Public contracts appear to be being handed out “like sweeties to people with friends in high places”, MPs have heard.
Raising the issue in Parliament, SNP MP Owen Thompson said that lucrative contracts have been given to firms with little public procurement experience during the Covid-19 pandemic.
Mr Thompson made the comments as he brought forward a 10-minute rule Bill to address concerns around the process of awarding contracts to companies under emergency legislation.
The Bill would require ministers to give a statement to Parliament if a contract is awarded under emergency powers to a person or company in which the minister has a personal, political or financial connection.
Mr Thompson explained that the legislation would help safeguard against the risk of “procurement corruption” and would “restore some trust in the integrity” of the UK’s democratic processes.
Line pockets for themselves
The MP for Midlothian told the Commons: “Anyone in public office should be there to serve the public good, not to exploit their position to line the pockets of themselves, their pals or their party donors.
“Yet during this crisis we’ve seen lucrative contracts go to firms with little experience in public procurement but with very clear links to people in power.
“Issues with cronyism are not new, but there’s been nothing of this scale before, nothing so blatantly disregarding due process.
“It could be said that a crony-virus is threatening the health of our public services and emergency action is needed to get the Government under control.”
The SNP MP said he understood why there was a need to procure goods at high speed when the pandemic struck, with usual processes set aside, but told MPs that to many it looked like the emergency had been used as a “catch-all” excuse by the Government to bypass due processes.
Citing the National Audit Office, he said that £10 billion worth of contracts had been awarded without competition by the end of July 2020.
Mr Thompson said: “There are serious questions to be answered about why politically connected and relatively new companies with no track record in procurement were amongst those awarded contracts to supply our NHS.
“To give just a few examples, the Good Law Project reports that within two weeks of inviting tenders in March last year, the Government had 24,000 offers from 16,000 suppliers, many of whom had a wealth of experience in providing PPE (personal protective equipment) for healthcare professionals.
“Yet three of the biggest beneficiaries of Government contracts awards were a Florida-based jewellery company with no experience of supplying PPE, a tiny vermin-control operation called PestFix valued at just £19,000, and an opaque family office owned through a tax haven.”
Mr Thompson also raised reports of a £30 million contract awarded to a former neighbour of Health Secretary Matt Hancock following an initial conversation over WhatsApp.
He said: “Now, he may well be the best person for that role, but without greater scrutiny and clarity, it’s no wonder questions are raised about the legitimacy of such deals.
“In many ways, you could be forgiven for thinking being a donor to the Tory party must carry an inherent specialism on delivering Covid contracts as Tory donors have really done very well out of this crisis.”
The Midlothian MP said that there is a clear need for greater scrutiny to be introduced.
He told the Commons: “In the full light of day, it may well be a scandal to rival or even surpass the MP expense scandal, but even if it’s not, we should at least get the regulations in order to prevent any suggestion of corruption setting in.
“When processes to protect the public purse and ensure fairness are stripped away, it leaves open the clear risk of unscrupulous individuals exploiting a system for private gain. So it’s important the Government does all it can to mitigate against those risks.
“Instead, sadly it seems to have revelled in the freedom to bypass due process. The need for greater scrutiny is clear.”
Mr Thompson insisted that the Government must be held to account for the decisions that it has taken over its awarding of contracts.
He said: “It’s simply appalling that while underpaid frontline staff struggle, billions of pounds in public contracts seem to be handed out like sweeties to people with friends in high places.
“People with questionable experience but with unquestionable links to power fast-tracked towards big money deals to supply life-saving equipment. It’s been done without competition, behind closed doors and often producing faulty or sub-standard goods.
Rub shoulders with right people
“Meanwhile, those with a track record in public procurement or an expertise in NHS supplies but who don’t happen to rub shoulders with the right people have struggled to get the toe in the door. It seems to be much more about who you know and not what you know.”
He added: “There should be absolutely no question mark about the motivation behind a Covid-19 contract, it cuts to the heart of how our Government operates and what their priorities are.
“Either it’s in the best interests of the public or it’s in the interests of lining pockets of their pals. All of us will be paying for these contracts through our taxes for years to come and tragically, some have paid with their lives for PPE mistakes.
“So the Government must be held to account for these decisions it’s taken. The great thing about this Bill is that if the right people or companies are getting the jobs, it should put an end to any question marks hanging over the decision-making process.”
A date for a second reading of the Bill has not been set and it will require Government support in order to progress.
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