Rayner: Revelations about PPE contracts show “total failure of due diligence”

Angela Rayner has declared that reports that a Tory peer received £29m from a firm that gained a government PPE contract show a “total failure of due diligence” and a “conflict of interest at the heart of government procurement”.

The Guardian reported today that Tory peer Michelle Mone and her family received £29m from the profits of a PPE company that was awarded government contracts after she recommended it to ministers.

According to the newspaper, Mone’s support helped PPE Medpro secure a place in a ‘VIP lane’ that the government used for procurement during the pandemic. The company was subsequently awarded contracts worth more than £200m.

Addressing the Commons during an urgent question on PPE procurement, the deputy Labour leader said the revelations about Mone demonstrate “a total failure of due diligence and a conflict of interest at the heart of government procurement”.

She told MPs: “Today’s reports concern just one single case, but this government has written off £10bn alone in PPE that was deemed unfit for use, unusable, overpriced or undelivered.

“Worse, ministers appear to have learnt no lessons and have no shame. As families struggle to make ends meet, taxpayers will spend £700,000 a day on the storage of inadequate PPE.”

Responding on behalf of the government, Neil O’Brien said sourcing, producing and distributing PPE is a “uniquely complex challenge” in normal circumstances, adding: “The efforts to do this during a pandemic, at a time when global demand was never higher, were truly extraordinary.”

The health minister stressed that the priority early in the pandemic was to get PPE to the frontline “as quickly as possible”. He admitted that “there are always lessons we can learn from any crisis” but added: “We must not lose sight of the huge national effort that took place to protect the most vulnerable.”

Documents seen by The Guardian suggest that millions of pounds of PPE Medpro’s profits were transferred to an offshore account of which Mone and her children were beneficiaries, despite her lawyer claiming last year that Mone “did not benefit financially and was not connected to PPE Medpro in any capacity”.

Mone is already under investigation by the House of Lords commissioner for standards over alleged links between her and the company, following a complaint by Labour peer George Foulkes in January. Her home in the Isle of Wight was raided in April as part of a National Crime Agency investigation into PPE Medpro.

O’Brien told MPs told that the company had an “underperforming” PPE contract and that the first step of the government’s response to such companies was to send a letter before action, after which it would commence litigation if a “satisfactory agreement” had been not reached.

The health minister added that, in the case of PPE Medpro, the government has not “got to a point where a satisfactory agreement has been reached at this stage”.

The High Court ruled in January that the VIP lanes set up for government procurement were unlawful. The judge said the operation of the “high priority lane”, which sped up the process for certain providers, was “in breach of the obligation of equal treatment”.

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”.

A public accounts committee report, published in June, found that the Department for Health and Social Care lost 75% of the £12bn it spent on PPE in the first year of the pandemic to inflated prices and equipment that did not meet requirements.

The committee revealed that £4bn of the £9bn wasted was spent buying PPE that the NHS will not use and now needs to dispose of, and that the government told the committee that it “plans to burn significant volumes” of the unused equipment.