DHSC bought £122m PPE from Tory peer-linked firm 'for almost three times manufacturing fee'
The 25 million gowns were never used after failing an inspection.
PPE bought by the Department of Health and Social Care for £122m from a company linked to a Tory peer – and later deemed unfit for use – was purchased from a Chinese manufacturer for just £46m, according to reports.
The government bought 25 million gowns from PPE Medpro at the beginning of the pandemic, but they were never used by the NHS after government officials rejected them.
Documents which allegedly show the profits made by the firm and its partners were leaked to the Guardian.
DHSC is seeking to recover money from PPE Medpro through a mediation process, according to the newspaper, while the company said it is entitled to keep the money as it fulfilled the contract,
PPE Medpro was awarded two contracts through the government “VIP lane”, which fast-tracked politically connected firms during the Covid pandemic.
Conservative peer Michelle Mone and her husband may have played key roles in the firm winning the contracts, according to files leaked at the beginning of the year.
PPE Medpro was fast-tracked via the government’s “VIP lane” after Baroness Mone “referred” the firm to then-Cabinet Office ministers Michael Gove and Theodore Agnew, although she claims she played no further part after this initial “simple, solitary and brief step”.
Mone allegedly sent the emails from her private email to Gove and Agnew's personal email accounts. The Information Commissioner's Office is investigating the use of private emails at DHSC during the pandemic.
The Tory peer’s husband Douglas Barrowman was also allegedly “part of the financial consortium that backed” the company.
The gowns were produced by a company in China called Wujiang Tutaike Textile and Finishing Co Ltd, and reportedly sold to PPE Medpro for $60.35m, which at the time equated to approximately £46m.
This means PPE Medpro and three intermediary companies shared up to £76m in profits, depending on how much the firm spent on shipping and other logistics costs.
A PPE Medpro spokesman told the Guardian it saved the government money, given the prices it was paying for PPE at the time, and said DHSC agents inspected the gowns before paying for them.
“The supply chain was significant, involving the sourcing team, manufacturers, sterilisation plants, packaging, quality assurance teams, logistics, finance and much more,” they said. “This global team of people and companies worked around the clock 24/7 to deliver PPE to the frontline to save lives.”
DHSC wrote off £8.7bn spent on pandemic PPE in its 2020-21 accounts – £4.7bn of which was attributed to inflated costs as governments scrambled to buy equipment amid the pandemic.
When the gowns were delivered to a depot in Daventry, they were inspected by officials from the DHSC and the Medicines and Healthcare products Regulatory Agency.
The gowns “did not enter the supply chain after a range of checks by the MHRA and DHSC, which also showed that they were not double-wrapped”, the MHRA told the Guardian.
At last count, DHSC estimated some seven billion items of PPE it had bought as part of the coronavirus pandemic were unfit for purpose because they did not pass quality checks, had expired or were otherwise deemed not suitable for NHS use.
During the coronavirus pandemic, ministers and civil servants could refer companies that were bidding for personal protective equipment contracts during the coronavirus pandemic to a “high-priority lane”.
Eighteen of the 47 companies awarded contracts via the VIP lane were referred by Conservative MPs, ministers or peers, including former health secretary Matt Hancock and prominent MPs Julian Lewis, Steve Brine, Esther McVey and Andrew Percy.
Those in the fast-track lane were 14 times more likely to win contracts than other suppliers, according to the National Audit Office.
The government has maintained that all PPE procurement went through an eight-step assurance process, with due diligence carried out on every contract.