Coronavirus deals worth billions of pounds have been awarded by the government to “unusual” companies, without advertising or competition.
By George Monbiot, published in the Guardian 15th July 2020
This stinks. It stinks worse than any of the other carrion this government has buried. Every day for the past fortnight, I’ve been asking myself why this scandal isn’t all over the front pages. Under cover of the pandemic, the government has awarded contracts worth billions of pounds for equipment on which our lives depend, without competition or transparency. It has trampled its own rules, operated secretly and made incomprehensible and – in some cases – highly suspicious decisions.
Let’s begin with the latest case, unearthed by investigative journalists at the Guardian and openDemocracy. It involves a contract to test the effectiveness of the government’s coronavirus messaging, worth £840,000. It was issued by the Cabinet Office, which is run by Michael Gove. The deal appears to have been struck on March 3, but the only written record in the public domain is a letter written on June 5, retrospectively offering the contract that had already been granted. There was no advertisement for the work, and no competition. No official notice of the award has yet been published. The deal appears to have been done with a handshake and a slap on the back.
But we do know who the contract went to. It’s a company called Public First, owned by a married couple, James Frayne and Rachel Wolf. Since 2000, James Frayne has worked on political campaigns with Dominic Cummings, Boris Johnson’s chief adviser. When Michael Gove was education secretary, he brought both Cummings and Frayne into his department. Cummings was Gove’s chief political adviser, while Frayne was his director of communications. At roughly the same time, in 2010, Gove’s Department awarded Rachel Wolf a £500,000 contract to promote his “free schools” obsession. Guess what? That didn’t go to competitive tender, either. Rachel Wolf co-wrote the Conservative party’s election manifesto in 2019.
In response to these revelations, the government claims it had to override the usual rules for public procurement because it was responding to an emergency. There are several problems with this claim. The first is that it had six weeks to prepare for the pandemic, before the deal was done. The second is that, of the four contracted services later listed on the government’s website, two were not for testing the government’s coronavirus messaging at all, but for “EU exit comms”: in other words, Brexit. The coronavirus work, according to this list, did not begin until May 27. The Cabinet Office now claims that when it said “EU exit”, it meant coronavirus. This seems an odd mistake to make. The third problem is that the government’s communications on the pandemic have been disastrous. Did it choose to ignore Public First’s “emergency” work, or was it of little value?
On Friday, the Good Law Project issued proceedings in the High Court against Michael Gove, alleging breaches of procurement law and apparent bias in the grant of the contract to his long-standing associates. It is crowdfunding the challenge.
But this, extraordinary as it is, is not the strangest of the cases the Good Law Project is taking on. Another involves a pest control company in Sussex called PestFix, which has listed net assets of only £18,000. On April 13, again without public advertisement or competition, the government awarded PestFix a £32 million contract to supply surgical gowns. PestFix is not a manufacturer, but an intermediary (its founder calls it a public health supply business): its role was to order the gowns from China. But, perhaps because of its lack of assets, the government gave it a deposit worth 75% of the value of the contract. The government’s own rules state that prepayments should be made only “in extremely limited and exceptional circumstances”, and even then must be “capped at 25% of the value of the contract”.
If the government had to provide the money upfront, why didn’t it order the gowns itself? And why, of all possible outsourcers, did it choose PestFix? In the two weeks before it awarded this contract, it was approached by 16,000 companies offering to supply protective equipment (PPE). Some of them had a long track record in manufacturing or supplying PPE, and had stocks that could be deployed immediately.
Again, the government relies on the emergency defence to justify its decision. But it issued its initial guidance on preventing infection among health and care workers on January 10. On February 14, it published specific guidance on the use of PPE. So why did it wait until April 13 to strike its “emergency” deal with PestFix? Moreover, it appears to have set the company no deadline for the delivery of the gowns. Astonishingly, even today only half of them appear to have reached the UK, and all those are still sitting in a warehouse in Daventry. On the government’s own admission, “none of the isolation suits delivered so far has been supplied into the NHS”. So much for taking urgent action in response to the emergency.
Again, the contract is surrounded by secrecy. Crucial sections, such as the price paid for the gowns, have been redacted. Bizarrely, the award notice initially stated that the contract was worth £108 million. But in responding to the lawsuit, the government claimed it had made a mistake: the real value is £32 million. Apparently, it struck “further contracts” with PestFix for other items of equipment. It has so far failed to reveal what these might be, or to publish the contracts. It is worth remembering that while all this was happening, frontline health and care workers were dying as a result of inadequate supplies of PPE.
There are plenty of other cases: such as the employment agency with net assets of £623, which was awarded an £18 million government contract to supply facemasks; the confectionery wholesaler given a £100 million contract to supply PPE; and the £250 million channelled through a “family office” registered in Mauritius, specialising in currency trading, offshore property and private equity, also to supply protective medical equipment. Altogether, billions of pounds’ worth of contracts appear to have been granted, often to surprising companies, without competition. I think we may reasonably ask what the hell is going on.
This is not just about value for money, important as that is. Transparent, competitive tendering is a crucial defence against cronyism and corruption. It is essential to integrity in public life and public trust in politics. But the government doesn’t seem to care. As the scandal over Dominic Cummings’s trip to Durham shows, its strategy is to brazen out disgrace until public outrage subsides. We know it cheats and lies. It knows that we know, and it doesn’t care.
But these things matter. People die when the government gets them wrong. Our challenge is to discover how to make them count.