| Work Detail |
Ministers told not to use coronavirus as ‘blank cheque’ to evade accountability
Coronavirus – latest updates
See all our coronavirus coverage
by Rob Evans, Juliette Garside, Joseph Smith and Pamela Duncan
Fri 15 May 2020 14.00 BSTLast modified on Fri 15 May 2020 19.25 BST
Shares
3295
State contracts worth over £1bn have been awarded to private companies dealing with the coronavirus pandemic, without offering other firms the chance to bid for the work, the Guardian can reveal.
In what amounts to a Covid-19 bonanza for some firms, ministers have suspended the standard rules to enable contracts to be issued “with extreme urgency”.
Under the fast-track rules, private firms have been handed direct contracts to administer Covid-19 tests, provide food parcels and personal protective equipment (PPE), and to run an operations room alongside civil servants.
Among the firms benefiting from taxpayer-funded contracts under the emergency powers are the accountants Deloitte, PricewaterhouseCoopers and Ernst & Young.
Laws designed to ensure transparency and value for money in the way public funds are spent usually require government and other state bodies to advertise any new contract over a certain value, and invite several bidders to compete.
However, in March, ministers told Whitehall departments, the NHS, local councils and other agencies that if they needed to act fast because of the public health risks posed by the pandemic, they could lawfully sign deals with private firms “without competing or advertising the requirement”.
Official data analysed by the Guardian shows state bodies have awarded at least 177 contracts worth £1.1bn to commercial firms in response to the Covid-19 pandemic.
Of those, 115 contracts – with a total value of just over £1bn – were awarded under the fast-track rules bypassing competitive tenders. They include two contracts worth more than £200m, both awarded by Whitehall departments.
Daniel Bruce, the chief executive of anti-corruption campaigners Transparency International UK, warned the government should not use the crisis like a “blank cheque to get rid of controls around transparency and accountability”.
Advertisement
“The alarming number of contracts seemingly awarded without any competition risks setting a dangerous precedent which may harm the public interest and reduce confidence,” he said. “When lucrative deals are awarded with no competitive tender and away from public scrutiny, taxpayer money could easily be wasted on overpriced equipment or substandard services.”
The largest contract, worth up to £234m, was handed by the Department for Education to a French-owned firm, Edenred, to feed more than a million pupils eligible for free school meals. Edenred has since been accused of “woeful” preparation which caused children to go hungry and humiliated parents.
Edenred said the scheme was now largely working well after it was asked to create and launch it within 10 days. The firm added it was “accountable for every penny spent on the scheme and any suggestion that the contract is ‘lucrative’, being run without due checks and controls is entirely false”.
Other big contracts have been awarded without competitive tenders to foreign multinationals, such as the US–owned Brake Brothers and the South African-run BFS Group, both of which have been given contracts worth a combined £208m by the environment department to deliver food boxes to vulnerable people.
Coronavirus: the week explained - sign up for our email newsletter
Read more
Earlier this week, the Guardian revealed that Randox, a healthcare firm which employs the Conservative MP Owen Paterson as a paid consultant, had been given a £133m contract by the health department to produce Covid-19 testing kits.
Randox has declined to say whether Paterson, whom it pays £100,000 a year, was involved in securing the contract when it was awarded without other firms bidding.
For some companies, the new business looks set to transform their fortunes. In Derry, a company that normally makes window blinds is being paid £48m to make face shields for the health service in Northern Ireland.
Advertisement
In order to produce 30m pieces of protective equipment, Bloc Blinds has formed a partnership with the Finnish packaging giant Huhtamaki, recruited hundreds of extra workers, repurposed its existing factory and turned a sports centre into a second workshop.
Northern Ireland has spent more than £160m buying protective equipment for health and social care staff. A spokesperson for the Department of Health in Belfast said prices had been “benchmarked against other prices being offered in the marketplace”.
A Hertfordshire firm, Computacenter, has a £60m contract for the education department to provide laptops to teachers and disadvantaged children during the lockdown. The education department has said there was not enough time to advertise and sift through competitive bids.
The health department awarded a deal valued at £8m to Amazon, which is helping deliver home test kits through the post. However, a spokesman for the US retail giant said it had waived any fee and was covering the costs itself.
Smaller contracts have been given to private firms tasked with building mortuaries, developing the NHS contact-tracing app and housing the homeless. A cruise ship firm, Noble Caledonia, was paid £1.5m to bring 118 people back from Antarctica without having to go through the Falkland Islands.
In Northern Ireland, Ernst & Young and PricewaterhouseCoopers were hired without competition to help set up an operations room within the Executive Office to manage the response to the pandemic. The firms declined to comment.
Advertisement
The UK government also spent nearly £20m snapping up stocks of HIV drugs and malaria drugs when it was considered they might be useful in the fight against the coronavirus.
The Guardian’s research was based on public databases in the UK and the EU, and aided by information gathered by the research organisation Tussell, which said it had noticed a surge in work awarded without competition in recent weeks.
“Since the start of the Covid crisis we’ve seen a spike in non-competed direct awards as public bodies rush to purchase the products and services they urgently need,” said Gus Tugendhat, its founder.
The contracts reviewed by the Guardian and Tussell may only constitute a portion of those awarded without a competitive tender for Covid-19 work. The government is declining to release a full list, despite guidelines which state any contract awarded using emergency powers should be published within 30 days.
Contracts not yet published include some of the key elements of the government’s pandemic response. Management consultants at Deloitte, the outsourcing firms G4S, Sodexo, Serco and Mitie, Boots the chemists, and the tech companies Palantir and Faculty have been running test centres and creating a Covid-19 data store since March.
Deloitte declined to reveal the terms of its contract, which involves advice on purchasing PPE and logistical work around a network of 50 drive-in testing centres.
A spokesperson for Boots said it was only being reimbursed for costs and this “has not been in any way a commercial activity”. Sodexo said its contract was signed in March.
Normally public bodies can take months to award contracts. To speed up contracting, the government has invoked a clause in the Public Contract Regulations 2015.
Responding on behalf of all ministries, a spokesperson for the department of health said it had “drawn on the expertise and resources of a number of public and private sector partners to support our NHS and social care sector. This is completely in line with procurement regulations for exceptional circumstances, where being able to procure at speed has been critical in the national response to Covid-19.”
The spokesperson added: “We have been clear from the outset that public authorities must achieve value for taxpayers and use good commercial judgment, and publication of contract information is being carried out as quickly as possible in line with government transparency guidelines.” |
