The Government can keep the amount of public money spent on “useless” personal protective equipment (PPE) from two companies confidential, the High Court has ruled.
The Good Law Project and EveryDoctor are bringing legal action against the Department of Health and Social Care (DHSC) claiming that contracts awarded to PestFix, Clandeboye and Ayanda Capital were given unlawfully at the height of the first wave of the coronavirus pandemic in April and May 2020.
The two groups allege DHSC has failed to provide proper reasons for why the contracts were awarded and say the Government violated principles of equal treatment and transparency when making the deals worth more than £700 million.
They also claim DHSC has failed to provide evidence it conducted any negotiations which applied equally between prospective suppliers.
Jason Coppel QC, for the groups, said: “The defendant established a system for awarding contracts which was fundamentally not transparent, unequal and unfair.”
At the start of the trial on Tuesday, Mr Coppel argued the amount of public money spent on PPE “useless to the NHS” provided by PestFix and Ayanda should be disclosed to the public.
In written arguments, Mr Coppel described the purchase of unusable PPE from the two companies as a “catastrophic waste of public funds”.
Mr Coppel said approximately £595 million was spent with PestFix and Ayanda, but it is not publicly known how much was spent on PPE which did not meet technical standards.
However, the barrister indicated that “well over half was wasted”.
He continued: “The defendant’s unlawful failure to carry out technical assurance on the products to be supplied by Pestfix and Ayanda led directly to the purchase of vast quantities of PPE which was unusable by the NHS, and so to a catastrophic waste of public funds.”
The breakdown of the spending on each type of PPE or the amount paid in pre-payments by the Government to the companies has been kept confidential.
The DHSC argued they are commercially sensitive and Mrs Justice O’Farrell found the specific pricing details were not relevant to what the court has to decide and did not need to be disclosed to the public.
She said: “The case concerns the decision-making process carried out by the defendant … the precise level of the pricing or pre-payments or total amounts spent on PPE that might not have been used or fit for purpose are not relevant to the issues before the court.
“It is not part of this court’s role to consider whether the contracts provided value for money or whether any public money has been wasted.”
She added: “It is not necessary in my judgment for further details of the pricing of the contracts to be made public in these proceedings.”
A large part of the Good Law Project and EveryDoctor’s claim is that the use of a “VIP lane” gave an unfair, unlawful advantage to some companies.
Mr Coppel said the VIP lane was set up in late March 2020, reserved for referrals from MPs, ministers and senior officials.
He told the court: “Through the VIP lane, the defendant then prioritised suppliers including PestFix and Ayanda because of who they knew, not what they could deliver.”
The court heard that PestFix had supplied PPE for individuals in pest control but had no experience in providing PPE for healthcare workers, and had net assets of around £18,000.
Mr Coppel said 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 DHSC.
He wrote: “The contracts secured by PestFix and Ayanda were directly attributable to their VIP status; many other suppliers who had made credible offers of PPE but who were not fortunate enough to have connections in Government did not have their offers progressed.”
The barrister said there was limited knowledge about the VIP lane which excluded many expert organisations.
He continued: “National medical associations with expert knowledge, including the British Medical Association and the Royal College of Nursing, were not told about the VIP lane and were therefore prevented from referring known PPE suppliers into it.”
The Good Law Project and EveryDoctor argue that a VIP supplier was “more than 10 times as likely” to get a contract compared to a non-VIP supplier.
Mr Coppel said there was no “quality filter” on the suppliers put into the VIP lane, but that ministers did not want their contacts to “wait in line” like other suppliers.
“The defendant should have been prioritising offers on the basis of their ability to meet clinical need, not who introduced them,” he added.
DHSC is contesting the claim and has told the court that it “wholeheartedly rejects” the case against it.
Michael Bowsher QC, for the DHSC, said in written submissions: “At a time of national lockdown and rising rates of infection and death, it was the duty of the defendant to secure, without delay, unprecedented volumes of personal protective equipment and medical devices in order to slow the spread of the virus and save lives.”
He said the Government “put together an unprecedented programme, on a huge scale, at commendable speed, during a serious crisis”, when the market for PPE had been “fundamentally reshaped” by the pandemic.
In a statement, the department said the National Audit Office found no evidence ministers were involved in procurement decisions.
The case, which is being heard remotely by Mrs Justice O’Farrell, is expected to end on Tuesday next week.