Firms handed £1.3bn in Covid contracts claimed £1bn in furlough grants
Companies handed a combined £1.3bn in controversial fast-track Covid contracts with minimal scrutiny also claimed at least £1m in furlough grants, it can be revealed.
Analysis of the accounts of companies that won lucrative emergency contracts to supply personal protective equipment (PPE) to the NHS during the height of the pandemic shows 12 also claimed funds to put staff on furlough at taxpayers’ expense.
Many had no prior history of supplying PPE but received huge boosts in revenue after securing deals to supply items ranging from gowns to masks. Overall the scramble to obtain PPE resulted in the Department of Health and Social Care (DHSC) spending £9bn on personal protective equipment that was either substandard, defective, past its use-by date or dramatically overpriced.
These furlough claims were legal under the terms of the £70bn job preservation scheme, but the revelations raise questions about the ethics of claiming taxpayer support while reaping windfall gains from lucrative state contracts.
All 12 companies that claimed furlough grants had won PPE contracts via a so-called VIP lane, where approvals were fast-tracked often after a recommendation by ministers and government officials. The government spent £5bn on VIP lane contracts with 47 companies, but its use of the lane was found unlawful by the high court in last month.
The London-based fashion brand Skinnydip, which built its reputation selling designer mobile phone cases, secured a£13m contract to supply PPE in May 2020 after a referral by the former Conservative party chairman Lord Feldman.
That pushed it from a £1m loss in 2019 to a year of “record profitability” in 2020. It posted profits of £4.5m from revenues of £38m, more than double the previous year’s
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