The British government’s use of a fast-track “VIP lane” to award lucrative contracts for personal protection equipment (PPE) during the height of the pandemic was unlawful, the High Court ruled today.
A legal challenge was brought by two campaigning organisations, the Good Law Project and EveryDoctor, over nearly £600 million ($816m) worth of business given to pest control firm PestFix and hedge fund Ayanda Capital during the first wave of the coronavirus pandemic.
Officially called the High Priority Lane, the sped-up process allowed MPs, ministers and senior officials to refer companies for contracts. Campaigners argued that the government “prioritised suppliers including PestFix and Ayanda because of who they knew, not what they could deliver”.
In a written judgment circulated on Wednesday, Mrs Justice O’Farrell said the process was illegal but added that the companies in question would “very likely” have been awarded the contracts anyway.
“Even if PestFix and Ayanda had not been allocated to the high priority lane, nevertheless they would have been treated as priority offers because of the substantial volumes of PPE they could supply that were urgently needed,” the judge said.
The Department of Health and Social Care (DHSC) had contested the claim, telling the court it “wholeheartedly” rejected the case against it and that the VIP lane was rational and resulted in a “large number of credible offers” in an environment where PPE deals often failed within “minutes”.
Whitehall’s procurement process has been dogged by complaints of cronyism and preferential treatment since the early days of the pandemic.
The Good Law Project, set up by British barrister Jolyon Maugham to “challenge abuses of power, exploitation, inequality and injustice” first raised questions around the use of a special pathway to PPE contracts in 2020 after seeing leaked documents that showed dormant or new companies being awarded business worth hundreds of millions of pounds.
Last year, more leaked documents revealed that a number of Conservative MPs, including the health secretary at the time, Matt Hancock, had referred companies to the VIP lane. A total of £1.6 billion worth of contracts were awarded as a result of referrals from just 10 Conservative party politicians, some of whom were found to have close links with the companies.
At the time, the government said that the VIP lane for PPE contracts “was widely advertised across government as a way of more quickly triaging offers of support” at the height of the pandemic.
Mrs Justice O’Farrell said the High Priority Lane breached “the obligation of equal treatment” by giving preferential treatment on bids but that “it did not confer any advantage at the decision-making stage of the process”.
“However, what is clear is that offers that were introduced through the senior referrers received earlier consideration at the outset of the process.
“The high priority lane team was better resourced and able to respond to such offers on the same day that they arrived, in contrast to the opportunities team, where the sheer volume of offers prevented such swift consideration,” said the judge.
Nevertheless, Mrs Justice O’Farrell found that the DHSC had complied with the duty to give “clear and sufficient reasons” for awarding both sets of contracts and that “sufficient financial due diligence” and technical verification was carried out.
The court found the government allocated offers to the VIP lane on a “flawed basis” and did not properly prioritise bids.
“There is evidence that opportunities were treated as high priority even where there were no objectively justifiable grounds for expediting the offer,” said the Judge.
Despite receiving the “unlawful” preferential treatment, the judge said Pestfix and Ayanda would likely have been awarded contracts anyway.
A DHSC representative said the department was “pleased” with the ruling for showing that their “industry’s call to arms was open and transparent”.
Lawyers for the campaigners had argued that PestFix was referred into the VIP lane because an ex-director of the company was an “old school friend” of the father-in-law of Steve Oldfield, the chief commercial officer at the DHSC.
The judge also heard claims that Andrew Mills, a former member of the UK Board of Trade and representative for Ayanda Capital, was added to the VIP lane when he contacted a senior official at the Department for International Trade.
Former health secretary Matt Hancock said he welcomed the judgment.
“The court found that the priority treatment was ‘justified’ and rightly refused to grant any rectification for the way PPE was urgently bought in the height of the crisis,” a representative for Mr Hancock said.
Good Law Project said it was considering the “wider implications” of the ruling and “next steps”.
