UK government spent billions on substandard PPE, and the private sector made a killing

The Tory government wasted billions of pounds buying Personal Protective Equipment (PPE) that was not fit for purpose.

A Department of Health and Social Care (DHSC) annual report recorded: “The Department estimates that there has been a loss in value of £8.7 billion of the £12.1 billion of PPE purchased in 2020-21. Of this £8.7 billion impairment, £4.7 billion relates to reductions in market prices since the goods were purchased.”

The amount wasted—almost £9 billion—could easily have provided over one million National Health Service (NHS) workers a 25 percent pay rise, instead of the well below inflation 3 percent increase imposed by the government. Even building 14 new hospitals would not have cost this amount of money.

The first priority of the Tories was to seize on the PPE shortage to enrich their cronies. A “VIP lane” was established to offer lucrative contracts, bypassing the usual tendering processes. Some 68 companies were able to profiteer at public expense, several even without any prior experience supplying PPE. The Good Law Project revealed that these “68 VIPs were awarded a total of £4.9 billion in PPE contracts—all without competition.”

An analysis of the DHSC figures by Open Democracy found that almost 60 percent of PPE procured from firms with links to the Tory government was unusable. A company owned by David Mellor, who has donated over £63,000 to the Tory party since 2009, supplied over half a million items at a cost of £8.5 million that went unused. MedPro, referred to the VIP lane by Conservative peer Baroness Mone, supplied 25.5 million items worth £124.6 million that were not used.

Following a legal challenge mounted by the Good Law Project, Justice O’Farrell found that two companies, PestFix and Ayanda, had been unlawfully awarded contracts to supply PPE through the VIP process. PPE valued at £225 million supplied by the two companies went unused.

The government also ensured its friends in the private health sector did not miss out on the feeding frenzy, spending an estimated £2-5 billion purchasing treatment services from private hospitals during the pandemic. With 8,000 beds, these hospitals only contributed to the delivery of 0.08 percent of COVID care for patients but provided rich rewards for their shareholders. Full report here: https://www.wsws.org/en/articles/2022/02/19/nofi-f19.html

Tax Avoidance – The Ugly Face of the UK financial sector

This is how the finance provided by the Tory government found its way into the pockets of Baroness Mone and many other ultra rich Tory donors.

The company “Itsascam” strips 50% of the finance gifted to the company by the Tory government, say £30million and donates the sum to a trust, registered in Jersey, called, “Itsmyturn”. The entire payment is tax-deductible.

“Itsmyturn” silently transfers the £30million to another Jersey registered but British tax-resident company called, “Menowok”.

“Menowok” purchases £30million shares in, “Imherenow”.

“Imherenow”, in late March each year awards non-recurring instant dividend shares, to the value of £30million to employees of, “Itsascam”.

Dividend share income attracts tax at 25% providing a 15% reduction in the top rate of tax.

UK revenue and customs loses around £4million in lost tax.

“Itsascam” also makes around£4million saving through the tax deductable donation to the “itsmyturn” Trust.

Total loss of tax due to HMRC £8million from one contract..

The foregoing “modus operandi” is standard practice for around 6000 UK resulting in a loss to HMRC of around £100billion.