PPE Medpro liquidation leaves UK government unlikely to recover £148m

The UK government is unlikely to recover most of the £148 million it was owed by PPE Medpro after the company was wound up this week. PPE Medpro, a consortium run by Douglas Barrowman, was placed into liquidation at the Insolvency and Companies Court on Thursday. The move follows a High Court ruling in October that the firm breached a contract to supply 25 million surgical gowns during the Covid-19 pandemic. PPE Medpro filed for administration in September, a day before the court ordered it to pay, and HM Revenue and Customs is separately owed about £39 million in tax. Records filed by the administrators show the company had only about £600,000 available to pay unsecured creditors.

At the Insolvency and Companies Court, the three joint administrators asked for PPE Medpro to remain in administration to begin paying creditors, but lawyers for the Department for Health and Social Care argued the firm was “hopelessly insolvent” and urged a winding-up order. Judge Sebastian Prentis ultimately placed the company into liquidation, noting that the department’s debt was very large and had arisen from the supply of defective equipment at a time of national crisis, with there being “very little” money left to recover. The ruling underscored the difficulty of recouping funds from a company that had secured lucrative NHS contracts but failed to deliver compliant PPE.

The decision crystallizes the government’s disadvantage in pursuing recovery from PPE Medpro. Health Secretary Wes Streeting said the Department would not rest until it had clawed back the “hard-earned taxpayer money paid to rogue operators like PPE Medpro.” He added that during the pandemic, when many families faced sacrifice, PPE Medpro supplied defective PPE and profited unfairly, vowing to pursue the funds “with everything we’ve got” to restore them to the NHS.

The case has been described by some as an “establishment win” for the government, with PPE Medpro having gained access to the government’s VIP lane to fast-track approved suppliers. Baroness Michelle Mone, who was made a peer by Prime Minister David Cameron in 2015 but later took a leave of absence and lost the Tory whip amid PPE revelations, framed the October ruling as a vindication of the government’s position. The episode has prompted renewed calls from Chancellor Rachel Reeves and Business and Trade Secretary Kemi Badenoch for the former entrepreneur to step down from the Lords.

Insolvency records show that PPE Medpro was granted contracts worth about £122 million to supply medical gowns to the NHS during the pandemic. The gowns have been in storage since 2020 after the company failed to demonstrate proper sterilisation, a point central to the legal dispute that culminated in the October ruling. The government’s insolvency service confirmed an officer had been appointed to oversee PPE Medpro’s liquidation, with Interpath Advisory appointed as joint liquidators to wind up the company’s affairs in line with statutory duties. Officials said the investigation would examine the causes of the company’s failure and the conduct of its directors, as is standard in cases of this nature.

The liquidation closes a chapter that connected political figures, procurement policy, and the management of pandemic-era supply chains. While the immediate financial impact for the DHSC and taxpayers is limited by the amount of assets available to unsecured creditors, the case has lasting implications for transparency and oversight of VIP-fast-tracked suppliers and the potential risks of engaging with entities tied to political figures.