A Tory party donor who supported Michael Gove’s leadership bid won £164 million in Covid contracts after the minister referred his firm to a “VIP lane” that handed £5 billion to companies with political connections.
The revelation has drawn accusations of a “chumocracy” at the heart of government, with new analysis revealing that MPs’ friends and contacts have won huge contracts without proper process of transparency.
Meller Designs – based in Bedford – was awarded six PPE contracts worth £164 million from the Department of Health and Social Care during the coronavirus pandemic.
Until January this year, it was co-owned by David Mellor – who has donated nearly £60,000 to the Tory party since 2009, including £3,250 to support Gove’s leadership bid in 2016.
‘Engulfed in corruption’
When the contracts were awarded, Gove was a minister at the Cabinet Office – which is responsible for government procurement – and holder of the office of the chancellor of the duchy of Lancaster, which referred Meller Designs for the PPE deal.
Angela Rayner, Labour’s deputy leader and the shadow chancellor of the duchy of Lancaster, said of Gove: “It shows just how engulfed in corruption this government is that the minister in charge of procurement and ensuring that contracts are awarded to the best bidder and represent value for money for the taxpayer was helping his own donor to get VIP fast-track access to contracts.
“It is time this … government published the full details of every PPE and testing contract awarded to companies with links to the Conservative party, Conservative ministers and Conservative MPs.”
It also emerged this week that an ex-chair of the Conservative party helped secure lavish PPE deals for a number of companies at the peak of the coronavirus pandemic.
Andrew Feldman – a peer who used to play tennis with David Cameron and was drafted into the health department as the virus hit – recommended contracts for three successful firms, it has emerged.
It has previously been reported that Feldman helped to secure work for Bunzl Healthcare, a client of his lobbying firm Tulchan. According to POLITICO, he also helped three other companies win contracts worth tens of millions of pounds.
Feldman’s dodgy dealings are contained in the full list of 47 that won contracts via the UK government’s VIP fast-track system that accelerated PPE procurement in the early months of the COVID crisis.
Last year, the National Audit Office (NAO) found that suppliers with links to Tory politicians were ten times more likely to be awarded contracts than those who applied to the Department of Health and Social Care.
The NAO said the government’s procurement efforts during the coronavirus crisis “diminished public transparency”, and accused officials of failing to meet “standards that the public sector will always need to apply if it is to maintain public trust”.
By the end of July, more than 8,600 contracts worth close to £18 billion had been awarded – 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”, the report said.
‘We need transparency’
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.
The full list reveals that former health secretary Matt Hancock helped secure work for four companies; that Dominic Cummings, the prime minister’s former chief aide, helped another; and that a number of prominent Tory MPs were among those who submitted referrals to the VIP process.
The Good Law Project, which helped uncover details of the VIP lane contracts, said “the vast financial rewards you could reap if you had a minister looking out for your interests” had at last been made clear.
“There was no good reason — but there were obvious bad reasons — for government to keep the public in the dark about these links,” director Jo Maugham told POLITICO.
“We now need some transparency about the equivalent VIP lane for Test and Trace contracts — on which £37bn of public money was spent.”