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Latest 23 February 2024

How to build a thriving business? Sell the Government £551m of useless PPE

Nine companies who bagged massive contracts through the unlawful VIP lane have gone on to build empires on mountains of equipment deemed unfit for use in the NHS.

Covid is blind, infecting Prime Ministers and plumbers, dancers and dermatologists alike. But the lasting effects of the pandemic were not so evenly spread out. While pubs and theatres, hotels and coffee shops were driven out of business, other companies raked in huge profits. Some of the firms that prospered have turned contracts awarded through the Tories’ unlawful VIP lane into ongoing concerns – and behind each one of those stands an official or Minister who put them forward for fast-track access to Government contracts.

Good Law Project can reveal that nine of those companies signed contracts worth a total of £551m for PPE that was deemed unusable in the NHS. This useless PPE accounts for 37.19% of the total amounts handed out to these firms.

These VIP lane companies saw record profits as a result of their political connections. Firms like Uniserve, Ayanda Capital, and Meller Designs all saw profits leap after the pandemic, with earnings surging by 500%, 2,600%, and 9,000% respectively.

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As well as these eye-watering profits, many of the directors of these firms have put themselves forward as industry leaders – and to give money back to the party that put them on the road to riches.

One example is Meller Designs Ltd, a fashion company owned by the longstanding Tory donor David Meller, who has given more than £68,000 to the party and supported Michael Gove’s leadership campaign in 2016. His most recent donation was £4,990 to Grant Shapps in 2023.

After contacting both Lord Bethell and the office of Michael Gove, his firm landed six contracts to make medical equipment worth £163m.

The company made over £13.2m in post-tax profits for the period ending December 2020, whereas the year before it cleared just £143,000 – an increase of around 9000%. Company accounts show that “turnover increased to £170m (2019: £12.8m), reflecting the additional PPE business in the year”.

More than £8.4m worth of PPE delivered by Meller Designs was unsuitable for use in an NHS setting. Three of their six PPE contracts were signed at above-average prices, with markups of between 1.2 and 2.2 times.

In September 2023, the Mirror revealed that Meller was one of 13 new appointments to the Board of Trade under the Business and Trade Secretary, Kemi Badenoch.

Another company that prospered during the pandemic is Ayanda Capital – owned by Tim Horlick and his family, and registered in the tax haven of Mauritius – which snagged a mammoth £252m contract to supply masks. The deal was brokered by Andrew Mills, who was an adviser at the same time both to the company and the Government’s Board of Trade.

Ayanda had no background in supplying PPE, or goods of any kind. Fifty million of the masks it provided – worth as much as £155m – were unusable in the NHS.

The company was pushed through the VIP lane after Mills contacted a senior official at the Department for International Trade, even though the company had previously failed financial due diligence. Civil servants also raised concerns about Mills’ political connections. But the deal went through. In 2021, Private Eye revealed he was paid £32.4m.

Ayanda Capital’s profits jumped a staggering 2,600% in 2020, up £17m from the previous year’s £633,000. As reported in the Daily Mail, Horlick recently bought a new home in the Alps, though sources close to him insist this was unrelated to the profits he made during the pandemic.

Some of the largest VIP lane contracts went to Uniserve, which was put forward by Lord Agnew – a Minister at the Cabinet Office in 2020. Uniserve snatched 12 deals for PPE worth over £300m, as well as a £573m contract for freight services.

Run by the Brexiter Ian Liddell, in 2020 the firm saw an increase in profits, up more than 500% on the previous year.

Eight of the deals awarded to the company were agreed at between 1.4 and 2.7 times above the average price at the time, with over 182 million items of PPE, valued at over £178m, deemed unusable by the NHS. 

In 2022, Uniserve Group announced it was expanding its UK national network, saying “we are synonymous with quality, reliability, and innovation, all delivered at the lowest possible cost.”

Another VIP lane firm that profited richly from the pandemic is the Paper Drinking Straw Company, which landed a £19.8m contract to supply surgical masks in June 2020. Good Law Project can reveal that every single one of these masks was unfit for use.

According to Government records, the unusable masks supplied by the Paper Drinking Straw Company were worth £24m – more than the original value of the contract. The Government did not respond to requests to clarify this point.

The company website declares it “was recently acquired by the Matrix Pack Group based in Greece. We are now part of the largest producer of all types of Drinking Straws in Europe with a combined annual production capacity of 15 billion pieces”.

Other VIP lane companies who have mushroomed include Life Partners, the broker for the Worldlink Resources contract, Ideal Medical Solutions, Regal Polythene, Universal Solutions Trading Ltd, and Pestfix.

The Department of Health and Social Care insisted its priority throughout the pandemic was “to save lives” and that “Due diligence was carried out on all companies and every company was subjected to the same checks.”

The department added that the “sensitive nature of ongoing work carried out by our contract dissolution team” meant they were “unable to provide an update on funds recovered through the Covid PPE contracts”.

For the Labour MP Nadia Whittome, these assurances ring hollow.

“The Government’s awarding of contracts to Tory friends and donors wasted billions of pounds of taxpayers’ money and failed to protect those on the frontline,” Whittome said. “It is disgraceful that many of those who cashed in on Covid-19 through their connections, often not even providing the products they promised, have continued to benefit from these dodgy deals while the rest of the country is still reeling from the pandemic and its aftermath.”

Meller Designs, Uniserve, and the Paper Drinking Straw Company were all approached for comment. 

 

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Investigation: The VIP Files

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Investigation: The VIP Files