Scrapped Covid vaccine deal with Valneva cost UK taxpayers £358m

Former prime minister Boris Johnson visited Valneva's manufacturing site in Livingston in January, 2021 - eight months before the vaccine deal was axed

A Covid vaccine contract which was axed by the UK government cost taxpayers £358.6m, new figures show.

French firm Valneva was meant to make more than 100m vaccines at its West Lothian plant, but the deal was controversially scrapped in 2021.

Financial records filed by Valneva show it has received hundreds of millions of pounds in non-refundable payments.

The UK government reached a final settlement with Valneva last year and no more money is due to the firm.

At the time ministers said all further details of this resolution were commercially confidential.

Meanwhile, Valneva has revealed it is now considering selling the mothballed Almeida plant in Livingston that it built to make the Covid vaccine.

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The UK government scrapped its vaccine deal with Valneva in September 2021 over allegations of a breach of the agreement - which was "strenuously denied" by the biotech firm.

Details of how much the UK government paid out to Valneva are contained in a filing made to the United States government agency, the Securities and Exchange Commission.

It states that Valneva has received a total of €420.6m (£358.6m) as part of its UK government vaccine supply agreement.

This breaks down as €47.5m (£40.5m) in a "settlement agreement" after the deal was terminated; €78m (£66.5m) in capital expenditure; and the rest in non-refundable payments for manufacturing expenses.

The UK government has previously said the cancellation of the Valneva deal did not affect the nationwide rollout of Covid vaccines.

Valneva CEO Thomas Lingelbach delivers a speech at the plant in 2022

Valneva employs about 190 people in Livingston. Its existing operations in the town are not affected by the possible sale of the mothballed Almeida plant.

The French firm has now hired a commercial real estate firm to explore options for the 75,000 sq ft facility, which was built to the high technical standards needed to manufacture vaccines.

Last month Valneva chief executive Thomas Lingelbach told Bloomberg News that about a dozen potential buyers had expressed an interest in the site.

Under the original deal between Valneva and the UK government, the French firm had an obligation to repay £69.8m of the advances it received in the event the Almeida plant was sold or it was transferred away from the manufacture of Covid vaccines.

According to the financial statement filed by Valneva, this obligation expired on 31 December last year.

Last year Scottish Enterprise awarded Valneva up to £20m in grants to support its future growth and vaccine development.

A total of £4.3m of this support from Scotland's economic development agency has been drawn down so far.

A spokesman for Valneva said the firm was "exploring options for its Almeida manufacturing facility in Livingston, initially built to produce its Covid-19 vaccine, including a possible sale or a repurposing to produce its vaccine for Japanese Encephalitis, and its chikungunya vaccine, if approved".