Government has paid private firms £6.5BILLION during COVID crisis as services struggled

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Government has paid private firms £6.5BILLION during COVID crisis – including £500,000 to test-and-trace disaster Baroness Dido Harding’s ex consultancy – as services struggled to cope

  • The analysis shows 1,262 contracts handed out to date, worth £6.61billion
  • Some £2.6billion of contracts were handed out in June alone, they show
  • Figures collected by Tussell, a database of government contracts and spending

By David Wilcock, Whitehall Correspondent For Mailonline

Published: | Updated:

Government departments have spent more than £6.5billion of taxpayers money emergency contracts for outside help – many to private firms – during the coronavirus pandemic.

More than 1,200 deals have been done, often without tendering, as ministers scrambled to adapt to the lightning-fast spread of the virus and the economic collapse that followed because of the lockdown.

The figure are laid bare in analysis of government procurement by Tussell, a database of government contracts and spending.

The cover a vast swathe of sectors and requirements for everything from emergency Nightingale hospitals and ventilators to free school vouchers and food delivery boxes for those shielding.

The analysis shows 1,262 contracts have been handed out to date, worth a total of £6.61billion. Some £2.6billion of contracts were handed out in June alone.

The Department of Health, as the lead department in the crisis, has so far spent £3.6billion on 334 contracts. 

It comes amid criticism over how many of the contracts, some worth hundreds of millions of pounds, were awarded. 

The ten largest contracts awarded during the lockdown (source: Tussell)

Matt Hancock

Baroness Harding is a former horse jockey who had been on the board at Cheltenham

Matt Hancock officially axed Public Health England this week after a series of failings during the coronavirus crisis. He was criticised for handing the reins of its replacement to Baroness Harding (right)

Chain of command: Baroness Harding will report directly to the health secretary after her appointment as interim chief of the new National Institute for Health Protection (NIHP) today

Consultants paid £563,000 for six-weeks work on public health agency’s new ‘vision’

The management consultancy received a Government contract worth than half-a-million pounds for six weeks of work on the ‘vision, purpose and narrative’ of the replacement for Public Health England.

McKinsey was handed  £563,4000 of taxpayers money earlier this year, before this week’s announcement that much-criticised PHE was to be replaced by a new National Institute for Health Protection (NIHP).

NIPH is to be led by Baroness Dido Harding as interim chief executive.  The choice of the former TalkTalk head has provoked criticism after she oversaw the botched test and trace system for the NHS.

She is also a former consultant for McKinsey, according to the Financial Times.  

The FT reported that McKinsey was hired to create a report outlining the ‘mission and vision’ of the planned new body by the end of June. There is no suggestion Baroness Harding was involved.

The overall largest contract was handed out by the Office For National Statistics (ONS), which is paying £750million on its Covid -19 Infection Survey (CIS), which provides data on how the pandemic is affecting the country. 

Other large contracts have been handed out by NHS England to various hospital trusts across the UK, to fund the building of Nightingale Hospitals to prevent emergency care being overwhelmed by the seriously ill. They totalled almost £326million.

The largest contract handed out to a single private company was the £252million awarded to finance firm Ayanda Capital to source and supply PPE.  

Last week it was revealed that because the masks had ear straps rather than head straps, the Department of Health was not using them, citing ‘concern’ they may not provide an ‘adequate fixing’ around the face. 

It prompted questions about the contract handed to Ayanda, which had no previous experience in sourcing PPE.

But the firm’s boss Tim Horlick said that 50 million Chinese-made FFP2 masks it supplied were ‘perfectly good’ and accused civil servants of an unwarranted attack on the business. 

There were also big contracts for Edenred, for handling the free school meal voucher scheme, and to Brake Bros and BFS Group for supplying food parcels to vulnerable people shielding at home at the worst of the crisis. 

Edenred was criticised in April for allowing thousands of British children to go hungry because it could not supply enough food vouchers.

Parents have been unable to claim the coupons they need to buy groceries during the coronavirus lockdown because the private company paid to run it couldn’t deal with a deluge of inquiries.

The French firm, which made more than £270 million profit last year, was inundated with calls from schools seeking assistance, with some teachers racking up substantial bills in the process.

In an email sent to schools the company said ‘higher than anticipated’ orders had an ‘impact on the performance and experience’.

Edenred said its team had been working ‘day and night’ through the Easter weekend to process orders and develop system capability.

‘If we can balance the load on the system, we can provide a consistent and constant flow of essential support through to families,’ the email, sent on behalf of the DfE, read.