The government failed to publish any information about £4 billion of coronavirus contracts awarded to private companies, campaigners have revealed.
The Good Law Project, along with a cross-party group of MPs, is now suing Matt Hancock, the health secretary, for what they say is an ongoing breach of UK law, accusing the Department of Health and Social Care (DHSC) of an “egregious and widespread failure to comply with legal duties and established policies”.
The group – which is led by Jolyon Maugham QC – warns of a “transparency gap”, and is urging an independent judge-led inquiry into the exorbitant amount of money spent on PPE, medicines and test and trace since the pandemic began.
A legal filing from government lawyers in the case, dated 30 October, revealed that £17 billion was spent by DHSC on Covid-related goods and services since the start of the financial year in April. But civil servants have only released details of £12.4 billion in contracts for that period – leaving £4.6 billion unaccounted for.
‘Staggering fortunes’
That gap was narrowed last week after DHSC published details of £1.6 billion in new contracts – mostly accounting for the purchase of rapid test kits being used in the city-wide testing programme in Liverpool.
Departments are required by law to publish details of contracts no later than 30 days after awarding them – supposedly to improve value for money by allowing proper scrutiny of how taxpayer money is being spent.
The public can be notified of awards over a certain value by a European database, Tenders Electronic Daily, and on the UK’s own Contracts Finder website. Government guidances suggests civil servants publish the contracts themselves within 20 days.
“There is overwhelming evidence that entities connected to key government figures have made staggering fortunes from these procurement contracts,” Maugham said.
“There is a clear public interest in us knowing promptly, whilst those contracts can still be challenged, who benefited and to the tune of how much.”
Pesky Pestfix
Good Law’s case zeroes in on a few especially controversial cases – including the awarding of a £252 million PPE contract to a company called Ayanda Capital in April, which was not published on the European database until July.
The firm – which describes itself as “a London-based family office focused on a broad investment strategy” – is owned through a Mauritius-based holding company and headed by Tom Horlick, a former director of investment bank Kleinwort Benson.
Its website states that the company specialises in “currency trading, offshore property, private equity and trade financing”.
The firm also appears to have existing links with the government. Andrew Mills – who, according to LinkedIn, has been a ‘Senior Board Adviser’ to Ayanda Capital since March – is one of twelve advisers to the Board of Trade, chaired by International Trade Secretary Liz Truss.
Good Law Project is already demanding a judicial review into the government’s awarding of a £108 million PPE contract given to PestFix – a little-known pest control firm based in Sussex, with just 16 members of staff.
According to filings on Companies House, Crisp Websites Limited – which trades as PestFix – has cash assets of just over £19,000. It was reportedly the only bidder for the PPE contract.
‘Astounding’
“It’s astounding that there could be a gap this big between what the government spent and what it has told the public it paid,” Labour’s shadow Cabinet Office minister, Rachel Reeves, said.
“There has been a whole catalogue of contracts that are either opaque, wasteful, unaccountable, or linked to Tory friends and donors. It’s little wonder that trust in the government’s handling of public contracts is dropping like a stone.”
A spokesperson for the DHSC said: “As part of an unprecedented response to this global pandemic we have drawn on the expertise and resources of a number of public and private sector partners. This is completely in line with procurement regulations for exceptional circumstances.
“We have been clear from the outset that public authorities must achieve value for taxpayers and use good commercial judgement. Publication of contract information is being carried out as quickly as possible in line with government transparency guidelines.”
Related: Fresh scrutiny poured on government’s PPE procurement