A lifestyle company won a £25.8m government contract for PPE through the so-called VIP lane after the new Conservative chair, Greg Hands, was approached by a local Tory activist, new documents suggest.
Luxe Lifestyle, a company trading in “specialised design activities”, had no published accounts at the time the contract was awarded, and did not appear to have a history of supplying PPE.
It is understood Hands, then a trade minister, made a referral to officials in early April 2020 after a Conservative activist, Mark Higton, approached him about a contact offering 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 Higton”, a former chair of a neighbouring constituency association.
A subsequent freedom of information request revealed that 9m items worth £20m provided by Luxe Lifestyle were labelled “do not supply” by the government, meaning they were not used.
It is understood that an internal government audit of the workings of the VIP Lane, prepared for the Cabinet Office in September 2020, noted that Luxe Lifestyle’s contract was processed through the VIP channel and it had been referred by an MP.
A spokesperson for Luxe Lifestyle said: “Luxe Lifestyle’s contract to supply PPE was negotiated on an arm length basis through MoD procurement officers, seconded to the DHSC [Department of Health and Social Care]. The company was awarded a single contract for two out of six products offered via a competitive process based on price and availability.
“No minister was ever directly contacted by the company and all products offered were uploaded on to the relevant DSHC PPE procurement website established by the government at the time of the pandemic for review and assessment alongside other PPE providers. No one at the company has ever contacted or spoken to Greg Hands.”
It is understood the company considered all its PPE was in usable condition, had a two-year shelf life and that it was not informed by the Department of Health and Social Care of any problems with the consignments. Higton could not be reached for comment.
Luxe Lifestyle has not filed any accounts relating to the period in question with Companies House. Its last published accounts, filed in December 2020 and covering up to November 2019, show it had no employees at that point.
There is mounting parliamentary scrutiny over the government’s decision to use a VIP lane to prioritise offers of PPE during the pandemic, benefiting companies that were referred to officials by Tory peers and other politicians and officials.
Companies referred to the VIP lane had a 10 times greater success rate for being awarded contracts than those without access to it, according to a subsequent report by the National Audit Office. The government had suspended usual procurement procedures because of the health emergency at the time.
A spokesperson for Hands said: “Minister Hands forwarded a message from someone who contacted him to the relevant officials. Minister Hands had no further role or involvement in the process, and was unaware of any outcome.”
A government spokesperson said: “Ministers had no involvement in any procurement decisions. During the pandemic, potential suppliers often passed on offers of PPE to MPs, civil servants and ministers. These offers for support were passed to procurement teams for assessment.”
The government has repeatedly said the criteria used to assess offers were the same, no matter where they came from or who they were referred by, and that suppliers had to undergo the same checks and clearances as all others awarded a contract.
The £25.8m contract for Luxe Lifestyle to supply masks and gowns did not appear on the government’s list of 47 firms on the VIP lane, which it was ordered to reveal in 2021. Instead, it was listed as a “new buy” contract, meaning it did not sit on existing frameworks to supply PPE. However, both the Cabinet Office report and the 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 after the outbreak of the coronavirus pandemic was ruled unlawful by the high court after a legal challenge to the scheme by the Good Law Project and EveryDoctor.
Describing the allocation of offers to the VIP lane as “flawed”, the judge said: “There is evidence that opportunities were treated as high priority even where there were no objectively justifiable grounds for expediting the offer.”
Jolyon Maugham, of the Good Law Project, said: “The prime minister can smile sweetly and talk about integrity until the cows come home. But facts speak louder than words and the facts here are very grim indeed.”
When the list of VIP lane suppliers was revealed in December 2021, it emerged that a Conservative party donor who supported Michael Gove’s Tory leadership bid won £164m in Covid contracts after the minister referred his company.
It was among 47 awarded contracts for PPE totalling £4.7bn after referrals from politicians and officials, according to a Guardian analysis. Several were linked to MPs, all of them Conservative. Due to the health emergency, many – but not all – of the contracts were awarded without competitive tender.
