Owen Paterson resigned as an MP last week © OLI SCARFF/AFP via Getty Images
Owen Paterson resigned as an MP last week © OLI SCARFF/AFP via Getty Images

Labour calls for inquiry into Covid contracts amid Paterson scandal

8 November 2021

Labour leader Sir Keir Starmer has called for an investigation into contracts awarded to Randox Health amid the Owen Paterson lobbying debacle.

During an emergency Parliamentary debate into standards and the Paterson affair, Starmer demanded a “full, transparent investigation” into contracts awarded by the Department for Health and Social Care (DHSC) worth almost half a billion pounds.

Paterson resigned as an MP last week after the Parliamentary commissioner for standards found him guilty of breaching lobbying rules in his work for Randox – which paid him £100,000 a year – and Lynn’s Country Foods between November 2016 and February 2020.

The commissioner said Paterson “repeatedly used his position as a member to promote the companies by whom he was paid,” and he “failed to establish the proper boundaries between his private commercial work and his parliamentary activities”.

Paterson approached ministers and public officials a total of 14 times lobbying in favour of the two companies. 

Starmer said told the House of Commons it was “vital the public has confidence that Owen Paterson's paid advocacy did not influence these decisions”.

Questions have also been raised over how Randox came to win the contract after documents showed government officials were aware the company did not have enough testing equipment required, according to the Sunday Times.

Randox was awarded three contracts by the DHSC between March and October 2020 for Covid-19 testing equipment. 

The company was awarded the first contract, worth £133m, in March 2020 for 2.7m coronavirus testing kits. There was no public tender.

It was then awarded further contracts worth £346m and £16,600 in October 2020 as variation agreements. 

The Department of Health and Social Care (DHSC) justified the direct award through a clause in the government’s procurement policy crafted for the pandemic, which allowed contracts to be directly awarded to a company if “only one supplier is capable of delivering the requirement, or due to extreme urgency brought about by unforeseen events”.

Randox told the Sunday Times it had won the government contracts on “merit” and there had been “a sudden and urgent global demand for testing equipment and diagnostics support” following the onset of the Covid-19 pandemic. 

Jo Maugham, director of the Good Law Project, a non-profit campaigning organisation, accused the government of being “contemptuous” towards lobbying issues, and questioned why the original £133mn contract was allowed to be awarded without public tender. 

Maugham told Supply Management: “The government has been far too contemptuous for far too long of the public interest in ensuring that public money is spent for public purposes. Every time you try to establish how a contract was awarded you are blocked.

“Diagnostics company Randox paid Owen Paterson for lobbying work and won a Covid testing contract worth £133m despite not having enough equipment. It is in the public interest to know why the government awarded them a contract without proper competition.”

The Good Law Project said the lobbying scandal “undermined our democracy”.

Paterson, a former environment secretary, maintained in a statement he is “totally innocent of what I have been accused of,” and that he “acted at all times in the interests of public health and safety”.

A DHSC spokesperson said: “In building the largest diagnostic industry in UK history, NHS Test and Trace has drawn on expertise from across the public and private sectors. So far, over 323m tests delivered and almost 20 million people contacted who could otherwise have unknowingly transmitted the virus.

“There are robust rules and processes in place in order to ensure that conflicts of interest do not occur and all contracts are awarded in line with procurement regulations and transparency guidelines.

“We are working hard to respond to freedom of information requests, of which we’ve experienced unprecedented volumes over the last 18 months.”

Contracts awarded under emergency procurement rules by the government during the pandemic have proved highly controversial.

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