Only one in 100 contracts handed out to companies to support the government’s Covid-19 response was awarded by competitive tender, according to a leading think tank.
Despite the public debate over whether the taxpayer has received good value for the billions spent on tackling the virus, the Institute for Government (IfG) said it had seen little evidence of Whitehall re-establishing traditional competitive procurement rules.
Out of £17.3 billion of new contracts issued up to the end of July, £10.5 billion were direct awards and £6.7 billion were given to firms on lists of approved suppliers. Only 1 per cent was awarded through competitive tenders.
“There is no evidence that the use of direct awards at the start of the crisis has waned as the crisis has gone on” the institute said. “Even though many of the Test and Trace contract awards have come later in the pandemic, those contracts have been just as likely to be direct awards”.
The institute said the more firms that bid for a contract, the less the government paid. On average, each additional bidder on a contract reduces the overall cost by 2.5 per cent. Boris Johnson and his ministers need to learn from the repeated U-turns, the poor-value-for-money schemes and the other mistakes of 2020, as well as from what has gone well, to make a success of 2021.
And a former government adviser who brokered a bungled £250 million PPE contract has used an obscure change in company status to avoid having to disclose details of his earnings. Andrew Mills, who served as an unpaid adviser to the Board of Trade, chaired by Liz Truss, secured a deal between the government and the investment company Ayanda Capital for millions of masks.
The NHS subsequently deemed millions of those masks worth £155 million unusable for the intended use because they were supplied with ear loops rather than head straps. Ayanda has blamed government officials for the mistake and said it supplied masks to the specification agreed.
And in another case a company, Abingdon Health, didn’t obtain MHRA approval for its antibody lateral flow test and its contract was cancelled by the Secretary of State for Health & Social Care.
From the Good Law Project we read “So much, so very much, is wrong with the Government’s decision to contract with Abingdon Health. As we understand matters, Government gave, without competition, substantial public contracts to develop Covid-19 antibody tests to a company which had no tests, ignoring established operators. We believe these contracts were worth £85m but it’s proving hard to pin Government down. Government took a cut of the revenues from the tests, which didn’t do what they were supposed to, and Government has, there’s no polite way to put this, lied about what it did”.
No surprise there then?