openDemocracyUK: News

UK broke law with COVID deals for ‘VIP’ firms run by government contacts

High Court rules ministers acted unlawfully by giving multi-million-pound PPE supply deals to a pest control company and a private equity firm

Martin Williams
12 January 2022, 1.09pm
Boris Johnson’s government awarded £1.7bn of COVID contracts to firms recommended by its MPs and ministers
Tayfun Salci/ZUMA Wire/Alamy Live News. All rights reserved

The government broke the law by prioritising a pest control firm and a private equity firm with political connections for lucrative COVID contracts, the High Court ruled today.

A judge found that the government’s ‘VIP lane’ scheme, which helped give contracts worth hundreds of millions of pounds to politically connected firms, was unlawful.

The legal challenge, brought by the Good Law Project and EveryDoctor, focused on just a few of the contracts awarded under the scheme.

Some £1.7bn worth of contracts to deliver personal protective equipment (PPE) were awarded through the scheme during the first wave of the pandemic.

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But investigations by openDemocracy, among others, found that many of the firms had connections with Conservative ministers and government officials.

In one case, pest control company PestFix was given more than £340m to deliver PPE to the NHS including masks, gloves and gowns.

Another company, private equity firm Ayanda Capital, won a £250m PPE contract through the VIP lane. It delivered 50 million masks that could not be used by the NHS because they had the wrong type of straps – but it still went on to see its profits increase by more than 2,600% in 2020.

Ayanda’s mammoth deal was brokered by the company’s senior adviser, Andrew Mills, who was at the time also an adviser for the government’s Board of Trade, chaired by Liz Truss. The firm later blamed government officials for the problems with the masks.

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A damning report by the National Audit Office in 2020 said companies in the ‘VIP lane’ were ten times more likely to win a contract.

The judge, Mrs Justice O'Farrell, today said: “The claimants have established that operation of the high priority lane was in breach of the obligation of equal treatment. The illegality is marked by this judgement.”

The ruling explained: “Offers that were introduced through the senior referrers received earlier consideration at the outset of the process. The high-priority lane team was better resourced and able to respond to such offers on the same day that they arrived.”

The court also found the government allocated offers to those in the VIP lane on a “flawed basis” and did not properly prioritise bids. Emails released in court showed that civil servants were “drowning in VIP requests”.

Speaking about two of the ‘VIP’ firms – Ayanda and Pestfix – the judge said that although they received unlawful treatment, their offers did deserve priority consideration and they would “very likely” have been awarded contracts anyway.

Never again should any government treat a public health crisis as an opportunity to enrich its associates and donors

Dr Julia Grace Patterson, the chief executive of EveryDoctor, said: “We brought the government to court because NHS staff and other frontline workers were woefully unsupported and unprotected by this government.

“Many were provided with no PPE, and many died. The government must never again be allowed to conduct themselves in this manner during a national healthcare crisis."

In a statement, the director of the Good Law Project, Jo Maugham, said: “Never again should any government treat a public health crisis as an opportunity to enrich its associates and donors at public expense.”

A spokesperson for the Department for Health and Social Care said: "At the height of the pandemic there was a desperate need for PPE to protect health and social care staff and the government rightly took swift and decisive action to secure it.

"We are pleased the court has ruled that our industry call to arms was open and transparent. The ruling says it is highly likely these offers would have been awarded if they were processed through other channels also used to process offers. All contracts underwent sufficient financial and technical due diligence and the Court found that we did not rely on the referral to the High Priority Lane when awarding contracts."

A spokesperson for Ayanda Capital said: "We are pleased that, despite all the claims to the contrary, the court has rejected any suggestion that we were not an appropriate business to source desperately needed personal protective equipment (PPE) and concluded that the offer we made the Department of Health justified priority treatment on its merits."

They added: "We were doing the best we possibly could to help to respond to an unprecedented national emergency, and crucially, the court has not criticised the way we conducted ourselves in any respect."

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