Mates Rates: Watchdog criticises government over pandemic-related contracts

December 22, 2020

2 min read

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What's going on here?

A report by the National Audit Office (NAO) following its investigation into government procurement during the COVID-19 pandemic has raised concerns over a lack of transparency. 

What does this mean?

One of the key concerns included findings that 58% of the £18bn spent on contracts were awarded without competitive tender, which refers to the process of different companies bidding for the right to gain a contract. The government responded that it was under urgent pressure to obtain more Personal Protective Equipment, which made up 80% of contracts, as governments across the world were racing to secure supply. The watchdog acknowledged that the Public Contracts Regulations allowed for awarding deals without competition under an emergency response as the bidding process would have been time-consuming. They also urge that this departure from usual standards makes transparency even more important. 

Another key issue has been the suggestion that not enough was done to address potential conflicts of interest. The report mentions a “high-priority lane” for fast-tracking contacts of government officials, MPs, peers and ministers’ offices. The NAO found that these companies would be ten times more likely to win the lucrative contracts than those who pitched through the usual process. Nevertheless, the NAO found that there was “no evidence” of ministerial involvement in the procurement of contracts, but underlined a lack of transparency on how these conflicts were managed. 

Additionally, the report stated that clear documentation of the decision-making process was sometimes missing, some companies such as Deloitte were granted work without the signing of a formal contract and that proper due diligence checks were not always completed prior to contracts being awarded. 

What's the big picture effect?

This report points to the importance of transparency if the government wants to remedy the growing lack of public trust in the handling of the pandemic. The failure to properly document how decisions to use taxpayer money are made in the midst of a public health crisis can be seen to be adding to public frustration.

Further to this, an outcome of the poor procurement decisions has resulted in poor quality of products. For example, Ayanda Capital secured a deal of £155m to provide 50 million masks, but these masks could not ultimately be worn for their original purposes because of design issues that meant they were not secure enough. This deal was brokered by an individual who was at the time an advisor to the government’s Board of Trade. This calls into question what the government defends as its “robust processes” and exemplifies the way in which public money has been wasted. 

The investigation and report highlights that we are likely to see further scrutiny of the government’s handling of the pandemic as time goes on. Meg Hillier, a Labour MP and chair of the Public Accounts Committee is calling for the publishing of all contracts awarded, warning that these failings might be the “tip of the iceberg”. While these are exceptional circumstances, there are also basic standards that the public sector will need to consider in order to maintain public trust. 

Report written by Yaeno Fernandez

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