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Latest 18 January 2024

£336m likely to be lost after VIP lane companies shut up shop

Sergey Timofeev/ Alamy

Firms that bagged massive contracts have now stopped trading, meaning that hundreds of millions of pounds spent on unusable PPE is likely to be unrecoverable.

by Max Colbert

Four years after the VIP lane was set up, 14% of the 51 companies that landed multi million-pound contracts are no longer trading, with at least £336m spent purchasing unusable PPE likely to be unrecoverable.

Analysis by Good Law Project reveals that seven of the firms referred by Ministers and officials have shut up shop.

One of the many troubling things about VIP contracts was how many went to brand new companies – or companies with no assets,” said the Executive Director of Good Law Project, Jo Maugham.

Typically, with companies like that, if they don’t deliver usable PPE there is no way to get the money back. This fact alone should have stopped them getting contracts – but they were VIPs and the normal rules seemed not to apply.”

These seven companies were collectively handed over £611m in Government contracts to supply PPE. At least £336m – more than half of this total – was for equipment that has been deemed unusable in an NHS setting. But three of these companies have now been dissolved, with four more in liquidation, making it almost impossible to recover this wasted money.

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This figure does not include PPE Medpro – the company referred to the VIP lane by Michelle Mone – which is still listed as actively trading but is currently under investigation by the National Crime Agency. The Department of Health and Social Care is engaged in legal action to try and recover £122m of the £202m landed by PPE Medpro. However, PPE Medpro’s accounts to 31 March 2023 show net assets of under £3m and Doug Barrowman of PPE Medpro is reported to be having a £50m superyacht delivered.

In January 2022, the High Court ruled that the VIP lane was unlawful, with “evidence that opportunities were treated as high priority even where there were no objectively justifiable grounds for expediting the offer”. 

The Public Accounts Committee found that the Government’s response to the dwindling stocks of PPE amounted to “panic-buying” and that the risk of conflicts of interest emerging from the VIP lane was “high by design”. At least 46 of 111 VIP lane contracts issued were also found to have been issued before any formal due diligence.

Hundreds of millions of pounds are set to be unrecoverable because the Government bought PPE from suppliers who have stopped trading, pushing them through a rushed process without due diligence that favoured offers from people with connections to influential Tories.

One example is the Tory councillor Steve Dechan, who campaigned with the Stroud MP Siobhan Baillie and the former chancellor Sajid Javid at the 2019 General Election. The following year, Dechan bagged £276m for his company P14 Medical across three contracts to supply gowns and face shields. At least £183m worth of this PPE has now been deemed unfit for use within the NHS.

Prior to the pandemic, P14 was a small, loss-making firm, but between December 2019 and June 2021 profits surged. After the award of these VIP lane contracts, Dechan and his wife paid themselves large salaries, donated £7,500 to the Tories and bought a £1.5m grade II-listed mansion in the Cotswolds. He resigned as a councillor in August 2020 after the contracts were revealed. P14 Medical went into liquidation in August 2023.

Another company that was waved through the VIP lane was SG Recruitment, which specialised in healthcare recruitment and had no prior experience delivering PPE. SG Recruitment snagged contracts collectively worth over £50m in 2020. The deal came about after Tory peer Lord Chadlington texted Lord Feldman, who was working in the Department of Health and Social Care at the time.

Chadlington, however, was a director and shareholder of SG’s parent company, Sumner Group Holdings. These gowns and hand gel bought from SG were done so at twice the average unit price at the time, and more than half the items provided through the contracts were unusable in the NHS. The Government is currently in a dispute with the company. 

There were already serious doubts about whether this money could be recouped, as Sumner Group Holdings has gone into liquidation. Good Law Project can now reveal that SG Recruitment has also followed suit, after a court ordered it to wind up in December 2023.

The other five companies that have folded after bagging VIP lane contracts are Excalibur Healthcare, MGP Advisory, the UK arm of Worldlink Resources, NKD International and Euthenia Investments. Four of these five supplied £127m worth of unusable PPE – there is no record of any problems with the PPE supplied by NKD International.

The Department of Health and Social Care insisted that saving lives was the priority “throughout the pandemic”, and that it “acted swiftly to procure PPE at the height of the pandemic, competing in an overheated global market where demand massively outstripped supply. Due diligence was carried out on all companies and every company was subjected to the same checks.”

However, the Public Accounts Committee concluded that “the risk of conflicts of interest from the High Priority Lane was…high by design”.

SG Recruitment, Lord Chadlington, and Steve Dechan were approached for comment.

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