Public Spending - Acting quickly, or turning Britain into a Chumocracy?

By MIKE JOYNER

The National Audit Office has found that £10.5 billion of coronavirus contracts were awarded directly without a competitive tender process. The report also notes how contracts were more than ten times more likely to be given to a supplier with political connections. This has raised questions over the government turning into a 'chumocracy', giving out contracts to those closest to the Conservative Party. The ‘My Little Crony’ map shows the extent of the links between Government, MPs and Tory Donors. There is a 'high-priority fast lane' for companies referred by Government officials, ministers' officials, MPs and peers, as well as senior NHS staff and other health professionals, to ensure the quick acquisition of PPE. Yet, as the links between the private firms and government officials come to light, it has inevitably led to fears of cronyism. The report highlights contracts such as the one which was given to Public First, whose owners were former advisors to both Boris Johnson and Michael Gove. Another example is the AI company Faculty that was awarded almost £3 million worth of contracts - cabinet officer Lord Agnew owned a £90,000 stake in the company and has relinquished it, but only in July after details of the deal were first reported. The audit stated that in the case of Faculty that the Cabinet office ‘failed to document why it chose this particular supplier’.

In response to this, the government is keen to emphasise that the report had found 'no evidence that ministers had been involved in the award or management of contracts.’ At the start of the pandemic, the government was under immense pressure to get as much PPE as quickly as possible and was bidding against other governments around the world. This makes it more understandable that due to the speed the government needed to act, that contracts were given out without the usual competitive tendering process, which can be time-consuming. In PMQs, Boris Johnson responded by saying that he was proud of the way the government has got supplies of PPE at the start of the virus. He said that he was being criticised for moving too fast and that any government would have done the same thing. In a similar manner, the cabinet office emphasised the speed they had to act to acquire vital supplies to protect NHS workers and the public, and that they have ‘robust processes in place for spending public money to ensure we get critical equipment as quickly as possible, while also ensuring value for money.’


However, although many would forgive the government for making mistakes in attempting to acquire PPE so quickly, more than half of the 1,664 contracts agreed with private companies between March and July have still not been published. Meg Hillier, the chair of the public accounts committee, described the mistakes in the report as 'the tip of the iceberg,' expecting many more to be made public in the future. She demanded that the ‘government come clean and immediately publish all of the contracts it’s awarded so far.’ The fact that the government is so reluctant to release the rest of them suggests that there are many more examples of deals that were acquired without the competitive tendering process by those who have the right connections to government, further adding to this government's reputation of alleged cronyism.


A system that fast-tracks companies that have been recommended by government officials is always going to be perceived as influencing buying contracts. The cross-government PPE team considered that leads from these sources would be more credible and needed to be treated with greater urgency. The situation is, therefore, exacerbated when these companies fail to deliver on what they were promised as the system was put in place to get PPE equipment quickly while still ensuring high standards. A £350m contract with PestFix, which was mistakenly put into the high-priority process, delivered 600,000 masks which could not be used, showing that the fast-track system may not be fit for purpose anyway. It makes other policies which insist on financial prudence, such as a potential pay freeze for the public service even harder to swallow when the government is so nonchalant about their spending in other areas.


The National Audit Office in its recommendations encourages the government to ensure that they are fully transparent in how taxpayer money is being spent on contracts, to prevent questions of corruption being raised. To quell legitimate concerns of cronyism, all deals should be public within 30 days of signing them. The government should also be more careful to ensure that all conflicts of interest are well understood and have no impact on why a company is chosen to provide PPE.


Image - Unsplash (Christopher Bill)

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