Ministers wasted at least £150 million buying masks with the wrong kind of straps from a little-known family investment company, The Times can reveal.
Health officials signed a £252 million contract to buy masks for frontline healthcare staff from Ayanda Capital in April in a deal brokered by a government adviser who also advises the company’s board.
The contract included 50 million high-strength “FFP2” medical masks costing an estimated £150 million to £180 million and amounting to the entire health system’s expected consumption for a year, as well as 150 million cheaper “IIR” masks.
Officials have admitted that the 43.5 million Chinese-made FFP2 masks delivered so far did not meet standards and could not be used in the NHS, legal documents reveal. The masks have elastic ear loops instead of straps that tie around the back of the head, leading to concerns that they cannot be fixed securely.
Ayanda Capital, based in London, specialises in “currency trading, offshore property, private equity and trade financing” and has no history of PPE procurement or government contracts. The deal was brokered by an adviser to its board, Andrew Mills, who is also an adviser to Liz Truss and the Department for International Trade.
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Ayanda is run by Tim Horlick, a former investment banker. It is owned by the Horlick family via a holding company registered in a tax haven.
The investment company blamed the government for the problems with the masks, saying that Ayanda had only ever suggested supplying masks with ear loops and insisting that this had been approved by government officials before the contract was signed.
Mr Horlick said that at a “late stage in our contract” the government had asked to switch the small number of FFP2 masks not then delivered “to headbands from early loop design [and] we are working with [the Department of Health and Social Care] to try to assist them with this matter”.
The government’s admission that tens of millions of masks were unusable came in response to a legal case brought by the Good Law Project, which is seeking a judicial review of the process by which three PPE contracts were awarded at the height of the pandemic.
Officials have not disclosed the exact price paid for the FFP2 masks but said that IIR masks were selling for 59p to 64p at the time of the contract and Ayanda offered an “extremely competitive price”. If the government had paid 64p for the cheaper IIR masks, that would have amounted to £96 million of the £252 million contract, with the remainder paying for FFP2 masks.
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Jolyon Maugham, QC, who set up the Good Law Project, said that he was “staggered” by the “extraordinary waste [and] basic incompetence”.
Sir Ed Davey, acting leader of the Liberal Democrats, said: “The government management of PPE in the early months of the crisis was an almost unmitigated disaster.”
The deal with Ayanda is the largest individual PPE contract disclosed by the government and came amid purchases of £5.5 billion.
Although officials cited the urgency of the pandemic as the reason for not requiring normal tendering processes, PPE delivered under several large contracts is yet to be deployed to the NHS, legal documents show.
The other masks supplied by Ayanda are still awaiting further testing, while isolation suits delivered under a £32 million contract with a family-run pest control supplies company called Pestfix are also awaiting testing. So, too, are gowns procured from Clandeboye Agencies, a confectionery wholesaler based in Northern Ireland, which was given a £108 million contract.
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A government spokesman said: “Throughout this global pandemic, we have been working tirelessly to deliver PPE to protect people on the frontline.
“Over 2.4 billion items have been delivered, and more than 30 billion have been ordered from UK-based manufacturers and international partners to provide a continuous supply, which meets the needs of health and social care staff both now and in the future.
“There is a robust process in place to ensure orders are of high quality and meet strict safety standards, with the necessary due diligence undertaken on all government contracts.”
Update October 20, 2020: Ayanda Capital has informed The Times that it has fulfilled the entirety of its PPE procurement contract with DHSC on time, to the agreed specification. It says it is not as yet known to what use the government may put the PPE it has purchased.
