Government fast track for ‘VIP’ PPE suppliers ruled unlawful by court

Companies with contacts won contracts worth hundreds of millions of pounds

The government’s use of a VIP fast lane for suppliers of Covid personal protective equipment (PPE) with connections to ministers and officials has been ruled unlawful by the High Court.

Campaigners from the Good Law Project and EveryDoctor took the Department of Health and Social Care to court over claims that suppliers with political links were given an unfair advantage in obtaining contracts running into hundreds of millions of pounds.

In a ruling released today, judge Mrs Justice O’Farrell found that the VIP lane system was “in breach of the obligation of equal treatment”, adding: “The illegality is marked by this judgment.”

At the height of the first wave of coronavirus, a number of bids to supply PPE such as gowns, masks and gloves were passed on to officials by ministers including then health secretary Matt Hancock after they were approached directly by contacts.

The groups took legal action over more than £340m in contracts awarded to pest control firm PestFix and a contract worth around £252m to the hedge fund Ayanda Capital.

They argued that suppliers including PestFix and Ayanda were prioritised “because of who they knew, not what they could deliver”.

DHSC contested the claim, telling the court it “wholeheartedly” rejected the case against it and that the VIP lane was rational and resulted in a “large number of credible offers” in an environment where PPE deals often failed within “minutes”.

The court found that offers introduced by “senior referrers” such as ministers or high-ranking officials received “earlier consideration” than others submitted under the normal processes.

“The High Priority Lane Team was better resourced and able to respond to such offers on the same day that they arrived,” said the ruling.

And the judge that “there is evidence that opportunities were treated as high priority even where there were no objectively justifiable grounds for expediting the offer”.

However, she found that both of the companies’ offers “justified priority treatment on its merits” and were “very likely” to have been awarded contracts even without the VIP lane.

Barrister Jo Maugham, the director of the Good Law Project, said: “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.

“Never again should any government treat a public health crisis as an opportunity to enrich its associates and donors at public expense.”

The chief executive of campaign group EveryDoctor, Dr Julia Grace Patterson, said: “We brought the government to court because NHS staff and other frontline workers were woefully unsupported and unprotected by this government.

“Many were provided with no PPE and many died. The government must never again be allowed to conduct themselves in this manner during a national healthcare crisis”.

The ruling noted that some of the equipment supplied, including aprons, gowns and masks, could not be used in the NHS.

Labour deputy leader Angela Rayner called for a full independent inquiry into the VIP fast-lane system.

“While our hardworking NHS staff were going without PPE, Tory politicians saw an opportunity to line their cronies’ pockets,” said Ms Rayner. 

“A judge has now ruled the VIP lane unlawful but that may be just the tip of the iceberg.

“Even now ministers are covering up key documents while critical messages and minutes have gone missing.

“Only a fully independent investigation will get to the bottom of how £3.5bn of taxpayers’ cash were handed out in crony contracts and ensure it can never happen again.”

A DHSC spokesperson said: “At the height of the pandemic there was a desperate need for PPE to protect health and social care staff and the government rightly took swift and decisive action to secure it.

“We are pleased the court has ruled that our industry call to arms was open and transparent. The ruling says it is highly likely these offers would have been awarded if they were processed through other channels also used to process offers.

“All contracts underwent sufficient financial and technical due diligence and the court found that we did not rely on the referral to the High Priority Lane when awarding contracts.”

“Throughout the pandemic our absolute priority has always been saving lives and we have been working tirelessly to deliver PPE to protect our health and social care staff on the frontline, with over 17.5 billion PPE items delivered so far.”

A spokesperson for Mr Hancock said: “We are delighted that the Department for Health has won this case, as the Court found that the priority treatment was ‘justified’ and rightly refused to grant any rectification for the way PPE was urgently bought in the height of the crisis.

“It is good that this costly legal action has come to an end with no further action necessary.

“At the time, a huge number of people were doing everything they could to get PPE to the front line as fast as possible in a national emergency. As the National Audit Office has confirmed, ministers had no involvement in procurement decisions or contract management.

“The department was doing the best it possibly could within the rules to respond to an unprecedented situation, and crucially, the court has rightly found that action was justified and absolutely no rectification or further action is necessary.”