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Covid-19: NAO Report on Government Procurement
09 December 2020
Lead MP
Dan Carden
Liverpool Walton
Lab
Responding Minister
Julia Lopez
Tags
NHSEconomyForeign AffairsStandards & Ethics
Word Count: 14311
Other Contributors: 20
At a Glance
Dan Carden raised concerns about covid-19: nao report on government procurement in Westminster Hall. A government minister responded.
Key Requests to Government:
I urge the Government to end the VIP lane for fast-tracked companies, return to competitive procurement processes, publish details of fast-tracked companies and their sources of referral, implement NAO recommendations, embed open contracting systems in procurement processes, and establish an effective conflict of interest regime with a publicly accessible database.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
I am concerned about the mismanagement of procurement risks during the pandemic, including conflicts of interest and lack of transparency. The National Audit Office report highlights issues such as £10.5 billion being awarded in contracts without competition, direct awards to suppliers like PestFix and Ayanda Capital that did not meet NHS specifications, and the awarding of contracts to businesses with no prior experience or established family-run companies being overlooked for contracts while Tory-linked firms received them instead.
Clapham and Brixton Hill
The hon. Member congratulated her colleague for securing the debate and stated that transparency and accountability should come from the Government, not independent investigations or media reports. She highlighted that 10% of suppliers were referred through political channels while only 1% had no links to politicians, with some £10 billion-worth of contracts awarded without competition.
Bill Esterson
Lab
Sefton Central
I am concerned about the procurement process highlighted in the National Audit Office report, particularly regarding PPE Medpro's £122 million contract awarded without advertisement. This contrasts with local companies like Florence Roby, which were unable to secure contracts despite their efforts over months. The lack of transparency and favouritism towards certain companies is a missed opportunity for environmental sustainability, economic support, and job creation.
Catherine West
Lab
Hornsey and Friern Barnet
Catherine West criticised the Government's handling of procurement decisions, stating that huge sums of money have been wasted. She questioned the transparency of remaining unpublished contracts and called for full implementation of the NAO report recommendations to prevent future errors. Will the Minister give way?
Emma Hardy
Lab
Kingston upon Hull West and Haltemprice
Emma Hardy highlighted the challenges faced by Arco, a local family-run company in her constituency that specializes in safety equipment. She detailed how despite being world-leading in its field, Arco struggled to secure government contracts due to the confusion and lack of clarity within the procurement system during the pandemic.
Fleur Anderson
Lab
Putney
Ms Anderson highlighted the issue of scrubs, noting a shortage at the start of the crisis and ongoing issues with procurement processes. She asked why volunteers are still involved in fulfilling contracts from hospitals that say they have a shortage of scrubs months later.
Helen Hayes
Lab
Dulwich and West Norwood
She highlighted the National Audit Office's findings on calamitous errors in decision-making during the pandemic, citing issues such as contracts awarded without proper checks, after completion of work, and with no competition. She mentioned £17.3 billion being awarded to suppliers directly without competition. Additionally, she questioned transparency around the VIP procurement route and cronyism.
I agree that we had daily calls during the pandemic discussing how to help constituents and businesses, with Labour Members asking for PPE for care homes and other organisations.
In response to Bill Esterson's points, I clarified that my role as anti-corruption tsar does not involve investigatory powers and is unpaid. Both my wife's role and mine are declared in the Register of Members' Financial Interests, ensuring transparency.
Jon Trickett
Lab
Normanton and Hemsworth
He criticised the government for abandoning value-for-money checks, citing examples of £95 billion of outsourcing with a 20% increase in contracts. He mentioned that over £10 billion was spent without tendering processes and highlighted the potential wasteful spending affecting each household by £3,500.
Justin Madders
Lab
Ellesmere Port and Bromborough
Mr Madders expressed concern about the handling of PPE contracts, noting that companies with connections to the Tory party received contracts despite having no background in PPE. He asked how many items of PPE purchased never showed up or were unusable.
Kevin Hollinrake
Con
Thirsk and Malton
He questioned the SNP MP about her allegations of cronyism, noting that the NAO report found no evidence of Minister involvement in procurement decisions.
Kim Johnson
Lab
Liverpool Riverside
The hon. Member is concerned about the disparity between the wealth increase of billionaires and the destitution of the poorest during the pandemic. She criticises the lack of transparency in Government contracts and highlights several instances of potential cronyism, including a £3.2 million contract to Deloitte paid retrospectively for work already done since March.
Lee Rowley
Con
North East Derbyshire
He defended the government's procurement process during the pandemic, stating that actions were taken in exceptional circumstances. He highlighted that standardised processes and clearance boards were established to approve PPE contracts and dismissed claims of mismanagement and rigging the system.
L Mid Derbyshire
The Government's actions during the pandemic were driven by a need to procure PPE quickly, and while there may have been issues, no evidence has emerged that any rules or regulations were broken. The hon. Gentleman should be careful about casting aspersions on hard-working public servants who put their lives at risk.
Munira Wilson
Lib Dem
Twickenham
She noted serious questions raised by the NAO report about competency and cronyism, citing examples like £364 million spent on full-body coveralls with only 432,000 delivered. She called for a clear explanation of criteria used to assess offers from MPs, peers, and Ministers.
Nadia Whittome
Lab
Nottingham East
The hon. Member criticised the Government for disregarding their procurement rules and making dangerous decisions during the pandemic that had real-life consequences, such as delays in procuring PPE and testing kits which led to risks of virus spread in care homes. She cited a report by the Organisation for Economic Co-operation and Development on foreign bribery, stating public procurement is vulnerable to corruption.
Paula Barker
Lab
Liverpool Wavertree
She thanked the Chair and her colleague for securing the debate, highlighting the National Audit Office's critical report on Government procurement during the pandemic. She expressed disappointment in the Government's lack of transparency and accountability regarding public funds used.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
The hon. Member discusses the Select Committee on Public Administration and Constitutional Affairs findings, which revealed a lack of due process in contract awarding during the pandemic. She criticises the VIP lane process for companies referred by Ministers and officials, stating that firms in this lane were far more likely to receive contracts than those not in it. Will the Minister give way?
Richard Thomson
SNP
Dunfermline and West Fife
He criticised the government's procurement processes during the pandemic, highlighting that £10.5 billion worth of contracts were awarded without competition, leading to inadequate record-keeping and transparency issues. He pointed out significant differences in success rates between priority and normal lanes for contract awards.
Zarah Sultana
Your Party
Coventry South
The hon. Member highlights examples of companies with political connections receiving large contracts, such as a company awarded £163 million in PPE contracts despite having no relevant experience prior to the pandemic. She criticises the term 'chumocracy' and suggests these dealings could be considered corruption if they occurred elsewhere.
Government Response
Julia Lopez
Government Response
It is a pleasure to serve under your chairmanship, Ms Eagle. I thank the hon. Member for Liverpool, Walton for tabling an incredibly important debate and all those making contributions today. The care with which we spend taxpayers' money matters very deeply to public confidence in Government. At the height of the pandemic, more than 8,600 contracts worth £18 billion had successfully been awarded by 31 July, compared to 174 contracts worth £1.1 billion last year. Due to time pressures and the volume of procurement activity during this national health emergency, I will focus on areas looked into by the NAO report. The Government needed to procure with extreme urgency through direct award due to unprecedented global demand for PPE and other medical products. No rules were suspended or changed; Regulation 32(2)(c) allowed for such procedures. Procurement teams went through an eight-stage assessment process, examining prices against a rolling benchmark of prices to protect the taxpayer from mispricing. In a market where product was often going for more than five times the normal price and opportunistic middlemen were present, procurement teams faced difficult choices between buying expensive products or risking not securing them at all. The Government established a virtual team of 450 people to assist with PPE procurement, many working remotely on unfamiliar IT systems and products in an extremely pressured market. A separate mailbox was set up for handling offers of help, but only 90% were rejected; no special treatment was given based on referrals. There has been no evidence found of conflicts involving ministers' interests or their involvement in procurement decisions. The Government have built up national capability and resilience with the potential for 70% of PPE to be produced in the UK. They are improving transparency by publishing more contract notices; as of 3 December, 96% of required contract notices were published on Tenders Electronic Daily. Regarding communications contracts, a preliminary internal fact-finding exercise was conducted and an independent expert review led by Nigel Boardman was commissioned, with results published yesterday on gov.uk. The Government will take forward all 28 recommendations in full. They are looking at better skill-up civil servants to reduce reliance on consultancy, consolidating IT systems for easier movement around internally, and launching a procurement Green Paper to strengthen transparency during crises.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.