Tory donors’ firms landed lucrative government contracts

Not-so-risky business: Iain Duncan Smith’s department outsources work programme contracts.

Two separate stories over the weekend link prominent Conservative Party donors and government contracts worth millions of pounds.

The Guardian reports that an investment firm set up by two donors has seen a training company it owned awarded contracts with the Department of Work and Pensions (DWP) worth £73m, for helping get the unemployed back into work. Until it was sold last Monday the training company, Employment and Skills Group (ESG), belonged to Sovereign Capital, an investment company set up in 2001 by John Nash and Ryan Robson, among others.

Robson left Sovereign in March 2011 but was a director of ESG when the firm was awarded its contracts. Sovereign also has significant interests in healthcare, another area that stands to benefit from government schemes, the Guardian notes. The DWP notes, ‘All our contracts are awarded in fair and open competition.’

Nash, who with his wife has donated a reported £182,500 in the past six years, is a member of George Osborne’s Independent Challenge Group.  The group is tasked with ‘thinking the unthinkable’ about where budget savings could be found, the Guardian reports. Michael Gove appointed Nash to the Department for Education board.

Meanwhile, Robson has donated a reported £267,000 to the party and has run for parliament as a Conservative candidate. He is a director of Iain Duncan Smith’s Centre for Social Justice, which comes up with ways to cut the benefits bill.

Last year the Bureau revealed that over a quarter of all Tory donors were from the financial sector.

Click here to read the Bureau’s investigation into Conservative Party funding.

Elsewhere, Labour blogger Dr Eoin Clarke claims on his blog The Green Benches that a nursing staffing agency that is making big profits from NHS cuts is linked to former Conservative Party treasurer Lord Ashcroft.

Medacs Healthcare is providing millions of hours of agency staff to the NHS, where hiring freezes mean many trusts are unable to fill vacancies and must rely on temporary cover. Medacs is owned by the Impellam Group, a company in which Ashcroft and his family own an interest.

Clarke points to TUC figures showing Medacs earns a profit of £31,902 per employee each year – much of which is coming from cash-strapped NHS trusts that are being forced to turn to expensive agency staff. NHS contracts have ‘rocketed’ in the past two years under the tough new budget conditions, he says.

‘The conflict of interest is clear, Tory donors are profiting directly from the dismantling of our NHS’, Clarke claims.