The point of Brexit, according to its champions, was to liberate Britain from intolerable EU rules. One of these was that government contracts should always go out to transparent competitive tender. This was supposed to aid efficiency and avert the endemic corruption of certain European states. One such state now appears to be Britain.
Last November the National Audit Office estimated that since the coronavirus pandemic began, Whitehall had given out £18bn in procurement contracts, largely for PPE supplies and test-and-trace services, including to firms with little or no record of such work. It turned out that the government also secretly set up a fast conduit – a so-called VIP lane – for contracts to people personally known to ministers, peers and MPs.
Unsurprisingly, this became a crony bonanza. Of the £18bn spent, the NAO has traced £10.5bn awarded directly without competition. About one in 10 bids to supply through the fast-track system were awarded contracts, against one in 100 from open tender bidders. Meanwhile, the procurement consultancy Tussell found that of £15bn in health department contracts to buy PPE by October, only £2.68bn of the contracts had been published.
The sums are staggering, as is the potential for waste. In August it was reported that 50m face masks unsuitable for the NHS cost the Treasury £155m: they came from a contract worth £252m with Ayanda Capital, a firm with a senior adviser who was also an adviser to the UK Board of Trade at the Department for International Trade. The NAO found multiple shortcomings with deals signed with Ayanda and Public First.
Last week we saw court documents showing Dominic Cummings’ central role in awarding a contract for Covid focus groups to Public First, “a research company owned and run by two of his longstanding associates”. The contract is the subject of a judicial review, in a case taken by the public interest group the Good Law Project.
On Friday, a high court judge ruled that Matt Hancock, the health secretary, acted unlawfully by not publishing details of multibillion-pound government Covid contracts. The case was also taken by the Good Law Project, which highlighted three PPE contracts: “A £252m contract for the supply of face masks with a finance company, Ayanda Capital; a £108m contract with Clandeboye Agencies, which had previously supplied only confectionery products, and PPE contracts worth £345m with a company trading as Pestfix.” It claims that the government has failed to publish such contracts in a timely manner, hampering scrutiny and transparency.
In his ruling, Mr Justice Chamberlain said: “The secretary of state spent vast quantities of public money on pandemic-related procurements during 2020. The public were entitled to see who this money was going to, what it was being spent on and how the relevant contracts were awarded.” He also criticised the minister for not simply admitting the breaches of the rules instead of spending £207,000 of public money defending them.
A familiar feature of emergencies is that governments feel entitled to take powers that would not be merited in normal times. Hancock certainly deserves sympathy for what has for him been a nightmare year. But we are seeing a web of connections involving others in the Tory establishment in the awarding of contracts: the much discussed “chumocracy”. Hancock’s attempts to excuse his lack of transparency as being “second order to saving lives” ring hollow.
Public sympathy relies on such emergency powers not being abused – as clearly is happening in these cases. At a time when billions in taxpayers’ money is being spent fighting disease and relieving hardship, breaking rules designed to avoid corruption can only diminish public sentiment and sympathy.
The government clearly hopes that its success with the Covid vaccination will wipe out memories of its failures in the early days of the pandemic. Yet it may be the case that its slapdash approach to PPE contracts has contributed to the raw fact that Britain has one of the highest Covid death rates in the world. When this emergency is over, the most searching of all inquiries will be needed: only this will ensure that a government all too happy to avail of emergency powers will actually bring them to an end.
Simon Jenkins is a Hlcarpenter.com columnist