News 26th Nov 2021

Leaking VIP lane names does not get the government off the hook for pandemic procurement

Susannah Fitzgerald

Network Co-ordinator

Susannah joined Transparency International UK in March 2020 as the UK Anti-Corruption Programme’s Network Co-ordinator. She works to coordinate the advocacy and campaign efforts of key civil society organisations, including the UK Anti-Corruption Coalition. Prior to joining TI-UK, she worked in advocacy and fundraising for a global NGO and completed an MA in International Relations from King’s College London.

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Track and Trace

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The COVID-19 pandemic has required a rapid public health response on a scale and speed unseen in modern times. Whilst those procuring goods and services have sought to expedite the emergency response, we observe a pattern of behaviour whereby critical safeguards for protecting the public purse have been thrown aside without adequate justification.

Emerging evidence from investigative journalists, the National Audit Office (NAO) and public interest litigation highlights these in startling detail.

Using evidence from these reports and analysis of available data, we identify two key issues concerning procurement practices during the pandemic. We also identify a third, more general issue relating to the mechanisms for ensuring integrity in public office.

From these findings, we propose ten steps that could address some of the concerns raised over the last year, and help avoid similar mistakes being repeated in the future. None of these are particularly costly, with three either complementing or endorsing proposals already included in the UK Government’s Green Paper for reform. If implemented effectively, they have the potential to increase transparency, deliver greater accountability, and reduce the risks associated with contracting, both during a crisis and in normal times.

We hope this provides a critical, yet constructive contribution towards recent debates. Some of what we propose may be uncomfortable for those of which we ask it – subjecting oneself to greater scrutiny is seldom a natural imperative for those in public office – yet these steps are critical to setting the record straight.

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Our report Track and Trace was raised in Parliament this week as MPs sought answers to our findings that one in five Covid-19 PPE contracts raised red flags for corruption. Although Ministers were evasive, questions about these contracts refuse to go away.

Last week, Politico published a leaked government list of 47 firms that won PPE contracts through the VIP lane during the pandemic, including who made the referral. The VIP lane, first revealed by the National Audit Office in November 2020, was a high-priority channel established for ministers, parliamentarians, and government officials to refer companies for consideration for PPE contracts. This practice has been widely, and rightly, criticised as a highly questionable approach to triaging offers; suppliers with links to political figures are normally subject to higher scrutiny, not less, due to the increased risk of a conflict of interest.

At this point, it would have been wise for the government to make a concerted effort to come clean about any mistakes made and allay public concerns. Instead, Ministers have fought tooth and nail to withhold this information from publication, both against litigation in the courts and a deluge of FOI requests, including one from us. Below, we outline why the recent VIP lane leak should not be considered the end of the story, and how the government can win back trust on public procurement.

 

  1. Leaking subverts proper process – and breaches the Ministerial Code.

The first problem with the government’s approach is the way in which they chose to release this information. On 18 October 2021, the Information Commissioner’s Office (ICO) ruled that the Department for Health and Social Care disclose the names of VIP lane companies and their referrers by 22 November. Yet this information was made available through a leak rather than a statement to Parliament or a full response to those requests the department had received on the matter, including ours that we had submitted a year earlier.

Leaking matters because, as clearly stated by the Prime Minister, it is a breach of the Ministerial Code. Those playing devil’s advocate may be tempted to argue that this is not the most significant transgression and that the practice is commonplace, yet this is precisely the problem. The Speaker has already chastised the government for leaking several times before informing Parliament, most recently in the context of the budget, arguing that it “run[s] roughshod” over parliamentary process.

The Owen Paterson scandal has already placed the spotlight on the government’s relationship with the legislature and leaking significant information like this shows yet further disregard for MPs and the constituents they represent. At worst, this could be interpreted as a cynical attempt to avoid further scrutiny. It is a far cry from the calls from one Conservative MP to “let us publish everything we feasibly can, and let us be as clear as we possibly can about what happened and why” during a recent parliamentary debate on pandemic procurement.

 

  1. We still need more information.

What’s in a name? Frankly, not enough. The ICO decision required that only the names of companies, the source of the referral, and the actual referrers to the VIP lane be published. This has been a critical first step which has confirmed many suspicions regarding who was on the list, including Conservative donors and politicians. In some cases, non-partisan civil servants were used to ‘officially’ refer the suppliers even when the source was from within the Conservative party.

Yet we still need more information. In Track and Trace, we identified 73 contracts relating to the Covid-19 response, worth over £3.7 billion, whose award merited further investigation. We were particularly concerned about the VIP lane, posing four questions: who knew about the lane, when they knew about it, why did they know and not others, and who passed through this privileged procurement route? Yet the recent leak only provides answers on who passed through the VIP lane. Without these other pieces of information, it is impossible to rule out that the VIP lane created a systemic and partisan bias in the award of PPE contracts

We are yet to receive a response to our Freedom of Information request to the Department for Health and Social Care (DHSC) from over a year ago, which would help answer some of these questions. Our last contact from DHSC was back in June 2021, nearly half a year ago. In July 2021, we wrote to the Secretary of State for Health and Social Care asking for a full audit of 63 contracts from his department that raised red flags for corruption. We are also yet to receive a response to this letter.

 

  1. Pandemic procurement should be addressed in the Covid-19 inquiry.

Lastly, and most significantly, overdue transparency does not neatly translate into what the public wants most from the government: accountability. The Public Accounts Committee’s report on PPE procurement makes for sobering reading. It states that the failures of transparency, record-keeping, and publication left the government “open to accusations of poor value for money, conflicts of interest and preferential treatment of some suppliers, and undermines public trust in government procurement and the use of taxpayers’ money.”

As of 10 June 2021, the amount spent on unusable PPE was revealed to be worth an estimated £2.8 billion. Yet more than money, what really cannot be ignored is the impact the lack of PPE had on both key workers and patients in health and social care settings. A joint inquiry by the Health and Social Care Committee and Science and Technology Committee found that difficulties in obtaining PPE “hampered isolation and infection control and the ability to keep covid at bay.”

The Public Accounts Committee have begun compiling evidence for the Covid-19 inquiry, due to start in Spring 2022, with their first conclusion related to serious concerns about PPE supply. Likewise, the Institute for Government has called for procurement to be within scope for investigation in their report on the Inquiry. To date, the government has remained evasive about whether or not this will be included within the Terms of Reference.

 

Where next for the government?

It is clear that the government has a long way to go before it can win back public trust on procurement, which it will need to make its planned reforms a success. The Transforming Public Procurement Green Paper included many positive changes, although tweaks are still needed to ensure the necessary safeguards are in place should we face a crisis situation again. To address this situation, the government should:

  • Carry out a full and detailed audit of the 73 contracts we identified as having red flags for corruption in Track and Trace and provide full transparency over how the VIP lane operated;
  • Include procurement within the scope of the Covid-19 inquiry, as recommended by the Public Accounts Committee and Institute for Government; and
  • Ensure that the planned Procurement Bill includes proper safeguards against conflicts of interest and abuse of emergency powers, in line with recommendations made by the UK Anti-Corruption Coalition.