£4bn of taxpayer money spent on private Covid contracts is still unaccounted for

The UK government has been accused of breaking the law by failing to publish any information about more than £4 billion spent on contracts with private firms relating to coronavirus.

The Good Law Project campaign group, along with a cross-party group of MPs, is suing health secretary Matt Hancock for an “egregious and widespread failure to comply with legal duties and established policies.”

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Of the £17 billion which has been spent by the Department for Health and Social Care (DHSC) on Covid-related goods and services since April, £4.6 billion has not been accounted for. The department has only released details of £12.4 billion worth of contracts.

Government departments are legally obligated to publish the details of contracts no more than 30 days after awarding them, while government guidance goes further and advises civil servants to publish the contracts within 20 days.

Tussell, a research firm commissioned to look into the contracts by the Good Law Project, found that Covid-related contracts were being published much slower than non-Covid contracts, at an average of 78 days after being awarded.

Speaking to The Guardian, founder of Tussell, Gus Tugendhat, said, “While the Department of Health has published £12.4bn of Covid-response contracts, we know this is still not the full picture of its spending to date. It may be that the lag in publishing is even greater than that reported here.”

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What’s the problem?

The requirement to publish information about government contracts over a certain value exists to try and reduce the risk of fraud and allow scrutiny of taxpayer spending, which should lead to better value for money.

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In this case, campaigners have also made allegations of cronyism, saying that valuable contracts have, in some instances, been given to firms based on their connections to government, rather than their ability to deliver the goods and services, or provide good value for money.

“There is overwhelming evidence that entities connected to key government figures have made staggering fortunes from these procurement contracts,” said Jolyon Maugham, founder of the Good Law Project.

“There is a clear public interest in us knowing promptly, whilst those contracts can still be challenged, who benefited and to the tune of how much.”

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Which companies have won contracts?

Among the companies named in the legal challenge against the government is Ayanda Capital, which won a £252 million contract to supply facemasks, many of which were unsuitable.

Campaigners have noted that Ayanda has links to figures in government, and the prices it charged for the equipment were well above the norm, it is claimed.

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Another recipient of lucrative contracts was PPE Medpro, which won contracts worth £200 million, just seven weeks after it was set up by “a former business associate” of a Conservative peer, according to the Good Law Project.

As the matters are the subject of legal proceedings, the DHSC said it could not comment, but explained, “As part of an unprecedented response to this global pandemic we have drawn on the expertise and resources of a number of public and private sector partners. This is completely in line with procurement regulations for exceptional circumstances.

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“We have been clear from the outset that public authorities must achieve value for taxpayers and use good commercial judgement. Publication of contract information is being carried out as quickly as possible in line with government transparency guidelines.”