COVID-19 contracts in the United Kingdom

In response to the COVID-19 pandemic in the United Kingdom, from March 2020 the British government had to rapidly place contracts and recruit a number of individuals, with the lack of personal protective equipment being a particular political issue for the second Johnson ministry. This led to a number of contracts being awarded without a competitive tendering process, and friends of political figures and people who had made political donations being "fast-tracked" into contracts. This led to accusations of cronyism or a "chumocracy".

Context: PPE and equipment shortages
See also: Shortages related to the COVID-19 pandemic

Simulations of influenza-like pandemics have been carried out by National Health Service (NHS) trusts since the 2007 H5N1 influenza outbreak ("bird flu"). Russell King, a resilience manager in the NHS at the time, said "the Cabinet Office had identified the availability and distribution of PPE [personal protective equipment] as a pinch point in a pandemic".[1]

Early in the pandemic, the government was criticised for the lack of PPE available to NHS workers; as such, there was pressure to supply PPE quickly to the NHS.[2] The UK did not take part in an April 8 bid for €1.5bn (£1.3bn) worth of PPE by members of the European Union, or any bids under the EU Joint Procurement Agreement (set up in 2014 following the H1N1 influenza pandemic ("swine flu")[3]), as "we are no longer members of the EU".[4] The purpose of the scheme is to allow EU countries to purchase together as a bloc, securing the best prices and allowing quick procurement at a time of shortage. Under the terms of the Brexit withdrawal agreement, the government had the right to take part until 31 December 2020.[3]

There was a lack of surgical masks, goggles, visors and gowns in many NHS hospitals in the UK. On 31 March, The Doctors' Association UK alleges that shortages were covered-up through intimidating emails, threats of disciplinary action and in two cases being sent home from work. Some doctors have been disciplined after managers were annoyed by material they had posted online regarding these shortages.[5] Speaking to Nafeez Ahmed in April, Anthony Costello (who used to work for the World Health Organization) said: "We simply don't have enough PPE. Not enough visors, not enough N95 respirators. Government is not following WHO guidelines."[6]

On 18 April, Robert Jenrick reported that 400,000 protective gowns and other PPE were on their way to the UK from Turkey.[7] One day later, these were delayed; this led hospital leaders to directly criticise the government for the first time during the pandemic.[8] The shipment arrived at Istanbul airport en route to the UK two days after ministers said that the PPE would appear in the UK.[9] Only 32,000 of the order arrived (less than one-tenth), despite the NHS making a down payment to secure its arrival on 22 April.[10] Eventually, these all had to be returned to Turkey as they did not meet NHS standards.[11]

In March, the government called for British industry to get involved with making ventilators for the NHS, with Dyson and Babcock revealing plans on creating 30,000 medical ventilators (this amount was seen as necessary based on modelling from the time from China). The Ventilator Challenge involved companies such as Airbus, Rolls-Royce and Ford.[12] This was seen as impractical at the time; the type of ventilators suggested by the government to these companies were crude and would not have been able to be used in hospitals, and none of the companies involved reached the final stages of testing and the majority have proved surplus to requirements in hindsight.[13]

In May, it was revealed that almost half of England's doctors sourced their own PPE or relied on donations when none was available through normal NHS channels.[11]

Controversy: Lack of competitive tendering process, alleged cronyism

Early in the pandemic, the government was criticised for the lack of personal protective equipment (PPE) available to NHS workers; as such, there was pressure to supply PPE quickly to the NHS.[2] The UK did not take part in an April 8 bid for €1.5bn (£1.3bn) worth of PPE by members of the European Union, or any bids under the EU Joint Procurement Agreement (set up in 2014 following the H1N1 influenza pandemic[3]), as "we are no longer members of the EU".[14] The purpose of the scheme is to allow EU countries to purchase together as a bloc, securing the best prices and allowing quick procurement at a time of shortage. Under the terms of the Brexit withdrawal agreement, the government had the right to take part until 31 December 2020.[3]

Normally, the UK would have published an open call for bids to provide PPE in the Official Journal of the European Union. However, under EU directives, when there is an "extreme urgency" to buy goods or services, the government does not have to open up a contract to competition; it can instead approach companies directly.[15] During the pandemic, the Department of Health and Social Care (DHSC), local NHS bodies and other government agencies have directly approached firms to provide services, bypassing the EU's tendering process – in some cases without a "call for competition", meaning that only one firm was approached.[15] This was done through the invoking emergency procurement procedures – regulation 32(2)(c) under the Public Contract Regulations 2015 – which allowed for the sourcing of goods without the formal tender process.[16]

One of the largest government PPE contracts went to a small pest control firm Crisp Websites Ltd., trading as PestFix. PestFix secured a contract in April with the DHSC for a £32M batch of isolation suits; three months after the contract was signed, suits from PestFix were not released for use in the NHS as they were being stored at an NHS supply chain warehouse awaiting safety assessments.[2] The Health and Safety Executive (HSE) concluded that supplies of PPE had not been specified to the correct standard for use in hospitals when they were bought. One email from a firm working alongside the HSE in June says that there was "'political' pressure" to get the suits through the quality assurance process.[2] The contract is being challenged in the courts by the not-for-profit Good Law Project (founded by Jolyon Maugham QC), which asked why DHSC had agreed to pay 75% upfront when the provider was "wholly unsuited" to deliver such a large and important order,[2] and further discovered that the company had actually been awarded PPE contracts worth £313m.[17]

The National Audit Office said that £10.5bn of the overall £18bn spent on pandemic-related contracts (58%) was awarded directly to suppliers without competitive tender, with PPE accounting for 80% of contracts.[18] The UK government was competing with governments from all over the world, and to satisfy the unprecedented demand for PPE, had awarded contracts hastily, and bypassed the normal bureaucrat competitive tendering processes to secure supplies.[18] In light of this report, the Good Law Project opened a number of cases against the DHSC, questioning the awarding of PPE contracts more than £250M to Michael Saiger, head of an American jewellery company based in Florida with no experience of supplying PPE,[17] which involved a £21M payment to Gabriel González Andersson, who acted as an intermediary.[19] The contract was offered without any advertisement or competitive tender process.[17]

The Sunday Times said the government gave £1.5 billion to companies linked to the party.[20] Although the NAO said there was "no evidence" that ministers were "involved in either the award or management of the contracts",[18] companies who had links to government ministers, politicians or health chiefs were put in a 'high priority' channel;[21] this category was 'fast-tracked', and those in it were ten times more likely to win a contract.[18] BBC economics correspondent Andrew Verity said that "contracts are seen to be awarded not on merit or value for money but because of personal connections".[18] Sophie Hill, a British PhD student at Harvard University, created the online map "My Little Crony" to document alleged cronyism, collating reports from openDemocracy and the Byline Times.[22]

The Baroness Harding, a Conservative peer and the wife of Conservative MP John Penrose, was appointed to run NHS Test and Trace.[20] Kate Bingham, a family friend of the PM married to Conservative MP and Financial Secretary to the Treasury Jesse Norman, was appointed to oversee the vaccine taskforce.[23] Bingham went to school with Boris Johnson's sister Rachel Johnson.[24] Bingham accepted the position after decades in venture capital, having been hired without a recruitment process.[25] According to leaked documents seen by The Sunday Times, she charged the taxpayer £670,000 for a team of eight full-time boutique consultants from Admiral Associates.[26] In October 2020, Mike Coupe, a friend of Harding's,[27] took a three-month appointment as head of infection testing at NHS Test and Trace.[28] The Good Law Project and the Runnymede Trust launched a legal case which alleged Johnson acted unlawfully in securing these three contracts and chose them because of their connections to the Conservative Party.[27]

Former Conservative party chair the Lord Feldman was appointed as an unpaid adviser to Conservative peer Lord Bethell.[29] Feldman was present when Bethell awarded Meller Designs (owned by David Meller, who gave £63,000 to the Conservative Party, mostly when Feldman was chair) £163 million in contracts for PPE on 6 April.[20] Three days later, Conservative MP and former Secretary of State for Northern Ireland Owen Paterson took part in a phone call with Bethell and Randox, who pay Paterson £100,000 a year as a consultant. The Grand National (the biggest sporting event of the Jockey Club; Harding sits on the club's board) is sponsored by Randox, who received £479M in testing contracts, with orders continuing even after it had to recall half a million tests because of safety concerns.[20] George Pascoe-Watson, chair of Portland Communications, was appointed to an unpaid advisory role by the Department of Health and Social Care (DHSC); he participated in daily strategic discussions chaired by Bethell.[30] He also sent information about government policy to his paying clients before this was made public.[31][32] Conservative peer Lord O'Shaughnessy was paid as an "external adviser" to the DHSC when he was a paid Portland adviser. In May, O'Shaughnessy took part in a call with Bethell and Boston Consulting Group (BCG), a Portland client that got £21M in contracts on the testing system.[20] BCG management consultants were paid up to £6,250 a day to help speed up and reorganise the Test and Trace system.[33]

Ayanda Capital is an Mauritius-based investment firm with no prior public health experience which gained a £252M contract in April to supply face masks. The contract included an order for 50 million high-strength FFP2 medical masks that did not meet NHS standards, as they had elastic ear-loops instead of the required straps tied behind the wearer's head.[17] Ayanda says they adhered to the specifications they were given.[17] The deal was arranged by Andrew Mills, then an adviser to the Board of Trade (a branch of Liz Truss's Department for International Trade (DIT)); his involvement was criticised by the Good Law Project[24] and Keir Starmer, Leader of the Opposition.[17] The DIT said neither it nor the Board of Trade was involved in the deal.[24]

In June the Cabinet Office published details of a March contract with the policy consultancy Public First, which had been running under emergency procedures, to research public opinion about the government's COVID communications. The company is owned by James Frayne (a long-term political associate of Cummings, co-founding the New Frontiers Foundation with him in 2003) and his wife Rachel Wolf, a former adviser to Michael Gove (Minister for the Cabinet Office) who co-wrote the Conservative party manifesto for the 2016 election. They were given £840,000.[34]

Other allegations of cronyism include:

  • Faculty, which worked with Dominic Cummings for Vote Leave during the Brexit referendum, was given government contracts since 2018. After Johnson became PM, a former Faculty employee who worked on Vote Leave, Ben Warner, was recruited by Cummings to work alongside him in Downing Street.[24]
  • Hanbury Strategy, a policy and lobbying consultancy, has been paid £648,000 under two contracts (one issued under emergency procedures) to research "public attitudes and behaviours" in relation to the pandemic, the other, at a level that did not require a tender, to conduct weekly polling. The company was co-founded by Paul Stephenson, director of communications for Vote Leave and contender to be Downing Street Chief of Staff. In March last year, Hanbury was given responsibility for assessing job applications for Conservative special advisers.[24]
  • Globus Limited, which has donated more than £400,000 to the Conservatives since 2016, won a £93.8M government contract for the supply of respirator face masks.[35]
  • Gina Coladangelo, a close friend of Matt Hancock with no known health background, was paid £15,000 as a non-executive director of the DHSC on a six-month contract, although there was no public record of the appointment. She accompanied Hancock to confidential meetings with civil servants. She was given a parliamentary pass sponsored by Bethell (Coladangelo does not play a role in Bethell's team.)[36]
  • Alex Bourne, a former neighbour and owner of the Cock Inn pub near Hancock's constituency home, gained a contract which involved supplying "tens of millions of vials for NHS Covid-19 tests".[37]

Companies

PestFix

One of the largest government PPE contracts went to a small pest control firm Crisp Websites Ltd., trading as PestFix. PestFix secured a contract in April with the DHSC for a £32M batch of isolation suits; three months after the contract was signed, suits from PestFix were not released for use in the NHS as they were being stored at an NHS supply chain warehouse awaiting safety assessments.[2] The Health and Safety Executive (HSE) concluded that supplies of PPE had not been specified to the correct standard for use in hospitals when they were bought. One email from a firm working alongside the HSE in June says that there was "'political' pressure" to get the suits through the quality assurance process.[2] The contract is being challenged in the courts by the not-for-profit Good Law Project (founded by Jolyon Maugham QC), which asked why DHSC had agreed to pay 75% upfront when the provider was "wholly unsuited" to deliver such a large and important order,[2] and further discovered that the company had actually been awarded PPE contracts worth £313M.[17]

Ayanda Capital

Ayanda Capital Limited is a limited liability company[38] which specialises in "currency trading, offshore property, and private equity and trade financing".[39] In April 2020 it was awarded a contract "for the supply of personal protective equipment (masks) to protect health and care workers from contracting the Covid-19 disease."[40] This is in spite of the company having no prior health industry experience. It is run by financier Tim Horlick and his family through Milo Investments, a holding company registered in Mauritius,[41][42] although it told the i that it pays tax in the UK.[38]

The £252 million contract – supplied under emergency regulations, without advertisement or competitive tender – included an order for 50 million high-strength FFP2 medical masks and 150 million Type IIR masks to the government.[43] The FFP2 masks, worth at least £150 million, did not meet NHS standards as they had elastic ear-loops instead of the required head-loops (loops tied behind the wearer's head); this meant they could not be fastened tightly enough.[44] Ayanda denied the masks were unsafe, and said they adhered to the specifications they were given.[45] Under the terms of the agreement signed, the company was not responsible for any delays in meeting the deadline for handing over masks to the government, as the contract said that "due to the severe global impact of Covid-19 ... the supplier will not be responsible for any delay" provided that it acted in good faith to try to mitigate any problems.[43]

The deal was arranged by Andrew Mills, then an adviser to the Board of Trade (a branch of the Department for International Trade (DIT)) and a senior adviser at Ayanda.[46] Prospermill (Mills's company) had secured production in China, but he requested that the government sign the contract with Ayanda because it could arrange overseas payments more quickly.[46] A document titled "Terms and conditions inc price" (obtained by the Good Law Project) said that no questions would be asked about value for money unless prices were more than 25% above average unit prices.[46] Jolyon Maugham said: "The leaked documents reveal that Cabinet Office contacts and others were helping 'VIPs' sell PPE to government outside normal procurement channels. The information that government would buy at 25% above the price paid to regular suppliers was a licence to make enormous margins – 35-45% – on contracts sometimes worth hundreds of millions of pounds."[46]

As well as Maugham and his Good Law Project, Keir Starmer, Leader of the Opposition, also questioned the government over its awarding of the contract.[17] The DIT said neither it nor Mills or the Board of Trade was involved in the deal[46][24] and Horlick denied that there was any "chumocracy" involved in the deal.[47] However, Mills was dismissed from the DIT in August 2020.[43]

Public First

In June the Cabinet Office published details of a March contract with the policy consultancy Public First, which had been running under emergency procedures, to research public opinion about the government's COVID communications. The company is owned by James Frayne (a long-term political associate of Cummings, co-founding the New Frontiers Foundation with him in 2003) and his wife Rachel Wolf, a former adviser to Michael Gove (Minister for the Cabinet Office) who co-wrote the Conservative party manifesto for the 2016 election. They were given £840,000.[48]

Faculty

Faculty, which worked with Dominic Cummings for Vote Leave during the Brexit referendum, was given government contracts since 2018. After Johnson became PM, a former Faculty employee who worked on Vote Leave, Ben Warner, was recruited by Cummings to work alongside him in Downing Street.[24]

Hanbury Strategy

Hanbury Strategy, a policy and lobbying consultancy, has been paid £648,000 under two contracts (one issued under emergency procedures) to research "public attitudes and behaviours" in relation to the pandemic, the other, at a level that did not require a tender, to conduct weekly polling. The company was co-founded by Paul Stephenson, director of communications for Vote Leave and contender to be Downing Street Chief of Staff. In March last year, Hanbury was given responsibility for assessing job applications for Conservative special advisers.[24]

Clipper Logistics

On 30 March, retail logistics firm Clipper Logistics was put in charge of a new supply channel for NHS PPE.[49] Its founding executive chairman is Steven Parkin, a top Conservative Party donor who has attended Leader's Group meetings ("the premier supporter Group of the Conservative Party") and donated £725,000 to the Conservative Party.[50] The company reported 38.2 percent rise in interim pre-tax profits aided by "a successful Black Friday weekend" and was helped by a "significant increase in supporting Supply Chain Co-ordination (NHS) with the storage and distribution of PPE", processing "over 7.4 billion items of PPE on the NHS contract".[51]

Aventis Solutions

Aventis Solutions, was awarded an £18.48 million contract on 12 May to supply garments for biological or chemical protection to the NHS. Aventis is a consulting firm, although its director Jamie Farrell told Byline Times that it had been supplying the NHS for nine years before the DHSC contract.[52]

Luxe Lifestyle

Design company Luxe Lifestyle Limited was awarded a £25 million contract on 27 April to supply garments for biological or chemical protection to the NHS, including 1.2 million gowns and 10 million FFP2/KN95 masks. According to Companies House, the business was incorporated by fashion designer Karen Brost in November 2018. The company has no employees, no assets, no turnover and no history of trading at all.[16] Brost's previous brand was called Zazaboom; founded in March 2020, this brand included handmade designer face masks costing £25 each.[16]

Globus

Globus Limited, which has donated more than £400,000 to the Conservatives since 2016, won a £93.8M government contract for the supply of respirator face masks.[53]

Clandeboye Agencies

The gave Clandeboyne Agencies Limited, a wholesaler of confectionary, an £108 million contract for the supply of PPE. It was awarded without competitive tender. The company has no previous experience in supplying PPE. The Good Law Project and EveryDoctor are seeking a judicial review for the contract.[54]

Individuals

Michael Saiger

The Good Law Project opened a number of cases against the DHSC, questioning the awarding of PPE contracts more than £250M to Michael Saiger, head of an American jewellery company based in Florida with no experience of supplying PPE,[17] which involved a £21M payment to Gabriel González Andersson, who acted as an intermediary.[55] The contract was offered without any advertisement or competitive tender process.[17]

Baroness Harding, Kate Bingham, and Mike Coupe

Baroness Harding, a Conservative peer and the wife of Conservative MP John Penrose, was appointed to run NHS Test and Trace.[20] Kate Bingham, a family friend of the PM married to Conservative MP and Financial Secretary to the Treasury Jesse Norman, was appointed to oversee the vaccine taskforce.[56] Bingham went to school with Boris Johnson's sister Rachel Johnson.[24] Bingham accepted the position after decades in venture capital, having been hired without a recruitment process.[57] According to leaked documents seen by The Sunday Times, she charged the taxpayer £670,000 for a team of eight full-time boutique consultants from Admiral Associates.[58] In October 2020, Mike Coupe, a friend of Harding's,[27] took a three-month appointment as head of infection testing at NHS Test and Trace.[59] The Good Law Project and the Runnymede Trust launched a legal case which alleged Johnson acted unlawfully in securing these three contracts and chose them because of their connections to the Conservative Party.[27]

Lords Feldman and Bethell, Roland Rudd, Meller Designs

Former Conservative party chair Lord Feldman was appointed as an unpaid adviser to Conservative peer Lord Bethell.[60] On 1 April, Matt Hancock held a meeting with the Office for Life Sciences and DNA sequencing firm Oxford Nanopore Technologies to discuss the government's "testing ambition". They were joined in this meeting by the Tulchan Group, a communications company headed by Bethell. On 6 April, Bethell met with Roland Rudd (brother of former Home Secretary Amber Rudd) to discuss "COVID-19 testing communications".[61] Feldman was present when Bethell awarded Meller Designs (owned by David Meller, who gave £63,000 to the Conservative Party, mostly when Feldman was chair) £163 million in contracts for PPE on 6 April.[20][62]

Owen Paterson

Three days later, Conservative MP and former Secretary of State for Northern Ireland Owen Paterson took part in a phone call with Bethell and Randox, who pay Paterson £100,000 a year as a consultant. The Grand National (the biggest sporting event of the Jockey Club; Baroness Harding sits on the club's board) is sponsored by Randox, who received £479M in testing contracts, with orders continuing even after it had to recall half a million tests because of safety concerns.[20]

Lord O'Shaughnessy

Conservative peer Lord O'Shaughnessy was paid as an "external adviser" to the DHSC when he was a paid Portland adviser. In May, O'Shaughnessy took part in a call with Bethell and Boston Consulting Group (BCG), a Portland client that got £21M in contracts on the testing system.[20] BCG management consultants were paid up to £6,250 a day to help speed up and reorganise the Test and Trace system.[63] On 10 April, he and Bethell arranged a phone call with Daniel Korski, CEO of venture capitalist firm PUBLIC and former special adviser to David Cameron.[61] According to TechCrunch, PUBLIC received funding from a number of high-profile investors, including Conservative Party donor David Meller, and Conservative life peer and current Treasury minister Lord Agnew.[61][64] Korski met Bethell and O'Shaughnessy to discuss "health technology and COVID-19".[61]

George Pascoe-Watson

George Pascoe-Watson, chair of Portland Communications, was appointed to an unpaid advisory role by the Department of Health and Social Care (DHSC); he participated in daily strategic discussions chaired by Bethell.[65] He also sent information about government policy to his paying clients before this was made public.[66][67]

Gina Coladangelo

Gina Coladangelo, a close friend of Matt Hancock with no known health background, was paid £15,000 as a non-executive director of the DHSC on a six-month contract, although there was no public record of the appointment. She accompanied Hancock to confidential meetings with civil servants. She was given a parliamentary pass sponsored by Bethell (Coladangelo does not play a role in Bethell's team.)[36]

Sean Topham and Ben Guerin

Sean Topham and Ben Guerin, who are known for making right-wing memes during the Conservative Party's 2019 campaign, as well as Australia's right-wing coalition and the mining firm Glencore, were given a £3 million contract for handling COVID-19 digital communications from March until September.[68]

Alex Bourne

Alex Bourne, a former neighbour and owner of the Cock Inn pub near Hancock's constituency home, gained a contract which involved supplying "tens of millions of vials for NHS Covid-19 tests".[69]

Right-libertarian think-tank heads

A number of heads of right-libertarian think-tanks have been appointed by Liz Truss to the Strategic Trade Advisory Group. These include, Mark Littlewood, director general of the Institute of Economic Affairs; Matt Kilcoyne, deputy director of the Adam Smith Institute, and Robert Colvile, director of the Centre for Policy Studies.[70]

Dominic Johnson

On 1 December 2020 it was announced that Dominic Johnson, CEO of Somerset Capital Management (co-founded by Johnson and Jacob Rees-Mogg) and former Conservative chair will join the non-executive board at the Department for International Trade, and will chair the Audit and Risk Assurance Committee. The board also includes Douglas Carswell, a founding director of Vote Leave.[70]

See also

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