It is “impossible to have confidence” that nearly £777m of Covid-related contracts “were awarded properly” by the Government, a damning report by MPs has found.
They highlighted “woefully inadequate record-keeping” of ministers’ meetings, as businesspeople lobbied for lucrative Covid-testing contracts.
There was a failure to deal with potential conflicts of interest – despite “clear concerns about political connections” – which saw valuable contracts awarded, many without competition.
Even allowing for “exceptional circumstances” at the start of the pandemic, “basic civil service practices to document contract decision making were not followed”, the MPs said.
The Department for Health and Social Care “failed in its duties to be transparent about meetings its ministers had with Randox Laboratories”, they added.
The result left health ministers who had to approve contracts “confused and unclear”, according to the report by the Public Accounts Committee (PAC).
Randox won the first contract, worth £132m, without competition and without any performance benchmarking measures. MPs found it struggled to deliver the expected level of Covid-testing capacity.
Despite this, ministers awarded the Northern Ireland-based firm a contract extension worth £328m seven months later, again without competition.
The Government failed to consider profit margins or the potential for excess profit-making when deciding the contracts, and were powerless as Randox subsequently enjoyed a hundred-fold increase in its profit in the year to June 2021.
MPs found the Health Department only properly reported four of eight meetings between ministers and Randox, and only kept minutes of two of those – despite guidelines that require officials to report all meetings that ministers have with external parties, and any hospitality received.
The Health Department also failed to declare hospitality that then-health secretary Matt Hancock received from Randox during a ministerial visit to Northern Ireland in 2019.
Mr Hancock told MPs that his ministerial private office considered it was a political event and did not need to be declared.
He later resigned after it emerged he breached social distancing rules while having an affair with his aide during lockdown.
The PAC report found the Health Department’s disclosures and record-keeping were “well below the standards we would expect under any circumstances” and demanded it show evidence of how it intends to improve.
The “large gaps in the document trail mean that it is impossible to say the contracts were awarded properly in the way that we would expect to be able to, even allowing for the exceptional circumstances and accelerated processes in place at the time,” MPs found.
Health officials also failed to take any care over potential conflicts of interest when contracts were awarded to Randox, despite being aware of contacts between Tory MP Owen Paterson, who was a paid consultant for Randox while a sitting MP, and Matt Hancock.
Mr Paterson later resigned from Parliament, in November 2021, following a report by the Parliamentary Standards Commissioner, who found he had broken paid advocacy rules.
MPs said the Department of Health “could not answer clearly how it makes sure that those involved in procurement give due consideration to potential conflicts of interest in their decision making, even where interests are properly recorded or declared”.
The Procurement Bill, published in May 2022, contains new requirements on departments to record conflicts of interests relating to contracts.
The committee said it was also “concerned about the Department’s prioritisation of testing suppliers through VIP and priority routes, including those referred by ministers, MPs or Number 10.”
It found that suppliers that came through these routes were awarded £6bn out of the £7.9bn total of testing contracts awarded between May 2020 and March 2021.
Dame Meg Hillier, chair of the PAC, said: “The NAO (National Audit Office) has been careful to stress that it has not seen any evidence that the Government’s contracts with Randox were awarded improperly. But then, in the case of the hundreds of millions of pounds of contracts awarded to Randox there was precious little evidence to see.
“Much of the business was won without any competing tenders from companies who may have had better capacity to deliver, perhaps without the upfront capital.
“Add to that the failure to include any performance measures in the first contract, or any protection against excess profits, and this looks less like just the rushed policy and contract-making that we’ve seen across so much of the Government’s response to the pandemic.
“We repeatedly hear the reference to the crisis we were facing as a nation. But acting fast doesn’t mean acting fast and loose.
“There is truth in the adage about ‘opportunities in a crisis’ but I don’t think this is what was in mind.”
Randox said it had processed more than 25 million samples and “played a crucial role in keeping vital elements of the UK economy functioning during lockdowns”.
A spokesman said: “At no stage, either during its deliberations or in its preparation of this report, did the PAC make any contact whatsoever with Randox.
“Consequently many elements of its report relating to Randox are false, based as they are, on wrong and unchecked assumptions about the company.”