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Tuesday, June 18, 2024

Covid Contract scandal features in election

Just when the Tories hoped that it had gone away the Guardian reports that controversy over the way government awarded contracts during the covid pandemic has reared its head again due to a row that has broken out in the USA.

According to the paper the founder of Innova Medical Group, who says his business collected $2bn (£1.6bn) in profits, one of the largest fortunes banked by any medical supplier during the scramble for lifesaving equipment in the early months of the pandemic, has been hit by a storm of claims and counter-claims. This has led to Innova’s boss, Charles Huang, to be accused by former associates of “squandering” or moving $1bn of those profits, spending lavishly on luxury aircraft, an $18m house in Los Angeles and “homes for his mistresses”:

The previously little-known Chinese-American businessman’s fortune was transformed by the British taxpayer through 11 government contracts worth approximately £4.3bn for lateral flow tests (LFTs) made in China and sold by Innova. The government fast-tracked the company after its British representatives sent a direct email to Dominic Cummings, the chief adviser to the then prime minister, Boris Johnson, in July 2020. And, a Guardian investigation has found, the fast-tracking of Innova was supported by the then chancellor Rishi Sunak’s team at the Treasury.

Innova became for a period of at least four critical months the only company authorised to supply rapid Covid tests in the UK, despite scores of others developing similar kits. At the time, the government spending watchdog raised concerns, saying the lack of competition posed “risks to value for money”.

In his evidence to the Covid inquiry last October, Cummings told how he had pushed through the first Innova contract with backing from Sunak’s team. The intention was to allow the economy to reopen by providing enough kits for up to 10 million people a day to test for the disease. The mass daily testing plan, labelled “moonshot”, was met with scepticism by scientists, including Jonathan Van Tam, the then deputy chief medical officer, who has told the inquiry that he had “real doubts about whether it was workable”. The moonshot plan became part of NHS test and trace, known as the mass testing programme.

“In the autumn [of 2020],” Cummings said in his written statement, “Sunak’s team supported me with the mass testing team as we tried to overcome horrific Whitehall bureaucracy, secretly buy hundreds of millions of fast tests before other countries realised their value and there was a PPE-like panic.”

The UK Health Security Agency has confirmed in response to a freedom of information request that the “secret” buying of tests was the first contract awarded to Innova. Agreed in September 2020, it was worth £103m. The government went on to spend billions more with the company.

The information raises further questions about the UK government’s widely criticised decision-making during the pandemic, and the huge sums of public money spent after normal procurement processes were suspended. The apparent support of Sunak’s team also raises questions about how far the Treasury was involved in the government expenditure of billions of pounds on test and trace and personal protective equipment. Sunak has repeatedly presented his work during the pandemic as a landmark success, telling workers at an event on the first day of the 2024 general election campaign: “You know you can trust me when it comes to the economy: I got our country through Covid.”

That this should hit the media now is not just inconvenient for Sunak, but could well lead to further public controversy that will hit Tory poll ratings even further.
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