Labour’s proposed covid corruption commissioner: an important signal, but it won’t be easy to get the money back

The UK’s failure to prepare for the pandemic, despite having conducted exercises that identified much of what needed to be done,1 left ministers frantically scrambling to respond. Stocks of goods that would be needed in an emergency, in particular personal protective equipment, were depleted and what existed was often out of date. In their panic, they established a VIP lane, whereby trusted suppliers, which in practice meant people they happened to know, could gain rapid access to civil servants.2 The result was that billions of pounds were wasted. Now Rachel Reeves, the Labour Party’s chancellor of the exchequer in waiting, wants some of the money back and she has said that she will appoint a covid corruption commissioner to recover it.3

The case for acting is strong. Labour needs all the money it can get. It will inherit the legacy of over a decade of underinvestment, with infrastructure, in the case of schools and hospitals, literally crumbling. Uniquely among industrialised countries, its workforce has failed to recover after the pandemic.4 Credible economic forecasters agree that Brexit will act as a continuing drag on growth.5 But there is also a moral argument. Reeves’ proposal sends a signal that fraud and corruption will not be ignored.

There are, however, several questions that must be answered. First, how will this commissioner work? Reeves’ speech was short on detail, saying only that the commissioner will be “supported by a hit squad of investigators, equipped with the powers they need and the mandate to do whatever it takes.”3 Other reports suggest that this initiative will bring together His Majesty’s Revenue and Customs (HMRC), the Serious Fraud Office (SFO), and the National Crime Agency (NCA).6 But some may ask what is new? A National Economic Crime Centre already exists, created in 2018.7 It already provides a mechanism for these organisations to collaborate, along with the City of London Police, the Home Office, and the Financial Conduct Authority. One of its stated aims is to “ensure that criminals defrauding British citizens, attacking UK industry and abusing UK financial services are effectively pursued.” It is difficult to see why a new structure is needed.

Another question is what measures will be open to the commissioner? Reeves’ speech suggests that they will be wide-ranging, to do “whatever it takes.” Certainly, the organisations mentioned above have many powers. HMRC can investigate and impose penalties for tax evasion. The SFO can search property and require persons to answer questions and produce documents. NCA Investigators can exercise the powers of the police, customs, and immigration services. These powers have already been used. Thus, HMRC issued a winding up order against PPE Medpro, a company that received £203 million after using the VIP lane and which has been linked to a Conservative peer.8 The NCA is also investigating its affairs and has subsequently arrested individuals suspected of creating a company solely for running a fraudulent PPE scheme and money laundering.9 In 2022, it was reported that the SFO was investigating a small number of covid-19 related cases. The Insolvency Service has also acted against companies seemingly set up solely to claim grants fraudulently.10 The government can also pursue claims for breach of contract in the civil courts, as has done with PPE Medpro, seeking to recover £122 million paid for surgical gowns that were never used, plus an additional sum for storing and disposing of them.11

A third question is how much money we are talking about? Reeves quoted the sum of £7.2 billion. The Department of Health and Social Care alone has spent £15 billion on unused equipment.12 However, there are many reasons for this other than fraud. Thus, the Good Law Project, a public interest law firm that has played a crucial role in exposing government failures, launched a judicial review of the decision to award multimillion pound contracts for PPE to two companies that supplied PPE that was later found to be largely unusable. However, while the court found the use of the VIP lane to be unlawful, it concluded that the process by which the contracts were awarded was lawful. Whether it was wise to award such large sums to what the Commons Public Accounts Committee described as “unproven, newly created companies”13 is another question, as happened with a £108 million given to a small pest control company with assets of only £19 000.14

The final question is how much of the wasted money will be recoverable. This is far from clear. Some companies that have attracted attention operate overseas, beyond the UK’s jurisdiction. As noted above, others have gone into liquidation.8

The UK’s response to the pandemic was characterised by a scandalous waste of resources.15 All those involved bear some responsibility, from the politicians that sidestepped the provisions for procurement in an emergency that already existed16 to those who exploited their personal and political connections to abuse the system. The proposed commissioner may struggle to recover much of the money that was wasted but they can at least challenge the complacency that has long characterised the UK’s response to corruption.