£121.7 Million Increase in Profits for COVID Contract Winners With Conservative Links

£121.7 MillionIncrease in Profitsfor COVID Contract Winners With Conservative Links

Twelve COVID-contract winning firms with ties to the Conservative Party have increased their profits by 57.1%, Byline Times and The Citizens reveal

Twelve companies with links to the Conservative Party, all of which won contracts during the Coronavirus pandemic, have recorded an overall 57.1% increase in profits in their latest annual accounts – equivalent to £121.7 million, the Byline Intelligence Team and The Citizens can reveal.

The findings have been described as “shocking” by Labour Party Deputy Leader Angela Rayner.

It has been 18 months since Byline Times, The Citizens and others began reporting on the multi-million-pound Government contracts awarded to firms with ties to the Conservative Party; ultimately uncovering that at least £1 billion worth of contracts were awarded to companies linked to Conservative donors, and £2 billion to firms linked to Conservative associates. The Labour Party has since calculated that the overall figure has reached £3.5 billion.

To date, only 12 of the 30 companies covered in our reporting have filed annual returns for the period covering the awarding of their pandemic-related contracts. However, of the 12 firms that have filed their accounts for the relevant period, they have recorded total profits of almost £334.7 million.

Of these companies, eight are linked to Conservative Party donors, and a further four are linked to Conservative associates – individuals with non-financial links to the party or the Government. Nine of the companies have increased their profits, while three have seen their profits fall.

There is no suggestion of wrongdoing on the part of the companies and individuals involved. Indeed, the pandemic procurement system was created and operated by the Government. But there is a public interest in providing information to taxpayers on where their money has been spent during the Coronavirus pandemic.

All of the firms mentioned in this report have been contacted for comment. It is acknowledged that multiple sources of income, not solely Government contracts, will have contributed to the balance sheets of each of the companies. 

The companies that have seen the largest increases in profits are Meller Designs and Ayanda Capital. The latter firm controversially won a £250 million PPE contract brokered by Andrew Mills, who was at the time an advisor to the Government’s Board of Trade. Ayanda saw its profits increase by 2,600% during the latest accounting period, up from £633,000 to £17 million.

Meller Designs – the co-owner of which is David Meller, who has donated £63,000 to the Conservatives since 2009 – saw gains of more than 9,000%. The firm’s profits rose from £143,000 to £13 million during the accounting period ending December 2020. The firm won contracts worth at least £163 million during the pandemic. “Turnover increased to £170 million (2019: £12.8 million) reflecting the additional PPE business in the year,” the company’s accounts say.

A Meller Designs spokesperson previously told The Times: “We are extremely proud of the role we played at the height of the crisis and managed to secure more than 150 million items of PPE.”

Clipper Logistics – the founder and executive chairman of which is Steve Parkin, who has donated £730,000 to the Conservatives since 2016 – saw an increase in profits of 20.7% for the period ending 30 April 2020, from £13.4 million to £16.2 million. It was awarded a £1.3 million contract on 1 April 2020 to supply personal protective equipment (PPE) to the NHS, which has since increased to £11 million.

IT company Computacenter saw its profits increase by 51.7% for the period ending December 2020, from £102 million to £154 million. The firm was awarded more than £240 million in deals to supply laptops and tablets to children for home-based learning during lockdown. Co-founded by Sir Philip Hulme, Computacenter posted an annual revenue stream of more than £5 billion in 2019, jumping to £5.4 billion by the end of 2020.

Hulme’s wife Janet donated £100,000 to the Conservatives prior to the 2019 General Election, and in 2013 Philip Hulme donated £10,000 to then Conservative MP Nick Herbert. Philip Hulme remains a non-executive director and shareholder of the company. He previously told Private Eye that he was “proud” to be part of “this vital programme to support the educational needs of some of the most disadvantaged young people”. 

Next, Globus Shetland, which as a company has donated £375,522 to the Conservative Party, doubled its post-tax profits, from £2.5 to £5 million, in the period to 31 May 2020. Its director, Haraldur Agustsson, is also a member of the Conservative Leader’s Group – an elite dining society which grants access to top politicians in exchange for party donations. Globus Shetland was awarded £94 million for the supply of respirators in September 2020. One of Agustsson’s other companies, Alpha Solway, has also won £10 million in six Coronavirus-related contracts.

IT infrastructure group Softcat also saw an increase in profits of more than 10%, securing £75 million in post-tax returns in the year to 31 July 2020. As Byline Times and The Citizens previously reported, Conservative Lord John Nash controls shares in the company worth an estimated £112 million, seemingly earning dividends valued at more than £7 million since 2017. On top of his role in the Lords, Nash was appointed as the Cabinet Office’s lead non-executive director in July 2020. 

One of the several firms linked to former Health and Social Care Secretary Matt Hancock also made the list. Cheshire-based EMS Healthcare won a contract to provide articulated mobile testing units on the 15 September 2020. EMS chairman Iain Johnston is a former business partner of Shirley and Robert Carter – Hancock’s mother and stepfather. The firm decided against logging profit and loss figures in its annual accounts. However, the records do show that the firm’s profit and loss reserves increased by the end of December from £687,643 to nearly £1.7 million. The accounts acknowledge that the Coronavirus crisis has resulted in increased demand for EMS Healthcare’s testing facilities.

The artificial intelligence start-up Faculty Science enjoyed a rise in gross profits of 27.4% from £3.8 million to £4.8 million up to 31 March 2021 – although the firm still made a £289,000 loss during the year (albeit down from its £1 million loss in 2019). The firm was championed by former Downing Street chief aide Dominic Cummings during his time in Government, after it worked for the Vote Leave EU Referendum campaign – run by Cummings. The Citizens has previously mapped the expansion of Faculty into the public sector, spanning 20 different public sector contracts worth a cumulative £11.2 million since 2018. 

When Byline Times previously reported on Faculty’s current Government contracts, the firm said: “We have procured all of our public-sector contracts via the correct channels and as part of competitive procurement processes. With regard to the Vote Leave campaign, we did not anticipate that working as a contractor for an official campaign would come to be seen as so controversial… We no longer work for any political parties or on any political campaigns.”

Uniserve, the firm that won the fifth-largest value of contracts during the pandemic, saw a 505% increase in profits – from £6.2 million in 2019 to £38 million by the end of June 2020. As reported at the time by ITV, Uniserve “in effect became [the Department of Health and Social Care’s] global logistics partner”. The firm’s owner, Iain Liddell, has ties to the post-Brexit forum Prosperity UK, which included business leaders, academics and policy-makers, notably Michael Gove and Rishi Sunak.

“Mr Liddell does not have any relationships with Government ministers or the Conservative Party,” a company spokesperson told Byline Times. “We are immensely proud of the work that Uniserve has done, and continues to do, to get PPE to our frontline staff… We have not failed to deliver on any of our commitments.”

Only three firms logged a fall in profits in their latest accounts.

The procurement consultancy Efficio saw its takings fall from £4.1 million to £1.5 million in the period to 30 June 2020. Byline Times and The Citizens have previously mapped £6 million in Coronavirus-related contracts to the firm. Until shortly after our initial reporting, investment firm Livingbridge sat as an entity with significant control of Efficio, owned by Oluwole ‘Wol’ Kolade. Kolade has donated £884,334 to the Conservatives since 2011, and sits on the board of NHS Improvement.

The other firms were Medacs Healthcare, controlled by Lord Michael Ashcroft; and Specialist Computer Centres – which reported a decline in post-tax profits of 80% and 3.1% respectively. Lord Ashcroft is one of the largest Conservative donors in history, previously serving as party treasurer from 1998 to 2001. Specialist Computer Centres, owned by Rigby Group, was awarded contracts worth at least £2 million for the supply of technology devices to school children. Rigby Group gave £50,000 to the Conservatives in 2019, following a donation of £55,000 in 2017. 

The Labour Party’s Deputy Leader, Angela Rayner, told Byline Times that the new revelations were “shocking”.

“The Conservatives have shown complete disregard for taxpayers during the pandemic, spending billions without proper oversight,” she said. “While the Tories’ tax hike on working people is hitting home and household bills are soaring, their donors and associates are doing just fine. The Government should have long ago ended the so-called emergency procurement rules and ‘VIP access’ to contracts, and they must now tell us how they will recover the public money that has been spent on unusable PPE or undelivered services.”

The above list of firms is still not exhaustive, with many more due to file their accounts in the coming months. The Byline Intelligence Team and The Citizens will continue to monitor them closely.

Reporting by Max Colbert