Almost a third of the U.K. government’s £41.8 billion ($54.8 billion) pandemic spend carried a ‘high risk’ of corruption, a charity probe has found.
Covid-19 contracts worth around £15.8 billion ($20 billion) used multiple questionable procurement processes that raise ‘red flags’, according to a report published Monday by NGO Transparency International.
The organization considers government contracts with three ‘red flags’ to indicate a high risk of corruption. These flags included things like the award of a contract with no competitive process, or to a company less than 100 days old.
Of some 5,000 Covid-19 contracts, 135 had at least three red flags — a relatively low figure given their total cost, indicating some very high-value deals were awarded without proper process.
The government paused many standard procurement rules during the pandemic in an effort to get goods into the country as quickly as possible. But this decision has long been considered controversial.
Inadequate emergency stockpiles
The U.K. went into the pandemic with had inadequate stocks of numerous crucial items. Some items, including protective gowns and body bags, hadn’t been stockpiled at all for the event of a pandemic, I revealed for HSJ back in 2020.
This left the country particularly vulnerable to soaring global demand for these kinds of items. I previously reported on the chaos surrounding the country’s procurement of PPE during the pandemic.
Although pandemic contracts cover all manner of goods and services, personal protective equipment deals have received perhaps the most public scrutiny.
A huge amount of public money was spent on PPE, but most of it was never used.
As governments around the world raced to supply their hospitals with equipment, the U.K. purchased many items for several times their regular price.
Officials also ended up placing excessive orders for PPE products in the rush to secure goods, many of which didn’t arrive for months after they were needed.
More than £750 million ($980 million) was spent storing items in tens of thousands of containers at shipping ports and in warehouses at home and abroad in the first 18 months of the pandemic.
Many products that did arrive were deemed unusable by the country’s health system.
In the end, the government wrote nearly £10 billion ($13 billion) off the value of the £13.6 billion ($17.8 billion) it originally spent on PPE.
A procurement strategy ‘like no other’
Around £1 billion ($1.3 billion) worth of these unused products were purchased through a now-notorious ‘VIP’ procurement lane, according to the Spotlight on Corruption organization.
The ‘VIP lane’ was a dedicated PPE procurement stream for companies recommended by government ministers.
An inquiry into public procurement published by the National Audit Office back in 2020, however, didn’t find evidence that ministers played a hand in procurement.
In response to the Transparency International report, a spokesperson for the Conservative Party, who led the country during the pandemic, told the BBC: “Government policy was in no way influenced by the donations the party received — they are entirely separate.”
In a letter to the country’s Public Accounts Committee, the National Audit Office and Chancellor Rachel Reeves, chief executive Daniel Bruce said his charity’s review “points to more than coincidence or incompetence.”
“The Covid procurement response was marked by various points of systemic weakness and political choices that allowed cronyism to thrive, all enabled by woefully inadequate public transparency,” he wrote. “As far as we can ascertain, no other country used a system like the UK’s VIP lane in their Covid response.”
The cost to the taxpayer has “already become increasingly clear with huge sums lost to unusable PPE from ill-qualified suppliers,” he added. “We strongly urge the Covid-19 inquiries and planned Covid corruption commissioner to ensure full accountability and for the new government to swiftly implement lessons learned.”
The country’s new Labour government has pledged to appoint a commissioner to investigate alleged corruption in pandemic contracts, and to claw back funds where possible.
This latest report comes as a national inquiry into the U.K.’s Covid-19 response hears evidence on the impact of the pandemic on its healthcare system.
