Over £300m of taxpayers' money spent by govt on Covid VIP lane is 'lost'
More than £300m of taxpayers' money spent by the Government on “VIP lane” Covid contracts is likely to have been lost after the companies involved shut up shop, the Mirror can reveal.
Firms that landed massive pandemic contracts have now stopped trading, meaning that hundreds of millions of pounds spent on unusable PPE is likely to never be recovered.
The Good Law Project has found that 14% of the 51 companies that landed multimillion-pound contracts through the so-called VIP Lane in 2020 are no longer trading. These seven companies won 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 unlikely the money will be recovered for the taxpayer.
Mr Jo Maugham QC (PA)This 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 has insisted that saving lives was the priority “throughout the pandemic”.
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.”
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But Jo Maugham, Executive Director of Good Law Project, said: “One of the many troubling things about VIP contracts was how many went to brand new companies - or companies with no assets. 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."
P14 Medical won three conflicts worth £276m but £183m has been deemed unfit for use in the NHS. Director Stephen Dechan, a former Tory councillor, said he had done “very, very well out of the pandemic” but denied he received any political patronage in the awarding of the contracts.P14 Medical went into liquidation in August 2023.
A second company SG Recruitment specialised in healthcare recruitment but had no prior experience delivering PPE when it won contracts worth over £50m. Lord Chadlington, who was a director and shareholder of SG’s parent company Sumner Group Holdings, texted Lord Feldman, who was working unpaid in the Department for Health, about the deal. Lord Chadlington was later cleared of breaching lobbying rules.
The gowns and hand gel bought from SG reportedly cost twice the average unit price at the time and much was deemed unusable in the NHS. The Government is in a dispute with the company and SG Recruitment was wound up in the High Court last month.Four of the five other closed VIP lane companies supplied £127m worth of allegedly unusable PPE.
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