A High Court judge has ruled this week that the government’s use of a “high priority” or “VIP lane” to award personal protective equipment [PPE] contracts to two firms was unlawful.
The judge presiding over the case, Mrs Justice O’Farrell, deemed it unlawful that both were given preferential treatment through use of the “high priority lane”, but concluded that they would likely have won the contracts in any case.
In the wake of the ruling, Labour deputy leader Angela Rayner called for an independent investigation to uncover how “£3.5 billion of taxpayers’ cash were handed out in crony contracts”.
The priority lane under scrutiny was brought in on April 2, 2020, during the height of the first Covid wave, to help ministers choose the best offers from the high volume of bids it was receiving.
The lane was reserved for referrals from MPs, ministers, senior officials and House of Lords members, with the intent of treating those offers with greater urgency since they were likely to be more credible.
Figures published by the National Audit Office in November 2020 indicate that roughly one in every ten suppliers that were placed into the VIP lane were awarded contracts. For suppliers that were not included, less than one in every 100 were successful.
The entities that launched the legal challenge, the Good Law Project and EveryDoctor, were specifically contesting over £340 million worth in PPE contracts handed to pest control product supplier PestFix and deals worth £252 million awarded to hedge fund Ayanda Capital.
The complainants said that the Department for Health and Social Care [DHSC] “prioritised suppliers including PestFix and Ayanda because of who they knew, not what they could deliver”.
Indeed, while the government distributed some 11.7 billion items of PPE from the start of the pandemic to May 30, 2021, there have been issues with the quality of some of the items it had purchased, with many masks and gowns later deemed unusable and needing to be withdrawn from circulation.
Mrs Justice O’Farrell told the High Court that the evidence provided by DHSC “establishes that presence on the high priority lane did not confer any advantage at the decision-making stage of the process”, but felt it was clear that offers “introduced through the senior referrers received earlier consideration at the outset of the process”.
She continued to say that the team responding to offers submitted through the VIP lane was better resourced and able to respond more quickly to offers, but that “sufficient financial due diligence” was done in the case of both sets of contracts.
A spokesperson for PestFix said that they were pleased that the company had been “completely vindicated” by the ruling, insisting that the firm only new of its inclusion in the VIP lane following the publication of the National Audit Office’s report.
A spokesperson for the then health secretary Matt Hancock said that they were pleased that the High Court ruled that the priority treatment was “justified”, adding that ministers had not had any involvement in procurement decisions or contract management.
The spokesperson said: “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.”
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