Wednesday 18 November 2020 7:05 am

Spending watchdog criticises government over £18bn Covid contracts

The UK’s public spending watchdog has slapped the government on the wrist for failures of transparency when awarding lucrative private contracts worth around £18bn to companies during the coronavirus crisis, highlighting errors and potential conflicts of interest.

The National Audit Office’s (NAO) report comes amid claims that the government has awarded contracts to businesses with links to ministers and advisers without due scrutiny.

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“We recognise that these were exceptional circumstances,” said NAO boss Gareth Davies.

But he said 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.”

The NAO said more than 8,600 coronavirus contracts were awarded by 31 July. But it said £10.5bn were given out without a competitive tender process.

Government ‘failed to document conflicts’

Yesterday the BBC reported that a Spanish businessman who acted as a middleman in securing personal protective equipment (PPE) for the NHS received £21m of government money. Despite this, the company providing the equipment was left scrambling to fulfil the order.

The NAO said it worried that the government “failed to document any consideration of any potential conflicts of interest” in some cases.

It cited a consulting deal with Public First, which was worth £550,000. Two directors of the company had previously worked for Michael Gove, the Cabinet Office minister. 

The watchdog also cited a £252m deal with private investment firm Ayanda Capital to provide PPE. Andrew Mills, who was then adviser to the Board of Trade, advises the board.

Cabinet Office minister Julia Lopez told Reuters: “We needed to procure contracts with extreme urgency to secure the vital supplies required to protect frontline NHS workers and the public and we make no apology for that.”

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The report said that “a clear trail of documents to support key procurement decisions was sometimes missing”.

It said that “there was evidence for most controls being applied”. Yet it added: “There were some gaps in the documentation, such as why some suppliers which had low due diligence ratings were awarded contracts.”