Ministers need to provide evidence for why multimillion pound contracts for personal protective equipment went to certain suppliers in order to prevent “indefinite” public suspicion, the head of the UK’s public spending watchdog has warned.
The government spent billions of pounds during the spring on PPE to address an urgent shortage in the NHS and elsewhere, abandoning the usual competitive procurement in favour of buying gowns, masks and gloves in haste from many small companies.
Since then, however, it has emerged that many of the companies receiving huge contracts had no background in PPE, while some turned out to have links to the Conservative party.
A recent National Audit Office report revealed that suppliers put on a “VIP list” — through recommendations by ministers, MPs or senior officials — were 10 times more likely to receive contracts. A small family company selling pest control supplies, called Pestfix, received a deal worth £350m after being put on that list due to an “error”, the report disclosed.
Another NAO report last week disclosed that 195m pieces of PPE had turned out to be unusable while the government had ended up paying £10bn more than it would have done if it had bought the kit a year earlier.
The government is braced for further NAO reports into the much-criticised test and trace programme and into the government’s vaccine preparations next month.
Gareth Davies, NAO chief, said ministers had not demonstrated that they had used money in a way that was “fair and transparent” or that clearly represented “the best available value for money”.
“That’s what has not been possible in this case because we couldn’t give a positive opinion based on the work we’d done because of these gaps in the evidence,” he said in an interview with the Financial Times.
Ministers and officials would have a public opportunity to set out the evidence behind those deals when the House of Commons’ public accounts committee opens an inquiry into PPE procurement next month.
“This isn’t just bureaucratic box-ticking, it really matters that you can demonstrate why you picked the suppliers you picked,” Mr Davies said. “Because otherwise you’re vulnerable to these questions indefinitely.”
Mr Davies accepted that it was easy to criticise the government with “hindsight” and said there was always going to be a trade-off between “perfection and speed” when buying kit to deal with a deadly pandemic. But he said that ministers should have switched to competitive tendering earlier in the crisis.
The government has so far failed to provide evidence for how some companies ended up in the “high-priority channel” because officials and ministers did not document the sources for the referrals.
Last week it emerged that Alex Bourne, who used to run a pub near the constituency home of health secretary Matt Hancock, was supplying the government with tens of millions of vials despite having no prior experience of producing medical supplies — having offered his services to Mr Hancock via WhatsApp.
Mr Davies said it was not unreasonable for ministers to set up a “sifting mechanism” to prioritise more credible bids: “But you have to be as completely clear and transparent about how you operated that, because otherwise people will draw their own conclusions.”
It was not too late for the government to “put right” their omissions by retrospectively putting in place the explanations of why they chose certain contractors, he said.
Last week Boris Johnson, the prime minister, attacked over the PPE issue by Labour leader Keir Starmer, said that 99.5 per cent of products had been usable, despite the NAO claims.
Mr Davies said he did not think anyone should be “too distracted by the percentages” given that the figure was still huge as an absolute number. “We certainly identified hundreds of millions of pounds of spending that isn’t going to be useful.”
The story of Britain’s pandemic PPE purchases is still not over given that many of the orders have not yet arrived and some are still sitting in warehouses.
In previous reports the NAO has found that billions of pounds was probably siphoned out of the government’s furlough and loan schemes by criminals.
Asked whether any PPE procurement was open to criminal abuse, Mr Davies chose his words carefully.
“We don’t have any evidence ourselves,” he said. “But the weaknesses in the processes we’ve set out and some of the ones we’ve already discussed means that we can’t give a positive audit view . . . we can’t give a positive assurance.”