A cynical & brazen cronyism: As new report reveals £18bn coronavirus PPE farce, DAVID ROSE argues this is not how public procurement in Britain is meant to work
The mismanagement, the incompetence, the reckless waste – all of this is shocking. But worse, perhaps, is the brazen cronyism involved.
The National Audit Office report on Personal Protective Equipment procurement is a searing indictment of this Government’s incompetence.
Yes, there was an unprecedented crisis. As the virus rampaged through hospitals and care homes, there was a desperate shortage of PPE.
The Government made a dramatic appeal to suppliers of Personal Protective Equipment at the start of the pandemic
Understandably, the Government made a dramatic appeal to suppliers – please get in touch, we need you.
But it awarded PPE contracts worth billions to companies not on the basis of quality or price, but in many cases – according to today’s damning report – on which firms had the best personal contacts in Westminster and Whitehall.
This isn’t how public procurement in Britain is meant to work. Strict, legally binding rules are supposed to enforce fairness and transparency, promote competitive pricing and to prevent conflicts of interest.
But thanks to the pandemic, the report suggests, the rules were cast aside – and replaced in many cases by the old pals act.
The report confirms what this newspaper revealed two weeks ago, that well-connected firms and individuals could be put on a ‘VIP’ route – officially called a ‘high-priority lane’ – meaning decisions on their potential contracts were fast-tracked.
Once recommended, these firms were more than ten times as likely to win contracts.
The result is we have been landed with equipment that has often turned out to be useless, and with bills that are far higher than they should have been.
As the virus rampaged through hospitals and care homes, there was a desperate shortage of PPE
At the same time, those with real expertise and the ability to procure quality products at a good price have been sidelined.
Take Jonathon Bennett. As the Mail reported this month, he is a veteran textile importer with extensive contacts in China, where most PPE is made. His bid to supply millions of masks in April was highly competitive – well below the Government’s ‘benchmark’ price.
But the £253million contract went to Ayanda Capital, a firm with no experience which was charging almost twice as much. Worse, 50 million of their masks were of the wrong design.
Mr Bennett has long suspected Ayanda won its contract because it was brokered by someone who until recently had been an adviser to Trade Secretary Liz Truss – an Ayanda associate called Andrew Mills.
The NAO report confirms this. It was thanks to a ‘referral’ by Mr Mills that Ayanda’s bid got the VIP treatment.
Ayanda is far from the only company that benefited from fast-tracking and went on to produce unusable PPE.
Each time the Department of Health is asked how these contracts were awarded, it says the same thing – that it always exercises strict ‘due diligence’
Each time the Department of Health is asked how these contracts were awarded, it says the same thing – that it always exercises strict ‘due diligence’.
Yet the NAO report reveals that when department officials carried out ‘due diligence’ on Ayanda, they somehow failed to notice Mr Mills’s involvement.
So what were the criteria that determined who got VIP status? Amazingly, the NAO finds there were none, while ‘the source of the referral’ for this treatment ‘was not always recorded’.
In the Middle East, there is a term for this way of doing business: ‘Wasta’. It means exploiting the access and influence someone has.
Could this system really now be a feature of public policy in Britain? There are growing concerns over the allocation of up to £42billion on Operation Moonshot mass virus testing.
Insiders told me told me there has been a VIP channel in this process, too. Just how many more contracts will NAO investigators now find cause for serious concern over?