By Stephen Komarnyckyj
In 2002 Lord Young of Graffham, who was leaving his job as president of the Institute of Directors, used his farewell address to attack non-executive directors. “Some are on a dozen or more boards,” he fumed, “in businesses they have no experience of.” Yet Young himself is now a non-executive director. The firm he works for, Tussell Limited, was awarded a £29,000 contract by the Cabinet Office, his former employer, which commenced on 9 June 2020. The contract was handed over, apparently perfectly legally without other firms having the chance to compete. The firm’s founder and its other director, Angus Tugendhat, is the son of former Conservative MP Baron Tugendhat.
Tussell was established in 2015, shortly after Lord Young left his appointment with the government, and advises companies bidding for government contracts. Its contract with the Cabinet Office requires it to ‘track public sector contracting and spending, specifically, but not limited to the Government’s response to the Covid-19 pandemic’. A Cabinet spokesman has since stated that the contract is simply for “Twelve months access for Government officials to use Tussell’s extensive database of UK and EU contracts.” However, Tussell simply collates information from government data. Is it really being paid to present the government’s own data to the government?
Tussell is not the only firm linked to the Conservatives which is enjoying rich pickings thanks to the Pandemic. In March 2020, PricewaterhouseCoopers (PwC) where Boris Johnson’s brother Leo works won a £3m contract from the Cabinet Office for ‘Covid-19 Financial Analysis’. PwC, like Tussell Limited, also advises firms bidding to provide public services. Tussell’s clients include Accenture which won a contract to provide support for the NHS tracing app on 1st July 2020. But both companies will only be using the government’s own data. So why have they been hired when the government should be able to track its own spending?
The government’s Covid-19 procurement is chaotic. The Department of Health and local authorities and health organisations have all purchased items of equipment separately. If they had bought PPE in bulk by joining the EU’s scheme early in 2020 it would have been simpler and cheaper. Instead there are hundreds of contracts, often for the same pieces of equipment, some of which have been undertaken without proper checks. In May 2020 PPE equipment was purchased from a company with no cash in its account. The same excuse is given in most of the contracts: the proper process for buying goods and services can be ignored because of the ‘urgency’ of the situation. However, the government knew about the pandemic in January. The EU had successfully completed its procurement of PPE by 24 March 2020 and followed due process. In the UK government bodies were still scrabbling around buying PPE in May. There was, apparently, no centralised system for tracking spend or whether procurements were duplicated. So Tussell could sell the government its own information.
The contracts with Tussell Limited and PwC are unlikely to improve the situation unless central government takes control. But they do raise questions about the families of Britain’s political class winning government contracts. Equally, there are issues about the role of such firms and their beneficiaries in tax avoidance.
Tussell in particular is a family affair. The firm’s shareholders, as of January 2020, include Angus himself, Baron Tugendhat, and Angus’s brother James. The other shareholders include Mark Faulkner who allegedly avoided paying tax by placing assets with a Mauritian company. Faulkner’s lawyers denied the allegations when they emerged in 2017. However, he subsequently told the BBC that his tax arrangements would be ‘reviewed’. Faulkner and another Tussell Limited shareholder, Donal Smith, also have shares in a company called Credit Benchmark Limited. One of the other shareholders is Babington PCC, the Mauritian company Faulkner allegedly used for tax avoidance.
PwC is one of the big four accounting firms whose other members are Ernst and Young, KPMG and Deloitte. These companies facilitate tax avoidance in the EU according to a 2018 report from the European Observatory. PwC was also accused by British MPs of promoting tax avoidance on an industrial scale in 2015.
There is no suggestion that these firms benefited from their ties to the government or that anyone acted improperly. The Cabinet Office insists that there is no conflict of interest in firms advising both the purchaser and provider of services to the government. However, would the additional expenditure on these consultancies be necessary if the government got the basics right? Should the Conservative government’s mishandling of the pandemic benefit firms with ties to the Conservatives? Should taxpayers fund companies that are linked to tax avoidance? Should the state really be paying to have its own information presented to its officials? The government will have a lot of difficult questions to answer about its procurement when the pandemic is over.