A British High Court has ordered PPE Medpro to repay £122 million to the Department of Health and Social Care (DHSC) after ruling the company’s supply of 25 million surgical gowns during the COVID-19 pandemic breached contract terms by failing to meet necessary sterility standards. The gowns, manufactured in China and rejected by the NHS, were deemed unsafe for clinical use due to inadequate sterility certification, with the court finding the product faulty and unusable as sterile gowns. However, the government was not awarded additional costs related to gown storage, as the NHS had no need for the gowns, even as non-sterile items, due to regulatory and procurement constraints.

The ruling has intensified scrutiny on PPE Medpro and its consortium partners, including Loudwater Trade and Finance and Eric Beare Associates, linked to Baroness Michelle Mone, a Conservative peer at the time. Although Baroness Mone is not a director or shareholder in PPE Medpro, she used her influence to secure the company’s entry into the government’s "VIP lane" for preferential contract access. Doug Barrowman, her husband and a principal backer, admitted to receiving around £60 million from PPE Medpro. A spokesperson for PPE Medpro emphasised that the company passed most of the government funds, about £83 million, to other consortium members, suggesting a "very strong case" exists for administrators to pursue those firms for repayment.

Following the judgment, PPE Medpro entered administration, placing the company’s assets—estimated at just £666,000—under the control of appointed administrators tasked with recovering funds for creditors. Given the company’s limited assets, full repayment to the DHSC appears unlikely. The government has pledged to work closely with administrators and reportedly intends to seek recovery of funds wherever possible.

The company spokesperson stressed the shared responsibility among consortium members and criticised the disproportionate blame placed on Barrowman. They highlighted that the consortium structure was designed to fulfil the government’s preference for trading with a UK-based company. They also noted that PPE Medpro itself did not manage the technical manufacturing processes in China, including quality control or sterility assurance, which were handled by other consortium members who have since distanced themselves from the company.

The gowns supplied lacked the proper European regulatory identifiers marking them as sterilised and certified by approved quality assurance bodies. Health officials first identified these shortcomings during inspection in September 2020, prompting the NHS to reject their use. The court heard that the gowns could have "seriously harmed or killed patients" if deployed in healthcare settings.

The National Crime Agency is investigating the PPE Medpro affair, though it has not commented on whether the probe extends to the entire consortium. Loudwater Holdings Ltd, parent company of Loudwater Trade and Finance, reportedly holds net assets exceeding £55 million and annual turnover around £95 million, while Eric Beare Associates has so far declined to comment.

The scandal has provoked political fallout, with calls for Baroness Mone to repay money personally and even for her to be stripped of her peerage, amid broader criticism of the government’s handling of pandemic PPE contracts and the associated "VIP lane" system. Mr Barrowman has publicly condemned the court ruling as a "travesty of justice," while Baroness Mone described the judgment as "shocking but all too predictable," asserting in a statement that she and her husband are "scapegoats for this disgraceful waste of taxpayers’ money."

As the government seeks to reclaim public funds, the unfolding PPE Medpro case exemplifies challenges in pandemic procurement and accountability in high-value contracts awarded under emergency conditions.

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Source: Noah Wire Services