Baroness Mone is facing a call to be stripped of her peerage as questions were raised last night about whether the government will get all of the £122m awarded to it by a judge.
A ruling in the High Court means ruled that PPE Medpro which she is linked to must repay the money for supplying faulty PPE gowns.
The High Court found in favour of the Department of Health and Social Care (DHSC) which sued PPE Medpro for repayment and has now said it will pursue the company for the money owed.
PPE Medpro is a consortium led by Baroness Mone’s husband Doug Barrowman that was awarded government contracts by the former Conservative government to supply personal protective equipment (PPE) during the pandemic. Baroness Mone recommended the firm to ministers.
Mr Barrowman previously said that he received around £60m in profits from the firm. Baroness Mone has admitted referring the company to a “VIP lane” for contracts, and said that she and her children stand to benefit from a trust into which some of those profits were paid.
Mrs Justice Cockerill today found that PPE Medpro “has breached the contract” and the DHSC was “entitled to the price of the gowns as damages” as they “could not be used as sterile gowns”. She ruled the Government was not entitled to the costs of storing the gowns.
The judge said that payment was due by 15 October.
However, questions are being asked about how the money will be recovered in view of the company appointing administrators after it announced it had net assets of just £666,025.
One insolvency and restructuring specialist Michael Lynch of DMH Stallard said tonight: “It is clear from PPE Medpro’s unaudited accounts for the period 1 April 2024 to 31 July 2025 that it does not have requisite funds to pay £122m.
“Accordingly, it has determined to enter into formal insolvency.
“As to the purpose of the administration, that remains to be seen. What is likely is that there will be little return to creditors (based on the accounts), in particular the Secretary of State for Health and Social Care.
“However, any subsequently appointed administrators are obligated to investigate the conduct and affairs of PPE Medpro and its officers.
“This can include those persons determined to have been directing PPE Medpro.
“The insolvency regime in the UK gives officeholders extensive investigatory and recovery powers and so it is unlikely that DHSC’s steps to recover its monies will end with PPE Medpro’s administration.”
Baroness Mone, who on Tuesday claimed the government was “scapegoating” her and her husband, described the ruling as “shocking but predictable”, while Mr Barrowman said it was a “travesty”.
The National Crime Agency is separately conducting its own enquiries. Both Baroness Mone and Mr Barrowman have denied any wrongdoing.
At this week’s Labour conference the Chancellor Rachel Reeves said that £400m had been recovered in Covid fraud and that she had set up a “hit squad” to claim back more.
She joked that the government did have a vendetta against Baroness Michelle Mone, telling a fringe event: “Michelle Mone, remember her, she’s come out today and said that the government has got a vendetta against her. Too right we do.”
In June, an interim report for the Chancellor said failed PPE contracts had cost the taxpayer £1.4 billion – half of which may never be recovered.
The UK Health Secretary Wes Streeting, responding to today’s verdict, said: “PPE Medpro put NHS staff and patients in danger with substandard kit whilst lining their own pockets with taxpayers’ money at a time of national crisis.
“Today’s court ruling makes clear we won’t stand for it and we’re coming after every penny owed to our NHS.
“This government will ruthlessly pursue any company which tried to exploit the pandemic for their own ends while our health service was fighting to save lives.
“PPE Medpro must now repay the government and the taxpayer £122m. My department will work closely with PPE Medpro Limited’s administrators to recover everything we can.”
Pete Wishart, the SNP deputy leader in Westminster has demanded the Labour Government remove Mone’s peerage.
She was elevated to the Lords by former PM David Cameron in 2015 who believed she could apply some of her entrepreneurial experience to underprivileged communities. She lost the Tory whip in 2022 and now sits as an independent peer, though she is on indefinite leave.
A peerage can only be removed by an act of parliament, but Mr Wishart says the Labour Party’s substantial majority means it is able to take action.
“We now have a ruling on the Michelle Mone PPE scandal and now is the time for the Labour Government to act – they must strip Ms Mone of her peerage,” he said.
“The Lords is expensive enough – Michelle Mone cannot continue to have access to unfettered expenses at great cost to the public.”
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