Procurement. I’m sure, like me, even a mention of the word gets your engines revving. Finally, something we can all get excited about. People all across the world, of all races, sexualities and political leanings, joining together, unified by that beautiful word.
I jest, of course, procurement (especially of the public variety) is not sexy. It is inescapably unsexy. Unashamedly dull. It is the over-boiled cabbage of Governmental activity. So mind-bogglingly uninteresting that if one were to be asked at a dinner party “what do you do?” and one responded “I’m in public procurement”, your companions would start talking about their self-assessment tax returns and obscure VAT rules in preference.
It’s this characteristic that makes me argue that it is perhaps the most dangerous element of a mature democracy (and even more so developing ones). It’s extraordinarily hard to get anybody excited about the ins and outs of the systems controlling public procurement and so consequently also hard to hold anyone to account. It’s not as if the Sun and the Daily Star are going to choose to sell papers with a detailed expose of closed-tender contracts when they could otherwise focus on another case of parliamentary boffing.
And yet, we should be incredibly interested in where our hard-earned tax is eventually getting spent, who’s pockets it’s lining, and how the rules are being ever-so-gently massaged.
That’s how we find ourselves here, nine or so months into the first pandemic of the century (and crucially the first pandemic of the digital age), needing desperately to examine where all the money is going. After all, it’s those of us in Gens X, Y and Z that are going to bear the economic brunt of paying all this money back for the longest time.
The National Audit Office will release a full report into the ‘concerns’ that have been raised in late 2020. Whilst we sit on the edge of our seats awaiting publication, I thought it would be interesting to have a look at a bit of background, and some standout moments. A sort of ‘Greatest Hits of Shocking Cronyism’ if you will.
Public procurement tenders are generally an extraordinarily bureaucratic process: the Government body acting as the purchaser must ensure it gets good value for money and do extensive due diligence on those it’s entering into contract with, for obvious reasons. These normal processes are not well suited to an emergency such as a pandemic, when decisions must be made rapidly, thus rules can be suspended when necessary.
On the 18th March the Cabinet Office distributed a notice to all public contracting authorities setting out guidance for how procurement could be fast-tracked in this situation. Tendering processes could be skipped ‘due to extreme urgency’ or ‘due to absence of competition or protection of exclusive rights’. Makes perfect sense, it would be unthinkably stupid to jump through bureacratic hoops to procure an item with only one supplier during a pandemic.
WJH wrote extensively at the time about the mess of these first few months in our weekly newsletters, partly because we experienced this first-hand. Businesses across the UK launched into action producing desperately needed supplies such as hand sanitiser, scrubs, masks and pretty much everything else you can imagine. At first things seemed to go well; individual NHS Trusts reacted rapidly to take on unknown suppliers. And then one day the phones went silent.
On 1st May DHSC centralised procurement of key medical supplies, including all PPE (Personal Protective Equipment). Existing stocks and contracts became the property of central government, who would handle it from hereon. Except it wasn’t actually our elected overlords in control: the role had been subcontracted to accountancy firm Deloitte who had set up a ‘cell’ inside the cabinet office. Probably nothing to do with cabinet minister Chloe Smith having been a consultant at Deloitte.
After this point, those of us with supplies available were uniformly told that they weren’t needed. Meanwhile any conversation with clinical staff revealed a desperation for any PPE they could get their hands on. I know of many cases where NHS and care staff were reliant on businesses circumventing procurement (and the need to make ends meet) by donating supplies directly at the good-ins entrances of hospitals.
The Government opened a web portal inviting suppliers to let them know what could be made available. It would seem that most were ignored.
Contracts were being awarded though. Some received extraordinary publicity, like the 400,000 gowns flown in from Turkey by the RAF after some delay and much mutual back-patting from ministers, only to all be rejected as unfit for use. Most though kept quiet, and many are only having their details publicised now.
(I should note at this point that thankfully I’ve had to do little hard lifting in digging any of the following examples up: people like the Good Law project are hard at work, led by the infamous Jolyon Maugham, who’ll always be remembered better for beating a fox to death in the early morning light wearing his dressing gown.)
Have you heard of PPE Medpro? It’s unlikely, since it was only incorporated in mid-May with a standard £100 statement of capital. It’s owner is Anthony Page, who that same day quit his role as company secretary at the business that manages the brand of Baroness Mone. The Conservative peer Baroness Mone. Page is also the Finance Director at Knox Group, which owns Lancaster Knox LLP, an outfit that specialises in handling tax fraud investigations, and has donated £221,000 to the Conservative party. 44 days later PPE Medpro was awarded unadvertised and uncompetitive contracts for £122m for the supply of medical gowns.
How about Crisp Websites Limited? It’s a small company that generally trades under the brand ‘PestFix’ (and sometimes ‘Pigeon Stop’). Last year it reported assets of about £18,000. We can assume though that the owners do at least have the Midas touch, seeing as they’ve been awarded £313.7m in uncontested contracts for various PPE, some £168.5m worth of which turned out to be unusable. Luckily our ever-benevolent government believes in 7th chances so paid them upfront more than £32m for a shipment of coveralls. Astonishingly more contracts were awarded which haven’t been made public yet. I’m wondering which bank lent a company with assets of £18k enough capital to deliver on these contracts? If anyone finds who it is I’ve got a bridge they might like to buy… (Pestfix actually held a crowdfunder in early April in which they admitted to never having supplied medical PPE.)
PestFix have been one of the benefactors of a remarkable spurt of purchasing coveralls. The Government won’t say how many they bought, but estimates based on spend and cost per unit put it at 29m. For reference the NHS so far has needed 500,000. The items have been tested to a substandard level by a substandard lab, of those that even have been tested and aren’t just sat in a warehouse somewhere.
The largest beneficiary of the coveralls gold-rush is an interior design company (specialising in offices) called Unispace, racking up £239m worth. The other lucky bastards included: P14 Medical (a loss-making company owned by a Tory councillor, £156m), Cargo Services Far East limited (£106m), Medicine Box Ltd (another micro-company, £40m), Initia Ventures Limited (a dormant company with £100 in assets, £32.5m), SG Recruitment UK Ltd (yup, a recruitment company which is under audit, £23.9m), ‘Tower Supplies’ (which isn’t even a legal entity (!), £40.5m), and Kau Media Group Ltd (a digital media agency, £19.5m).
To maintain impartiality, I should point out that the cash-grabbing doesn’t seem to have been limited to those with Conservative Party affiliations. Sir Christopher Evans, a Labour Party donor who was arrested in 2007 in the cash-for-honours scandal, is chairman of Excalibur Healthcare. The Isle of Man based company sourced £135m worth of ventilators for the NHS at the bargain price of £50,000 per unit. The same ventilators which it had been selling 3 weeks earlier at £8,800 per unit.
Lucky then that this government has an anti-corruption champion. The chap in question is MP John Penrose. John Penrose who is married to Baroness Dido Harding, the former CEO of TalkTalk (and Conservative Peer).who has somehow become responsible for the ever-increasing failure that is the Test and Trace system. The £12bn failure. The £12bn failure that last week briefly accidentally made an advert public for a £2000 a day role of VP of operations to try and sort out their useless call centres!
The most astonishing part of this story is I could literally keep going for page after page after page, but at this point your eyes have glazed over and I’m in the corner in the foetal position vomiting with rage. When all of this comes to a head it will be fascinating to see where the line is drawn between incompetence and simple fraud and embezzlement, because this shit stinks, and this is only what has been gleaned from public record documents. It’s horrifying to think of profit being skimmed from the public purse during a pandemic by a well-connected minority whilst the same government won’t fund free school meals. But where there’s smoke, there’s most usually fire. And this looks like a warehouse full of untested, poorly manufactured fire, purchased from chancer fire-eaters who know the Mayor of Fireville.
What Just Happened? 