Government Contracts: Covid-19

Yvonne Fovargue Excerpts

Monday 21st June 2021 Westminster Hall

[Yvonne Fovargue (in the Chair)]

I remind hon. Members that there have been some changes to normal practice, to support the new hybrid arrangements. The timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be suspensions between each debate.

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[Adam Holloway]

But this is one of the main planks, and it just does not stack up. Do you really think Matt Hancock is going to give a £103 million contract to somebody because they were once a parliamentary candidate and they edged in in a picture with Boris? It is absurd, and it is one of your main planks.

[Yvonne Fovargue (in the Chair)]

Order. I remind hon. Members to refer to other hon. Members not as “you”, but by constituency.

[Fleur Anderson]

The hon. Member has made my case for me. If there is nothing to see here, let us have an inquiry. Members of the public have signed this petition in their thousands because they do not have confidence in these contracts, and they want there to be an inquiry. If everything is above board and all was fine, we will find that out through the inquiry, but it is public concern that has brought us here today. There are questions to be answered, there is a pattern of cronyism that the public are seeing, and that is why an inquiry would be the right response.

It is not good enough for Ministers to say, “We needed these items urgently back in March”—no question there—“so stop complaining about how we did it.” Of course we needed them. Of course systems had to be used to get our NHS staff all the safety equipment they needed then and there, but all checks and balances did not need to go out of the window. Ministers should still check their family connections, and they should still register interests. The best companies should not be overlooked in favour of Tory party donors. These emergency systems should not still be in place so long after they were needed.

Last year, 126,000 people signed this petition, and yet we are still uncovering more issues like those they were concerned about. They are right to feel ignored, and a public inquiry would listen to their concerns. Only a few weeks ago, it emerged that the Home Secretary lobbied the Chancellor of the Duchy of Lancaster on behalf of a healthcare firm trying to get a Government contract. She wrote to him expressing disappointment that the Government had not bought face masks from a company that had links to someone she knew. That glaring and flagrant breach of the ministerial code needs to be investigated.

Then, of course, there are the hundreds of millions of pounds handed to Serco to run the national Test and Trace system. Some £37 billion was earmarked, and it is reported that £277 million has been signed by now. Why is there the discrepancy here? What were those contracts for? Where did they go to? Will we get money back for the contracts that were not delivered?

The Local Government Association found last year that local contact tracing systems have a 97.1% success rate at finding close contacts and advising them to self-isolate. That is considerably better than a centralised system, so although rushing to go to the private sector would in many cases have been the right thing to do, was it always the right thing to do? Incidentally, only last week, Serco upgraded its profit forecast by £15 million thanks to its Test and Trace work.

It is not just Opposition MPs making these points. Transparency International has identified 73 contracts worth more than £3.7 billion—equivalent to 20% of the covid-19 contracts signed between February and November 2020—that raised one or more flags for possible corruption. It concluded that there was a systematic bias towards those with connections to the party of Government in Westminster. It found that 72% of the covid-related contracts awarded in the sample period

“were reported after the 30 day legal deadline, £7.4 billion of which was reported over 100 days after the contract award.”

In comparison, it took the Ukrainian Government on average less than a day to publish information on 103,000 covid-19 contracts after they were awarded during the same period.

On that point, the Chancellor of the Duchy of Lancaster at least owes us a statement to Parliament setting out where the UK has not complied with its legal transparency obligations, how they are being rectified and how these issues will be prevented in the future. When the Minister comes to respond, she will no doubt tell us that the Government and markets faced unprecedented global demand for PPE, and that in a short space of time the Government procured billions of items of PPE. That just does not wash anymore, which is why the public wanted this debate. The months preceding the first lockdown are a sorry tale of complacency and missed opportunities, leading to the scramble for PPE. There should never have been a shortage in the first place.

We need an inquiry to answer questions about what happened and to make strong recommendations about what to put in place in the future. It should assess the performance of companies that went through the emergency contracting procedures, such as Ayanda, Randox and PestFix, which other Members mentioned. It should speak to the companies affected and to the CEO of the UK Fashion and Textile Association, which represents 2,500 companies and first engaged with the Government on 18 March 2020. He said that the domestic procurement operation had been slow to grind into gear and failed to tap into industry expertise. Companies waiting to deliver the much-needed PPE were overlooked.

An inquiry must look into why the Government sidelined companies such as Arco, which had extensive experience of providing health-grade PPE prior to the pandemic. It provided PPE during Ebola, swine flu, avian flu and foot and mouth, but it secured only £14 million-worth of contracts over the past year during the pandemic. It could have fulfilled far more, and it is at a loss as to why it did not get into the VIP lane.

It will no doubt be argued in a moment that the VIP lane was a perfectly reasonable, rational solution to the mass of offers to supply equipment at the start of the pandemic. However, the opposite was true. We have seen evidence presented in recent High Court hearings showing emails in which civil servants raised the alarm that they were drowning in VIP requests from political connections that did not have the correct certification or did not pass due diligence. For us as outsiders, it does not seem that the VIP lane worked. It should not be used in any future emergency contracting and should not be used in a future crisis, but an inquiry would tell us more and give us those recommendations.

As the Good Law Project puts it:

“This is the cost of cronyism—good administration suffers, efficient buying of PPE suffers.”

I, Members here, the British public and the petitioners want answers from the Minister on four key questions. Will there be a rapid-fire inquiry and will the covid contracts be part of the major covid inquiry? Secondly, what is her Department doing to claw back the cash from companies that provided the Government with millions of items of unsafe, unusable PPE at a time of unprecedented national crisis? What options do the Government have in the contracts—we cannot see them—in terms of clawback? It is important that we know.

Thirdly, will the Government finally, as the Opposition have been demanding for months, deliver full transparency on the VIP lane, including publishing the names of the companies awarded the contracts via the channel and who made referrals to it? Were there any conflicts of interest to be identified and addressed? It is important to know, otherwise the information will just keep dripping out bit by bit and we will find out partially what is going on. If there is nothing to see here, open up the light and let us know.

Finally, will the Minister commit her Department to auditing in detail all the contracts that have raised red flags and to publishing the outcomes of the audit? Given that her Department is formally responsible for improving transparency and ensuring better procurement across Government, we expect the Cabinet Office to take responsibility for what happened, to learn the lessons so that this never happens again, and to ensure that, if there is a future crisis, we have the best contracting facilities for the best companies to deliver what we need immediately. That is what the British public want to know.

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[Neale Hanvey]

I would like to ask for the Minister’s view on whether there is a perceived or actual impropriety in the way some of the contracts have been handled. I will read you the information that has just come out from the Good Law Project:

“Uniserve Limited is a logistics firm controlled by Iain Liddell. Prior to the pandemic, the firm had no experience in supplying PPE, yet the firm landed a staggering £300m+ in PPE contracts from the DHSC and an eye-watering £572m deal to provide freight services for the supply of PPE. The company shares the same address as Cabinet Minister Julia Lopez MP and is based in her constituency.”

Does that not give you a sense that there might be something in this? The whole issue around conflict of interest is not whether it is real, but whether a member of the public might assume that there is a concern.

[Yvonne Fovargue (in the Chair)]

Order. I remind the hon. Gentleman that interventions should be shorter and that “you” refers to the Chair.

[Julia Lopez]

I appreciate the hon. Gentleman’s raising that contract, because it has been a challenge to me as a Minister. As I said earlier, I began this role only in June 2020. I had not been allocated a private office, and I had not been given a portfolio. Then I found myself in a procurement role, and questions are being asked about the company from which I rent a constituency office. As I say, I was not actually in post at the time that that was being decided. The challenge is that questions have been raised that I cannot fully address, because I do not have all the information. I was not party to the contract, so it is a considerable challenge. It is something that my hon. Friend the Member for Gravesham also raised.