Chris Yates was sounding bullish. Boastful, even. The chief executive of the medical diagnostic firm Abingdon Health was telling his audience that after a ‘roller-coaster 12 months’, it had been ‘a real positive for us to be able to mitigate the effects of the pandemic’.
His workforce, he revealed proudly, had quadrupled to 200 but it had not been easy – his staff had worked seven days a week to develop a new Covid test for a government contract worth up to £87.5million.
Speaking at a webinar last week from his six-bedroom home just outside York, Mr Yates, 46, a Cambridge economics graduate, exuded a quiet confidence, and no wonder. It had been quite some year.
In December 2019, Abingdon Health was teetering on the brink, with losses of £1.5million.
According to its last published accounts, the firm’s directors were warning that to survive, it would have to cut costs and seek new investment.
In December 2019, Abingdon Health was teetering on the brink, with losses of £1.5m. A year later, it was floating on the AIM small firms stock market, raising £22m from investors. That means the shares owned by Chris Yates (left), chief executive of the medical diagnostic firm, are worth £7.2m and those held by company chairman Chris Hand (right) £12.4m
Abingdon Health was awarded a deal first to develop and then supply a million do-it-yourself home Covid antibody tests, with an option for nine million more, worth a potential £75m. There’s just one problem. Health Secretary Matt Hancock has since cancelled all further orders ‘with immediate effect’
Fast forward in pandemic Britain. Exactly a year later, Abingdon was floating on the AIM small firms stock market, raising £22million from investors.
Yesterday it was valued at £106million. That means the shares owned by Mr Yates are worth £7.2million and those held by company chairman Chris Hand £12.4million.
The reason? In between had come Operation Moonshoot, Boris Johnson’s multi-billion pound bid to create a world-leading test and trace system. Abingdon Health was awarded a deal first to develop and then supply a million do-it-yourself home Covid antibody tests, with an option for nine million more, worth a potential £75million.
There’s just one problem. Health Secretary Matt Hancock has since cancelled all further orders ‘with immediate effect’.
Public Health England requires at least 98 per cent accuracy for antibody tests and its evaluation was that Abingdon’s offered less than 85 per cent. The supply deal – signed in August – was contingent on Medicines and Health Regulatory Agency clearance by Christmas Day. When it was not forthcoming, Mr Hancock pulled the plug.
The story of Abingdon Health and its antibody test, say critics, is yet another example of the Government’s flawed approach to PPE and test and trace: of over-vaulting ambition, huge gambles, preferred bidders, lack of due process, big failures – and some people becoming very rich indeed.
So how did all this come about? It is an embarrassing tale, not only for Abingdon Health but for Mr Hancock, his junior minister Lord Bethell and Sir John Bell, Oxford University’s regius professor of medicine and a government adviser.
The Good Law Project, the campaign group led by Jolyon Maugham QC that uses the courts to enforce government accountability, was already challenging the deals with Abingdon with a High Court judicial review. It claims the deal was not awarded after proper competition.
The story of Abingdon Health and its antibody test, say critics, is yet another example of the Government’s flawed approach to PPE and test and trace: of over-vaulting ambition, huge gambles, preferred bidders, lack of due process, big failures – and some people becoming very rich. How did all this come about? It is an embarrassing tale, not only for Abingdon Health but for Mr Hancock, his junior minister Lord Bethell and Sir John Bell (above), Oxford University’s regius professor of medicine and a government adviser
At a Downing Street press conference on March 18, the Prime Minister and chief scientific adviser Sir Patrick Vallance (both pictured) declared that Covid antibody testing would be the ‘game changer’ pathway to normal life. Work on this was ‘already progressing very fast’
Now, the Daily Mail can reveal, leaked government documents show critical decisions were rushed through by a group of ministers and advisers. Right from the outset, senior civil servants raised red flags.
Twice, the documents reveal, the Government was warned by its own lawyers that the deals it signed with Abingdon Health – £2.5million for development, £10million for components and up to £75million for supply – were at ‘high risk’ of being ruled unlawful if challenged. The advice appears to have been ignored.
At a Downing Street press conference on March 18, the Prime Minister and chief scientific adviser Sir Patrick Vallance declared that Covid antibody testing would be the ‘game changer’ pathway to normal life. Work on this was ‘already progressing very fast’.
Indeed it was. Mr Yates and Mr Hand, 58, with a background in biotechnology, were approached by Sir John. Dubbed ‘the fixer’, the forceful Canadian has played an extraordinary behind-the-scenes role during the pandemic. His business connections include posts at pharmaceutical giants Roche and AstraZeneca – with which he helped broker the deal to make the Oxford vaccine.
Abingdon Health already made other tests, including one for HIV. Sir John asked if it would like to develop one for Covid. (File photo)
He also headed the National Covid Testing Scientific Advisory Panel. In the words of one senior industry source: ‘On testing, all roads lead to Bell. There’s no way round him and no way through him. Everyone defers to him in government.’
Abingdon Health already made other tests, including one for HIV. Sir John asked if it would like to develop one for Covid.
A colleague who worked closely with Sir John in the Health department’s research arm co-authored a memo on April 2, presenting what appeared to be a fait accompli, advocating that the Government award the first £2.5million contract to Abingdon Health to head a new Rapid Test Consortium with three other firms as junior partners for a home-based antibody test.
It had been recommended by Sir John’s scientific panel.
Other, existing tests had been tried but were not good enough, the memo said. The following week, the Government would issue a ‘call to arms’, asking other manufacturers for proposals.
But the deal that mattered appeared to have already been done, for the memo concluded with a draft email laying out terms for Lord Bethell, the Ministry of Sound nightclub impresario turned Minister for Innovation, to send to Abingdon.
In fact, another leaked document reveals, the previous day, April 1, Lord Bethell had already held a conference call with Mr Yates and Mr Hand, to which Mr Hancock was also invited. The decision, it seems, had effectively been made.
Almost immediately, there were concerns in Whitehall. On April 6, Mike Batley, the Department of Health and Social Care’s deputy director of research, wrote to senior colleagues warning that although Lord Bethell and Mr Hancock already seemed to have approved the deal, ‘this all happened over the weekend without any engagement with us’. It was, he added, ‘no way to do business’.
On April 6, Mike Batley, the Department of Health and Social Care’s deputy director of research, wrote to senior colleagues warning that although Lord Bethell (pictured) and Mr Hancock already seemed to have approved a deal with Abingdon, ‘this all happened over the weekend without any engagement with us’. It was, he added, ‘no way to do business’
The same day, Andrea Barry, responsible for partnerships with business, asked whether anyone had done ‘due diligence’ on Abingdon Health, citing its latest accounts.
She wrote: ‘What is the basis for picking this company as opposed to others? Being clear about the criteria on which we are choosing to use public money for company X but not similar company Y is really important.’
It was to no avail. Abingdon got its research contract, followed, in May, by a further payment of £10million to buy materials to make 10million tests.
Other companies responded to the call to arms but got nowhere. Directors at two of them insisted last week they could have produced better Covid tests but never got a look in.
‘Why did they give this to a company that had been on its knees, when we were a market leader?’ one asked. ‘This was a travesty which deprived the British people of what might have been a much better test.’
The other said he had submitted a detailed proposal but ‘it seemed to vanish into a black hole’.
Whitehall’s concern didn’t go away. First the government legal department warned the way in which the contracts had been awarded risked a successful legal challenge. Then in August, when the Government decided it wanted to sign a new contract for Abingdon and its partners to make up to 10million tests, it sought advice from a top law firm.
Its analysis – also leaked to the Mail – said the short-circuiting of the usual procurement process would be hard to defend. Depending on how a challenge might be framed, the risk of the deals being declared unlawful in court ranged between ‘medium high’ – 50 to 70 per cent – and ‘high’ – above 70 per cent. This too was ignored.
Abingdon continues to insist on its website that its test, which delivers results in 20 minutes from a pinprick blood sample, is 99 per cent accurate.
But in November, Pubic Health England published an evaluation claiming the true, ‘real world’ figure was less than 85 per cent. The firm disputes this. But no one was claiming now that this might be a ‘game changer’.
On Christmas Eve came another blow – a report to the Government by auditors Ankura claimed manufacturing was falling behind, thanks to a ‘breakdown in consortium relationships’.
It also identified accountancy errors – overcharging through mistakes in foreign exchange calculations and a £500,000 VAT claim that should not have been made.
But for further orders under the August contract to go ahead, Abingdon needed MHRA approval by Christmas Day. It was not forthcoming.
Still, the first million tests were delivered on January 8. But three days later, the DHSC sent the Good Law Project a letter, saying that because of the failure to win approval, Mr Hancock had ‘exercised his contractual right to cancel with immediate effect all outstanding orders’. It might still place further orders but there would be competition.
An Abingdon spokesman denied investors might have been misled, saying the possibility this might happen had been mentioned in the share prospectus at the time of the float.
He also denied that taxpayers’ cash had saved a failing business: although the antibody test ‘has been the catalyst’ for its growth, ‘there was an underlying business which was growing’.
Abingdon said its contract remains in place until February 14, that it expects any future orders will be via an application to future DHSC tenders, that it continues to liaise with the MHRA regarding the use of its test, and that it has not seen the Ankura report.
There was no response from Oxford University to a request for a comment from Sir John.
Mr Maugham said: ‘What these leaked documents seem to show is that Matt Hancock and Sir John Bell ignored basic process, and their own internal and external advice, and just took a punt.
‘That punt failed. And, once again, it’s the taxpayer who is left to pick up the tab.’
The DHSC said: ‘We do not comment on details relating to ongoing legal proceedings, but we have been always been clear that government contracts must deliver value for taxpayer money and we will take action in instances where this does not happen.’