The government has been accused of playing ‘quick’ with public money after a report revealed it failed to ‘adequately’ document key decisions when buying Covid-19 tests.
When the pandemic hit, ministers were forced to act quickly to increase testing capacity, working with the private sector to secure the necessary services and supplies, according to the National Audit Office (NAO).
As part of these efforts, between January 2020 and December 2021, the Department of Health and Social Care (DHSC) and Public Health England (PHE) awarded 22 contracts to healthcare company Randox, or its strategic partner, Qnostics Ltd, with a maximum value of £776.9million, the watchdog said.
By value, almost all contracts were for the supply of Covid testing services, with less than 1 per cent (£6.9m) for the supply of test-related goods, he added.
The NAO found that 60% of the total contract value (£463.5m) had been awarded directly without competitive bidding, under emergency procurement rules.
The watchdog acknowledged in its report, published on Thursday, that these were “exceptional circumstances”, and said it had seen no evidence that the government‘s contracts with Randox had been awarded “out of inappropriate manner”.
But it found that the DHSC had not “adequately” documented key decisions, nor “fully” disclosed departmental meetings with the supplier.
“The gaps in the audit trail mean that it is not possible to provide positive assurance in the normal way,” the report warns.
The NAO said the DHSC first awarded a £132.4 million contract to Randox for testing services on March 30, 2020.
He said the department told him that a competitive tender had been ruled out due to the need to act quickly and that he could not award the contract from an existing framework because its value exceeded the limit.
But the watchdog said “basic information about the emergency procurement process”, including proof of approval, was not recorded in DHSC’s systems.
“The department had to review the email accounts of several officials to find evidence of its decision to award Randox the first test contract,” the report said.
The NAO added that the DHSC had provided it with “incomplete or no documentation” on “other important aspects of the market,” including detailed contract negotiations and consideration of potential conflicts of interest.
It also found that the ministry failed to disclose Randox’s attendance at four ministerial meetings as it should have done in accordance with transparency requirements.
According to the report, minutes were taken for two of the eight test meetings involving ministers and Randox that took place in 2020 and 2021.
In addition, he referred to “certain private exchanges of correspondence” between then Health Secretary Matt Hancock and North Shropshire MP Owen Paterson, which he said had “recently been put on hold”. the disposition of the department”.
Mr Paterson resigned from Parliament in November last year after being found guilty of breaking the rules by repeatedly lobbying on behalf of Randox and another company, for which he acted as paid consultant.
“The then-Secretary of State told us that he did not pass all of these messages on to the department at the time because they were not substantive discussions and therefore he was not required to do so,” the report said.
“These messages were not inconsistent with what the then-Secretary of State saw as his ministerial responsibility to get things done, rapidly building testing capacity with Randox and other vendors.”
Messages not forwarded by Mr Hancock at the time were retained by him and made available to Parliament in February 2022, he added.
The watchdog concluded that the pace required at the start of the pandemic to create high-volume testing capacity “required the use of emergency purchases without tenders”.
The NAO said it had seen no evidence that government contracts with Randox had been awarded improperly.
But he said that because the department had failed to adequately document key decisions, disclose full ministerial meetings or keep full records of ministerial discussions involving Randox, he was unable to “provide a positive assurance in the normal way”.
Gareth Davies, the head of the NAO, said: “The dire need to quickly build high-volume testing capacity at the start of the Covid-19 pandemic meant standard public procurement approaches were not appropriate. Even taking into account these exceptional circumstances, the documentation of the decision-making process for such large contracts was insufficient.
“Our previous reports on Covid-19 procurement and those by Nigel Boardman have recommended improvements to ensure an adequate audit trail is maintained even when the priority is speed of action. The government has already started to implement some of these improvements, and we will monitor progress.
Labor MP Meg Hillier, chair of the House of Commons Public Accounts Committee (PAC), said the government had played “fast and loose” in spending public money.
“The government understood the urgent need to increase the scale of testing at the start of the pandemic. But while the procurement was fast, the process was fast and smooth,” she said.
“The Randox contracts illustrate that good government transparency is vital. The government hasn’t properly documented the decisions and the public is right to wonder if he was playing with a straight bat.
Randox said the watchdog’s finding of no evidence of wrongdoing in the awarding of the contracts “justifies” its insistence that the process followed official protocols.
“We welcome the conclusion of the NAO report that there is no evidence of impropriety in the awarding of government contracts to Randox,” a spokesperson said.
“This independent finding confirms what Randox and the government have always said, which is that these contracts were awarded on merit and in accordance with government protocols and regulations during times of acute national emergency.”
He added: “The report indicates that four ministerial meetings took place which were apparently not fully documented by the DHSC.
“Although we cannot comment on the minutes of the government meetings, Randox can state categorically that the award of contracts was not on the agenda of any of these meetings.”
Responding to the report, Mr Hancock said it ‘confirms a totally healthy bill of health on ministers’ work with Randox during the pandemic’.
“The report found no evidence of wrongdoing because there was no wrongdoing – just a lot of hard work to expand testing capacity,” he said.
Lord Bethell, who was Minister for Technology, Innovation and Life Sciences at DHSC from March 2020 to September 2021, said the NAO’s finding that there was no irregularity “puts in bed wild speculation and conspiracy theories”.
A government spokesman said: “As the public would expect, at the start of the pandemic, we took every possible step to build quickly and from scratch the largest diagnostics industry in the history of the world. UK – which helped limit the spread of Covid and save lives.
“Building the scale of testing needed at unprecedented speed required working closely with businesses, universities and others, to get the right skills, equipment and logistics in place as quickly as possible – and contracts with Randox and other suppliers have contributed significantly to the UK’s response to Covid.
“Robust rules and processes are in place to ensure there are no conflicts of interest, and all contracts are awarded in accordance with procurement regulations and transparency guidelines. The NAO concludes that there is no evidence that government contracts with Randox were improperly awarded.