UK Crony Capitalism: High Court update

19 May 2021 — Good Law Project

Today the High Court heard our lawyers detail waste, mismanagement – and yet more special treatment for politically connected companies placed in the “VIP” Lane.

Government paid tens of millions of pounds to PestFix and Ayanda Capital for face masks which did not meet NHS standards. An email from a senior official stated that they needed to “get out of a contract” due to “a failure of the commercial process…

PestFix was in the “VIP” lane because an ex-director was an old-school friend of a senior official’s father-in-law; Ayanda, because one of its senior advisers was a member of Government’s Board of Trade.

Government failed to carry out any proper checks before ordering gowns from PestFix. After examining the evidence, our lawyers told the Court: “over £100m spent on gowns with no technical assurance, no financial due diligence and based on a misunderstanding of the gowns which were actually being purchased.”

Government didn’t put its cards on the table. One witness went to some lengths to “gloss over” – as our lawyer put it – the lack of technical assurance. It was left to a detailed forensic review by our legal team to uncover this extraordinary failure.

Government awarded huge contracts to Ayanda Capital despite it having failed financial due diligence. The hedge fund was given a red rating, which meant there were “Major issues or concerns [which] would need to be resolved before we use them

Not only did this not dissuade Government from accepting Ayanda’s offer to supply millions of FFP2 masks, but its VIP status actually meant that it was invited to supply a different type of mask, leading to an even larger contract award.

This was taxpayers’ money, dished out to companies because of who they knew, not what they could supply. The result – unsurprisingly – was a waste of hundreds of millions of pounds. In these contracts alone.

Our challenge seeks to get to the truth of the PPE procurement process in which – again to quote our lawyer – “a truly colossal amount of public money” was spent “in circumstances of almost total secrecy”.

Thank you,

Jo Maugham
Director of Good Law Project

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