The UK government has accused a company linked to the Conservative peer Michelle Mone of supplying defective gowns that could have compromised the safety of patients had they been used in the NHS.
The Department of Health and Social Care (DHSC) paid the company, PPE Medpro, £122m for 25m sterile surgical gowns under a contract awarded in June 2020 after Mone first approached ministers offering to supply PPE.
The DHSC has alleged that the gowns were rejected because they were not sterile, their technical labelling was “invalid” and “improper”, and they “cannot be used within the NHS for any purpose”.
The DHSC’s allegations will add to the intense public and political pressure on Mone over her apparent involvement in PPE Medpro, after the Guardian reported in November that leaked bank documents indicated she and her three adult children secretly received £29m originating from the company’s profits on the government PPE deals.
Mone has previously denied via her lawyers that she had any involvement in the company, despite having first approached Michael Gove in May 2020 offering to supply PPE through “my team in Hong Kong”, and the Guardian reporting last year, based on leaked files, that she did appear to have been secretly involved.
Her lawyer has also said she did not declare PPE Medpro on her Lords register of interests because “she did not benefit financially and was not connected to PPE Medpro in any capacity”. Mone, the founder of the lingerie brand Ultimo, was appointed to the House of Lords by David Cameron in 2015.
The sterility of the surgical gowns PPE Medpro was contracted to supply is vital, and governed by extensive technical laws and regulations, because such gowns are used to protect patients from infection in critical medical settings such as operating theatres.
The DHSC’s allegations that the gowns were not sterile are set out in court documents, seen by the Guardian, served on PPE Medpro as part of the government’s legal action launched last month to recover its money. The DHSC is seeking a return of the full £122m in public money, and a further £11.6m for storing and disposing of the gowns, plus interest.
“The gowns … were not designed, manufactured or packaged in such a way that they would be suitable for use as sterile gowns,” the claim alleges.
It states that the overwhelming majority of gowns in a randomly tested sample were found to be not sterile, alleging that patients’ safety could have been compromised had the gowns been used. “The gowns were not manufactured in such a way that if used as sterile gowns in the NHS, they would not compromise the clinical safety of patients,” it said.
PPE Medpro, which was also awarded an £80.85m contract for the supply of 210m face masks – which are not the subject of any legal complaint – has previously said it rejects the allegations and will defend the legal action.
The legal claim states that the DHSC paid PPE Medpro the full £122m for the 25m gowns by 28 August 2020. This was before any of the gowns had been inspected in the UK, and before all the gowns had arrived. Health officials rejected the gowns after a first inspection at the NHS depot in Daventry on 11 September 2020.
The initial reason for rejecting the gowns was – as the Guardian revealed in March – that although the labelling on the packaging had the mark “CE”, a European quality assurance standard, it had no number alongside it. CE numbers identify that an officially accredited organisation has certified that correct manufacturing processes have been followed.
The DHSC notified PPE Medpro on 23 December 2020 that it had rejected the gowns, the claim states. “The rejection notice explained that the gowns had been rejected by DHSC because they did not comply with relevant laws applying to medical devices and because PPE Medpro had failed to provide certification to establish that the gowns had been reliably sterilised for medical use, rendering them unusable in the NHS.”
The claim also states that the packaging did not comply with requirements for sterility because the gowns were “single-wrapped” in a polythene bag, rather than “double-wrapped”, in cloth inside a package that also has a layer of outer packaging that is peeled away first.
In a response last month to the DHSC’s commencement of legal action, after a mediation process failed to resolve the dispute, PPE Medpro insisted in a statement that its gowns “passed quality inspection in China” and were manufactured to the “correct quality standards and specification”.
It accused the DHSC of a “cynical attempt to recover money from suppliers” because by December 2020 the department had vastly over-ordered PPE, and said the court action would be “rigorously defended”. The company argued that DHSC consultants had picked fault with PPE based on “contract technicalities that were never envisaged at the time of contract”, claiming as an example that the “double bagging” requirement had not been specified in the contract.
“PPE Medpro will demonstrate to the courts that we supplied our gowns to the correct specification, on time and at a highly competitive price,” the company said. “The case will also show the utter incompetence of DHSC to correctly procure and specify PPE during the emergency procurement period. This will be the real legacy of the court case and it will be played out in the public arena for all to see.
“At present, no further detailed statements will be issued until PPE Medpro examines fully the alleged pleadings by DHSC. From our preliminary review of their case, we refute all their claims, which are portrayed in a one-sided predictably biased way. The same approach shown by DHSC in their half-hearted attempt at mediation.”
The DHSC said: “We can confirm that we have commenced legal proceedings in the high court against PPE Medpro Limited for breach of contract regarding gowns delivered under a contract dated 26 June 2020. We do not comment on matters that are the subject of ongoing legal proceedings.”
In November, the Guardian reported, based on leaked documents compiled by HSBC, that £29m originating from the profits of PPE Medpro was paid to an offshore trust whose beneficiaries, bank records indicated, were Mone and her three adult children.
Mone’s husband, the Isle of Man-based financier Douglas Barrowman, was paid £70m by PPE Medpro, at least £65m of which came from the company’s profits on the two government contracts. Barrowman then made a series of distributions from that money, including the £29m to Mone’s trust, according to the documents.
Lawyers for Mone and Barrowman did not respond to requests for comment about the DHSC’s legal claim.
In response to questions about the distribution of PPE Medpro’s profits, a lawyer for Mone told the Guardian at the time: “There are a number of reasons why our client cannot comment on these issues and she is under no duty to do so.”
A lawyer who represents Barrowman and PPE Medpro said a continuing investigation limited what his clients could say about payments and distributions. “For the time being we are also instructed to say that there is much inaccuracy in the portrayal of the alleged ‘facts’ and a number of them are completely wrong.”
The company declined to say how it would repay the £122m if ultimately ordered to do so as a result of the litigation.
PPE Medpro is the subject of an ongoing potential fraud investigation by the National Crime Agency (NCA). An investigation into Mone by the House of Lords commissioners for standards has been paused while the NCA investigation continues.
Mone announced a leave of absence from the Lords in December, which a spokesperson said was to “clear her name of the allegations that have been unjustly levelled against her”.
Lawyers for PPE Medpro have declined to comment on the NCA investigation.