Jobs at Valneva's Livingston site 'at risk' after UK cancelled deal in 'bad faith'

Dame Kate Bingham, who stood down from her role at the end of last year, criticised the decision to pull out of a deal with French pharmaceutical company Valneva before it had finished the clinical testing of its Covid-19 vaccine.

The decision was not only a blow to international pandemic efforts, but will dampen the UK’s resilience to future disease outbreaks, she said.

Jobs at the firm’s site in Livingston, near Edinburgh, are now “at risk”, she added.

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She warned that the Biosciences world is a “small one” and questioned whether the Government could be proud of its dealings with the firm which “massively extended itself to help during the pandemic crisis”.

Dame Kate called for ministers to take a more “positive and proactive” approach to dealing with the life sciences industry as she criticised a “devastating” lack of skills and experience in science, industry, commerce and manufacturing in the civil service.

In a speech at Oxford University, Dame Kate said: “I have in mind the inexplicable recent decision by the Government to cancel the contract agreed by the VTF with a pioneering French vaccine company, Valneva, three weeks before its pivotal phase three trial results were announced.

Prime Minister Boris Johnson visiting the factory in January

“Among other things, the result of these actions was to cause the share price of Valneva to fall by about 50%.

“Valneva’s adaptable approach could be used to produce whole virus-based vaccines against disease X – whether Sars-CoV-2 variants or future pandemic viruses – and provide critical infrastructure for the future.

“We judged that even though this vaccine would come online after the early vaccines might be approved, it would prove to be a valuable option for vaccine boosters, for children and for export overseas.

“The Government’s decision to cancel the contract with Valneva may have been based on the grounds that the UK had enough vaccines even for booster, and in a way that is an understandable view. After all the contract allowed for at-will termination subject to paying costs incurred up to that point.

“But it was a very narrow view.”

Dame Kate added: “This decision set aside the need to build resilience in the UK in pandemic preparedness capability through a new flexible state of the art manufacturing plant, able to manufacture vaccines of any format as might be needed, including flu vaccine.”

She continued: ““What was still worse was the way in which the contract was ended.

“With cabinet support early on, the VTF had encouraged Valneva to upgrade and build a new manufacturing plant in Livingston, just outside Edinburgh.

“The result of the contract termination was that these plans were instantly put on hold, discussions for supply in the EU were paused and 100 plus new jobs immediately lost.

“But instead of an amicable wind down with a company that had massively extended itself to help during the pandemic crisis, the Government alleged a breach of contract, apparently as a means to avoid paying for the costs incurred up to that point – costs incurred at the request and for the convenience of the Government.

“Some might consider this behaviour as acting in bad faith.

“As it turned out, the phase three data showed that the vaccine was highly effective and safe.

“The company’s share price has since recovered, reflecting the view in the rest of the world that this is a valuable company with a valuable set of vaccines and technologies.

“New manufacturing jobs are now being created in eastern Germany, with Scottish jobs now at risk.

“Valneva remains, as I’ve described, in dispute with the British Government, which it had trusted and worked closely with during the height of the pandemic.

“The Biosciences world is a small one. Is this really, all in all, an example of industrial strategy of which the Government can be proud?”

She added: “It is interesting to reflect that the behaviour of the Government appears to change significantly from my time in the VTF.

“Officials have reverted to their usual practice and the pre-existing culture of distrust of business. It is hard not to see that a massive opportunity to win has been lost, indeed, converted into something of an own goal.”

Meanwhile, she said that there was a “notable lack of scientific, industrial, commercial and manufacturing skills, both among civil servants and politicians”.

She concluded: “Despite our recent successes with vaccines, much of the wider story is not a good one – little relevant scientific and business experience across Government; a culture of underperformance in delivering outcomes; a distressful and often dysfunctional relationship between Government and the biosciences industry; and the result of all this is at present the UK Government, both in Whitehall and Westminster, is not skilled, nor organised to manage complex scientific challenges.”

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In response to a trailed version of the speech, a Government spokesperson said: “Thanks to our collective national effort and our preparations for flu, we have saved lives, vaccinated tens of millions of people and prevented the NHS from being overwhelmed.

“Throughout the pandemic we have been guided by scientific and medical experts and we never shied away from taking quick and decisive action to save lives and protect our NHS.

“We prepare for a range of scenarios and, while there were extensive arrangements in place, this is an unprecedented pandemic that has challenged health systems around the world.

“We have always said there are lessons to be learnt from the pandemic and have committed to a full public inquiry in spring.”