Covid-19: Government has spent billions on contracts with little transparency, watchdog says

The government failed to provide transparency when hastily awarding billions of pounds worth of contracts during the covid-19 pandemic, the UK’s public spending watchdog has concluded.

The National Audit Office (NAO) said that the government had failed to provide adequate documentation showing how some key decisions were reached, including why particular suppliers were chosen or how potential conflicts of interest were handled.

Some contracts were awarded after work had already begun, many were not published in the timeframe they should have been, and some conflicts of interest were not disclosed, a report1 by the auditors found.

The investigation into government procurement during the pandemic found that the government awarded over 8600 contracts worth £18bn (€20bn; $24bn) by 31 July, with most of these (£16.2bn worth) awarded by the Department of Health and Social Care and its national bodies.

Contracts totalling £10.5bn have been awarded without a competitive tender process, the NAO found.

Gareth Davies, the head of the NAO, said, “While we recognise that these were exceptional circumstances, it remains essential that decisions are properly documented and made transparent if government is to maintain public trust that taxpayers’ money is being spent appropriately and fairly. The evidence set out in our report shows that these standards of transparency and documentation were not consistently met in the first phase of the pandemic.”

Personal protective equipment (PPE) accounted for 80% of the number of contracts awarded (over 6900 contracts) and 68% of the total value (£12.3bn). The Department of Health and Social Care awarded contracts to 71 suppliers, worth £1.5bn in total, before its process to assess and process offers of support of PPE was standardised, the NAO found. Examples of contracts awarded retrospectively after work had already been carried out included £3.2m to Deloitte to support procurement of PPE on 21 July 2020.

The government also established a “high priority lane” to assess potential PPE sources referred by officials and politicians that were deemed more credible. About one in 10 suppliers processed through the high priority lane (47 out of 493) obtained contracts, compared with less than one in 100 suppliers that came through the ordinary lane (104 of 14 892). The NAO also found that sources of referrals to the high priority lane were not always documented, with one supplier, PestFix, added in error without a referral.

A clear trail of documents to support key procurement decisions was sometimes missing, the auditors said.

The NAO also reported that many of the contracts awarded have not been published in a timely manner. By 10 November 2020, details were still missing for 55% of the 1644 contracts worth more than £25 000 awarded up to the end of July 2020, and only 25% were published within the 90 day target.

If a similar situation arises again, the government should identify and manage potential conflicts of interest and bias earlier in the procurement process and ensure that basic information on contracts are published within 90 days of award, the auditors concluded.

Meg Hillier, chair of the Commons Committee of Public Accounts, said, “Even in an emergency, public procurements need to get the basics right. Clearly, too many didn’t.

“The mistakes revealed by this report are likely to be only the tip of the iceberg.”