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Latest 30 April 2024

VIP lane firm folds, putting another £2.58m at risk

By Max Colbert
Mavo / Shutterstock

Hotel Logistics shuts up shop, making it unlikely that millions wasted on useless PPE will ever be recovered.

A company that landed contracts worth £5.3m through the Tories’ unlawful VIP lane has gone into liquidation, bringing the total spent on unusable PPE which the government is unlikely to ever recover to £338m.

Hotel Logistics was a small company based in Huddersfield that provided carpeting and tiling services to the hospitality industry and had no previous experience in selling PPE.

In April 2020, the firm held assets of £20,664, and was in danger of being struck off the company register.

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That year, Hotel Logistics’s managing director, Douglas Campbell, described a recent merger with a carpet company Chinese Haima Corporation as offering “diverse interests” in “textiles, medical services, PPE and pharmaceutical goods”.

We still don’t know who referred the company on to the VIP lane, but between April and November 2020 the company bagged four contracts without competition worth a total of £5.3m to supply gloves, masks, gowns and lateral flow kits.

Analysis of leaked internal information from the health department reveals that some masks bought from Hotel Logistics cost between 9.5 and 12.3 times the average price for similar items bought at the time, while some of the goggles came in at between 4.25 and 4.86 times the average. Over three million items supplied by the company, worth some £2.58m, were unsuitable for use within the NHS. 

In total, over £1bn was wasted on unusable equipment bought through VIP lane companies. But the health department will not disclose how much money it has recovered from companies that didn’t deliver on the contracts they were issued.

Hotel Logistics is the eighth VIP lane company to have folded out of a total of 51. Between them, the firms that are either liquidated or dissolved supplied £338m worth of useless PPE. 

In April 2023, the directors of Hotel Logistics established a new company, Haima Carpet UK Limited. It has yet to file accounts for its first year of trading. 

Both the health department and Hotel Logistics were approached for comment.

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Investigation: The VIP Files

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Investigation: The VIP Files