Emergency Covid Contracts

Angela Rayner Excerpts

Tuesday 29th June 2021 Commons Chamber

[Julia Lopez]

I thank my hon. Friend for pointing out just how fantastic the co-operation has been between all parts of our United Kingdom. The UK Government have provided huge support to the Scottish Government and other devolved Administrations—that comes in testing capacity; we have helped with PPE; we have obviously helped with the furlough scheme—and, as he says, that should be celebrated, not denigrated.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I think it is worth reiterating that the Government have been found to have acted unlawfully over the contract with Public First. Their attitude is that the rules do not apply to them. Given that the judge found apparent bias, surely this must now be referred to the independent adviser and the Cabinet Secretary. What are they scared of?

I know all too well, on the point made by the hon. Member for North West Durham (Mr Holden), the need to secure PPE for our frontline NHS and social care workers, but while nurses were working in bin bags, others were filling their pockets at the taxpayer’s expense. The Minister quoted the National Audit Office, but the Comptroller and Auditor General said that the evidence shows that

“standards of transparency…were not consistently met”.

Perhaps the Minister can explain today why the National Audit Office found that PestFix, for example, was wrongly added to the high priority lane and awarded over £300 million after a shareholder reminded a senior official that he was a friend of his father-in-law.

The Minister claimed that a full eight-stage process always took place, but the NAO found over 70 contracts awarded before that process even existed. Can she confirm that Ayanda Capital was placed on the VIP list without that process, thanks to an adviser to the International Trade Secretary? Officials admitted that due diligence had not been carried out on Ayanda, and the bar seems to have been lowered in that case.

Mr Speaker, £150 million was spent on entirely useless PPE, so can the Minister confirm how much equipment bought this way was not fit for use? We already know that over £10 billion has been awarded without a competitive tender—for example, the £100 million given to Pharmaceuticals Direct Ltd after lobbying by the Home Secretary, with millions apparently ending up in the hands of her close associate, the “broker” to the deal. Will the Home Secretary be referred to the independent adviser—and if not, why not?

Yesterday, the Minister accepted that private emails were used by other Ministers in the process of awarding contracts, but the Prime Minister’s official spokesperson denied it. Will the Minister ensure that the record is now corrected?

Finally, the Minister promised that all such emails are covered by freedom of information. We have submitted such a request, but how will the former and current Health Ministers be prevented from permanently deleting the emails first? I urge her to refer the whole issue to the Information Commissioner. Surely she can see why only an independent process can restore trust. If Ministers want to be taken seriously by the public, then, quite frankly, they need to stop taking the hit and miss.

[Julia Lopez]

I have listened over this past year to the criticisms and attacks made by the Opposition and campaign groups on covid contracts, and I take them very seriously. That is why I took the time, when I assumed my role after maternity leave, to understand what happened. I do not think anyone is standing here suggesting that everything went smoothly during the height of pandemic. It did not. A whole series of challenges were faced and shortcomings highlighted. I have now twice set out in some detail the problems that have been described to me, and I have set out what we are doing to resolve them.

Let me go through some of them in relation to PPE. Some 450 people from across Government were moved into the Department of Health and Social Care to become a stand-up virtual team to assist with securing PPE. That team is normally only 21 people strong. That meant a lot of people who did not know each other working remotely on a range of different IT systems, with suppliers they did not know, on product they were not familiar with, in the most highly pressured market of their careers. That has led to lags in contract publication, as paperwork has been very tricky to join up across systems.

Faced with exceptional global demand, the usual vendors in China, which service the central procurement function, very quickly ran out of supply, and the world descended on a few factories in that country to bid for available items. It was in that market context that the Government had to procure with extreme urgency. That was often through direct award of contracts. If we did not do that, we risked missing out on vital supplies. We never ripped up procurement rules. It was a situation of genuine crisis and extreme urgency, where offers had to be accepted or rejected in a matter of hours or days, and it was simply not viable to run the usual procurement timescales.

The effort to secure PPE was herculean and involved setting up a new logistics network from scratch. I have explained in Parliament on a number of occasions that the VIP fast-track lane that has been touted often by the Opposition, was actually a mailbox set up by officials during the height of the pandemic to consider some of the 15,000 offers of assistance to supply PPE. In the early months, leads were coming in a lot faster than they could be processed. When they were rejected, or if they were delayed, people started chasing them through their MPs or through Ministers. To manage that influx of offers, a separate mailbox was set up to handle this area of work and sift credible offers.

I addressed yesterday concerns about private email use and the rules governing it. Government guidance is that official devices, email accounts and comms applications should be used for communicating classified information, but that other forms of electronic communication may be used in the course of conducting Government business. Each Minister is responsible for ensuring that Government information is handled in a secure way. We also set out that where business is conducted on non-official IT, relevant information should be recorded on Government systems, but we are keeping the guidance under review to ensure that it is up to date.

The most important thing to note, as the right hon. Lady does, is that all PPE offers, no matter where they came from, went through the same eight-stage checks. The PPE team compared prices with those obtained in the previous two weeks, to benchmark the competitiveness of those offers. Separate approval and additional justification were required for any offers not within 25% of the average that were considered for possible approval. It is also important to note that of the 493 offers that went through the priority mailbox, I understand that only 47 were taken forward—in other words, 90% were rejected.

There have been judicial reviews in respect of some of those contracts. The case relating to the Department of Health and Social Care looked not at the awarding of contracts, but at the delays in publishing their details. Health Ministers have always been clear that transparency is vital, and the court found that there was no deliberate policy to delay publication. In the judicial review relating to Public First, the court recognised

“that everyone involved was acting under immense pressure and the urgency of the…crisis did not allow time for reflection. The time constraints justified the…derogation from the usual procedures required under PCR 2015. But they did not exonerate the Defendant”—

us—

“from conducting the procurement so as to demonstrate a fair and impartial process of selection.”

We recognised very quickly that there was an issue of process where we could do much better. That is why we investigated what happened to prepare for that court case and launched an internal review into the contracts that were undertaken. Public First has cross-party directors and, as I mentioned, we already have a programme of work in the two Boardman reviews.

I appreciate that throughout the pandemic the Opposition have wanted to raised questions about the contracts. I hope that I can address them as best I can. If there are any questions that the right hon. Lady feels I have not covered, I will come back to her on them.

--- Later in debate ---

[Julia Lopez]

The hon. Gentleman is right to highlight how fantastically the devolved Administrations have worked with central Government on some of the critical issues that have faced us during the pandemic. He raised the issue of large firms. One hope in our procurement Green Paper is that our procurement reforms will make it much easier for small and medium-sized enterprises to bid for key Government contracts.

[Angela Rayner]

On a point of order, Mr Speaker. In the last 24 hours, we have had two urgent questions; the Minister for the Cabinet Office has not appeared, although the Parliamentary Secretary, Cabinet Office, the hon. Member for Hornchurch and Upminster (Julia Lopez), has done her best. In the last hour, we have heard media reports that No. 10 has confirmed that Lord Bethell used his private email address in regard to procurement. I seek your advice as to how we get clarity on this matter, because there have been misleading reports over the last 24 hours. How can we get an independent inquiry so that we actually get to the facts of the case?

[Mr Speaker]

Obviously, I am not aware of what has just been announced. If we are going to criticise, there needs to be a substantive motion, but the right hon. Lady is asking about the internal arrangements. Her point is now on the record; I hope that people have been listening to her request. We will take it from there. I am sure that this will not be the end of the matter being raised. I know that she will use her best endeavours and offices to ensure that the issue continues to be addressed.

We are going to suspend the House for two minutes so that the necessary arrangements can be made before the next business.