‘Not too late’ for government transparency on PPE contracts

3 December 2020

Ministers must be able to demonstrate why they picked certain suppliers or face being vulnerable to questions “indefinitely”, the boss of the spending watchdog has warned.

Gareth Davies, head of the National Audit Office (NAO) told the Financial Times it is not too late for the government to “put right” its omissions by retrospectively putting in place explanations of why they chose certain contractors for personal protective equipment (PPE) contracts.

Last month, the watchdog published two reports on PPE which found that the government had “lacked transparency” on contract awards and hundreds of millions had been spent on “potentially unsuitable” equipment.

Davies told the newspaper ministers had failed to demonstrate they had used money in a way that was “fair and transparent” or clearly represented “the best available value for money”. 

“That’s what has not been possible in this case because we couldn’t give a positive opinion based on the work we’d done because of these gaps in the evidence.

“This isn’t just bureaucratic box ticking, it really matters that you can demonstrate why you picked the suppliers you picked. Because otherwise you’re vulnerable to these questions indefinitely,” he said. 

Davies added ministers would be able to provide evidence on the decisions behind the deal when the Public Accounts Committee opens its inquiry into PPE procurement in January 2021. 

He acknowledged there would be a trade-off between “perfection and speed” when buying equipment to manage the pandemic, but added that ministers should have switched to competitive tendering earlier in the crisis. 

An NAO report also revealed there was a “high priority channel” for PPE suppliers recommended by politicians and officials, and those suppliers with political connections were 10 times more likely to receive government contracts.

Davies said it was not unreasonable for ministers to set up a “sifting mechanism” for suppliers, but added it was crucial to be “completely clear and transparent about how you operated that, because otherwise people will draw their own conclusions”. 

Last week, labour leader Keir Starmer accused prime minister Boris Johnson of "wasting" taxpayer's money on equipment that "can't be used".

Johnson said  “99.5%” of the 32bn items of PPE bought between February and July 2020 “conform entirely to our clinical needs”.

Davies said people should not get “too distracted by the percentages”, added the NAO had “certainly identified hundreds of millions of pounds of spending that isn’t going to be useful”.

When questioned on whether there could be any criminality, Davies said the watchdog doesn’t “have any evidence”.

“But the weaknesses in the processes we’ve set out and some of the ones we’ve already discussed means that we can’t give a positive audit view… We can’t give a positive assurance,” he said. 

Last month, not-for-profit the Good Law Project launched legal proceedings against the Department of Health and Social Care (DHSC) over a £250m contract awarded to a Florida-based jewellery company with “no experience of supplying PPE”.  

The contract the claimants are challenging was entered into on 4 June for £70.5m for the supply of 10.2m gowns. The Good Law Project alleged the DHSC paid the firm £7.05 per gown, while the average price for PPE gowns was £4.60.

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