VIP lane contracts inflated by £925m

In the early months of the pandemic, as the Tories scrambled to replenish stocks of masks, gloves and gowns depleted through years of austerity, they set up a VIP lane to give fast-track treatment to bids from companies connected with the party.

According to internal documents from the Department of Health and Social Care, seen by Good Law Project, the contracts signed through this VIP lane were inflated by at least £925m.

On average, VIP lane suppliers were paid 80% more per unit than other suppliers. Some contracts were agreed at more than four times the average unit price.

And a quarter of the money awarded through the VIP lane was wasted on equipment that couldn’t be used. Last year, Spotlight on Corruption revealed that VIP firms supplied £1bn worth of PPE that was not fit for purpose, amounting to 26% of the money spent in this way.

Good Law Project has been passed a spreadsheet giving details of thousands of different PPE contracts from 2020, which includes figures for the unit price for almost all of these contracts. This information – which the Government redacted from published material – allows us to compare the prices paid for medical equipment sourced via the VIP lane with the prices paid via standard routes.

The majority of VIP lane companies signed at least one contract at above the average unit price.

One example is Meller Designs Ltd, a fashion company owned by David Meller,  a longstanding Tory donor, who has given more than £68,000 to the party and supported Michael Gove’s leadership campaign in 2016.

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

Of the six contracts, three were paid above the odds, with the contracts awarded at between 1.2 and 2.2 times the average unit price. The average price for medical gowns was £5.87. But the gowns bought from Meller Designs Ltd – a fashion company run by a Tory donor until January 2021 – cost £12.64. And £8.46m worth of the equipment supplied by Meller Designs was unsuitable for use in an NHS setting.

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%.

As well as his donations to the Tory party, Meller has served as a trustee of the rightwing Policy Exchange think-tank and has sat on the board of the Department for Education. In September, he was appointed to the Board of Trade under Business and Trade Secretary Kemi Badenoch, an appointment which the Labour Party Chairwoman Anneliese Dodds said sent a clear message: “give tens of thousands of pounds to the Tories and you’ll be catapulted into positions of power and rewarded with lucrative contracts”.

In April 2020, Andrew Mills – an adviser to the Government’s Board of Trade under Liz Truss – brokered a deal for Ayanda Capital to supply masks. This investment firm had no experience in supplying medical equipment, but snagged a contract worth over £252m.

According to the documents seen by Good Law Project, these masks were supplied at between 1.8 and 2.6 times over the average paid for similar items – the Department of Health and Social Care does not contest these figures, but Ayanda Capital says it does not recognise them. And 50 million of them were deemed unusable in an NHS setting, wasting more than £145m.

The National Audit Office launched an investigation that found this deal was awarded without proper oversight, and highlighted how no conflicts of interest were registered on a standard form which failed to mention Mills’ role at Ayanda.

One of the companies to have gained most from the pandemic is the logistics firm Uniserve, which is owned by Ian Liddell. Liddell has held various roles within the pro-Brexit lobby group Prosperity UK and his company shares an address with the office of MP and then-Cabinet Office Minister Julia Lopez.

Between March and June 2020, Uniserve snatched 12 deals worth nearly £304m to supply gowns, eye protectors, and masks. Eight of these deals were agreed at between 1.4 and 2.7 times above the average price, the highest being a £69.6m contract to supply surgical masks. Over 182.8 million of these items were deemed unusable by the NHS, wasting £178.5m.

Uniserve saw its profits for the year ending June 2020 rise to £32m, an increase on the previous year of more than 500%. 

The Department of Health and Social Care did not contest any of Good Law Project’s figures but said the ”priority throughout the pandemic was to save lives” adding that the department “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.”

But the Shadow Chancellor Rachel Reeves declared the “British public are sick of being ripped off under the Conservatives”.

“Billions of pounds of taxpayers’ money have been squandered in waste and fraud when it could have been spent in our schools, hospitals and police,” Reeves said. “That is why Labour will appoint a Covid Corruption Commissioner to go through pandemic contracts line by line and whenever they have failed to deliver, we will clawback every pound we can for the public.”

Susie Flintham’s father, Howard Crozier, died of Covid in March 2020 having caught it in hospital. She is now a spokesperson for the Covid-19 Bereaved Families for Justice campaign:

“I saw with my own eyes that there wasn’t enough PPE while my dad was in hospital, and it was my dad who paid the price. These contracts are another example of the government’s prioritisation of their own interests over the safety of the public, whilst at the same time tanking the economy and misusing public funds.”

We asked for a response from the three companies mentioned. 

Meller Designs Ltd and Uniserve did not reply.