Government PPE Contracts

Peter Grant Excerpts

Tuesday 6th December 2022 Commons Chamber

[Brendan O’Hara]

I shall from now on, Madam Deputy Speaker; thank you.

This whole process stinks, and we all know it does. That is why we have to see what this Government know. They deliberately created the conditions in which such behaviour could flourish, and they have to release what they know.

[Peter Grant (Glenrothes) (SNP)]

May I take my hon. Friend back to his comments earlier about due diligence? We all heard the Minister a few minutes ago claiming that due diligence was carried out in every single case. Is it possible for even the top civil servants in the United Kingdom to do any sort of due diligence on a company that did not exist two or three weeks before?

[Brendan O’Hara]

That is an excellent question, and perhaps it is a question that, had my hon. Friend managed to intervene on him, the Minister would have been far better placed than I to answer. I find it remarkable that due diligence can be carried out on a company that did not exist.

The Government know that the release of the PPE Medpro papers will not make this magically disappear, and they are right to fear that, in releasing those files, they are likely to blow the lid off this Pandora’s box and reveal that their VIP lane for politically connected pals was simply a green light for unfettered crony capitalism, rampant profiteering and widespread abuse of public funds.

In his answer to the question on 24 November, the Under-Secretary of State for Health and Social Care, the hon. Member for Harborough (Neil O’Brien), told this House:

“There was a global scramble for PPE…It was an extraordinary situation in which we had to act in a different way.”—[Official Report, 24 November 2022; Vol. 723, c. 441.]

It is a defence that the Minister today, the hon. Member for Colchester (Will Quince), also tried to hide behind a moment ago. It may be true that things had to be done slightly differently, but what is undeniable is that the UK Government made an active choice to act in the way that they did. It was a political choice to make this an all-in, free market jamboree. They did not need to do so. [Interruption.]

In response to the chuntering from the hon. Member for Crewe and Nantwich (Dr Mullan), the Scottish Government acted in an entirely different way. Many items of PPE for Scotland had to be sourced from overseas, but the big difference and—[Interruption.] If the hon. Member will stop talking and listen, I will explain. The big difference was that our Government sent staff from Scottish Enterprise over to China to source the items we needed and to ensure they were made to an acceptable standard and delivered at a cost we could afford. At the same time, the Scottish Government were increasingly working with Scottish manufacturers, so that by April 2021, 88% of our PPE was being produced in Scotland.

That Government involvement had a huge impact on the price. Unit costs show that disposable facemasks cost the NHS in Scotland 31p each, while the Department of Health and Social Care in England paid 40p. That is an increase of 29%.

[Peter Grant]

I can personally vouch for what my hon. Friend has said about the development of the manufacturing industry in Scotland, because there is an outstanding manufacturer in my constituency that did exactly that—its staff came in and worked unpaid over the weekend to reset its production lines to make what was needed, instead of the high-quality stuff it had been producing before. Does he think it is sad that I cannot name that company and sing its praises today, because I do not know whether it would thank me for connecting it, even tangentially, to the subject of this debate? Is it not sad that even outstanding Scottish firms are in danger of being tarred by the same brush that has been applied elsewhere?

[Brendan O’Hara]

My hon. Friend makes an excellent point. All the good that we could and should be talking about is being lost by this tarnished reputation. He could just as easily have pointed to the Scotch Whisky Association, which pivoted very quickly to turn its alcohol into millions of gallons of hand gel.

I go back to the point that the Scottish Government’s involvement was absolutely crucial in controlling the prices. As I said, disposable face masks were 29% cheaper because they were bought by the Scottish Government directly. The Scottish Government bought FFP3 face masks for £2.08 a unit. The Department of Health and Social Care bought them for £2.51—a fifth higher. Disposable gloves cost the Scottish NHS 9p each. In England, it was 33% higher at 12p. Even non-sterile gloves were bought 10% cheaper by the Scottish Government. One would have thought that a country with one twelfth the population of England would have a real job in pushing unit costs down below those of a country 12 times its size. It goes back to the fact that the approach the Scottish Government took meant they were in control of every part of the process, and they secured the deals they required.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

I certainly support the motion, and I commend the Opposition for devoting part of their Opposition day to it. It is perhaps unfortunate that they did not realise that another very interesting piece of contract lobbying had been carried out. Apparently the contract was not awarded, and the person who did the lobbying was later described by a senior civil servant as “incandescent with rage” that her chosen supplier had not been successful. I do not know whether that incident relates to the same company that we are talking about today, but it is clear that there has been more than one instance of lobbying for very lucrative contracts for well-connected companies.

The Minister referred several times to the fact that the National Audit Office and the Public Accounts Committee have looked at the issue. Well, that’s okay—everything must be fine! I wonder why he did not choose to enlighten hon. Members who have not read the reports about some of the things they say. The NAO report of 26 November 2020 states that

“some procurements were carried out before all key controls were put in place”

and that the Government

“awarded contracts to 71 suppliers, with a total value of £1.5 billion, before the financial and company due diligence process was standardised.”

As for the claim that 97% to 98% of all items were usable, another NAO report records the Department’s estimate that 3.6 billion items—11% of the total, at a cost of £2.9 billion—were

“not currently suitable for front-line services”.

In other words, when we talk about 97% of items being usable, we mean that we might have paid for high-grade, clinical, sterile equipment that someone cutting up wood could use as a face mask to keep the dust out of their lungs. That is not frontline clinical use.

In July this year, the Public Accounts Committee said:

“The Department still”

—two years after the contracts were signed—

“lacks a stock management system that enables it to fully understand what PPE it has and where it is.”

So the Department does not know what it has or where it is. The Committee also said that there were

“insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest.”

The exact concerns that Members were raising from day one have been confirmed by the PAC, which concluded:

“We are…unsurprised to see the reports of excessive profits and conflicts of interest on PPE contracts.”

We can only speculate on why the Minister did not find time to refer to any of the content of those reports when he addressed us earlier.

The Minister boasted that 97% to 98% of items were usable, but we should note that he referred to “items” without referring to their value. If you order clinical gloves and get gloves that are not suitable for clinical use, you can still use them to keep the oil off your hands if you are servicing your car, but each of those costs pennies. As we have heard, millions of pounds-worth of “sterile” gowns could not be used because they were not in fact sterile. Why did the Minister choose to give us part of the truth, but not the whole truth?

Failings by the Government have meant that there is, at best, a huge question mark over this whole process, and a question mark over legitimate firms and hard-working professional civil servants, but in some cases—a minority, but some of them significant—those question marks are not in fact question marks, but exclamation marks. It is clear that things have happened that should not have been allowed to happen, and that require further investigation. The Government may have their reasons for wanting to keep this information from—not necessarily only from the public, but from the Public Accounts Committee. That information must be released, and the decision on what is made public and what is kept secret must be left to the judgment of that impartial Committee.

--- Later in debate ---

[Neil O’Brien]

Thank you, Madam Deputy Speaker. I am keen to reply to them. The hon. Gentleman said that only 3%—

[Peter Grant]

rose—

[Neil O’Brien]

I am literally responding to the hon. Gentleman. He talked about only 3% not being reusable and implied that some of the other things were only fit for servicing a car. To be clear, some of these things have a different clinical use. For example, the NHS tends to use and wants to use aprons on a roll when there is the choice, where we have a normal PPE market. What we do therefore is use the flat-pack ones that we had and donate them to care homes. Self-assembly visors are not preferred in the NHS because they take a bit of time to assemble, so we give them to dentists and the like.

We have heard two different uses of the words “writing off” in this debate, and it is important to be clear about the difference between these two things. Some people talk about “writing off” for things that are not usable, and only 3% of what was purchased is in that category. Then there is a different accounting use of “writing off”, which is something we have to do; we bought a load of PPE because we needed it in the middle of the pandemic and it was more expensive at that time—it was worth more then than it is now. That is the accounting meaning of “writing off”. Let us be clear about those two different uses.