THE UK Government’s bank blocked Matt Hancock’s department from paying for PPE contracts over fears they were being conned by fraudsters, the High Court has heard.
NatWest suspended payments of more than £5 million so they could be reviewed by fraud specialists amid concerns about a lack of due diligence on deals done via the so-called “VIP lane”.
The Health Secretary’s team has been taken to court by the Good Law Project and Every Doctor UK over allegations it acted unlawfully in handing out bumper contracts to friends and contacts of ministers, MPs and officials.
More than £1.7 billion was dished out though the “VIP lane”, some of which went towards unusable products.
A report by the Commons Public Accounts Committee concluded the Department of Health and Social Care (DHSC) “wasted hundreds of millions of pounds on PPE which is of poor quality and cannot be used for the intended purpose.”
READ MORE: Tories' Australian zero-tariff deal would 'seriously betray' farmers, NFUS says
The probe found companies applying via the “VIP lane” were 10 times more likely to secure contracts than those that applied through the official route on Government’s procurement website.
The High Court heard NatWest was so worried about payments to one of the “VIP” firms, Ayanda Capital, that it tried to stop them.
The court was presented with correspondence from the height of the pandemic. An email sent by DHCS’s head of finance operations in May 2020 read: "Over recent days, and in particular over the last 24 hours, a number of approved payments have been stopped by the bank who believe there is evidence we may be being targeted by fraudsters and that the supplier due diligence processes being operated by the buying team...are not sufficiently robust."
They added: "I concur with the bank's assessment."
A due diligence report carried out on Ayanda after the contract was in place gave it a "red" rating – both for "financial information" and for its credit score, which was "low”, the court was told.
DHSC's Anti-fraud unit also advised the department to obtain a guarantor for the contract, but documents say "there is no evidence this was ever done”.
The court heard that after it was revealed due diligence had not been performed properly, a DHSC official wrote in an email: "S**t hit the fan...due diligence hadn't been carried out on Ayanda...there are a lot of people covering there [sic] own a****s...I think something went wrong!!! big style!"
A spokesperson for Ayanda said “extensive” due diligence was done on the firm, but that the accounting officer was not aware of it due to an “administrative error.”
“When they checked the DD it was approved,” they added.
The spokesperson insisted a guarantor was not required because the company had a “good credit rating”.
READ MORE: Planes from India continue arriving in England as cases of Covid variant surge
They added that “Ayanda had at its own instigation and without being asked, put in place with its bankers a dedicated blocked PPE bank account” – which they claimed meant there was “zero risk of fraud”.
The DHSC commented: “We set up, from scratch, a new parallel supply chain to procure, manage and distribute life-saving PPE. This was an enormous cross-government effort, drawing upon expertise from a number of departments together with fantastic support from the military and private sector partners.
“Officials worked day and night to secure these contracts. We prioritised procurement and we make no apology for that.
“In this unique situation, we had to change how we approached risk. The risks that the contracts might not perform needed to be balanced against the risk to the health of frontline workers, the NHS and the public if we failed to get the PPE we so desperately needed.”
The trial, being heard by Justice O’Farrell, is expected to last five days.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel