Government agreed to pay £280m for masks below NHS standards in ‘truly colossal’ PPE spending spree

Dame Donna Kinnair comments
PA

The government agreed to pay £280 million to two ‘VIP’ companies fast-tracked into PPE deals for face masks which did not meet NHS standards, the High Court has heard.

PestFix and Ayanda Capital landed huge contracts to deliver protection equipment for healthcare workers in the first wave of the pandemic, having had bids for deals promoted through the “VIP Lane”.

Companies with connections to Ministers or senior government officials were given priority access to contracts in the scramble to obtain PPE last April.

The Good Law Project and EveryDoctor has now brought judicial review proceedings into that process, arguing it was secretive and unfair, and the usual quality checks were abandoned or ignored.

Bringing the claim, Jason Coppel QC said the judicial review case aims to “shine a light on the process of PPE procurement during the first wave of the pandemic”, when “a truly colossal amount of public money” was spent “in circumstances of almost total secrecy”.

He said the evidence due to be aired in the High Court over the next week shows that large sums of money was spent on equipment from hedge fund Ayanda and small family-run firm PestFix which failed to meet NHS safety standards.

“The defendant prioritised suppliers including PestFix and Ayanda because of who they knew and not what they could deliver,” he said.

“The defendant spent vast amounts of money without first applying basic technical checks and basic standards of financial due diligence, which he accepts were required of him.”

PestFix, which had assets of just £18,000 and no experience of PPE, landed six contracts worth £342 million “without any due diligence at all,” Mr Coppel said.

“The defendant bought, under one of the contracts, well over £100 million of surgical gowns from PestFix without conducting any technical checks of the gowns at all.

“The defendant agreed to purchase masks of a combined value of £280 million from PestFix and Ayanda without realising the masks weren’t compliant with NHS technical specifications. They had ear loops rather than head straps, and couldn’t be used by the NHS.

“The evidence shows the defendant contracted with Ayanda without the official who approved the deal appreciating that Ayanda had failed the basic financial checks carried out upon it by the due diligence team.

“The outcome was a truly tragic waste of public money. Enormous quantities of equipment purchased at inflated prices which was useless to the NHS. Of the £595m paid to PestFix and Ayanda, well over half was wasted.”

“The process which was adopted by the defendant in relation to these contracts gave rise to very serious concerns as to the management of large amount of public money, and gave rise to obvious illegality”, added Mr Coppel.

“The defendant established a system for awarding contracts which was fundamentally non-transparent, unequal, and unfair.”

Mr Coppel said the ‘VIP Lane’ meant the contacts of Ministers and top officials “wouldn’t have to wait in line with everyone else”.

But he added: “The VIP Lane didn’t have a quality filter - there’s no suggestion Ministers were given any criteria for which offers they should put into the VIP Lane and which they shouldn’t.

“They were told ‘it’s a contact, a recommendation from you, it’s the VIP Lane’ regardless of the quality of the offer.”

Mr Coppel said “bog-standard” offers to supply PPE were not given the “hand-holding” that VIP companies received, and could have found themselves cut out of the system entirely.

“If it took longer than a few days to examine your submission, it was effectively discarded”, he said. “That didn’t happen for VIP cases”.

The Secretary of State for Health and Social Care, Matt Hancock, is the defendant in the case, and in a statement his department said “we make no apology” for prioritising procurement of PPE.

“We set up, from scratch, a new parallel supply chain to procure, manage and distribute life-saving PPE. This was an enormous cross-government effort, drawing upon expertise from a number of departments together with fantastic support from the military and private sector partners.

“Officials worked day and night to secure these contracts. We prioritised procurement and we make no apology for that.”

The statement continued: “In this unique situation, we had to change how we approached risk. The risks that the contracts might not perform needed to be balanced against the risk to the health of frontline workers, the NHS and the public if we failed to get the PPE we so desperately needed.”

DHSC said the National Audit Office found no evidence ministers were involved in procurement decisions.

It added: “To save lives, we focused our efforts, our resources and our attention on sourcing PPE. We stand by our efforts to prioritise protecting frontline workers and citizens.”

The hearing, which is due to last until next Tuesday, continues today.

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