Three years ago, in the aftermath of the covid-19 pandemic, vital frontline staff across our NHS were struggling against dangerously low stocks of personal protective equipment. We all heard the stories of frontline workers in the early stages of the pandemic. These stories show us the impact of not procuring adequate reserves for a pandemic such as covid-19, and they show us why we need the right culture to rapidly respond to emergency procurement demands whenever they may show. Sadly, what we saw during the pandemic did not live up to standards. What followed, with the horror stories of frontline workers in the early stages of 2020, was a case study in wasteful and inefficient emergency procurement.
In January, the National Audit Office found that nearly £15 billion was wasted on unused covid supplies. That is £15 billion that could be going towards tens of thousands of full-time nursery places. It is £15 billion that could be going towards clearing the backlog in our NHS. It is £15 billion that could hand every single person in this country £220 and still have change left over. Instead, the incompetence we saw from this Government cost this country a fortune. In fact, the Government’s record keeping was so flawed that the
Public Accounts Committee’s July 2022 report on the awarding of contracts to Randox during the pandemic stated it was
“impossible to have confidence that all its contracts with Randox were awarded properly.”
It is not just incompetence that costs the country. During the pandemic, the Government created a VIP lane for those offering to provide PPE. The system was extremely useful for some suppliers, with the Public Accounts Committee finding that one in 10 suppliers coming through the high-priority lane were awarded a contract. That compares with just one in 100 for the ordinary lane. The Cabinet Office and the Department of Health and Social Care also accepted that leads that went through the high-priority lane were handled better. Who was in that lane?
In the Public Account Committee’s report on PPE procurement, it stated
“The British Medical Association and the Royal College of Nursing told us that their organisations did not have access to the high-priority lane, even though they were being contacted by, and therefore would have been able to put forward, credible leads based on the knowledge of their members. The British Medical Association also noted that suppliers which had contacted them, including suppliers trusted by doctors, tried the normal channels of reaching out to the Government but had ‘hit a brick wall’. Care England told us that it had similarly shared the details of potential suppliers but there had been no follow-through.”
Instead, those with contacts with Government Ministers and officials, MPs and Members of the House of Lords were given access to this VIP lane. That included PPE Medpro, a company set up only a few days before but—surprise, surprise—with links to a Tory politician, which was awarded more than £200 million of public money. In total, £3.4 billion of taxpayers’ money in the form of contracts went to Conservative donors and friends. At a time when we were asking people up and down the country to come outside and clap, the Tory Government were giving cash to their donors. The Bill must be used to ensure that that never happens again.
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Use of the VIP lane was unlawful, as a High Court judge ruled last January. Although the increased transparency in clauses 44 and 81 to 83 is welcome, it is not enough to shine a proper light on the practices that occurred. Under our amendment 2, which is based on a proposal by the independent National Audit Office, any Minister, peer or senior civil servant involved in recommending a supplier for a public contract, under clauses 41 or 43, would be mandated to make a public declaration to the Cabinet Office of any private interest. That would go further than the provisions in the Bill by opening to public scrutiny information that relates to a supplier who is recommended for a direct contract. I pay tribute to the hon. Member for Richmond Park (Sarah Olney) for her amendment 1, which clarifies the point of law.
Without proper transparency, breaches of procurement practices can take years to come to light. Meanwhile, huge amounts of public money can be wasted, and companies that lack such connections, including small and medium-sized enterprises, which already face a struggle to get contracts under the current system, can
be sidelined. SMEs are often close to the heart of the communities they offer services to, and proactive procurement policy can help them grow. These contracts can boost the social impact of how we spend public money across the board. The Opposition welcome the amendments made to the Bill so far to improve the situation for SMEs, but we worry that the Government are not matching them with action.
According to research from the British Chambers of Commerce—the Minister knows that I have cited these figures before—in 2016, 25% of public sector procurement spending was awarded directly to SMEs. By 2021, that had dropped to 21%. Neither of those figures suggests a healthy procurement environment for SMEs, but it is shocking that SMEs have faced more difficulty in getting a fair share of public contracts in the past five years, despite the strong rhetoric from the Government. One important barrier for SMEs is the constant delay they face in getting access to the money they are owed within an appropriate timeframe. For SMEs that see a significant amount of money coming in via a single contract or a small pool of contracts, such delays can be devastating to the balance sheet. They can lead to missed payments, job losses and even closures of our valuable SMEs.