Special procurement channels were set up for ‘VIPs’ and government contacts to win inflated government PPE contracts, according to the Good Law Project. The not-for-profit legal group set up by barrister Jolyon Maugham QC claims to have leaked documents revealing that the Cabinet Office was feeding its contacts into a process separate from the regular public channel. Questions over the value of resulting contracts were only to be asked if the price was greater than 25% above the average price paid to regular suppliers.
The Good Law Project reckons that since regular suppliers supposedly charged the government at a 10-20% profit margin, such contacts had the potential to make a 35-45% profit margin on already lucrative contracts. Maugham, Good Law Project director, argues that the Government not only overpaid these suppliers but overbought from them as well. While data suggests that only 533,000 coveralls have been used during the pandemic, by Maugham’s calculations the Government paid for at least 29 million which, he reckons, represents a 36-year supply of coveralls (whose shelf-life are three years). Other Twitter threads argued that some of the PPE supplied under these contracts were unfit for purpose.
The Good Law Project has launched two judicial reviews against the Government in relation to its Covid-19 contracts. The first was brought alongside EveryDoctor on the grounds that awarding hundred million dollar contracts without competitive tender to a pest controller (Pestfix), a sweet wholesaler (Clandeboye), and a currency trading company (Ayanda Capital) was unlawful.
Pestfix and Clandeboye are both family run businesses with 16 and 14 employees, respectively. The former had received at least £200.5m for their supply of PPE when their net assets at the time were worth just £18k and the latter received at least £107.4m when its net assets were worth a mere £291k. Meanwhile, Ayanda Capital, owned by a firm based in tax haven Mauritius, obtained a PPE contract worth £252.2m. Questions over the procurement of this last contract were raised on the basis of Andrew Mills’ position as a senior board adviser to Ayanda Capital whilst also acting as an adviser to the Board of Trade.
In their claim, the Good Law Project and EveryDoctor maintain that the Government had provided no explanation as to why it had awarded PPE contracts to these companies with no experience in supplying PPE risking the lives of NHS doctors and staff.
While the Government announced that it had awarded £11bn in contracts between April and September, analysis by data provider Tussell showed that over £3bn of those contracts had not yet been accounted for. Good Law Project has launched a second action supported by three MPs (Caroline Lucas, Green; Debbie Abrahams, Labour; and Layla Moran, Liberal Democrat) to force the Government to comply with its legal obligation to publish contract award notices within 30 days, and 20 days after that, the contracts themselves, in accordance with the Government’s own policy.
Lucas argued that ‘when billions of pounds of public money is handed out to private companies, some of them with political connections but no experience in delivering medical supplies, ministers should be explaining why those companies were awarded the contracts’. ‘It’s completely unacceptable that, as an MP, I’m prevented from being able to scrutinise those decisions,’ she said.
The founder of Tussell, Gus Tugendhat, emphasised ‘how centralised the response [to the pandemic] has been’, given over 50% of all Covid-19 contracts went through central government. He suggested that ‘had more spending gone through local authorities, it may have been more attuned to local needs’. Scrutiny over the Government’s Covid-19 contracts is seen against the background of its reluctance to continue under EU state aid rules after Brexit. The Good Law Project’s legal actions are funded through donation here.
