The Conservative government has faced fresh scrutiny after it was revealed that £114 million was paid out in compensation for undelivered or cancelled Covid contracts. A significant portion of these payments went to companies linked to senior Tory figures, raising questions about the awarding of lucrative pandemic deals.
An investigation by the Good Law Project found that the Department of Health and the UK Health Security Agency shelled out millions to firms that either didn’t deliver medical equipment or supplied items that didn’t meet required standards. These settlements were made before the last general election, with 86% of the compensation going to companies with connections to prominent Tory members.
Largest Payouts to Tory-Linked Firms
The biggest recipient of these payouts was Oxford Nanopore Technologies PLC, which received £60 million after a contract dispute over the supply of testing equipment. The settlement followed an “amicable resolution” between the firm and the government.
What makes this more controversial is the involvement of Lord Feldman, former Conservative Party chair, who had been instrumental in pushing pandemic contracts through the government’s VIP lane. Lord Feldman met with Oxford Nanopore representatives and then-Health Secretary Matt Hancock in April 2020. Just two months later, the company secured a contract worth £112 million, and soon after, it hired Feldman’s PR company, Tulchan Communications.
Although the health department confirmed that some testing kits were delivered in 2020, it admitted that by April 2021, the demand for these products had diminished. As a result, the government terminated the contract before it reached its maximum fulfilment.
£38 Million Payout for No Services Rendered
Another large payout went to Ecolog, a company with links to Conservative donor Mustafa Mohammed. Despite never providing the promised testing services, Ecolog received £38 million in compensation. WhatsApp messages between Mohammed and Hancock in June 2020 paved the way for the company’s inclusion in the VIP Test and Trace lane.
The Department of Health signed a letter of intent with Ecolog in September 2020, which guaranteed payment, even if the services were no longer required. By 2021, the government decided it no longer needed Ecolog’s services but still had to pay the agreed amount due to the legal agreement.
Other firms, including Ortho Clinical Diagnostics, Beijing Aeonmed, and Jason Offshore, also received settlement payments as part of these deals, contributing to the £114 million total.
Government Response and Accountability
In response to the revelations, the Department of Health stated that the government “will not tolerate waste” and is committed to ensuring that public money is spent responsibly. The Chancellor has announced the appointment of a Covid Corruption Commissioner, who will oversee any future settlements and contracts to prevent further waste of taxpayer funds.
“This government will not tolerate waste, and the Chancellor has announced plans to appoint a Covid Corruption Commissioner to independently assess any future contracts,” a health department spokesperson said. The commissioner, set to be appointed next month, will block any personal protective equipment (PPE) contracts from being waived or abandoned until reviewed.
The revelations about the large payouts and Tory-linked companies have sparked criticism, with many questioning how pandemic funds were managed during the crisis. Oxford Nanopore, Lord Feldman, and Ecolog were approached for comment by the Good Law Project.
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