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Procurement

Watchdog reveals failings in Government procurement of services at start of pandemic

Ministers set aside normal standards of transparency as they scrambled to secure £18bn of supplies and services in response to the coronavirus crisis, relying on some firms recommended by MPs and peers, a new report says.

The study by the National Audit Office found that a “high-priority lane” was established for firms referred to the Government’s PPE team by officials, ministers’ offices, MPs, peers and senior NHS staff, with about one in 10 companies going through this route getting a contract, compared with one in 100 for those in the “ordinary lane”.

Many contracts were awarded retrospectively after work was carried out, the report found, including a £3.2m agreement with Deloitte to support the PPE team and an £840,000 deal with Public First for focus groups.

And there was “inadequate documentation” in a number of cases on how risks, including potential conflicts of interest, had been managed.

Meg Hillier, chairwoman of the Commons Public Accounts Committee, said the failings uncovered in the NAO report may be the “tip of the iceberg” and called for Ministers to “come clean” and publish all information about the contracts awarded.

The NAO’s investigation comes with the Government under intense pressure about claims of a “cronyvirus” culture which has seen allegations about key posts and contracts going to people linked to the Tory party.

NAO chief Gareth Davies said: “At the start of the Covid-19 pandemic in the UK, government had to procure large volumes of goods and services quickly whilst managing the increased risks this might entail.

“While we recognise that these were exceptional circumstances, it remains essential that decisions are properly documented and made transparent if government is to maintain public trust that taxpayers’ money is being spent appropriately and fairly.

“The evidence set out in our report shows that these standards of transparency and documentation were not consistently met in the first phase of the pandemic.”

The NAO concluded that “in the examples we examined where there were potential conflicts of interest involving ministers, we found that the ministers had properly declared their interests and we found no evidence of their involvement in procurement decisions or contract management”.

The spending watchdog also acknowledged the pandemic required acting with “extreme urgency” and the Public Contracts Regulations allowed an emergency response, including awarding deals directly without a formal competition.

But it criticised a lack of record-keeping within the “high-priority lane”, which involved 493 suppliers, of which 47 were given contracts.

Labour MP Ms Hillier said: “The Government overlooked a serious conflict of interest, paid consultants for months before giving them contracts and purchased masks it knew weren’t up to scratch.

“It’s bad enough that it set up a ‘high-priority lane’ to fast-track companies with the right connections.

“But the failure to track how half the companies had ended up on it made it impossible to ensure proper safeguards were in place. The Government needs to come clean and immediately publish all the contracts it’s awarded so far.”

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