Conservative Lord’s £100 Million LinkTo Private Government Contractor
The Tory peer and senior Cabinet Office official appears to have benefitted financially from a firm that has won millions in public sector contracts
A Conservative member of the House of Lords, who also operates as the Government’s lead non-executive director, appears to have benefitted financially from public sector contracts awarded to a private firm, Byline Times and The Citizens can reveal.
Lord John Nash was an early investor in Softcat, an IT infrastructure company founded in 1993, and sat as one of its directors from 2002 to 2013. At the time that Softcat floated on the London Stock Exchange in 2015/16, records show that Lord Nash held 11% in company shares. The Times estimates that Lord Nash made roughly £20 million from the company’s public listing.
Since its initial listing, Softcat’s share value has risen from £2.80 per share to £15.52. It is understood that Lord Nash currently holds 7.25 million shares, equivalent to 3.65% of the company. In May 2020, The Times reported that Lord Nash’s Softcat shares were worth £94.4 million. Since that time, due to the firm’s rising stock price, their value has increased to more than £112 million, Byline Times estimates.
Public sector work, commissioned by the Government and various public bodies, forms a large chunk of Softcat’s operation.
The firm’s revenue amounted to more than £1 billion in the 2020 financial year, according to its website, with gross profits of £235.7 million. According to an Investors’ Chronicle article published in January, public sector work accounts for 35% of Softcat’s total gross invoiced income. Indeed, it is estimated that, since 2014, the firm has won more than 800 Government contracts.
For example, over the course of the Coronavirus pandemic, Softcat has clinched multiple deals worth up to £16.2 million from various Government departments and public bodies.
It is estimated that Lord Nash has been awarded dividends worth more than £7 million from Softcat since 2017, based on the pay-outs listed here. The Conservative peer has therefore seemingly financially benefitted, both directly through dividends and indirectly through rising share prices, from Softcat’s Government contracts.
Lord Nash lists Softcat in his register of interests, which states that he holds shares in 79 other companies.
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John Nash, a former venture capitalist who was listed in The Sunday Times’ 2020 Rich List, was made a life peer in the House of Lords in January 2013. In the same month, he was appointed as a minister in the Department for Education (DfE) – a position in which he served until September 2017.
In July 2020, he was appointed to the role of Government lead non-executive director, for a three-year term. In this position, he works closely with the Chancellor of the Duchy of Lancaster Michael Gove, along with Cabinet Secretary Simon Case, to ensure the smooth operation of Government. Lord Nash is also a non-executive director at the Cabinet Office.
Lord Nash has pre-existing working ties with Gove, who was Education Secretary until July 2014. They both sat on the DfE’s board in 2013/14, alongside current Health and Social Care Secretary Matt Hancock, and International Trade Secretary Liz Truss.
Electoral Commission records show that Lord Nash has donated at least £415,805 to the Conservative Party since 2016 – including £125,000 to the Conservative Party’s candidate for Mayor of London, Shaun Bailey; and £3,250 to Gove’s short-lived 2016 Conservative leadership campaign.
It is also the case that one of Softcat’s current non-executive directors, Vin Murria, has donated £125,000 to the Conservative Party since 2019 via her firm, VM.AV Corporate Services Limited.
There is no evidence to suggest that Softcat has benefitted from the connections of Lord Nash and Murria to the Conservative Party or the Government. Nor is there any evidence to suggest that Softcat is an unsuitable public sector supplier.
Lord Nash, the Cabinet Office and Softcat PLC did not respond to a request for comment.
The Conservative Crisis
Concerns have manifested during the Coronavirus pandemic about the relationship between Conservative donors, ministers and firms that have been awarded Government contracts.
Byline Times and The Citizens have recorded that more than £900 million in COVID-related contracts have been awarded to firms owned by Conservative donors during the pandemic.
Ministers and officials have also been directly caught up in claims of cronyism, with several firms boasting close ties to Matt Hancock. A firm with links to the Government’s own health procurement and efficiency chair was even awarded a £38 million contract.
The New York Times found that roughly half of the Government’s £15 billion expenditure on personal protective equipment (PPE) was awarded to firms “either run by friends and associates of politicians in the Conservative Party, or with no prior experience or a history of controversy”.
This has been an issue of concern for both public bodies and MPs.
In two reports released last November, the National Audit Office (NAO) evaluated the Government’s procurement of services during the pandemic, noting that officials had failed to record basic conflicts of interest or the reasons why certain suppliers were selected. There has been “a lack of documentation recording the process for choosing the supplier, the justification for using emergency procurement, or any considerations around potential conflicts of interest,” the first report stated.
This has consequently provoked a debate, both inside and outside Parliament, about the financial interests of MPs and how to prevent both real and reasonably perceived conflicts of interest – as stipulated by the Ministerial Code.
One proposed solution is the ‘Crony Bill’, introduced to the House of Commons by Scottish National Party MP Owen Thompson. If passed, the legislation would ensure that MPs can interrogate ministers about any personal, political or financial connections they may have to a company that is awarded a Government contract.
The Conservative Party has so far failed to declare its support for the proposed legislation.