A mystery business with shady investors and links to the Isle of Man was handed a £200 million government PPE contract, after being placed in the ‘high-priority lane’ for politically-connected firms.
PPE Medpro has refused to reveal the identities of the financiers and businessmen behind the company – and, the Guardian reported, it is unclear how its offer to supply PPE ended up in the VIP channel created for firms referred by officials and politicians.
The company was handed its first contract – £80.5m to supply 210m face masks – on 12 June. It secured its second two weeks later – this time for £122m, to supply 25m surgical gowns.
Two of PPE Medpro’s three directors are also directors of Knox House Trust – part of the Knox Group in the Isle of Man, a tax advisory and wealth management firm run by businessman Douglas Barrowman, who is married to Michelle One – the ex-owner of a lingerie company and a Tory peer.
Both contracts were awarded directly by ministers without competitive tenders, under emergency Covid-19 procurement rules that waved the need for transparency.
By the end of July, more than 8,600 contracts worth close to £18 billion had been awarded by the government – and £10.49 billion of those were awarded directly to the supplier without any competition or tendering process. In some instances, due diligence was not carried out until weeks after contracts were awarded.
The “high-priority lane” was open for companies referred by government officials, ministers, MPs and peers – sources “considered to be more credible”, a National Audit Report revealed last month.
Roughly one-in-ten suppliers processed through the VIP channel – 47 out of 493 – obtained lucrative PPE contracts, compared to less than one-in-a-hundred suppliers that came through the ordinary lane.
In one particularly revealing case, PestFix – a pest control firm from Littlehampton in Sussex – was “added to the high-priority lane in error without a referral”, the NAO said. The company, which has net assets of just £18,000, was awarded a £350 million contract to supply PPE to the NHS.
Part of that contract was a deal to buy 25 million FFP2 face masks. After 600,000 of the masks were delivered, it emerged that they were “not in line with the government’s published PPE specifications” – and were therefore unusable. PestFix “is continuing to work” with the Department of Health, the report revealed.
Another fast-tracked company, Ayanda Capital, received a £253 million that was brokered by a businessman who was appointed as an adviser to the Board of Trade by Liz Truss, the trade secretary. Again, ministers ordered 50 million FFP2 masks that were ultimately unusable – because they had the wrong kind of ear loops.
Jolyon Maugham QC, director of the Good Law Project, urged the government to disclose all the companies that came through the high-priority lane.
“Slowly it is going to emerge which companies won highly lucrative public contracts having been ushered through the VIP lane,” he said.
“There is a serious public interest in the government explaining precisely who was put in that lane, and why.”