PARLIAMENTARY DEBATE
Emergency Covid Contracts - 29 June 2021 (Commons/Commons Chamber)
Debate Detail
I am grateful for the chance to address the House about the Government’s use of emergency covid contracts. I have previously responded to debates on this issue with as much detail and candour as I have been able to provide as someone who came to this brief last June and who has tried subsequently to understand what happened in the early months of the pandemic.
The right hon. Member for Ross, Skye and Lochaber (Ian Blackford) will know that all corners of our country have worked together to tackle covid. The public have all too often seen division between different regional authorities but, in truth, close collaboration with the devolved Administrations has been at the heart of our pandemic response, enabling swift policy action such as the roll-out of the vaccine programme UK-wide, the furlough scheme and a rapid increase in testing capacity.
At the beginning of the pandemic, over 13 million items of personal protective equipment were distributed to the devolved Administrations. Throughout the pandemic, the UK Government and the devolved Administrations have worked side by side on sourcing and supply of PPE such as FFP3 masks, and they continue to work together on meeting future demands on frontline staff. The existing procurement rules rightly allow the Government to procure at speed at times of emergency under the Public Contracts Regulations 2015. The rules predate covid-19, and there was no need for suspension or relaxation in order for them to be used. None the less, I understand and welcome questions that right hon. and hon. Members have about covid contracts, because how we spend taxpayers’ money matters very deeply to public trust.
It is true to say that the Government faced a number of challenges at the height of the pandemic, and we should be open about those. It is incumbent on all of us to understand not only the kinds of pressures that were on the system, but some of the shortcomings that desperately need to be addressed. That being the case, the Government are already adapting their commercial guidance and work. Following the first, independent Boardman review of procurement processes, looking at a small number of contracts in the Government Communication Service, 24 out of 28 recommendations have already been implemented, and the remainder will be met by the end of the calendar year. Following the second, wider Boardman review, which looked at PPE, ventilators, test and trace, vaccines and food parcels across Government, 28 further recommended improvements were identified, and progress on those is under way. Our Green Paper on transforming public procurement also sets out proposals to update the rules on procuring in times of extreme emergency or crisis.
Let me also briefly address the issue of Government polling during the pandemic. The Government regularly undertake research to support policy development, which includes work related to the impact of covid in areas across the UK. It is the sign of a responsible Government to understand the public’s views on how best to keep people safe to recover from the pandemic and to ensure that we will continue to deliver for all parts of the United Kingdom.
After the revelations and resignations at the weekend, this urgent question concerns yet another scandal at the very heart of this Tory Government. It seems that not even a health pandemic can do away with classic Tory cronyism, and the scale of this particular scandal makes it one of the biggest yet.
The Secretary of State ordered the use of a £560,000 emergency covid contract to conduct constitutional campaigning on the Union. Instead of using an emergency covid contract to order PPE for the NHS, the Minister chose to order political polling. This is not media speculation, and it is not even a political accusation. It is, Mr Speaker, a plain fact. It comes directly from official evidence that has been published in the High Court. It comes in evidence from the Cabinet Office, in a witness statement dated 24 December 2020, which states:
“I...received an urgent request for Union-related research from the office of the Rt Hon Michael Gove...In response, I asked Public First to conduct some testing of people’s attitudes”
on this issue.
Did the Prime Minister know or approve of that polling and constitutional campaigning? Who were the polling results shared with, and will they be published in full? How many other pieces of political research were ordered during the pandemic, and exactly how much public money has been spent? These are just some of the questions that the Secretary of State needs to answer. There are many, many more.
The Secretary of State was in Scotland yesterday. He held a press conference. He told Greg Russell of The National newspaper:
“We don’t use taxpayer funds for party political polling”.
He went on to claim that the contract was assigned by others. We know from the witness statement that these things are not true. The truth and this Government are distant strangers, and that should come as no surprise when we remember the Prime Minister has been sacked not once but twice for lying.
Public First was taken on, alongside BritainThinks, as one of only two companies in the market deemed to have the scale, expertise and experience to provide focus group testing in March last year. Both were rapidly diverted from existing work to take a snapshot of public reaction, and that allowed us to test things such as the contain strategy, the early “Stop The Spread” campaign and the “Stay Home” message, alongside an understanding of how best to tailor messages to different audiences across the UK. These key communications campaigns were seen on television and social media, and I am sure we will all be familiar with them.
Ministers had no personal involvement in the decision to award this contract, and they do not, of course, personally approve contract awards. This contract did not relate to constitutional campaigning, and any suggestion that the Government carry out party political research is entirely false.
Focus groups, which were conducted by Public First but commissioned by the national resilience communications hub, looked at attitudes towards the virus, upcoming recovery and the wider context in which to interpret the results, and the results were shared with relevant policy and communications teams. They were involved in developing and delivering covid policy and communications across the devolved Administrations, enabling them to differentiate their content and messages as appropriate. We do not plan to publish the full results of the polling and focus groups that have been used to inform ongoing policy formulation. However, we regularly review all the data we collect, and we intend to publish the elements that are not sensitive in due course.
Separately, the Cabinet Office carries out polling on attitudes towards the Union on a regular basis, but this work was paused during the coronavirus crisis. We are aware that the Scottish Government also conducted polling on attitudes in relation to covid. We did not see this research, nor would we expect to. The Secretary of State for Scotland has already addressed some of the questions that the right hon. Gentleman has raised online on his Twitter account.
Finally, to return to the judgment on Public First at the recent court hearing, that judgment found in favour of the Government on two grounds, which were emergency award and contract terms, including length. It was recognised that
“everyone involved was acting under immense pressure and the urgency of the…crisis did not allow time for reflection. The time constraints justified…derogation from the usual procedures required under PCR 2015. But they did not exonerate the Defendant from conducting the procurement so as to demonstrate a fair and impartial process of selection.”
We have already recognised that there was an issue of process, where we could do much better. That is why we investigated what had happened to prepare for the court case. We launched an internal independent review—the subsequent Boardman review—which is published in full online. We have taken forward its recommendations in full, and have nearly delivered all of them. A steering group, chaired by our chief financial officer, has been tracking implementation.
I hope that the right hon. Gentleman feels reassured by my answers. I look forward to continued collaboration with the Scottish Government to the benefit of citizens across our Union.
I know all too well, on the point made by the hon. Member for North West Durham (Mr Holden), the need to secure PPE for our frontline NHS and social care workers, but while nurses were working in bin bags, others were filling their pockets at the taxpayer’s expense. The Minister quoted the National Audit Office, but the Comptroller and Auditor General said that the evidence shows that
“standards of transparency…were not consistently met”.
Perhaps the Minister can explain today why the National Audit Office found that PestFix, for example, was wrongly added to the high priority lane and awarded over £300 million after a shareholder reminded a senior official that he was a friend of his father-in-law.
The Minister claimed that a full eight-stage process always took place, but the NAO found over 70 contracts awarded before that process even existed. Can she confirm that Ayanda Capital was placed on the VIP list without that process, thanks to an adviser to the International Trade Secretary? Officials admitted that due diligence had not been carried out on Ayanda, and the bar seems to have been lowered in that case.
Mr Speaker, £150 million was spent on entirely useless PPE, so can the Minister confirm how much equipment bought this way was not fit for use? We already know that over £10 billion has been awarded without a competitive tender—for example, the £100 million given to Pharmaceuticals Direct Ltd after lobbying by the Home Secretary, with millions apparently ending up in the hands of her close associate, the “broker” to the deal. Will the Home Secretary be referred to the independent adviser—and if not, why not?
Yesterday, the Minister accepted that private emails were used by other Ministers in the process of awarding contracts, but the Prime Minister’s official spokesperson denied it. Will the Minister ensure that the record is now corrected?
Finally, the Minister promised that all such emails are covered by freedom of information. We have submitted such a request, but how will the former and current Health Ministers be prevented from permanently deleting the emails first? I urge her to refer the whole issue to the Information Commissioner. Surely she can see why only an independent process can restore trust. If Ministers want to be taken seriously by the public, then, quite frankly, they need to stop taking the hit and miss.
Let me go through some of them in relation to PPE. Some 450 people from across Government were moved into the Department of Health and Social Care to become a stand-up virtual team to assist with securing PPE. That team is normally only 21 people strong. That meant a lot of people who did not know each other working remotely on a range of different IT systems, with suppliers they did not know, on product they were not familiar with, in the most highly pressured market of their careers. That has led to lags in contract publication, as paperwork has been very tricky to join up across systems.
Faced with exceptional global demand, the usual vendors in China, which service the central procurement function, very quickly ran out of supply, and the world descended on a few factories in that country to bid for available items. It was in that market context that the Government had to procure with extreme urgency. That was often through direct award of contracts. If we did not do that, we risked missing out on vital supplies. We never ripped up procurement rules. It was a situation of genuine crisis and extreme urgency, where offers had to be accepted or rejected in a matter of hours or days, and it was simply not viable to run the usual procurement timescales.
The effort to secure PPE was herculean and involved setting up a new logistics network from scratch. I have explained in Parliament on a number of occasions that the VIP fast-track lane that has been touted often by the Opposition, was actually a mailbox set up by officials during the height of the pandemic to consider some of the 15,000 offers of assistance to supply PPE. In the early months, leads were coming in a lot faster than they could be processed. When they were rejected, or if they were delayed, people started chasing them through their MPs or through Ministers. To manage that influx of offers, a separate mailbox was set up to handle this area of work and sift credible offers.
I addressed yesterday concerns about private email use and the rules governing it. Government guidance is that official devices, email accounts and comms applications should be used for communicating classified information, but that other forms of electronic communication may be used in the course of conducting Government business. Each Minister is responsible for ensuring that Government information is handled in a secure way. We also set out that where business is conducted on non-official IT, relevant information should be recorded on Government systems, but we are keeping the guidance under review to ensure that it is up to date.
The most important thing to note, as the right hon. Lady does, is that all PPE offers, no matter where they came from, went through the same eight-stage checks. The PPE team compared prices with those obtained in the previous two weeks, to benchmark the competitiveness of those offers. Separate approval and additional justification were required for any offers not within 25% of the average that were considered for possible approval. It is also important to note that of the 493 offers that went through the priority mailbox, I understand that only 47 were taken forward—in other words, 90% were rejected.
There have been judicial reviews in respect of some of those contracts. The case relating to the Department of Health and Social Care looked not at the awarding of contracts, but at the delays in publishing their details. Health Ministers have always been clear that transparency is vital, and the court found that there was no deliberate policy to delay publication. In the judicial review relating to Public First, the court recognised
“that everyone involved was acting under immense pressure and the urgency of the…crisis did not allow time for reflection. The time constraints justified the…derogation from the usual procedures required under PCR 2015. But they did not exonerate the Defendant”—
us—
“from conducting the procurement so as to demonstrate a fair and impartial process of selection.”
We recognised very quickly that there was an issue of process where we could do much better. That is why we investigated what happened to prepare for that court case and launched an internal review into the contracts that were undertaken. Public First has cross-party directors and, as I mentioned, we already have a programme of work in the two Boardman reviews.
I appreciate that throughout the pandemic the Opposition have wanted to raised questions about the contracts. I hope that I can address them as best I can. If there are any questions that the right hon. Lady feels I have not covered, I will come back to her on them.
The other thing to say is that I do feel sorry for the Minister being set up. I am sorry that Minister Gove was not here to take some of the questions, because most of them are named for him, but this House will not be taken for granted. When statements continue to be made outside the House, I will continue to grant UQs, so let’s get used to it. If the Government do not want to come here, I will ensure that they are heard here.
I thank my hon. Friend for her question. We have tried throughout to be transparent, but I have set out some of the very good reasons why it has been difficult sometimes to publish the contracts in a timely way. This has been a very complex process where we have had to surge teams at very short notice and go back through all the paperwork, looking across different IT systems across different Departments. That has been a challenge that I have tried to address, as has the Department of Health and Social Care. My understanding is that all PPE contracts are now transparently published. We are working through them all in relation to comms and have a programme of work under way to make sure that we have transparent publication. I completely agree that it is important that we offer reassurances to the public on how taxpayers’ funds are used.
The Minister seems to be auditioning for the role of Minister for the Cabinet Office; I do not know whether he has been kidnapped but he does not seem to be about at the moment—but my hon. Friend is doing very well. Is this urgent question not an opportunity to highlight the fact that if the Government had not used emergency powers, we would not have established the world-leading vaccination programmes, which have saved not just hundreds of thousands but probably millions of lives across the globe? They used the emergency powers to develop the vaccine programme, rather than go through the red tape and bureaucracy that the European Union did and did not develop a programme.
My hon. Friend is right about the importance of being able to take sensible risks that save lives in times of crisis, which is what we did in a number of these areas, and that was the right decision to make.
If the Minister is so concerned about knowing what Scotland’s attitude to the Union is, may I point her to the biggest opinion survey ever conducted in Scotland? In May, the people of Scotland voted by a majority for pro-independence parties. The Scottish Parliament has a pro-independence majority yet again. Does she accept that that is a proper demonstration of the will of the people of Scotland to be rid of this corrupt Union, once and for all?
The hon. Gentleman is right to say that this was not a PPE contract; it was a contract about communications and the important role they played in managing the pandemic at a time when we did not have the vaccine, the testing capacity that we wanted or other measures that we needed to tackle the pandemic. Communications, in this context, were extremely important in making sure the public understood the behaviours they needed adopt to keep themselves safe.
“unleashing the potential of our whole country”—
countries—
“by backing British industry”—[Official Report, 21 June 2021; Vol. 697, c. 672-673.]
He derided China for “trade-distorting practices” and dismissed trade deals with China. That all sounds good, except it is just not true. Today in a covid briefing, the Government’s position on the US Food and Drug Agency judgment that the Innova tests were deadly was that it is down to an overreliance on the manufacturer’s data, and that the tests are being tested at Porton Down to disprove the Chinese manufacturer’s own data that they are unsafe. All the while, the UK diagnostic industry across the countries of the UK have been utterly betrayed. Can the Minister tell me: why are this Government using trade-distorting practices to prop up discredited Innova lateral flow devices made on the cheap in China but at massive expense to the UK? Why are UK diagnostic contracts and the hundreds of jobs that Lord Bethell—
The hon. Gentleman raised with me the importance of onshore manufacturing capacity in Westminster Hall last week. I have asked for a briefing on the issue and shall get back to him, because he raised an important issue about the extent to which we have key manufacturing capacity in this country. Project Defend in the Department for International Trade aims to ensure that we have the capacity that we need.
We are going to suspend the House for two minutes so that the necessary arrangements can be made before the next business.
Contains Parliamentary information licensed under the Open Parliament Licence v3.0.