Background: The PPE contract and the scrutiny surrounding it
A consortium led by Doug Barrowman, publicly associated with Baroness Michelle Mone, has faced a severe financial setback over a Covid-19 PPE contract. In 2020, PPE Medpro was awarded a government contract to supply personal protective equipment (PPE). The deal later drew intense political and legal attention after the government alleged the gowns supplied did not meet the required healthcare standards, particularly around sterility.
The Department of Health and Social Care (DHSC) initiated legal action in 2022, arguing that a substantial portion of the gowns failed to comply with the contract terms. The case concluded earlier this month in the High Court, with a ruling that at least some of the gowns were not sterile, undermining the integrity of the agreement and triggering significant financial consequences for the supplier.
The High Court ruling and the cost of breach
The court’s decision established that PPE Medpro breached its contract by delivering substandard PPE. The DHSC was ordered to recover damages, and the firm was required to pay substantial sums as redress. The government originally sought damages around the contract’s value, and the subsequent orders included interest penalties designed to reflect the breach’s financial impact on taxpayers.
Following the ruling, the DHSC disclosed that the total amount owed would exceed £145 million once interest is tallied. The department stated that interest would accrue at 8% per year from the day after the judgement, compounding the overall liability while the case moves toward resolution.
Administration and the deadline miss
PPE Medpro entered administration on 30 September, the day before the High Court judgement was handed down. Administrators tasked with recovering funds for creditors have since been attempting to secure repayment. However, the company reportedly failed to meet the 16:00 BST deadline on Wednesday to settle the damages, leaving the government and creditors in a precarious position as interest accrues daily.
Government response and ongoing pursuit
Health and Social Care Secretary Wes Streeting stated that the government would pursue PPE Medpro with “everything we’ve got” to recover funds for taxpayers. He described the substandard kit as a loss to the public purse and reaffirmed the government’s commitment to recoup as much of the £145.6 million as possible, including accrued interest.
The DHSC has indicated that the total amount continues to grow daily due to interest, and that recovery efforts would proceed under the administration’s oversight. Forvis Mazars, one of the joint administrators, declined to comment publicly on the ongoing collection process.
Context and wider implications
The PPE Medpro case sits within the broader scrutiny of UK PPE procurement during the Covid-19 crisis, raising questions about how contracts were awarded and monitored. While the contract’s awarding connected the firm to Baroness Mone’s circle, the government has faced cross-party calls to examine and, if appropriate, remove peers linked to controversial deals. It’s worth noting that the removal of a peerage would require an act of Parliament, underscoring the complexity of potential consequences for individuals involved.
What happens next
With administration ongoing and interest piling up, the primary objective remains clear: recover the funds owed to the taxpayer and limit further losses. The outcome of these recovery efforts may influence future procurement safeguards and the handling of similar contracts in the future.
