Nearly a third of the UK’s pandemic spending raises questions about corruption

Nearly a third of the British government’s £41.8 billion ($54.8 billion) pandemic spending posed a “high risk” of corruption, a charity study has found.

Covid-19 contracts worth around £15.8 billion ($20 billion) used multiple questionable procurement processes that, according to a report published on Monday by NGO Transparency International.

The organization considers government contracts with three ‘red flags’ as an indication of a high risk of corruption. These flags include things like awarding a contract without a competitive process, or to a company that was less than 100 days old.

Of around 5,000 Covid-19 contracts, 135 had at least three red flags – a relatively low figure considering the overall costs, suggesting that some highly valuable deals were awarded without the proper process.

The government has suspended many standard procurement rules during the pandemic in an effort to get goods into the country as quickly as possible. But this decision was considered controversial for a long time.

Insufficient emergency supplies

Britain entered the pandemic with insufficient supplies of many crucial items. Some items, including protective gowns and body bagswasn’t built at all for the event of a pandemic, I revealed HSJ back in 2020.

This made the country particularly vulnerable to rising global demand for these types of products. I rather reported on the chaos around the country’s purchase of personal protective equipment during the pandemic.

While pandemic contracts cover all kinds of goods and services, deals on personal protective equipment have perhaps received the most public attention.

A huge amount of public money was spent on personal protective equipment, but most of it was never used.

As governments around the world rushed to supply their hospitals with equipment, Britain purchased many items at several times the normal price.

Officials also ended up placing excessive orders for PPE products in the rush to secure goods, many of which arrived 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 warehouses at home and abroad in the first eighteen months of the pandemic.

Many products that did arrive were deemed unusable by the country’s healthcare system.

Ultimately, the government wrote off almost £10 billion (€13 billion) from the value of the €13.6 billion (€17.8 billion) it had originally spent on personal protective equipment.

A purchasing strategy ‘like no other’

About £1 billion ($1.3 billion) worth of these unused products were purchased through a now infamous ‘VIP’ purchasing route, according to the Spotlight on corruption organization.

The ‘VIP lane’ was a special PPE purchasing stream for companies recommended by ministers.

However, a study into government procurement published by the National Audit Office in 2020 provides no evidence found that ministers played a role in the tenders.

Responding to Transparency International’s report, a spokesperson for the Conservative Party, which led the country during the pandemic, told the BBC: “Government policy was in no way influenced by the donations the party received – which are fully separately.”

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 assessment “points to more than coincidence or incompetence.”

“The Covid procurement response has been marked by several points of systemic weakness and political choices that have allowed cronyism to thrive, all enabled by woefully inadequate public transparency,” he wrote. “As far as we can tell, no other country has used a system like the UK’s VIP lane in their Covid response.”

The costs to taxpayers have “already become increasingly apparent, with huge sums lost due to unusable PPE from poorly qualified suppliers,” he added. “We strongly urge that the Covid-19 investigations and the planned Covid corruption commissioner are fully accountable and that the new government quickly implements the lessons learned.”

The country’s new Labor government has pledged to appoint a commissioner to investigate alleged corruption in pandemic contracts and recover money where possible.

This latest report comes as a national inquiry into the UK’s response to Covid-19 reveals evidence about the impact of the pandemic on the UK’s healthcare system.