PPE Medpro dissolves with £600,000 against £148m taxpayer debt

A High Court ordered the consortium to repay £122m plus interest for breaching a contract to supply 25 million surgical gowns. The gowns failed sterilisation tests and sat unused since 2020. Run by Douglas Barrowman, husband of Baroness Michelle Mone, the firm accessed government contracts through the VIP lane.

Liquidators revealed assets of just £600,000 for unsecured creditors. The Department of Health and Social Care ranks as the largest, owed £148m overall. HM Revenue and Customs claims another £39m in unpaid tax.

Judge Sebastian Prentis approved winding-up despite administrator pleas to extend administration. He highlighted the debt’s scale from “defective equipment at a time of national crisis.” Recovery prospects for DHSC stand at near zero as an unsecured claim.

Health Secretary Wes Streeting pledged relentless pursuit of “hard-earned taxpayer money.” Labour ministers decry “rogue operators” who profited amid public sacrifices. Yet the firm’s structure ensures most funds evaporate before repayment.

VIP Lane Fast-Track

PPE Medpro secured £122m in NHS gown deals during 2020 peaks. The Conservative government prioritised politically connected suppliers via its VIP lane. Over 50 firms, many with Tory links, bypassed standard checks.

This channel awarded contracts worth £5.2 billion total. Audits later found one-third unusable or overpriced. Mone’s firm exemplifies how urgency enabled substandard supply at premium rates.

Directors Face Probes, But Patterns Hold

The Insolvency Service now investigates directors’ conduct. Barrowman urged chasing “partners” for funds after the ruling. Mone branded the October judgment an “establishment win.”

Such probes rarely yield personal liability. Directors often emerge unscathed, firms rebrand or dissolve. Taxpayers absorb the shortfall.

Cross-Party Procurement Rot

Labour now vows clawbacks, echoing Tory promises on prior scandals. The 2021 PPE review exposed £8.7 billion in waste across governments. Similar firms like Ayanda Capital settled fractions of debts after delays.

From 2010 coalition to 2024 Labour, procurement repeats flaws. Urgency trumps due diligence; connected bidders dominate. No administration reforms the system.

In 2023, the Public Accounts Committee noted £11 billion unrecovered from pandemic contracts. Recovery rates hover below 20% for liquidated suppliers. Officials shift blame while losses compound.

Everyday Costs Mount

NHS trusts discarded millions in faulty gear, straining frontline budgets. The £148m equals 148,000 hip replacements or 370,000 A&E shifts. Britons funded this via taxes and borrowing now at £2.7 trillion national debt.

Ordinary citizens queue longer as waste diverts funds. Working families pay twice: once for gowns, again for replacements.

Liquidation cements the loss. Connected entrepreneurs supply, fail, dissolve—and restart elsewhere. UK governance shields insiders while taxpayers fund endless repeats.

This episode exposes procurement as a conveyor of public money to private failure. Governments change, but the mechanism endures. Decline accelerates through unlearned lessons.