A lingering scent of corruption

Saturday August 8th 2020

Midlothian MP, Owen Thompson, writes his monthly column for Midlothian View

Lurking behind the emergency response to Covid19 there is a lingering scent of corruption, cronyism and the reckless wasting of public money by this Johnson-led government that deserves more thorough public scrutiny.

After running down public services over the last decade, we know the UK was not prepared when the Covid19 emergency struck, despite what was claimed in those critical weeks in January and February when the Prime Minister was still encouraging people to shake hands and not even bothering to turn up for emergency planning meetings (the first 5 coronavirus COBRA meetings were skipped by the PM).

When the cases started to surge and lockdown finally happened, the panic ordering of PPE began and so too did a scramble for lucrative government contracts. Companies with very small balance sheets and no obvious expertise or experience in supplying PPE, but often with links to the government or conservative party, seemed to land a lot of the deals, oddly enough. Under the excuse of urgency, big-money public contracts were signed without all the bother of competitive tendering and fair procurement processes.

All credit to those who are working to shine a light on some of the shady-looking deals, particularly Jo Maugham QC of the Good Law project.

Documents disclosed by Maugham’s investigations reveal the government was set to award a contract for face masks worth a whopping £252million to a company called Prospermill Ltd, valued at £100, which was set up by government adviser Andrew Mills. That’s despite them having no experience in providing medical equipment, or pretty much anything it would seem. We are told they had an exclusive deal with a Chinese factory to supply masks, which seems remarkable given their lack of assets and trading history.

The contract was signed with a private equity company Mills is linked to, Ayanda Capital Ltd, based on an offshore tax haven, seemingly because his own company Prospermill weren’t set up for international banking transactions. All very quiestionable. To make matters far worse, the 50 million masks supplied through this backroom deal are completely useless to the NHS. They fell below the technical standard required as they had ear loops, instead of head loops, and failed to fit tightly enough to provide critical protection on the frontline.

The Good Law project calculated that this single contract linked to a government crony represents a loss of between £156million and £177million to the public purse. It’s not clear what the UK Government will do with the mask mountain – perhaps we’ll see them on e-bay sometime soon – but they won’t be helping the NHS staff who really need them.

That is one of many mind-blowingly bizarre contract awards in the 15billion spending spree that needs to be opened to proper public scrutiny. There are others like the £32million contract for PPE supplies given to a small pest control company PestFix which had only £18,000 in assets at the time. There’s also the supplier of sweets, Clandeboye Agencies Ltd, who were handed a £108million contract for surgical gowns seemingly without any advertising or competitive tendering.

There’s fashion design brand Luxe Lifestyles Ltd who were given a £25million contract for NHS standard PPE. When I asked on July 3rd whether the UK Government had assessed the capacity of Luxe to provide 1.2million gowns and 10million masks to the NHS –- you would think that would be a simple yes – I was told “it will not be possible to answer this question within the usual time frame.” I’m still waiting.

Normal rules to secure good value for money were ditched during coronavirus, but with some 16,000 companies offering to supply PPE, many with good track records in the industry, the government has to stop ducking the questions and explain the reasoning for the contracts they signed.

Many of these deals look like very poor procurement decisions from an incompetent government at best, and corruption, cronyism and disaster capitalism at worst. What is crystal clear is that greater transparency and accountability is needed – something Boris Johnson and his team don’t like very much.

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