‘VIP’ Firms Referred by Tory MPs and Peers for PPE DealsSee Profits Soar
Hundreds of millions of pounds have been earned by companies channelled through the expedited procurement route by Conservative politicians, Sam Bright reports
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Companies that were referred by Conservative MPs and peers to the expedited ‘VIP’ lane for personal protective equipment (PPE) contracts during the pandemic have seen their profits quadruple, Byline Times can reveal.
Firms processed through this high-priority route – referred by MPs, peers, officials and advisors – were 10 times more likely to be awarded a contract than companies funnelled through other procurement paths.
The Government was earlier this year forced to release the names of the 51 firms that was awarded contracts through the VIP lane, along with the names of the individuals who referred them. Twenty of these firms were referred by Conservative MPs or peers, with not a single successful VIP lane firm referred by MPs or peers belonging to other political parties.
The firms referred by Conservative MPs and peers have enjoyed soaring profits, from £38 million to £156 million, during their latest relevant account periods (during which their contracts were awarded). We only calculated the profits of firms that display the relevant profit/loss data on their company accounts. These firms were cumulatively awarded PPE deals worth more than £1.2 billion during the pandemic, in the overwhelming majority of cases awarded without normal competition procedures.
This includes Meller Designs, awarded PPE contracts worth more than £170 million after being referred to the VIP lane by Michael Gove’s office. In the year ending December 2020, the firm logged profits of £13.1 million, up from just £144,000 the year before.
One of the individuals who co-owned Meller Designs during the pandemic – David Meller – has donated nearly £60,000 to Conservative politicians and the central party since 2009, including £3,250 to Gove’s unsuccessful leadership campaign in 2016. The Guardian has reported that Meller agreed to serve as the finance chair of Gove’s short-lived party leadership campaign in 2016.
Byline Times previously revealed that former Government Health minister Lord James Bethell held a meeting with Meller Designs on 6 April 2020. A month later, Government records show, the firm began winning PPE contracts worth millions of pounds.
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A Meller Designs spokesperson previously told The Times that: “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.”
Another VIP lane firm was the furniture company Monarch Acoustics, referred to the expedited procurement path by then-Health and Social Care Secretary Matt Hancock. The company, awarded PPE deals worth £28.8 million, logged post-tax profits of £10.8 million in 2020, compared to just £244,000 in 2019. Monarch’s parent company subsequently paid out ordinary dividends worth more than £1.7 million in 2021.
All the firms cited in this article have been approached for comment, and there is no suggestion of wrongdoing on their part – these were contracts awarded by the Government, within a procurement framework designed by ministers and officials.
Skinnydip, a clothing and accessories firm, likewise saw a jump in its financial position, from a loss of £950,000 to a profit of £4.1 million, after being awarded Government contracts worth £12.9 million. The company’s accounts for the period ending 31 December 2020 state that it received £516,000 through the Government’s furlough programme.
Skinnydip was referred to the VIP lane by Conservative peer (and former party Treasurer) Lord Andrew Feldman, and Conservative peer Peter Chadlington.
The Rush for Supplies
The VIP lane was established to quickly procure much-needed supplies at the start of the pandemic from firms that, in theory, had already been vetted by individuals in Government.
Forty-six of the 115 contracts awarded to VIP lane suppliers did not go through the eight-stage due diligence process that was later implemented by the Government, as these contracts were awarded before May 2020.
The High Court ruled in January that the use of the VIP lane for the awarding of PPE contracts was unlawful. “There is evidence that opportunities were treated as high priority even where there were no objectively justifiable grounds for expediting the offer,” the judge said, adding that the “operation of the high priority lane was in breach of the obligation of equal treatment under the public contract regulations.”
The National Audit Office also found that 53% of VIP lane suppliers provided some PPE items that are classified as not suitable for frontline services, while the Government believes that it may not achieve full value for money on 37% of the total value of all VIP lane contracts.
Several of the firms say that they did not realise they had been channelled through an expedited route – that they simply followed the instructions of officials, and worked at pace to procure supplies that the country needed. These firms may have come to the attention of MPs, ministers and officials through a variety of ways, and certainly not exclusively through party-political connections.
Further scrutiny has been applied in recent days to the Government’s PPE procurement process, after the Guardian revealed that Conservative peer Baroness Michelle Mone and her children received £29 million originating from the profits of PPE Medpro, a firm awarded more than £200 million in PPE contracts through the VIP lane. These profits were reportedly transferred to an offshore trust of which Mone and her adult children were the beneficiaries.
Mone referred the company to Gove and Lord Theodore Agnew, with the former telling Sky News that Mone was “keen to ensure that the PPE the Government needed at that time was provided.”
A lawyer representing PPE Medpro said that: “For the time being we are… instructed to say that there is much inaccuracy in the portrayal of the alleged ‘facts’ and a number of them are completely wrong.”
The Government’s procurement of PPE during the pandemic has drawn extensive criticism, with the Department of Health and Social Care itself revealing that £8.7 billion in PPE has now been written off on the basis of being unusable, having passed its expiry date, or having been procured at highly inflated prices.
Byline Times has previously revealed that COVID contract winners with direct links to the Conservative Party – in other words, party donors and associates, not including all those firms awarded deals via the VIP lane – have seen their collective financial position improve by £325.5 million.
Under-Secretary of State for Primary Care and Public Health Neil O’Brien defended the Government’s PPE procurement in the House of Commons last week, saying: “Sourcing, producing and distributing PPE is, even in normal times, a uniquely complex challenge. However, the efforts to do so during a pandemic, at a time when global demand was never higher, were truly extraordinary.”
However, the opposition benches take a much dimmer view. Labour Deputy Leader Angela Rayner has called for “Ministers [to] publish all correspondence and all documents, meeting minutes and notes related to each of the contracts awarded through the VIP lane and fast-track process for friends of prominent Conservative politicians. If they refuse to do so then the Cabinet Secretary needs to step in and publish these documents.”