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The unraveling of Britain’s high-profile Covid contracts scandal, involving a baroness and her husband, gained momentum last week with a high court ruling against a company linked to former Tory peer Michelle Mone.
Mrs. Justice Cockerill determined that PPE Medpro, owned by Mone’s husband Doug Barrowman, provided defective PPE to the NHS during the pandemic, ordering the return of £122m paid by the Department of Health and Social Care for 25m sterile surgical gowns under a contract awarded in June 2020 via the VIP lane.
The chancellor, Rachel Reeves, praised the judgment as a validation of the Labour government’s commitment to recouping the billions in public funds squandered during the Covid crisis by Boris Johnson’s government.
“We want our money back. We are getting our money back,” Reeves posted on X. “And it will go where it belongs – in our schools, NHS and communities.”
The June contract, along with another worth £80.85m for face masks funded by the DHSC, was awarded to PPE Medpro after Mone contacted then Cabinet Office minister Michael Gove in May 2020. Her proposal was expedited through the “VIP lane”, prioritizing politically connected individuals like Mone over seasoned PPE suppliers. Despite years of denial, Mone and Barrowman finally admitted their involvement in PPE Medpro, acknowledging their previous deception.
The gowns were rejected in September 2020 at NHS warehouses in Daventry, Northamptonshire, due to invalid labels and lack of sterile certification, a crucial safety requirement. Cockerill mandated the repayment by 15 October.
However, in this narrative of British justice recovering taxpayers’ money spent on unsafe medical supplies, a complication emerges. The ruling targets Barrowman’s company, not him personally, which has been financially drained. Notably, on 30 September, one day before Cockerill’s ruling, PPE Medpro Ltd entered insolvency with administrators assigned.
So although the company has until Wednesday to repay the £122m, there appears no realistic possibility that it can. In a series of public statements since the judgment, Mone has accused Reeves of inflammatory language after the chancellor jokingly confirmed that the government had “a vendetta” against the couple, and Barrowman has repeatedly said the judgment was wrong, “a white wash [sic] of the facts”. Neither had given any indication that they intended to fund the repayment of the money, until a new statement on Friday evening when their spokesperson said for the first time that the PPE Medpro “consortium” was prepared to discuss “a possible settlement with the government”.
In November 2022, the Guardian revealed that Barrowman had been paid at least £65m from PPE Medpro’s profits, then transferred £29m to a trust set up to benefit Mone and her three adult children. The couple said in a BBC interview in December 2023 that Barrowman’s children were also beneficiaries of the trust.
In a statement on 4 October, Barrowman’s spokesperson hit out at PPE Medpro’s supply-chain companies, saying the administrator could bring legal claims against them. It is difficult to see the basis for this, given that PPE Medpro accepted the gowns five years ago and has always argued they complied with the DHSC contract. Barrowman describes PPE Medpro and its supply-chain companies as a consortium.
Barrowman’s spokesperson confirmed PPE Medpro’s profits, saying of the £203m from the DHSC, the company paid £137m to the supply-chain companies to source and buy the PPE, which left a profit of £66m for Barrowman’s company. Of that, according to the spokesperson’s figures, PPE Medpro made a £39m profit on the contract for the gowns that were never used.
However, although Barrowman made so much from the PPE Medpro deals, and the couple have over the years owned luxury yachts, a private jet and prestige properties in different locations, there is no clear route to the government recovering even a penny after the judgment.
The Guardian asked the couple’s spokesperson this week if Barrowman intended to provide the £122m so that PPE Medpro could repay the DHSC. The spokesperson replied: “We are unable to comment on any matters that relate directly to PPE Medpro Ltd. This is not an attempt to avoid your questions. PPE Medpro is now in administration and only the administrators are able to comment on the company. It is vital to make clear, to avoid any misunderstanding, that the court case and subsequent ruling was against PPE Medpro, NOT Mr Barrowman.”
The Guardian asked the spokesperson to clarify if that meant Barrowman and Mone did not intend to fund the return of the £122m, or repay any of the money received from PPE Medpro profits. The spokesperson replied: “This is not what my statement said at all, and is a huge leap and incorrect for you to reach this conclusion. Let me be clear: ‘At no stage have we stated that Mr Barrowman has no intention of making any payment to the DHSC. We have been clear that we cannot answer any questions regarding PPE Medpro.’”
The spokesperson added: “Furthermore, you include Baroness Mone – why? She received no money from the DHSC contract. Her involvement as an introducer was fully disclosed to the DHSC … so to connect her and suggest she must repay money simply because she is married to Mr Barrowman is both unfair and disingenuous and shows that you have a personal/public agenda against her.”
In the new statement sent on Friday evening, Barrowman’s spokesperson said: “The consortium partners of PPE Medpro are prepared to enter into a dialogue with the administrators of the company to discuss a possible settlement with the government.”
PPE Medpro is now bust – put into administration by Perree Ptc, a private trust company linked to Barrowman registered in the British Virgin Islands tax haven, which had a mortgage-style charge against the company. Barrowman’s spokesperson did not respond to questions about Perree, or the circumstances in which it had put the company into administration.
The whole legal basis for limited companies is to protect the people who have put money in from becoming personally liable for all its debts: to give the owners limited liability. If Barrowman, who described himself in the 2023 BBC interview as the ultimate beneficial owner of PPE Medpro, and who received £65m in profits, does not wish to pay the DHSC, the legal routes to enforcing the judgment appear difficult.
There are only narrow circumstances in which an administrator or somebody owed money, the government in this case, can get behind a company’s limited liability – “pierce the corporate veil” in legal terminology – and enforce payment from directors or shareholders.
“There is no obvious, easy route to recover money from any individuals behind the company in this case,” Simon Walsh, a commercial litigation partner at SA Law, said. “The circumstances for piercing the corporate veil can include where an administrator proves that transactions have been improper, or fraudulent. This may not apply here and investigating it will inevitably be costly, complex and time-consuming. There is a real risk of a pyrrhic victory for the government in this case.”
It appears that any process for seeking repayment of the £122m is separate to the long-running investigation by the National Crime Agency into PPE Medpro and whether Mone and Barrowman may have committed criminal offences, including fraud by false representation, in the procurement of the contracts. The couple deny any criminal wrongdoing.
The NCA has confirmed that it began its investigation in May 2021, and in April the following year law enforcement officers raided the couple’s mansion on the Isle of Man and their London home, as well as the PPE Medpro offices. In December 2023, Mone and Barrowman agreed to a freezing order of more than £75m worth of assets, including bank accounts, wealth management accounts and shares held in companies owning luxury properties, after an application by the Crown Prosecution Service under the Proceeds of Crime Act.
The NCA has not provided any detailed information about the time it is taking or when the CPS might decide whether there will be any criminal charges. PPE Medpro’s barrister, Charles Samek KC, complained during the high court trial that the NCA investigation was “long-running and seemingly never-ending”, and “hanging … like Damocles’ sword” over the company “without ever seemingly being progressed”.
In response to questions about how long it was taking, the NCA has said in a statement: “Investigations must pursue all reasonable lines of inquiry. In serious economic crime investigations these lines of inquiry can be incredibly complex. It can take considerable time to ensure that a thorough, independent and objective investigation is conducted.”
Reeves has insisted the government is determined to recover money lost in failed pandemic spending, pointing to the establishment of the Covid counter-fraud commissioner among other initiatives. In the PPE Medpro case, however, it risks having spent more millions for an expert legal team led by Paul Stanley KC to win a hard-fought £122m judgment it cannot enforce. Government sources have not provided any information about what it might do if the money is not paid on Wednesday.
The DHSC has declined to expand on the comments of the health secretary, Wes Streeting, who said on the day of the judgment: “PPE Medpro must now repay the government and the taxpayer £122m. My department will work closely with PPE Medpro Limited’s administrators to recover everything we can.”
Daniel Bruce, the chief executive of Transparency International UK, a key member of the UK Anti-Corruption Coalition which was a core participant in the Covid public inquiry into the pandemic contracts debacle, said: “There appear to be very few levers the government has available to recover anything close to the £122m the high court has ordered PPE Medpro to repay. The whole case stands as a further indictment of the ‘VIP lane’ and the flawed, wasteful procurement of PPE during the pandemic.”
This saga of the Conservative peer, her businessman husband, Johnson’s Tory government and the multimillion-pound Covid contracts has some way to run yet.
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