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£150 million face masks bought for NHS from private equity firm fail safety tests
6 August 2020, 12:04
Fifty million face masks bought by the Government as part of a £252 million contract with a private equity firm will not be used in the NHS due to safety concerns.
The masks, ordered from Ayanda Capital Limited, which is owned through an offshore holding firm based in the tax haven of Mauritius, have ear loops rather than head loops, meaning they do not fit properly.
The Government has confirmed in court papers that the masks, which are now in the Department of Health and Social Care's (DHSC) logistic chain, will not be used in the NHS.
The Good Law Project and EveryDoctor are suing the Government over three PPE contracts, including Ayanda. They estimate the 50 million wasted masks would have cost more than £150 million.
Court papers show the Government awarded the £252.5 million contract to Ayanda - which has no experience of supplying masks - on April 29, with £41.25 million payable on commencement to secure the manufacturing capacity.
Ayanda Capital also supplied 150 million Type IIR masks, which the Government says are unaffected but still need further testing in the UK before any can be released for use in the NHS.
The Government also disclosed in court papers that the original approach to sell the masks came from a businessman called Andrew Mills, who advises both the Government and Ayanda on trade.
His company, Prospermill, had secured exclusive rights to the full production capacity of a large factory in China to produce masks and offer a large quantity almost immediately.
The legal document revealed Mr Mills requested DHSC's contractual counterparty should be Ayanda rather than Prospermill, as Ayanda could facilitate overseas payments more quickly.
Mr Mills told the BBC his position played no part in the award of the contract, the broadcaster reported.
Jolyon Maugham, director of the Good Law Project, said: "Good Law Project wrote to Government on three contracts each worth over a hundred million pounds - with respectively a pest control company, a confectioner and a family hedge fund.
"Each of those contracts has revealed real cause for alarm - including, on Ayanda, that around £150 million was spent on unusable masks. What other failures remain undiscovered?"
Rachel Reeves, shadow chancellor of the Duchy of Lancaster, said the case for the National Audit Office to investigate the Government's mishandling of PPE is "overwhelming".
"It is astounding that ministers allowed the national PPE stockpile to run down and then spent millions with an offshore finance company with no history of providing vital equipment for the NHS,” she said.
Liberal Democrat MP and chair of the All Party Parliamentary Group on Coronavirus Layla Moran said a clear strategy for procuring PPE is urgently needed, adding: "The Government has serious questions to answer over this shocking waste of taxpayers' money."
A Government spokesman said: "Throughout this global pandemic, we have been working tirelessly to deliver PPE to protect people on the front line.
"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."
On its website, Ayanda says it is "a family office focused on a broad investment strategy” with a “focus on currency trading, offshore property, and private equity and trade financing”.
Ayanda Capital CEO Tim Horlick said in a statement: "The masks met all Government specifications and standards, the masks are not unusable or unsafe and the Government has not wasted any money in purchasing these masks.”