A National Audit Office (NAO) investigation into pandemic procurement concludes normal transparency standards have been removed as departments awarded 8,600 contracts worth £ 18 billion to tackle COVID- 19.
Deals worth £ 10.5 billion were awarded without a tender.
The NAO found the rush to answer to the virus risked a lack of due diligence and scrutiny of potential conflicts of interest.
Normal reporting standards have also disappeared, with a large number of awarded contracts still not publicly disclosed.
The findings come as the government faces accusations of cronyism in its response to the pandemic, with senior positions and contracts awarded to political allies of ministers and the Conservative Party.
The investigation revealed that the scramble to provide adequate personal protective equipment (PPE) for the NHS and nursing homes accounted for 80% of the 8,600 contracts and 63% of the total value.
The contracts were awarded after the government changed its procurement guidelines due to the crisis.
To speed up the process, a ‘high priority’ supply route was established to handle leads referred by ‘officials, ministers’ offices, MPs and Lords, senior NHS officials and other law enforcement professionals. health, ”the NAO said.
About one in ten priority route companies (47 out of 493) got contracts, but the source of referrals was not always recorded, the NAO said, and in one case a pest control company received the priority Error.
Fewer than 250 sources for the 493 leads were recorded, of which 144 came from the private offices of ministers, 64 directly from backbenchers or peers and 21 from civil servants.
Of the 14,982 businesses and approaches processed through normal channels, only 104 were successful, less than one in 10.
NAO Chief Gareth Davies said: “While we recognize these were exceptional circumstances, it remains essential that decisions are properly documented and made transparent if the government is to maintain public confidence in the fact. that taxpayers’ money is spent appropriately and fairly.
“The evidence presented in our report shows that these standards of transparency and documentation were not consistently met in the first phase of the pandemic. “
The NAO has highlighted a number of contracts initially reported by the media:
- A £ 840,000 contract awarded retrospectively to hold focus groups with Public First, a consultancy firm founded by former advisers to Prime Minister Boris Johnson and Cabinet Minister Michael Gove.
- Three contracts worth over £ 3million with Faculty, an artificial intelligence firm that previously worked for the Vote Leave campaign in which Cabinet Minister Lord Agnew was a shareholder. Lord Agnew sold his £ 90,000 stake in July, after details of the deal were first reported.
- A £ 253million deal to supply PPE to Ayanda Capital, negotiated by Andrew Mills, then an adviser to the Board of Trade, which resulted in the purchase of 50million masks for £ 155million that did not not used for their original purpose as they did not comply with the guidelines used at the time.
- A £ 350million contract with PestFix, which mistakenly received priority access, and delivered 600,000 masks that also could not be used for their original purpose due to guidelines
- A £ 3.2million deal with Deloitte consultants for their assistance in the inter-government PPE procurement contract awarded months after work began
Public First defended his work for the Cabinet Office.
Founding partner James Frayne, former adviser to Mr Gove, told Sky News: “Opponents of this government have been pleased to omit this fact but, as the NAO finally points out, no great deal has ever been agreed in advance with us.
“We entered into a pay-as-you-go agreement where we could be fired at any time if they were not happy with our work.
“The reason we worked with the government for so long was because we provided useful information, especially among the hardest to reach groups. ”
Ayanda Capital, whose contract was raised during Prime Minister’s Questions by Labor leader Sir Keir Starmer last week, insisted the PPE it was providing met British safety standards.
The NAO concluded that “in the examples we looked at where there were potential conflicts of interest involving ministers, we found that the ministers correctly declared their interests and we found no evidence of their involvement in the process. purchasing decisions or contract management ”.
Labor MP Meg Hillier, Chairman of the Public Accounts Committee, said: ‘The government overlooked a serious conflict of interest, paid consultants for months before giving them contracts and bought masks it knew not up to par.
“It’s bad enough that it creates a ‘priority lane’ to accelerate businesses with the right connections.
“But not knowing how half of the companies ended up made it impossible to put in place appropriate safeguards.
“The government must be honest and immediately publish all the contracts it has awarded so far.”
Cabinet Minister Julia Lopez said: “We have faced an unprecedented global pandemic which has posed the UK’s greatest challenge in a generation.
“As this report rightly acknowledges, we needed to contract with the utmost urgency to secure the vital supplies needed to protect frontline NHS workers and the public and we make no apologies.
“We have robust processes in place for spending public funds to ensure that we get critical equipment where it needs to go as quickly as possible, while ensuring value for the taxpayer.
“It is important to maintain public confidence in the way we manage their money, and we welcome the NAO’s careful review of our processes and recommendations on how to improve them.”