A Tory Minister today refused to apologise after a devastating report laid bare the Government’s ‘mindblowing’ £18billion rush to source PPE during the coronavirus crisis and claims cronies were given VIP access to lucrative contracts.
Business Secretary Alok Sharma has denied allegations of wasting taxpayers’ money, claiming the scramble to buy lifesaving clothing for the NHS came at a time of ‘huge pressure’ at the start of the pandemic and through the first wave.
As coronavirus swept across Britain, a £12.3billion ‘Wild West’ opportunity emerged for any firms able to provide the NHS with protective equipment. Companies with no experience supplying PPE won lucrative Government deals while suppliers with political contacts were ten times more likely to get business.
A review by Britain’s spending watchdog the National Audit Office also revealed that officials had signed contracts for hundreds of thousands of facemasks which turned out to be unusable – wasting hundreds of millions of pounds.
The NAO is set to launch an urgent investigation into one extraordinary deal for gloves and gowns with a Florida-based jewellery designer where a Spanish businessman who served as a middleman to secure PPE for the NHS was paid an astonishing £21million in UK taxpayers’ cash. Mr Sharma insisted today the right ‘checks were done’.
Critics say the Government has frittered away huge sums of public in flawed and uncompetitive contracts, sometimes buying ‘useless PPE’, with the ‘taxpayer now reaping the ruin’.
Labour MP Rachel Reeves said that ‘a select group have been given privileged access to the government’, adding: ‘The country deserves to have confidence their money is being spent effectively by the government – and to know without doubt that friends and donors to the Conservative Party aren’t profiting from this pandemic.’
But Mr Sharma said he would not say sorry for working rapidly to secure supplies during the coronavirus crisis and said: ‘We had to do an enormous amount of work very fast to secure PPE and that’s what we did, and I’m not going to apologise for the fact that quite rightly we made that effort.
The bombshell report revealed:
- Suppliers with political contacts were given there own ‘high-priority’ lane and were ten times more likely to get Government contracts;
- Companies with ‘no relevant experience’ pocketed £12billion in shambolic scramble for PPE described as the ‘wild west’. More than 1,300 contracts worth £10.5billion were awarded by the Government with no competition whatsoever – increasing the chance of money being wasted;
- US jewellery designer Michael Saiger was handed ‘a number of lucrative contracts’ worth £200million after he started providing gloves and gowns to NHS staff. Young entrepreneur Sabia Mokeddem, 23, was handed a contract worth £880,000;
- Lord Feldman’s PR firm is helping a Covid testing firm given £28m contract after meeting where former Former Tory chairman was in the room advising Matt Hancock;
The National Audit Office report found more than 1,300 contracts worth £10.5billion were awarded by the Government with no competition whatsoever
Business Secretary Alok Sharma (pictured on GMB today) has defended the contracts and said the Government faced ‘huge pressure’ to get PPE into hospitals and care homes after a damning report laid bare ministers’ cavalier spending at the start of the pandemic
Florida-based jewellery designer Michael Saiger (pictured with girlfriend Rachael Russell) set up a PPE business selling to the NHS during the coronavirus crisis and the consultant he used, Gabriel Gonzalez Andersson, right, was handed £21million of taxpayers’ cash
Spanish middleman who was paid £21M to set up PPE deal between the NHS and Florida-based jewellery designer
Michael Saiger and his girlfriend Rachael Russell pictured on a yacht off the Italian coast
A Spanish businessman who served as a middleman to secure PPE for the NHS has been paid an astonishing £21million in UK taxpayers’ cash.
The consultant had been in line for another £15million of public funding, US court documents show.
Gabriel Gonzalez Andersson, from Madrid, was drafted in to help with ‘procurement, logistics, product sourcing and quality control’ of the life-saving equipment.
The court documents described him as having done ‘very well under this arrangement’ – at one point being in line for more than £35million.
He was working for Florida-based jewellery designer Michael Saiger, 31, who set up a business providing protective garments to governments across the world earlier this year.
Mr Saiger claimed his previous encounters with factories in China left him well-equipped to fulfil orders. As such, UK ministers handed his firm ‘a number of lucrative contracts’ worth £200million providing gloves and gowns to NHS staff.
Mr Andersson’s job was to find manufacturers who could quickly provide millions of items of PPE for deals already agreed for Mr Saiger.
And the Spaniard was paid more than $28million (£21million) for work on two NHS contracts, before his boss signed three more agreements in June. But their relationship later broke down, leading to a court fight in Miami in which the eye-watering sums involved have been laid bare.
Mr Saiger is now suing Mr Andersson for breach of contract and fraud in the inducement.
Michael Gove and Dominic Cummings were both drawn into the debacle after the spending watchdog said officials failed to consider potential conflicts of interests involving companies linked to them.
Mr Sharma insisted today that ‘checks were done’ in the case of a Spanish businessman acting as a go-between who was reportedly given £21million of UK taxpayers’ cash in deals struck with a Florida-based jewellery designers who turned to selling PPE to Governments during the pandemic.
Gabriel Gonzalez Andersson, from Madrid, was drafted in to help with ‘procurement, logistics, product sourcing and quality control’ of the life-saving equipment.
He was working for Florida-based jewellery designer Michael Saiger, 31, who set up a business providing protective garments to governments across the world earlier this year.
Mr Saiger claimed his previous encounters with factories in China left him well-equipped to fulfil orders. As such, UK ministers handed his firm ‘a number of lucrative contracts’ worth £200million providing gloves and gowns to NHS staff.
Mr Andersson’s job was to find manufacturers who could quickly provide millions of items of PPE for deals already agreed for Mr Saiger.
And the Spaniard was paid more than $28million (£21million) for work on two NHS contracts, before his boss signed three more agreements in June. But their relationship later broke down, leading to a court fight in Miami in which the eye-watering sums involved have been laid bare.
Mr Saiger is now suing Mr Andersson for breach of contract and fraud in the inducement.
Alok Sharma was taken to task about the case on Good Morning Britain today where Piers Morgan told him: ‘Contrary to what Matt Hancock said in January in Parliament, we were not prepared for this.
‘Despite having a pandemic exercise the Conservative government did nothing to replenish that stock [of PPE]. We simply weren’t prepared were we and the taxpayer is not reaping the ruin’.
Mr Sharma denied this saying: ‘All public contracts are ultimately set out and published in the due course. We worked really hard to get PPE to the frontline’.
Jolyon Maugham QC, director of The Good Law Project, has brought judicial review cases against the Government over the award of several PPE contracts.
He said: ‘We have profound concerns – which we are pursuing with Government lawyers – about the fact that consent was never sought from Parliament for this absolutely mindblowing spend’.
The NAO’s report looked at 8,600 contracts awarded by the Government between January and July.
These were worth £18billion, of which £17.3billion were new contracts rather than contract extensions. Most of the money, £12.3billion, went on PPE, with the remainder going on other equipment and virus testing.
Ministers, MPs and civil servants could refer businesses to a ‘high-priority’ lane and firms which were granted this VIP access were more than ten times as likely to be awarded a contract as those in the ordinary lane.
The smile that says ‘I bagged £880k deal on PPE gravy train’: How 23-year-old with no relevant experience was among firms who cashed in on government’s ‘shambolic’ £12bn NHS safety equipment bonanza
Sabia Mokeddem, 23, was handed a contract worth £880,000
As the coronavirus pandemic swept across Britain, a £12.3billion ‘Wild West’ opportunity emerged for any firms able to provide the NHS with protective equipment.
Companies with no experience supplying PPE won lucrative Government deals.
Euthenia Investments, run by 23-year-old Sabia Mokeddem, had set up her company seven months earlier. Despite having no experience in supplying medical equipment, the investor from Lyon, France, was given £880,000 to supply 55,000 coveralls.
The self-confessed party girl was paid almost half a million pounds upfront, although she said her cut of the deal was just ‘pocket money’.
She told the Mail she acted as a go-between for a wholesaler in Hong Kong and has since completed delivery of all the coveralls, priced at £16 each. Miss Mokkedem said the coveralls cost £11 before the pandemic – but they charged £16 as market demand and rising cargo costs pushed up prices.
Leads came into a dedicated mailbox, but officials only recorded the sources in half of cases, although many were from ministerial offices following tip-offs from MPs about firms in their constituencies.
The NAO highlighted one £840,000 contract with Public First for focus groups and communications.
The policy and research firm is owned by James Frayne and his wife Rachel Wolf, both of whom have previously worked for Michael Gove, the minister for the Cabinet Office. Miss Wolf co-wrote Boris Johnson’s 2019 manifesto.
The NAO said there was no evidence Mr Gove had been involved in the award, but ‘we found no documentation on the consideration of conflicts of interest’.
Mr Cummings’s association with Mr Frayne dates back to at least 2000, when they worked together on a campaign against Britain joining the euro. They also co-founded a Right-wing think tank.
The report discussed another potential conflict of interest in reference to Lord Agnew, a minister in the Treasury and the Cabinet Office.
He owned shares in Faculty, an artificial intelligence firm given three coronavirus contracts worth £3million for data analysis.
Faculty is also linked to Mr Cummings. It worked with him on the Vote Leave campaign in 2016, and The Guardian reported that he donated £260,000 to the firm from his company Dynamic Maps in 2018 and 2019.
A Faculty spokesman said: ‘The NAO found no evidence that Lord Agnew was involved in these procurements, which were contracted under delegated authority in different departments, none of them his own.
‘It also found that the minister had disclosed his interests. Lord Agnew retains ownership of his shares through a blind trust.’
The report did not mention Mr Cummings’s connection to either Public First or Faculty. Mr Frayne, of Public First, said: ‘We agreed a pay-as-you-go deal where we could be terminated at any point if they weren’t happy with our work.’
A government source said Mr Gove had no involvement with the Public First contract.
Cabinet Office minister Julia Lopez, said: ‘We have robust processes to ensure we get critical equipment to where it needs to go as quickly as possible, whilst also ensuring value for money for the taxpayer.’
Mr Cummings did not reply to a request for a comment.
Companies with no experience of supplying PPE won lucrative Government deals.
Last night, Labour health spokesman Justin Madders said the race to bag multi-million pound PPE contracts was ‘like a gold rush in the Wild West.’
Sabia, a self-confessed party girl, had no experience in supplying medical equipment when she was awarded the contract
In response to the covid pandemic, the Government relaxed procurement regulations to allow officials to award contracts without a competitive tender process.
This saw a government PPE team of more than 450 staff across several departments hand out more than 6,900 contracts worth £12.3billion.
One firm given a lucrative deal was Trade Markets Direct, a dormant company opened by former bookmaker Garry Morrill who had no relevant experience.
One firm given a lucrative deal was Trade Markets Direct, a dormant company opened by former bookmaker Garry Morrill (pictured)
He told the Mail that protective equipment is ‘not my area’ – but he applied for a contract on the Government website as he knows tradesmen in China who export medical supplies. After weeks of going back and forth, the businessman claims the NHS sent £3.8million to the wrong bank account before he had even confirmed the purchase order.
Astonishingly, this was despite Mr Morrill asking to be paid in instalments of £181,000 per delivery of 50,000 face masks as he did not want the ‘responsibility’ of such a vast sum of money in his account.
After being awarded the contract in April, he set up a specific business account which would only release the funds to China when the goods had been delivered.
But he claims the Government paid the lump sum to his bank directly as opposed to his specific business account.
The businessman returned the money and asked for it to be sent to the correct account. The order was then suspended.
‘You can’t just dump money in a bank account’, he said.
Mr Morrill had agreed to sell M3820 face masks for £3.65 per unit at a time when he claims the NHS was paying £5.
Had the deal gone through, he said he would only have made around £5,000 in commission, with the rest of the money going to the manufacturers.Instead, he claims he lost three months of his life trying to contend with the ‘shambolic’ procurement process.
‘It was an absolute nightmare. I wouldn’t trust them to make me a cup of tea’, he said.
Another firm that landed a lucrative contract was Euthenia Investments, run by 23-year-old Sabia Mokeddem, who had set up her company seven months earlier. Despite having no experience in supplying medical equipment, the investor from Lyon, France, was given £880,000 to supply 55,000 coveralls.
The self-confessed party girl was paid almost half a million pounds upfront, although she said her cut of the deal was just ‘pocket money’.
She told the Mail she acted as a go-between for a wholesaler in Hong Kong and has since completed delivery of all the coveralls, priced at £16 each. Miss Mokkedem said the coveralls cost £11 before the pandemic – but they charged £16 as market demand and rising cargo costs pushed up prices.
Defending the Government’s procurement drive, she said the checks had been stringent and she was asked to provide a range of documents including test reports for the product and details on the factories used.
But the financial trader, who lives in central London, appeared to ridicule the Government’s strategy to fight the pandemic.
Dominic Cummings was drawn into the debacle after the spending watchdog said officials failed to consider potential conflicts of interests
The National Audit Office said there was no evidence Mr Gove had been involved in the award
Lord Feldman’s PR firm started working for coronavirus testing company that landed £28million government deal after he advised ministers on Covid-19
A PR firm run by Lord Feldman represents a testing company handed a £28million Government contract following a meeting where the former Tory chairman was then advising Matt Hancock on Covid, it was revealed today.
Lord Feldman insists he had no involvement in the award of the multi-million pound contract despite his business now advising Oxford Nanopore after he worked for the Department of Health at the start of the pandemic.
The arrangement has been branded ‘troubling’ by Labour as a devastating report today lifted the lid on the cronyism and ineptitude that has characterised the Government’s £18billion rush to source PPE and other equipment during the coronavirus crisis.
The public list of meetings held by Matt Hancock has revealed that on April 1 the Health Secretary and Lord Feldman, David Cameron’s best friend and former Tory party chairman, met with coronavirus test maker Oxford Nanopore.
Lord Feldman was at the time acting for the Government as an ‘unpaid adviser’ on Covid-19 via his lobbying firm Tulchan Communications where he is managing partner.
Oxford Nanopore later agreed a £27.9m contract with Mr Hancock’s department to provide testing kits, chemicals and training support for administering them. In the May Lord Feldman joined Testing Minister Lord Bethell as he met with Oxford Nanopore.
And the BBC revealed today that Tulchan has confirmed that Oxford Nanopore now pays them to do ‘PR and public affairs’ in June. Tulchan has denied any conflict of interest, claiming Lord Feldman’s Government advisory role ended in the May and then the Oxford Nanopore work began a month later.
In August Oxford Nanopore agreed a further deal with the Government worth £100million-plus.
Revealed: Dominic Cummings’s links with two of the four companies detailed in damning PPE report
Dominic Cummings has links with two of the four companies picked out in the National Audit Office’s damning report.
The former chief adviser to the Prime Minister, 48, has connections to artificial intelligence firm Faculty and research company Public First, which have secured contracts worth more than £3.8million.
Mr Cummings was not named in the public watchdog’s devastating report, which found that bidders with ‘VIP access’ to ministers were ten times more likely to win Covid contracts than those who did not.
Mr Cummings worked with Faculty – which was awarded three contracts worth £3million for data analysis – on the Vote Leave campaign in 2016.
Dominic Cummings has connections to artificial intelligence firm Faculty and research company Public First
He also has long-standing links to Public First, run by James Frayne and his wife Rachel Wolf, who co-wrote the Conservative Party’s 2019 manifesto.
His association with Mr Frayne dates back to at least 2000, when they worked on a campaign against Britain joining the euro.
The NAO report criticised the fact that the £840,000 Public First contract was awarded retrospectively. The report states that Public First invoiced for £550,000 in total for work covered by the contract.
It identified that the company’s founders have also worked for Michael Gove, the Cabinet Office minister. The report said there was no evidence that Mr Gove had been involved in the awarding of the contract, but added that it ‘found no documentation on the consideration of conflicts of interest’.
There is no evidence to suggest that Mr Cummings played any role in either firm securing the contracts.
Another company scrutinised in the report is Ayanda Capital, which was handed a £253million contract to supply PPE.
The deal was brokered by Andrew Mills, who was one of 12 advisers to the Board of Trade, chaired by International Trade Secretary Liz Truss. Mr Mills is also a ‘senior board adviser’ to Ayanda Capital.
Some 50million masks, worth £155million, delivered by the company were of the wrong specification and cannot be used.
Ayanda said last night: ‘Suggestions that the masks are not fit for purpose or are somehow unsafe to use by frontline NHS workers are simply untrue and we are advised defamatory.’
On top of the three companies identified in the NAO report, the Mail can reveal 12 more included in the graphic above. They include Meller Designs, which secured £163million in PPE contracts. It is run by Tory donor David Meller.
P14 Medical Limited was awarded three contracts worth £272million to supply PPE. Its director is former Tory councillor Steve Dechan.
A cynical & brazen cronyism: As new report reveals £18bn coronavirus PPE farce, DAVID ROSE argues this is not how public procurement in Britain is meant to work
By David Rose for The Daily Mail
The mismanagement, the incompetence, the reckless waste – all of this is shocking. But worse, perhaps, is the brazen cronyism involved.
The National Audit Office report on Personal Protective Equipment procurement is a searing indictment of this Government’s incompetence.
Yes, there was an unprecedented crisis. As the virus rampaged through hospitals and care homes, there was a desperate shortage of PPE.
Understandably, the Government made a dramatic appeal to suppliers – please get in touch, we need you.
The Government made a dramatic appeal to suppliers of Personal Protective Equipment at the start of the pandemic
Personal protective equipment arrives from Tianjin, China , at Bournemouth International Airport on May 10
But it awarded PPE contracts worth billions to companies not on the basis of quality or price, but in many cases – according to today’s damning report – on which firms had the best personal contacts in Westminster and Whitehall.
This isn’t how public procurement in Britain is meant to work. Strict, legally binding rules are supposed to enforce fairness and transparency, promote competitive pricing and to prevent conflicts of interest.
But thanks to the pandemic, the report suggests, the rules were cast aside – and replaced in many cases by the old pals act.
The report confirms what this newspaper revealed two weeks ago, that well-connected firms and individuals could be put on a ‘VIP’ route – officially called a ‘high-priority lane’ – meaning decisions on their potential contracts were fast-tracked.
Once recommended, these firms were more than ten times as likely to win contracts.
As the virus rampaged through hospitals and care homes, there was a desperate shortage of PPE
The result is we have been landed with equipment that has often turned out to be useless, and with bills that are far higher than they should have been.
At the same time, those with real expertise and the ability to procure quality products at a good price have been sidelined.
Take Jonathon Bennett. As the Mail reported this month, he is a veteran textile importer with extensive contacts in China, where most PPE is made. His bid to supply millions of masks in April was highly competitive – well below the Government’s ‘benchmark’ price.
But the £253million contract went to Ayanda Capital, a firm with no experience which was charging almost twice as much. Worse, 50 million of their masks were of the wrong design.
Mr Bennett has long suspected Ayanda won its contract because it was brokered by someone who until recently had been an adviser to Trade Secretary Liz Truss – an Ayanda associate called Andrew Mills.
Each time the Department of Health is asked how these contracts were awarded, it says the same thing – that it always exercises strict ‘due diligence’
The NAO report confirms this. It was thanks to a ‘referral’ by Mr Mills that Ayanda’s bid got the VIP treatment.
Ayanda is far from the only company that benefited from fast-tracking and went on to produce unusable PPE.
Each time the Department of Health is asked how these contracts were awarded, it says the same thing – that it always exercises strict ‘due diligence’.
Yet the NAO report reveals that when department officials carried out ‘due diligence’ on Ayanda, they somehow failed to notice Mr Mills’s involvement.
So what were the criteria that determined who got VIP status? Amazingly, the NAO finds there were none, while ‘the source of the referral’ for this treatment ‘was not always recorded’.
In the Middle East, there is a term for this way of doing business: ‘Wasta’. It means exploiting the access and influence someone has.
Could this system really now be a feature of public policy in Britain? There are growing concerns over the allocation of up to £42billion on Operation Moonshot mass virus testing.
Insiders told me told me there has been a VIP channel in this process, too. Just how many more contracts will NAO investigators now find cause for serious concern over?