Covid Contracts: Judicial Review

Monday 1st March 2021 Lords Chamber

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Wednesday 24 February.

“Protecting those who protect us has been one of the Government’s most important goals in our fight against Covid-19. To do that, we have had to expand our personal protective equipment supply chain—it has gone from supplying 226 NHS trusts in England to supplying more than 58,000 different settings—and we have had to create a whole new logistics network from scratch. Thanks to the hard work and dedication of so many people, we have delivered more than 8.6 billion items of PPE to the front line so far, with billions more ordered and being supplied.

Our team worked night and day to procure PPE within very short timescales and against the background of unparalleled global demand. That often meant working at incredible speed, especially in the early months of the pandemic, to secure the vital supplies required to protect NHS workers and the public, which we did.

Let me turn specifically to the High Court judgment. There has been a lot of confusion about what the ruling said and did not say, and I welcome the opportunity to clarify that to the House today. The High Court case did not look at the awarding of the contracts; rather, it looked at the timing of the publication of the details of contracts awarded. The court ruled that at this time of unprecedented pressure, contract award notices were not all published in the timescales required by the regulations. However, it also found that there was no deprioritisation policy in that respect in the department. As we set out to the court, the delays were caused by the workload involved in responding to one of the greatest threats to public health that this country has ever seen.

We take our transparency requirements very seriously, and it is important that I put on the record that we of course take the judgment of the court very seriously and respect it. We are working with colleagues across Government to implement the recommendations set out in the report published earlier this month by the Public Accounts Committee, chaired by the honourable Member for Hackney South and Shoreditch (Meg Hillier), but as we do that, we will keep acting quickly and decisively to respond to this deadly threat, and we continue to do all we can to help save lives.”

14:04

[Baroness Thornton (Lab)]

My Lords, a year ago, Parliament gave the Government huge power so they could act quickly in the face of the pandemic. Unfortunately, growing evidence suggests that Ministers have taken advantage of these powers to the disadvantage of the taxpayer and to the cost of health workers and patients. The NAO report in November revealed that the Government set up fast-track systems for billions of pounds of contracts for people personally known to Ministers, Peers and MPs. They found that suppliers with links to politicians were 10 times more likely to be awarded contracts than those who had applied to the department in the normal way.

It looks like there is more to be explored here: not just a case of “delayed paperwork” as the Health Secretary has claimed but serious procurement rule breaches. Will the Government urgently publish the names of all companies awarded public contracts through the VIP lane and how much they were paid? What steps are the Government taking to recover millions of pounds of public money from companies which failed meet their contractual obligations?

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Bethell) (Con)]

My Lords, I am grateful for the question from the noble Baroness, Lady Thornton. During those hectic days, more than 15,000 suppliers approached us. Many of them were credible, but many sadly were not. It was entirely right and the best practice to have a high-priority lane to triage and prioritise those who were the most credible. A sample of 232 suppliers in that lane reveals that 144 came from Ministers, 21 from officials, 33 from MPs and 31 Members of the House of Lords not in the Government—including many who chose to write to me personally with the names of recommendations. I am enormously grateful to those who got in touch.

[Baroness Brinton (LD) [V]]

My Lords, the Prime Minister said last Monday in the House of Commons that

“the contracts are there on the record for everybody to see.”—[Official Report, Commons, 22/2/21; col 638.]

However, the evidence questions that statement. Can the Minister say how many PPE contracts entered into in the first wave of the pandemic, up to the end of June, remain unpublished? If the number is not to hand, please will he undertake to write to me with it?

[Lord Bethell (Con)]

From memory, it is my understanding that 99% of the contracts are published and 1% are outstanding. I am happy to check that and confirm it to the noble Baroness.

[Lord Robathan (Con)]

My Lords, it is fair to say that I have not been uncritical of some of the Government’s approach to this virus crisis and, of course, it is important that the Government follow proper procedures and are beyond reproach in their procurement policy. However, in relation to the judgment, did the judicial review find any impropriety in the behaviour of the Government, or was it a question of straining every sinew to deliver essential equipment to front-line workers, as the Government were urged to do by Rachel Reeves down at the other end?

[Lord Bethell (Con)]

My noble friend puts it extremely well. The judge said

“the overall picture shows the Secretary of State moving close to complete compliance. The evidence as a whole suggests that the backlog arose largely in the first few months of the pandemic and that officials began to bear down on it during the autumn of 2020”.

The judgment was entirely about the timing of the publication; it had nothing to do with the awarding of the contracts themselves. From that point of view, it is a ringing endorsement of the actions of officials in this matter.

[Baroness Meacher (CB) [V]]

My Lords, I strongly support the Secretary of State’s decision to prioritise saving patients’ lives, albeit that the contractual process appears to have breached the rules. Does the Minister agree that the real problem was the failure of Governments over the preceding 10 years to give proper attention to preparations for a pandemic which everybody knew could be around the corner? Can the Minister assure us that this failure will not be repeated, and systems are in place to ensure proper preparation in future?

[Lord Bethell (Con)]

My Lords, it is not for me to do the post-match analysis; that will be for those in the future. I reassure the noble Baroness that we have 32 billion units of PPE procured, including 19 billion purchased by the DHSC, 10 billion purchased by SSCL and 2.5 billion manufactured by our brilliant UK companies. We have 120 days of PPE ahead of us, and I can very confidently say that we are in great shape for anything the pandemic may throw at us.

[Lord Wood of Anfield (Lab)]

I declare an interest as director of the Good Law Project, which brought the action against the Government. Can the Minister clear up a confusion about this judicial review? In the wake of losing it, Matt Hancock, the Health Secretary, refused to apologise and said that dealing with the pandemic meant that breaching the legal obligation to publish within 30 days was “the right thing to do”. However, the case revealed emails showing that civil servants’ serious concerns that

“we are in legal breach”

were overridden in order

“to allow No.10 SpAds … enough time to be sighted and given full opportunity to comment”.

Why would the desire of No. 10 to provide comment on the mere publication of a contract legitimise a legal breach? Can the Minister explain the inconsistency between these facts and the Health Secretary’s professed explanation?

[Lord Bethell (Con)]

The right honourable Secretary of State for Health and Social Care put it extremely well. For those of us who were there at the time, the priority was saving lives, not publishing contracts or focusing on anything other than the protection of those who work and live in care.

[Lord Scriven (LD) [V]]

My Lords, 25 million masks that could not be used were supplied by a pest control firm in a £59 million deal, while a Mauritius hedge fund got £252 million, and, again, the face masks could not be used. There was also a £70 million contract with a Florida jeweller for gowns that could not be used. Will the Minister commit to a judge-led public inquiry into the handling of such PPE procurement?

[Lord Bethell (Con)]

As the noble Lord knows, I cannot comment on some of those cases specifically because they are subject to legal action at the moment. However, in broad strokes, I say that there were a lot of people who stepped forward to help us in our time of need; I do not condemn them. Some of them came not from the PPE industry but from others. I am extremely grateful to all those who stepped forward to help us when we needed it.

[Lord Harris of Haringey (Lab) [V]]

The Minister is on very thin ice. He is following Machiavelli’s teachings that the ends justify the means. He should be careful— this is the same argument that led to French aristocrats being guillotined after the revolution, to Stalin’s terror and to the blackshirts of Kristallnacht. Does he accept that the Government and Ministers have to obey the law? If he thinks that this case was trivial, where does he draw the line? Contracts to cronies? Clearly not—not until No. 10 spads have been “sighted”. Proroguing Parliament illegally? Clearly not. Interning vaccine refusers? Where is the line?

[Lord Bethell (Con)]

I am enormously grateful for the colourful character of that question. However, the noble Lord makes a serious point. We do respect the law, which is why we have published the contracts. The case found that we had published them 17 days late. Any reasonable person faced with a huge pandemic would think that a 17-day delay is a perfectly reasonable price to pay for saving lives. The noble Lord asked me about the price we are willing to pay and the reasons for standing out on this: saving lives is what this delay was about.

[Lord Mackenzie of Framwellgate (Non-Afl) [V]]

My Lords, at the beginning of this pandemic, I—like many Members of this House, I suspect—was approached by various suppliers and manufacturers asking how they could assist in supplying, or even making, PPE, ventilators and the like. Indeed, an appeal was made by the Health Secretary to this end. Of course, the difficulty was knowing who to contact. To assist in a similar future crisis, would the Government consider providing a direct hotline to deal efficiently with a large number of calls from people responding with help—rather like what Crimestoppers provides for police appeals?

[Lord Bethell (Con)]

My Lords, the noble Lord puts it extremely well, and he takes me right back to those days. I remember making a public call for help with diagnostics, and an NHSBSA call centre was overwhelmed by 5,500 calls in a week—triaging them took nearly a month. The noble Lord is entirely right: getting through all of those who sought to help was an enormously difficult task, and those who proved to be effective assistants were not always the obvious ones. I could share anecdotes of surprising people who came forward and gave tremendous help, while those who you would think could help simply did not have what we needed. Those were extremely complicated times, and I pay enormous tribute to the officials who saw us through them.

[Lord Wallace of Saltaire (LD) [V]]

My Lords, the Minister has been explaining how the centre was overwhelmed by the number of offers. In the early stages, why was it not dealt with by a greater degree of local decision-making and autonomy? Local authorities and hospital trusts were bypassed in this, as in a number of other areas, such as test and trace. Would it not have been much better to have allowed small companies and local authorities to bargain with each other about these offers in the first place?

[Lord Bethell (Con)]

That is a reasonable question, and, in fact, that was our starting point: the noble Lord will remember that, at the beginning of all of this, we supplied PPE to 252 NHS trusts and no one else—everyone else sorted out their own PPE. The reason we had to change was that this was a global crisis: borders were shut, factories closed down and every country in the world was desperate for PPE. There was no facility for a procurement manager at an NHS trust, let alone a small social care home in the West Country; those avenues were all shut. That is why it took a massive national effort to secure PPE. We now have a portal that supplies more than 50,000 different NHS and social care units; as I explained earlier, we have an enormous stockpile to secure that. This has been one of the big learnings of the pandemic: in order to have resilient supply chains, there needs to be some national muscle to make sure that it works properly.

[The Deputy Speaker (Lord Alderdice) (LD)]

My Lords, the time allowed for this Question has elapsed; I regret that we were not able to reach everyone on the list.