A lifestyle company won a £25.8m government contract for PPE through so-called VIP lanes after the new Conservative chair, Greg Hands, was approached by a local Tory activist, new documents show.
Lux Lifestyle, a company trading in “special design activities”, had no published accounts at the time the contract was awarded, and did not appear to have any history of supplying PPE.
It is understood that Hands, then trade minister, contacted authorities in early April 2020 after a Conservative activist, Mark Heigton, offered PPE and other items.
Leaked documents obtained by the Good Law Project later listed a PPE contract as “Minister Hands/Luxe Lifestyle” and the point of contact as “Mark Heigton”, former chairman of the neighboring constituency association .
A subsequent Freedom of Information request revealed that 9m items worth £20m provided by Luxe Lifestyle were labeled “not supplied” by the government, meaning they were not used.
It is understood that in September 2020, an internal government audit of the functioning of the VIP lane prepared for the Cabinet Office found that the contract for Lux Lifestyle was processed through the VIP channel and was referred by an MP.
A spokesperson for Luxe Lifestyle said: “Luxe Lifestyle’s contract to supply PPE was negotiated on an arm’s length basis through the MoD’s procurement officers, which were awarded to the DHSC. [Department of Health and Social Care], The company was awarded a contract for two of the six products offered through a competitive process based on price and availability.
“No minister was contacted directly by the company and all products offered were uploaded to the relevant DSHC PPE procurement website set up by the government at the time of the pandemic for review and evaluation with other PPE providers. No one at the company has ever contacted or spoken to Greg Hands.
It is understood the company believed all its PPE was in useable condition, had a shelf life of two years and that no problems with the consignment had been reported by the Department of Health and Social Care. Higton could not be reached for comment.
Luxe Lifestyle has not filed any accounts with Companies House relating to the period under consideration. Its last published accounts, filed in December 2020 and covering up to November 2019, show it had no employees at that time.
There is growing parliamentary scrutiny over the government’s decision to use VIP lanes to prioritize proposals for PPE during the pandemic, benefiting companies that were referred to the authorities by Tory peers and other politicians and officials .
According to a later report by the National Audit Office, companies that were referred to VIP lanes had a 10 times higher success rate than those awarded contracts without access. Due to the health emergency at that time, the government had suspended normal procurement procedures.
A Hands spokesperson said: “Minister Hands forwarded a message to someone who contacted the relevant authorities. Minister Hands had no further role or involvement in the process, and was unaware of any outcome.
A government spokesman said: “There was no involvement of ministers in any procurement decision. During the pandemic, potential suppliers often made proposals for PPE to MPs, civil servants and ministers. These offers of support were given to procurement teams for evaluation.”
The government has repeatedly stated that the criteria used to assess proposals were the same, no matter where they came from or by whom they were referred, and that suppliers were subjected to the same scrutiny and Had to go through clearance because everyone else had given the contract.
A £25.8m contract to supply masks and gowns to Lux Lifestyle did not appear on the government’s list of 47 firms on VIP Lane, ordered to be revealed in 2021. Instead, it was listed as a “new procurement” contract, meaning it did not sit on the existing framework for the supply of PPE. However, both the Cabinet Office report and leaked government documents suggest it was a VIP lane contract. The government had no explanation for the discrepancy.
The operation of a VIP lane for suppliers of personal protective equipment following the outbreak of the coronavirus pandemic was declared illegal by the High Court after the Good Law Project and EveryDoctor mounted a legal challenge to the scheme.
Describing the allocation of VIP lane offers as “flawed”, the judge said: “There is evidence that opportunities were treated as high priority where there was no reasonable basis for expediting the offer.”
Julian Maugham of the Good Law Project said: “The prime minister can smile sweetly until the cows come home and talk about honesty. But facts speak louder than words and the facts here are very serious indeed.”
When the list of VIP lane suppliers came out in December 2021, it emerged that a Conservative Party donor backing Michael Gove’s Tory leadership bid won £164m in Covid contracts after the minister referred his company.
It was one of 47 contracts awarded for PPE worth a total of £4.7 billion following referrals from politicians and officials, according to a Guardian analysis. Many were associated with MPs, all of them Conservative. Due to the health emergency, many – but not all – contracts were awarded without competitive tendering.