The High Court has ruled that special pathways set up outside of the normal procurement process to help ‘VIPs’ win lucrative government contracts for personal protective equipment (PPE) at the height of the pandemic were unlawful.
The judge said this morning that the operation of the “high priority lane”, which sped up the process for certain providers, was “in breach of the obligation of equal treatment” and added that “the illegality is marked by this judgment”.
The court found that offers had been allocated to the VIP lane on a “flawed basis” and that “there is evidence that opportunities were treated as high priority even where there were no objectively justifiable grounds for expediting the offer”.
The court noted in the case, brought by the Good Law Project, that the majority of the products supplied by Pestfix and Ayanda, including defective gowns, masks and aprons, could not be used in the NHS. Pestfix is facing multiple legal actions.
“Good Law Project revealed the red carpet-to-riches VIP lane for those with political connections in October 2020. And the court has now held that, unsurprisingly, the lane was illegal,” Good Law Project director Jo Maugham said.
“Never again should any government treat a public health crisis as an opportunity to enrich its associates and donors at public expense.”
The Good Law Project revealed leaked documents in October 2020, which it argued showed that the Cabinet Office was “directly feeding its contacts into the procurement process, outside the normal public channel”.
The non-profit also said the leaked information exposed a “startling opportunity for price gouging by favoured suppliers”, with questions only being asked if prices offered were more than 25% above the average paid to other suppliers.
The Good Law Project sais suspicions were raised over government procurement processes after what it described as “enormous contracts” were awarded to new entities, long-dormant companies or those of “dubious financial standing”.
The organisation highlighted several examples including PPE Medpro, which won two NHS contracts worth £200m just seven weeks after it was set up by the former business associate of Conservative peer Baroness Mone.
It pointed out that staffing agency SG Recruitment UK Limited won two PPE contracts worth over £50m despite auditors raising concerns about its solvency, and that Tory Peer Lord Chadlington sits on its parent company’s board.
The Good Law Project explained that P14 Medical Limited, which it says is controlled by the former Tory councillor Steve Dechan, was awarded three contracts worth over £276m despite having negative £485,000 in net assets.
A National Audit Office report in 2020 found that half of all Covid contracts, worth around £10.5bn, have been awarded without a competitive process and that applicants with political contacts were ten times more likely to be successful.
Labour repeatedly criticised PPE outsourcing in the pandemic. The party recently accused Downing Street of “damaging public confidence” after it emerged that contracts worth £81m were awarded to a firm owned by a major Tory donor.
The Good Law Project is a not-for-profit membership organisation. The stated aim of the body is to use strategic litigation as a way to “challenge abuses of power, exploitation, inequality, and injustice”.