The award of PPE contracts worth more than £200m to a company linked to Baroness Michelle Mone was part of a Covid procurement process described as “panic-buying”, according to a report published by the Public Accounts Committee (PAC).
Supplier PPE Medpro was awarded two UK Government contracts for face masks and sterile surgical gowns, after being recommended by Tory peer Mone, who is married to Scottish businessman Doug Barrowman.
The PAC report said there is inconclusive evidence to suggest that Lady Mone acted inappropriately over the awarding of the contracts.
She has consistently denied any “role or function” in the company, and her lawyers have previously said she is “not connected to PPE Medpro in any capacity”.
In its report published on Tuesday, PAC said: “These are serious defects in (the) government’s stewardship of public money and the committee has previously reported on this issue.
“However, from the evidence in the materials made available to us we cannot comprehensively conclude whether emails from Baroness Mone and the route through the high priority lane led to the PPE Medpro offer being treated differently by government than other offers made in the same way during those abnormal times.
“On the basis of the material we have seen, the risk appetite appears to have been so high at the time that the Department does not seem to have responded to the information it was receiving as part of the contracting process in a way that would be appropriate in normal times.
“The department had an overriding impetus to buy and though it conducted some checks, found aspects of bids or companies that were sub-optimal and put in place some limited safeguards (including assurances and payment on delivery), it then bought the products anyway.
“Colloquially, this might be called panic-buying.”
Lady Mone is currently on a leave of absence from the House of Lords, meaning she cannot attend sittings of the House, vote on any proceedings, or claim any allowances.
A spokesperson for Lady Mone said they could not comment on the report, while adding: “Baroness Mone is completely innocent and the truth will soon come out.”
The PAC said it was significantly limited in what it is able to comment on or publish at this stage due to two ongoing investigations.
The first is a National Crime Agency investigation into PPE Medpro, and the other is a House of Lords Commissioners for Standards investigation into the conduct of Baroness Mone.
There is also a civil case initiated by the Department of Health and Social Care (DHSC) against PPE Medpro in relation to a disputed contract.
Dame Meg Hillier, chair of the committee, said: “The conclusions included in this report are limited by nature.
“This is due both to the imperative to not impact ongoing investigations, and the fact the PAC has seen only a snapshot of procurement processes specifically relating to PPE Medpro, rather than a complete picture of the management of similar contracts by the DHSC.
“Our scrutiny of the DHSC’s overall approach to procurement in recent years has established a theme of inadequate financial controls, governance, documentation, and transparency, and poor management of due diligence and conflict of interests.
“Our committee continues to closely scrutinise these issues, as well as the government’s approach to public procurement more widely.”
Last year, the PAC said the UK Government had lost 75% of the £12bn it spent on PPE in the first year of the pandemic to inflated prices and kit that did not meet requirements – including £4bn of PPE that could not be used in the NHS.
The UK Government announced last December it was suing PPE Medro for £12m plus costs.
The PAC report concluded that there appeared to have been a lack of clarity about the purpose of officials checking whether conflicts of interest existed in the awarding of PPE contracts.
It also identified an overall picture of civil servants trying to fulfil the normal requirements of good contracting but without the time or structures in place to allow them to do so.
The report added: “During the initial stages of the crisis, the department solicited offers to provide PPE with no tendering process and received multiple offers from companies without any track record of delivering PPE or and with varying track records and longevity.
“The department then had insufficient time and resources to reflect properly on each offer, and under pressure caused by the sudden need for PPE, chose to accept very high levels of risk, as we have reported previously in our reports.”
Last November, health minister Neil O’Brien said a “satisfactory agreement” has not been reached with PPE Medpro about its contracts.
Responding to Labour, he told the Commons: “It’s been widely reported that it had an underperforming contract, and let me set out what we do in those cases.
“The first step is to send a letter before action, which outlines a claim for damages. And that is then followed by litigation in the event that a satisfactory agreement has not been reached.
O’Brien said the “high priority group” for PPE, also known as the VIP lane, did not have “any kind of successful guarantee of a contract”.
The UK Government is attempting to get its money back on one of the deals in the High Court, claiming the medical gowns supplied “did not comply with the specification in the contract”.
PPE Medpro has said it would rigorously defend the claim.
A spokesperson for the company said: “These were unprecedented times, and this report has shown the total disarray in Government departments at the time, including major procurement failings.
“PAC was given full access to all papers, advice and correspondence involving Ministers and Special Advisers relating to PPE contracts awarded to PPE Medpro by the Department. We welcome PAC’S findings that PPE Medpro was treated no differently from any other company.
“We have always known this to be the case because PPE Medpro not only underwent thorough and painstaking due diligence, but we were one of the few companies that took no upfront deposits from the Government.
“We, therefore, at great risk, had to underwrite the initial cost of all PPE Government orders.
“Although PPE Medpro were allocated through, what became known as the high priority lane, PPE Medpro were unaware of this at the time of contract award.
PPE Medpro delivered 210 million type IIR face masks and 25 million gowns at highly competitive prices, on time and to specification.
“According to the contracts, payment was received in full only after DHSC had satisfied itself with quality. We vigorously defend any claim that our gowns were not fit for purpose. DHSC only raised the subject of gown quality many months after being delivered and accepted by them after massively overordering PPE goods.
“All masks delivered were used in full by DHSC without complaint.”
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