'Come clean’ over coronavirus deals, says watchdog

The National Audit Office has said that the government has not been transparent about suppliers and services when it scrambled to award £18 billion worth of contracts to help tackle the coronavirus pandemic.

The public spending watchdog has reported that firms recommended by MPs, peers and ministers' offices were given priority and that, so far, there has been inadequate explanation of key decisions, such as why particular suppliers were chosen. The NAO also claims that some contracts were also awarded after work had already begun, and many were not published in the timeframe they should have been.

By 31 July, over 8,600 contracts, worth £18 billion, related to government’s response to the pandemic had been awarded. Individual contracts ranged in value from less than £100 to £410 million. New contracts worth £17.3 billion were awarded to suppliers, of which £10.5 billion were awarded directly without a competitive tender process.

According to the data, personal protective equipment (PPE) accounted for 80 per cent of the number of contracts awarded (over 6,900 contracts) and 68 per cent of the total value of contracts awarded (£12.3 billion).

The cross-government PPE team established a high-priority lane to assess and process potential PPE leads referred by government officials, ministers’ offices, MPs and Lords, senior NHS staff and other health professionals. Approximately one in ten suppliers processed through the high-priority lane (47 out of 493) obtained contracts compared to less than one in a hundred suppliers that came through the ordinary lane (104 of 14,892). The NAO says that the sources of the referrals to the high-priority lane were not always documented in the case management system and the watchdog found a case where a supplier, PestFix, was added to the high-priority lane in error.

For procurements where there is no competition, it is important that awarding bodies set out clearly why they have chosen a particular supplier and how any associated risks from a lack of competition have been identified and mitigated. The report states that departments failed to document key decisions, such as why they chose a particular supplier or used emergency procurement, and failed to document their consideration of risks, including how they had identified and managed any potential conflicts of interest.

Furthermore, the NAO found that some contracts were awarded retrospectively after work had already been carried out. For example, a £3.2 million contract was awarded to Deloitte to support the cross-government PPE team’s procurement of PPE on 21 July 2020, with the contract effective from 14 March 2020. The Cabinet Office’s contract with Public First was awarded on 5 June 2020, with the contract effective from 3 March 2020. By asking for work to be delivered without a formal contract, risks such as underperformance are increased.

Guidance issued by the Crown Commercial Service recommends that basic information about the award of all contracts is published within 90 days of the award. Of the 1,644 contracts worth more than £25,000 awarded up to the end of July 2020, 55 per cent had not had details published on Contracts Finder by 10 November 2020 and only 25 per cent were published within the 90-day target.

Gareth Davies, head of the NAO, 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.”

Meg Hillier, a Labour MP and chair of the Public Accounts Committee, said the failings uncovered may only be the ‘tip of the iceberg’.