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Wednesday, November 18, 2020

The cronyvirus culture

In my experience National Audit Office reports are largely measured and cautious, which makes it all the more damning when they really let rip. That is why the latest offering on the procurement of personal protection equipment during the pandemic is so potent.

As the Independent says, the report identifies that hundreds of firms were fast-tracked for lucrative potential Covid-19 contracts after tips from ministers and MPs as £18bn was handed out under emergency rules:

The way procurement and transparency rules were ripped up in the scramble for equipment – with some deals secured by Conservative allies – is sharply criticised by the spending watchdog.

Its report confirms a secret “high-priority lane” for favoured firms, with at least 144 put forward from ministers’ private offices as MPs suggested “a possible manufacturer in their constituency”.

The source of more than half of the 493 recommendations has not been identified, of which 47 secured deals – and just 55 per cent of the 1,644 contracts worth more than £25,000 awarded up to the end of July have been published.

The National Audit Office (NAO) said it had found “no evidence of ministerial involvement in procurement decisions”, but criticised a lack of documentation on how conflicts of interest were managed.

The latest revelation involves a £21 million handout to a Miami firm which acted as a go-between to secure NHS garments.

The NAO investigation examined 20 contracts in detail, including:

* A £253m deal with Ayanda Capital for the purchase of 50 million masks – which could not be used, because they were made with loose ear-loop fastenings, rather than head loops.

* Contracts worth almost £3m with artificial intelligence company Faculty, which Cabinet Office minister Lord Agnew owned £90,000 of shares in – although he has since ended his interest in the firm.

* A £350m deal with PestFix, a pest control company, which resulted in 600,000 masks which cannot “be used for their original purpose”. No due diligence was carried out and its placing on the high-priority route was a “mistake”.

* A £550,000 award to Public First – co-owned by a former adviser to Michael Gove – to test the effectiveness of coronavirus advice, with no “justification for using emergency procurement, or any considerations around potential conflicts of interest”.

The Public First contract was among several which were awarded after a firm had begun the work involved.

In total, £10.5bn was handed out without a competitive tender process, part of £18bn of awards of which £17.3bn involved new contracts. Personal protective equipment (PPE) accounted for 80 per cent of the contracts awarded and 68 per cent of the total value of them (£12.3bn).

The question is whether there will be consequences for the way these contracts were handled or at least strengthened procedures to ensure it doesnt happen again. I am not holding my breath.

One notes that in South Africa, a developing nation, a senior ruling party official has actually gone on trial for his alleged part in the non-delivery of a government contract.
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