COVID-19 contracts in the United Kingdom

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In response to the COVID-19 pandemic in the United Kingdom, from March 2020 the British government had to rapidly place contracts and recruit a number of individuals, with shortages of personal protective equipment being a particular political issue for the second Johnson ministry. This led to a number of contracts being awarded without a competitive tendering process, and friends of political figures and people who had made political donations being "fast-tracked" into contracts. This led to accusations of cronyism or a "chumocracy", with Transparency International UK finding that a fifth of contracts "raised red flags for possible corruption".[1]

Context: PPE and equipment shortages[edit]

See also: Shortages related to the COVID-19 pandemic

Simulations of influenza-like pandemics have been carried out by National Health Service (NHS) trusts since the 2007 H5N1 influenza outbreak ("bird flu"). Russell King, a resilience manager in the NHS at the time, said "the Cabinet Office had identified the availability and distribution of PPE [personal protective equipment] as a pinch point in a pandemic".[2]

Early in the pandemic, the government was criticised for the lack of PPE available to NHS workers; as such, there was pressure to supply PPE quickly to the NHS.[3] The UK did not take part in an 8 April bid for €1.5bn (£1.3bn) worth of PPE by members of the European Union, or any bids under the EU Joint Procurement Agreement (set up in 2014 following the H1N1 influenza pandemic ("swine flu")[4]), as "we are no longer members of the EU".[5] The purpose of the scheme is to allow EU countries to purchase together as a bloc, securing the best prices and allowing quick procurement at a time of shortage. Under the terms of the Brexit withdrawal agreement, the government had the right to take part until 31 December 2020.[4]

There was a lack of surgical masks, goggles, visors and gowns in many NHS hospitals in the UK. On 31 March, The Doctors' Association UK alleges that shortages were covered-up through intimidating emails, threats of disciplinary action and in two cases being sent home from work. Some doctors have been disciplined after managers were annoyed by material they had posted online regarding these shortages.[6] Speaking to Nafeez Ahmed in April, Anthony Costello (who used to work for the World Health Organization) said: "We simply don't have enough PPE. Not enough visors, not enough N95 respirators. Government is not following WHO guidelines."[7]

On 18 April, Robert Jenrick reported that 400,000 protective gowns and other PPE were on their way to the UK from Turkey.[8] One day later, these were delayed; this led hospital leaders to directly criticise the government for the first time during the pandemic.[9] The shipment arrived at Istanbul airport en route to the UK two days after ministers said that the PPE would appear in the UK.[10] Only 32,000 of the order arrived (less than one-tenth), despite the NHS making a down payment to secure its arrival on 22 April.[11] Eventually, these all had to be returned to Turkey as they did not meet NHS standards.[12]

In March, the government called for British industry to get involved with making ventilators for the NHS, with Dyson and Babcock revealing plans on creating 30,000 medical ventilators (this amount was seen as necessary based on modelling from the time from China). The Ventilator Challenge involved companies such as Airbus, Rolls-Royce and Ford.[13] This was seen as impractical at the time; the type of ventilators suggested by the government to these companies were crude and would not have been able to be used in hospitals, and none of the companies involved reached the final stages of testing and the majority have proved surplus to requirements in hindsight.[14]

In May, it was revealed that almost half of England's doctors sourced their own PPE or relied on donations when none was available through normal NHS channels.[12]

Lack of competitive tendering process, alleged cronyism[edit]

Early in the pandemic, the government was criticised for the lack of personal protective equipment (PPE) available to NHS workers; as such, there was pressure to supply PPE quickly to the NHS.[3] The UK did not take part in an 8 April 2020 bid for €1.5bn (£1.3bn) worth of PPE by members of the European Union, or any bids under the EU Joint Procurement Agreement (set up in 2014 following the H1N1 influenza pandemic[4]), as "we are no longer members of the EU".[15] The purpose of the scheme is to allow EU countries to purchase together as a bloc, securing the best prices and allowing quick procurement at a time of shortage. Under the terms of the Brexit withdrawal agreement, the government had the right to take part until 31 December 2020.[4]

Normally, the UK would have published an open call for bids to provide PPE in the Official Journal of the European Union. However, under EU directives, when there is an "extreme urgency" to buy goods or services, the government does not have to open up a contract to competition; it can instead approach companies directly.[16] During the pandemic, the Department of Health and Social Care (DHSC), local NHS bodies and other government agencies have directly approached firms to provide services, bypassing the EU's tendering process – in some cases without a "call for competition", meaning that only one firm was approached.[16] This was done through the invoking emergency procurement procedures – regulation 32(2)(c) under the Public Contract Regulations 2015 – which allowed for the sourcing of goods without the formal tendering process.[17] On 19 February 2021, the High Court of Justice ruled that the government had broken the law by not publishing contract awards within 30 days.[18]

The National Audit Office said that £10.5bn of the overall £18bn spent on pandemic-related contracts (58%) was awarded directly to suppliers without competitive tender, with PPE accounting for 80% of contracts.[19] The UK government was competing with governments from all over the world, and to satisfy the unprecedented demand for PPE, had awarded contracts hastily, and bypassed the normal bureaucrat competitive tendering processes to secure supplies.[19] In light of this report, the Good Law Project opened a number of cases against the DHSC, questioning the awarding of PPE contracts more than £250M to Michael Saiger, head of an American jewellery company based in Florida with no experience of supplying PPE,[20] which involved a £21M payment to Gabriel González Andersson, who acted as an intermediary.[21] The contract was offered without any advertisement or competitive tender process.[20]

Transparency International UK found that a fifth of contracts 'raised red flags for possible corruption'.[22] The procurement VIP lane which gave funding at a rate 10 times higher than other routes prioritised Conservative Party donors and others with political connections to the party. It described an "apparent systemic biases in the award of PPE contracts that favoured those with political connections to the party of government in Westminster."[22][23] The government has declined to name companies paid through the scheme.[22]

The Sunday Times said the government gave £1.5 billion to companies linked to the party.[24] Although the NAO said there was "no evidence" that ministers were "involved in either the award or management of the contracts",[19] companies who had links to government ministers, politicians or health chiefs were put in a 'high priority' channel;[25] this category was 'fast-tracked', and those in it were ten times more likely to win a contract.[19] BBC economics correspondent Andrew Verity said that "contracts are seen to be awarded not on merit or value for money but because of personal connections".[19]

The Baroness Harding, a Conservative peer and the wife of Conservative MP John Penrose, was appointed to run NHS Test and Trace.[24] Kate Bingham, a family friend of the PM married to Conservative MP and Financial Secretary to the Treasury Jesse Norman, was appointed to oversee the vaccine taskforce.[26] Bingham went to school with Boris Johnson's sister Rachel Johnson.[27] Bingham accepted the position after decades in venture capital, having been hired without a recruitment process.[28] According to leaked documents seen by The Sunday Times, she charged the taxpayer £670,000 for a team of eight full-time boutique consultants from Admiral Associates.[29] In October 2020, Mike Coupe, a friend of Harding's,[30] took a three-month appointment as head of infection testing at NHS Test and Trace.[31] The Good Law Project and the Runnymede Trust launched a legal case which alleged Johnson acted unlawfully in securing these three contracts and chose them because of their connections to the Conservative Party.[30]

Former Conservative party chair the Lord Feldman was appointed as an unpaid adviser to Conservative peer Lord Bethell.[32] Feldman was present when Bethell awarded Meller Designs (owned by David Meller, who gave £63,000 to the Conservative Party, mostly when Feldman was chair) £163 million in contracts for PPE on 6 April.[24] Three days later, Conservative MP and former Secretary of State for Northern Ireland Owen Paterson took part in a phone call with Bethell and Randox, who pay Paterson £100,000 a year as a consultant. The Grand National (the biggest sporting event of the Jockey Club; Harding sits on the club's board) is sponsored by Randox, who received £479M in testing contracts, with orders continuing even after it had to recall half a million tests because of safety concerns.[24] George Pascoe-Watson, chair of Portland Communications, was appointed to an unpaid advisory role by the Department of Health and Social Care (DHSC); he participated in daily strategic discussions chaired by Bethell.[33] He also sent information about government policy to his paying clients before this was made public.[34][35] Conservative peer Lord O'Shaughnessy was paid as an "external adviser" to the DHSC when he was a paid Portland adviser. In May, O'Shaughnessy took part in a call with Bethell and Boston Consulting Group (BCG), a Portland client that got £21M in contracts on the testing system.[24] BCG management consultants were paid up to £6,250 a day to help speed up and reorganise the Test and Trace system.[36]

Ayanda Capital is an Mauritius-based investment firm with no prior public health experience which gained a £252M contract in April to supply face masks. The contract included an order for 50 million high-strength FFP2 medical masks that did not meet NHS standards, as they had elastic ear-loops instead of the required straps tied behind the wearer's head.[20] Ayanda says they adhered to the specifications they were given.[20] The deal was arranged by Andrew Mills, then an adviser to the Board of Trade (a branch of Liz Truss's Department for International Trade (DIT)); his involvement was criticised by the Good Law Project.[27] The DIT said neither it nor the Board of Trade was involved in the deal.[27]

One of the largest government PPE contracts went to Crisp Websites Ltd., trading as PestFix, a business specialising in supplying PPE to protect users from airborne chemicals in a pest-control setting.[37] PestFix secured a contract in April with the DHSC for a £32M batch of isolation suits; three months after the contract was signed, suits from PestFix were not released for use in the NHS as they were being stored at an NHS supply chain warehouse awaiting safety assessments.[3] The Health and Safety Executive (HSE) concluded that supplies of PPE had not been specified to the correct standard for use in hospitals when they were bought. One email from a firm working alongside the HSE in June says that there was "'political' pressure" to get the suits through the quality assurance process.[3] However, the gowns were subsequently approved for use and released to hospitals in the summer, and HSE Chief Executive Sarah Albon strongly refuted claims her organisation came under 'political' pressure to approve PPE.[37]

In a letter dated 25 November 2020, Albon said: "At no time in the management of PPE supply have any HSE staff indicated that there were feelings of pressure being applied to make specific decisions, to change decisions, or to accept lower standards than required of PPE." Albon said that sometimes technical assessments had to be repeated. The fact the gowns had been released into hospitals having failed the first inspection did not mean they were unsuitable or unsafe. "In such cases HSE may have asked the supply chain to obtain further information, or to arrange for further testing, to verify the product. In these cases, products that initially had insufficient or incorrect information provided may have been subsequently reassessed and agreed for supply when those gaps had been addressed."[37] The contract is being challenged in the courts by the not-for-profit Good Law Project (founded by Jolyon Maugham QC), which asked why DHSC had agreed to pay 75% upfront when the provider was "wholly unsuited" to deliver such a large and important order,[3] and further discovered that the company had actually been awarded PPE contracts worth £313m.[20]

In June the Cabinet Office published details of a March contract with the policy consultancy Public First, which had been running under emergency procedures, to research public opinion about the government's COVID communications. The company is owned by James Frayne (a long-term political associate of Cummings, co-founding the New Frontiers Foundation with him in 2003) and his wife Rachel Wolf, a former adviser to Michael Gove (Minister for the Cabinet Office) who co-wrote the Conservative party manifesto for the 2016 election. They were given £840,000.[38] On 9 June, the High Court ruled that the government acted unlawfully in awarding a £560,000 contract to the firm. The judge said that a failure to consider other firms suggested a "real danger" of bias.[39]

Other allegations of cronyism include:

  • Faculty, which worked with Dominic Cummings for Vote Leave during the Brexit referendum, was given government contracts since 2018. After Johnson became PM, a former Faculty employee who worked on Vote Leave, Ben Warner, was recruited by Cummings to work alongside him in Downing Street.[27]
  • Hanbury Strategy, a policy and lobbying consultancy, has been paid £648,000 under two contracts (one issued under emergency procedures) to research "public attitudes and behaviours" in relation to the pandemic, the other, at a level that did not require a tender, to conduct weekly polling. The company was co-founded by Paul Stephenson, director of communications for Vote Leave and contender to be Downing Street Chief of Staff. In March last year, Hanbury was given responsibility for assessing job applications for Conservative special advisers.[27]
  • Gina Coladangelo, a close friend of Matt Hancock with no known health background, was paid £15,000 as a non-executive director of the DHSC on a six-month contract, although there was no public record of the appointment. She accompanied Hancock to confidential meetings with civil servants. She was given a parliamentary pass sponsored by Bethell (Coladangelo does not play a role in Bethell's team.)[40]
  • Alex Bourne, a former neighbour and owner of the Cock Inn pub near Hancock's constituency home, gained a contract which involved supplying "tens of millions of vials for NHS Covid-19 tests".[41]
  • The government gave Clandeboyne Agencies Limited, a wholesaler of confectionary, an £108 million contract for the supply of PPE. It was awarded without competitive tender. The company has no previous experience in supplying PPE. The Good Law Project and EveryDoctor are seeking a judicial review for the contract.[42]

See also[edit]

References[edit]

  1. ^ "Fifth of UK Covid contracts 'raised red flags for possible corruption'". the Guardian. 22 April 2021. Retrieved 22 April 2021.
  2. ^ Lay, Kat; Fisher, Lucy (31 March 2020). "Coronavirus: Shortage of masks and gowns for NHS staff foreseen over a decade ago". The Times. Retrieved 5 December 2020.
  3. ^ a b c d e Kemp, Phil (12 November 2020). "Coronavirus: Safety officials had 'political' pressure to approve PPE". BBC News. Retrieved 22 November 2020.
  4. ^ a b c d Boffey, Daniel (22 April 2020). "What is the EU medical equipment scheme and why did UK opt out?". The Guardian. Retrieved 22 November 2020.
  5. ^ Brundsen, Jim; Foster, Peter; Parker, George; Hughes, Laura (22 April 2020). "Brussels says UK was fully aware of PPE procurement plans". Financial Times. Retrieved 22 November 2020.
  6. ^ Campbell, Denis (31 March 2020). "NHS staff 'gagged' over coronavirus shortages". The Guardian. Retrieved 5 December 2020.
  7. ^ Ahmed, Nafeez (1 April 2020). "The Coronavirus Crisis: Eight Week Suppression Strategy Could Stop COVID-19 in its Tracks, says Ex-WHO Director". Byline Times. Retrieved 5 December 2020.
  8. ^ "Jenrick: 84 tonnes of PPE to arrive from Turkey". BBC News. 18 April 2020. Retrieved 5 December 2020.
  9. ^ Campbell, Denis (19 April 2020). "Hospital leaders hit out at government as PPE shortage row escalates". The Guardian. Retrieved 5 December 2020.
  10. ^ Sabbagh, Dan (21 April 2020). "Turkish PPE finally arrives at Istanbul airport en route to UK". The Guardian. Retrieved 5 December 2020.
  11. ^ Sabbagh, Dan (23 April 2020). "'Less than 10th' of PPE order arrives in UK, despite downpayment". The Guardian. Retrieved 5 December 2020.
  12. ^ a b Rawlinson, Kevin (7 May 2020). "Coronavirus PPE: all 400,000 gowns flown from Turkey for NHS fail UK standards". The Guardian. Retrieved 5 December 2020.
  13. ^ Davies, Rob (26 March 2020). "How the UK plans to source 30,000 ventilators for the NHS". The Guardian. Retrieved 5 December 2020.
  14. ^ Davies, Rob (4 May 2020). "The inside story of the UK's NHS coronavirus ventilator challenge". The Guardian. Retrieved 5 December 2020.
  15. ^ Brundsen, Jim; Foster, Peter; Parker, George; Hughes, Laura (22 April 2020). "Brussels says UK was fully aware of PPE procurement plans". Financial Times. Retrieved 22 November 2020.
  16. ^ a b Komarnyckyj, Stephen (9 July 2020). "Another Strange Contract: The Loophole Allowing the Government to Avoid PPE Procurement Rules". Byline Times. Retrieved 22 November 2020.
  17. ^ Delahunty, Stephen (2 July 2020). "Lifestyle Company with No Employees or Trading History Handed £25 Million PPE Contract". Byline Times. Retrieved 5 December 2020.
  18. ^ MacAskill, Andrew (19 February 2021). "UK government broke the law by failing to disclose PPE contracts, court rules". Reuters. London. Retrieved 20 February 2021.
  19. ^ a b c d e "Covid spending: Watchdog finds MPs' contacts were given priority". BBC News. 18 November 2020. Retrieved 18 November 2020.
  20. ^ a b c d e Adams, Tim (22 November 2020). "'I don't like acts of dishonesty by the state': Jolyon Maugham QC on Covid cronyism". The Observer. Retrieved 22 November 2020.
  21. ^ "Go-between paid £21m in taxpayer funds for NHS PPE". BBC News. 17 November 2020. Retrieved 22 November 2020.
  22. ^ a b c "Fifth of UK Covid contracts 'raised red flags for possible corruption'". The Guardian. 22 April 2021. Retrieved 22 April 2021.
  23. ^ "UK government under growing pressure over Covid procurement". The Guardian. 20 February 2021. Retrieved 22 April 2021.
  24. ^ a b c d e Pogrund, Gabriel; Calver, Tom (15 November 2020). "Chumocracy first in line as ministers splash Covid cash". The Sunday Times. Retrieved 15 November 2020.
  25. ^ Keslo, Paul (18 November 2020). "COVID-19: 'High priority' procurement for firms recommended by MPs and advisers". Sky News. Retrieved 27 November 2020.
  26. ^ "Kate Bingham: well-connected but under-fire UK vaccines chief". The Guardian. 10 November 2020. Retrieved 15 November 2020.
  27. ^ a b c d e Conn, David; Pegg, David; Evans, Rob; Garside, Juliette; Lawrence, Felicity (15 November 2020). "'Chumocracy': how Covid revealed the new shape of the Tory establishment". The Observer. Retrieved 15 November 2020.
  28. ^ "Boris Johnson's profligacy problem". The Economist. 14 November 2020. Retrieved 14 November 2020.
  29. ^ Pogrund, Gabriel (7 November 2020). "Vaccine tsar Kate Bingham runs up £670,000 PR bill". The Sunday Times. Retrieved 15 November 2020.
  30. ^ a b "Boris Johnson 'acted illegally' over jobs for top anti-Covid staff". The Guardian. 21 November 2020. Retrieved 22 November 2020.
  31. ^ Serle, Jack (29 September 2020). "Ex-Sainsbury's boss to join beleaguered Test and Trace as NHS chief returns to trust". Health Service Journal. Retrieved 30 September 2020.
  32. ^ Geoghehan, Peter; Scott, Russell (13 November 2020). "Revealed: Former Tory chairman was secretly appointed as COVID advisor". openDemocracy. Retrieved 15 November 2020.
  33. ^ Pogrund, Gabriel (15 November 2020). "George Pascoe-Watson among lobbyists given secret access to Covid meetings". The Sunday Times. Retrieved 15 November 2020.
  34. ^ Stone, Jon (15 November 2020). "Government gave lobbyists access to confidential coronavirus briefings". The Independent. Retrieved 15 November 2020.
  35. ^ Diver, Tony (15 November 2020). "National lockdown was revealed by lobbyists before press leaks". The Sunday Telegraph. Retrieved 15 November 2020.
  36. ^ Jolly, Jasper; Syal, Rajeev (14 October 2020). "Consultants' fees 'up to £6,250 a day' for work on Covid test system". The Guardian. Retrieved 15 November 2020.
  37. ^ a b c Liversedge, Belinda (21 December 2020). "HSE rejects claims it bowed to 'political' pressure to approve PPE". British Safety Council. Retrieved 21 December 2020.
  38. ^ Geoghegan, Peter; Conn, David (10 July 2020). "Revealed: Key Cummings and Gove ally given COVID-19 contract without open tender". openDemocracy. Retrieved 15 November 2020.
  39. ^ "Government acted unlawfully over firm's £560,000 Covid contract". BBC News. 9 June 2021. Retrieved 9 June 2021.
  40. ^ Pogrund, Gabriel (22 November 2020). "Matt Hancock gave key Covid role to lobbyist pal". The Sunday Times. Retrieved 22 November 2020.
  41. ^ Lawrence, Felicity (26 November 2020). "Hancock's former neighbour won Covid test kit work after WhatsApp message". The Guardian. Retrieved 26 November 2020.
  42. ^ "PPE supplied by a sweet wholesaler?". Good Law Project. 2 July 2020. Retrieved 5 December 2020.
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