medacs Healthcare plc. In recent weeks, the outsourcing company, which specialises in providing staff to the NHS, social care services and private healthcare providers, has been advertising for staff to work on the huge vaccination project.

Medacs is a subsidiary of Impellam Group, a FTSE-listed firm whose largest shareholder is Michael Ashcroft, the Belize-based Conservative peer who has donated millions to the party, including more than £175,000 in the past year.

The award of a major COVID contract to a firm with close ties to the Tories has sparked further questions about politically connected firms benefiting financially from the UK’s pandemic response.

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Last year, a highly critical National Audit Office report found that companies with political links were directed to a “VIP lane” for government contracts where bids were ten times more likely to be successful.

Cronyism, incompetence and waste have been everyday features of this government's approach to outsourcing

Shadow cabinet office minister Rachel Reeves told openDemocracy: "People are understandably furious seeing businesses owned and run by the friends and donors of the Tory Party being awarded huge multi-million-pound public contracts throughout this pandemic.

“Cronyism, incompetence and waste have been everyday features of this government's approach to outsourcing and ministers show little willingness to learn lessons from the National Audit Office investigations."

Outsourcing vaccination roll-out

Ashcroft is non-executive chairman of Impellam, and the largest shareholder in the publicly listed company, according to documents filed at Companies House.

Impellam describes itself as a “leading global talent acquisition and managed workforce solutions provider”. In 2019, the group’s accounts reported profits of £274.1m. Its healthcare division, Medacs Global Group – Medacs Healthcare is one of its brands – recorded revenues of £245.8m and a gross profit of £46.6m.

Medacs has previously worked with numerous councils across England but this appears to be the company’s first major COVID contract.

The public version of the contract between government and Medacs has been heavily redacted and does not include key sections – including the ‘contract charges’ and details of the services being provided – but it does confirm that Medacs will provide a “temporary workforce to support medical and clinical services in laboratories or to assist the national testing programme in response to Covid-19”.

The national testing programme is headed by Dido Harding. The Tory peer has defended the much-criticised Test and Trace scheme, which has seen private consultants paid £1,000 a day. It is estimated that Test and Trace will have cost the UK exchequer £23bn by March.

Medacs’ work appears to be part of the vaccination roll-out scheme. In December, Medacs released a statement saying that it was “delighted” to be working “in building a workforce for the National Vaccination Programme”.

However, in mid-December, Medacs was still recruiting staff to fulfil numerous important roles, including immunisers, nurses, GPs and paramedics as well as volunteers “from any background”.

In 2019 when a Care Quality Commission report on a homecare service run by Medacs was rated "inadequate". The regulator found “that the care people received was not safe”.

A job advertisement for a ‘band 5 immuniser’ published on Medacs’ website called for staff to “deliver Covid-19 vaccination to all eligible citizens and assist with the overall delivery of the vaccination programme”.

Another ad required Medac staff to “travel to individual residences to deliver the vaccination to specific cohorts (such as housebound and shielding citizens) who are unable to undertake the vaccination in a vaccination centre”.

Medacs was criticised in 2019 when a Care Quality Commission report on a homecare service run by the firm was rated "inadequate".

The regulator found “that the care people received was not safe. The majority of people's care calls were not delivered at the time they were expected and people gave examples of where this had impacted significantly upon them and the safety of the care that they received.”

Furthermore the report noted that: “medicines records were not kept up to date and CQC identified instances where medicines records showed a potential overdose”.

At the time, Medacs said that the poor rating was down to a lack of staff after the firm won a series of contracts in quick succession. “These award successes were characterised by an unprecedented shortfall in staff transferring from the outgoing providers,” the director of the company’s Croydon care home said.

“We have invested in new staff and in additional training and support as a priority measure,” she added.

‘Politically connected companies’

Ashcroft has been one of the largest Conservative donors on record. In 2010, an Electoral Commission investigation cleared him of any wrongdoing after one of his companies, Bearwood Corporate Services, channelled more than £5m to the Tories.

Ashcroft, who famously fell out with the former Conservative prime minister David Cameron, re-emerged as a party donor in 2017, joining the Leader’s Group of top donors. Among his recent donations was £100,000 towards Shaun Bailey’s bid to become the next mayor of London.

The award of government contracts to firms with political connections has been a running issue in recent months, with billions given to companies with ties to the Conservatives. As openDemocracy reported, Boris Johnson’s government was accused of cronyism after a Tory councillor won a £156m COVID contract. Stroud councillor Steve Dechan ran a small, loss-making firm distributing medical devices.

In November, openDemocracy discovered that Lord Feldman, another former Tory chairman and a corporate lobbyist, had been secretly appointed as a COVID advisor. Feldman’s role prompted fresh concerns about privileged access given to Tory 'friends and donors.

Commenting on the award to Medacs, the Good Law Project’s Jolyon Maugham said:

"The question many of us will have been wondering is: how will the government monetise the public health emergency that is the vaccine roll-out? The answer none of us will be surprised at is: with the help of, and so as financially to benefit, a large Conservative Party donor."

The Department for Health and Social Care spokesperson said: “As part of our response to this unprecedented global pandemic, we rightly have drawn on the expertise of a number of organisations to support this important work.

“This includes when establishing the largest diagnostic network in British history, and a test and trace system used by tens of millions of people to reduce rates of Coronavirus. Proper due diligence is carried out on all government contracts.”

Medacs and Impellam have been approached for comment.

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