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COVID-19, Contracts, and Corruption

Since the outbreak of the COVID-19 pandemic in early 2020 the UK government has made contracts with private producers and sellers - for important medical equipment like ventilators, masks, PPE, NHS staff and more. A recent report published by Transparency International UK has found that 20% of all government contracts should be investigated in relation to corruption; the report identified three keys areas that gave cause for concern:

  1. Contracts being awarded without proper competition among the contractors.

  2. Contracts being awarded with the help of political figures in the UK.

  3. Contracts being awarded to contractors with no previous experience in producing or supplying the relevant medical equipment.


These three areas are representative of the main issues surrounding all the recent corruption allegations relating to the government awarding Covid-19 related contracts.


Display coronavirus cases per local authority in the UK as of 4th Oct 2020.
Georgek98, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons

Contracts Awarded Without Competition


When the UK government intends to establish a contract for goods or services, they will often establish a competitive process in which interested companies bid on the contract - which is awarded to the company which can provide the goods or services at the best possible quality and cost.


A data analysis by the company Spend Network has revealed that Whitehall (the UK Civil Service) had repeatedly awarded Covid-19 related contracts to companies without using such a competitive process to select the contractors. This raises cause for concern as the lack of such a process undermines the transparency of the process, which is a matter of public interest.


Moreover, a case was heard in the High Court in February 2021 relating to the awarding of such contracts without a competitive process. The case was brought by the Good Law Project against the Secretary of State for Health and Social Care, Matt Hancock. The judge upheld the Good Law Project’s complaint, concluding that Hancock had “acted unlawfully by failing to comply with the Transparency Policy.”


By awarding contracts without a competitive process the UK government has created an issue of public interest as to whether they utilised public money in the most effective way.


Xavier Becerra and Matt Hancock at 2021 G7 Health Ministers summit
Xavier Becerra and Matt Hancock at 2021 G7 Health Ministers summit

Contracts Awarded Due to Political Influence

The Transparency International report referenced above also highlighted the issue of contracts being awarded via a ‘VIP’ stream. Findings revealed that contracts worth £1.6 billion were awarded to contractors with established links to the Conservative Party. The National Audit Office, which is responsible for monitoring Whitehall spending, has found that companies referred to the scheme by a political connection were more likely to be awarded the relevant contract than companies that relied on no such links.


Awarding contracts based on political influence or private endorsement lacks the transparency and fairness of procedure for the other companies involved and the UK public. This raises the issue of cronyism in UK politics which is influencing the economic activity of the government.


Contracts Awarded to Companies Lacking Experience


When it comes to COVID-19 related contracts, experience and quality should be essential qualifications for the contractors to possess. However, there are numerous examples of the government awarding such contracts to companies with no experience in providing health-related goods or services.


For example, a £168.5 million contract to provide face masks was awarded to Pestfix, a small pest control company based in Sussex. The company was later forced to recall two out of three types of face masks it had supplied to the government, as the products were faulty and ineffective.


Additionally, US jeweller Michael Saiger was given a £250 million contract to supply surgical gowns to the NHS as a way to secure more PPE for staff. Saiger had no previous experience in procuring medical PPE of any description, as his company deals in fine diamonds and jewellery.

Michael Saiger, a US Jeweler paid to secure PPE for the UK Government
Andrew Toth/ Getty Images in North America

A total of £6 billion was awarded to companies with no prior experience in producing or delivering the required goods or services. Many products secured by these contracts were unusable or did not arrive on time in the UK. This had a knock-on effect on NHS staff across the UK as some staff were advised to reuse PPE, or resorted to using bin bag liners in place of protective gowns. Awarding such vast amounts of money to inexperienced companies at a time of urgency such as a pandemic has been demonstrated to be a risky move, with much of the money ultimately being wasted.



Edited by Vihaan Manglani

What You Can Do


  • Get in contact with your MP and let them know there is a public interest in the issue of corruption and government Covid-19 related contracts.

  • Follow the work of the National Audit Office to keep up to date about government contract spending in the UK.

Sources


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