An outsourcing firm owned by prominent Tory donor Lord Ashcroft has been handed £350 million to help the government’s coronavirus testing.
Medacs Healthcare was given a two-year contract to recruit and manage staff for NHS Test & Trace. The firm is a subsidiary of Impellam, whose largest shareholder is billionaire Lord Ashcroft – who last year gave £175,000 to the Tories and their London mayoral candidate, Shaun Bailey.
First reported by openDemocracy, the contract – signed before Christmas – covers the “provision of temporary workforce to support medical and clinical services in laboratories or to assist the national testing programme in response to Covid-19”.
The company is also reportedly working with an NHS trust in Oxfordshire to recruit workers to administer Covid-19 vaccines.
While there is no suggestion of any wrongdoing on Lord Ashcroft’s part, the contract is likely to fuel claims of cronyism at the heart of government after a string of lucrative contracts to supply personal protective equipment were given to groups with political links.
Last year, the National Audit Office (NAO) found that suppliers with links to Tory politicians were ten times more likely to be awarded contracts than those who applied to the Department of Health and Social Care.
The damning report also found that more than £5 million of taxpayer cash was paid in consultancy fees with close links to ministers – including a £1.5 million deal for two social media consultants from New Zealand who worked on Boris Johnson’s election campaign.
The NAO said the government’s procurement efforts during the coronavirus crisis “diminished public transparency”, and accused officials of failing to meet “standards that the public sector will always need to apply if it is to maintain public trust”.
By the end of July, more than 8,600 contracts worth close to £18 billion had been awarded – and £10.49 billion of those were awarded directly to the supplier without any competition or tendering process. In some instances, due diligence was not carried out until weeks after contracts were awarded.
The “high-priority lane” was open for companies referred by government officials, ministers, MPs and peers – sources “considered to be more credible”, the report said.
Roughly one-in-ten suppliers processed through the VIP channel – 47 out of 493 – obtained lucrative PPE contracts, compared to less than one-in-a-hundred suppliers that came through the ordinary lane.
Rachel Reeves, the Labour shadow Cabinet Office minster, told openDemocracy: “People are understandably furious seeing businesses owned and run by the friends and donors of the Tory Party being awarded huge multi-million-pound public contracts throughout this pandemic.
“Cronyism, incompetence and waste have been everyday features of this government’s approach to outsourcing and ministers show little willingness to learn lessons from the National Audit Office investigations.”
Related: ‘Cronyism’ adviser behind botched £250m mask order hides earnings
