A Conservative peer advising the government during the coronavirus pandemic helped a company secure PPE contracts worth £50m after a fellow Tory peer introduced him to the firm, documents obtained by the Guardian show.
Andrew Feldman, a former Conservative party chair, referred the company, SG Recruitment, to the “VIP lane” that gave priority to politically connected firms, after the introduction by Lord Chadlington, a Tory peer for 26 years.
Chadlington, whose name is Peter Selwyn Gummer, had a financial interest in SG Recruitment as he was a director and shareholder of its parent company, Sumner Group Holdings, which is registered in Jersey.
Documents obtained by the Guardian through the Freedom of Information Act shed new light on how SG Recruitment came to be awarded the £50m government contracts. There is mounting parliamentary scrutiny over the government’s decision to use a VIP lane to prioritise offers of personal protective equipment (PPE) during the pandemic, benefiting companies that were recommended by Tory peers and other politicians and officials.
Lord Feldman was involved with the Department of Health and Social Care in an unpaid advisory role in the early stages of the pandemic, working on the effort to fill the dangerously low national stocks of PPE.
His referral of the company to the VIP lane followed an initial phone call on 20 April 2020 from the company’s chief executive and ultimate owner, David Sumner, a healthcare entrepreneur resident in the United Arab Emirates. Sumner mentioned on the call that Chadlington had provided him with Feldman’s email address.
Sumner then followed up his phone call by sending Feldman an email the next morning, at 5.10am, which included an offer to supply PPE from “our manufacturer network” based in China, and attaching a price list. His letter noted that: “Lord Chadlington currently sits on the board of [the parent company] SGH Global.”
Two hours later, before 7.30am, Feldman forwarded Sumner’s email to civil servants at the DHSC and the department’s “Covid PPE priority appraisals mailbox”.
Feldman told the officials in his email: “An interesting offer from David Sumner who was introduced to me by Lord Chadlington.”
The DHSC officials then processed the offer as a VIP high-priority case. Companies referred to the VIP lane, which was operated for recommendations by MPs, peers, and other politically connected people, had a 10 times greater success rate for being awarded contracts than those without VIP treatment, according to a subsequent report by the National Audit Office.
Within five days of Feldman forwarding Sumner’s offer to the officials, on 26 April 2020 SG Recruitment was given a £23.9m government contract to supply coveralls. The second contract, for £26.1m to supply hand sanitiser, was awarded on 28 May 2020. Both contracts were granted without inviting competitive bids from other companies, as the government had suspended normal procurement rules due to the pandemic emergency.
Before the pandemic SG Recruitment was a small UK-registered subsidiary company with five staff, primarily involved in recruiting nurses for the NHS from countries overseas including the Philippines and India.
The company also sought to fill vacancies for nurses and domestic workers in Saudi Arabia, Bahrain and Malaysia. In its financial accounts for the year before it was awarded the PPE contracts by the DHSC, SG Recruitment turned over less than £500,000 and made a loss of £700,000.
The financial accounts for the year covering the contract awards appear to show that SG Recruitment, since renamed Sumner Group Health Ltd, turned the previous year’s loss into a £1.1m profit. Sumner declined to say by how much the company profited from the contracts.
Feldman has said that his role at the DHSC was to help find urgently needed healthcare supplies and equipment at a time of national crisis. A spokesperson for Feldman said of his phone call with Sumner: “Andrew’s recollection is that during this call David Sumner introduced himself, informed Andrew Feldman that he had been given his departmental email address by Peter Chadlington, and said that he was going to send him an email in relation to PPE provision. This was the first time Andrew had ever spoken to David Sumner and he has never met him.”
Feldman himself added: “The full extent of the introduction from Peter Chadlington was that he provided David Sumner with my DHSC email address. My only action in relation to the email from David Sumner was to forward it on to the civil servants whose details he had been given for that purpose. After that I had no further involvement in this matter.”
In November 2021, after the DHSC was forced by the information commissioner to publish a list of companies awarded PPE contracts via the VIP lane and which politically connected people had referred them, SG Recruitment was confirmed as one of 51 companies on the list. The government stated that the referrals were made by Chadlington and Feldman.
A longstanding donor and supporter of the Conservative party, who is credited with advising Tory prime ministers, Chadlington founded two large public relations companies during his career in business. He was appointed a Conservative member of the Lords in October 1996.
In July last year, Chadlington was cleared of lobbying for the PPE contracts by the House of Lords commissioner for standards, who investigates whether peers have broken the upper house’s code of conduct. The watchdog said: “There is no evidence to suggest that the fact that Lord Chadlington provided Mr Sumner with the email address played any part in the decision to award the two contracts to SG Recruitment UK.”
Chadlington said he had not referred SG Recruitment to the government to be included in the VIP lane, nor had he lobbied for the firm. He said his only involvement had been to give Feldman’s official email address to Sumner.
He added: “During a global pandemic when the UK was facing a crisis in the provision of PPE to save the lives of its citizens, the secretary of state publicly called for help. I was then chairman of a holding company which, through a subsidiary, had expertise in healthcare and I suggested that this company might be of assistance.
“After making the introduction I left the negotiation to the executive team to take matters forward.”
The DHSC and Sumner declined to comment when asked if there was a dispute over whether SG Recruitment had delivered the material as ordered, citing commercial confidentiality. Sumner said: “The goods supplied were fit for purpose and … now all certificates required have been provided.”
A DHSC source said of the VIP lane: “Offers of support through the high-priority list were subject to the same rigorous cheques and robust assurance processes as all other procurement routes and ministers did not and do not have any role in awarding contracts.”
This article is republished from The Guardian under a Creative Commons licence. Read the original article.