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Revealed: Who Profited From The Government’s Coronavirus Multi-Billion-Pound Spending Boom

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19.08.2020

The coronavirus pandemic brought about an unprecedented peacetime public spending boom in the UK as the government pumped billions into trying to fight Covid-19.

But an investigation by HuffPost UK has led to renewed calls for an inquiry into government spending amid “scandalous and shocking” revelations about the way taxpayers’ money was handed out.

HuffPost UK has investigated which companies have profited from the pandemic that has killed 45,000 Brits and left millions at risk of redundancy.

We found deals involving “eye-wateringly large” sums of money that have proved highly controversial.

Revelations have already hit headlines about large PPE and testing contracts awarded to firms that ultimately supplied unsuitable products – such as Ayanda Capital Ltd and Randox – which has placed a spotlight on the government’s use of emergency procurement powers.

Now HuffPost UK can reveal other areas of government spending that raise further questions about how suppliers were selected and how these deals were arranged.

  • We found that PPE contracts worth £186m, the second largest amount spent with any PPE supplier, went to UK logistics firm Uniserve Limited, whose multi-millionaire owner is listed as a speaker for the influential pro-Brexit lobby group Prosperity UK. Other speakers listed on the site include chancellor Rishi Sunak and cabinet minister Michael Gove.
  • Another two large PPE contracts worth £49m in total went to a company, Initia Ventures Ltd, with assets of only £100. Companies House records list it as dormant.
  • Of the 10 companies that were handed the highest value deals to supply the government with PPE, we found that five had no apparent record of procuring PPE previously.
  • One firm told HuffPost UK its plan to manufacture face masks in the UK for as little as 10p a unit was turned down by government, despite its offer to make 75m masks a month at no profit at the point when the NHS need for PPE was at its most dire.
  • Smaller UK testing companies also told HuffPost UK the process unfairly excluded them from winning orders and may have deprived the UK of vital tests at the peak of the pandemic.
  • We found consultancy firm KPMG was paid almost £1m for three months’ work on one Nightingale hospital in Harrogate. This is the first time any information has come into the public domain about spending with top consultancy firms on the Nightingales. The government and NHS has faced criticised for its secrecy over the issue.

There is no suggestion of wrongdoing on the part of any of these companies.

In many cases, the thousands of firms that won Covid-19 contracts from government were at the forefront of the national effort to tackle the virus.

But these deals and others revealed in the data raise questions about how the government, moving at speed and during a period of incredibly intense global demand, decided which companies should be appointed as suppliers.

Under the guidelines that are in place under emergency Covid-19 procurement powers, known as Regulation 32 powers, government and other public authorities do not have to go out to competitive tender due to the need to appoint suppliers with “extreme urgency”.

However, it is unclear how the government sought to achieve best value for money without the usual checks and balances in place – for example, how the Department of Health and Social Care (DHSC) would have selected a dormant company such as Initia Ventures Ltd, which has no history manufacturing PPE, as a supplier when it was not carrying out tendering processes.

“There must be an inquiry into the way government has handled the crisis and into the way public money has been spent,” said MP Rosie Cooper, who sits on the health and social care committee.

“It is scandalous and shocking that eye-watering sums of money appear to have been spent with companies that don’t have a track record in this field, such as PPE and test and trace.

“Disgracefully, companies with experience were ignored, and government needs to explain how nearly £50m can be spent with a dormant company. Who authorised that and why?

“Why were smaller testing companies ignored while contracts were placed with large companies who failed to deliver? Who took each decision and why needs to be made public.”

She said taxpayers needed answers, adding: “It’s their money and they’re likely to be paying for these decisions for many years to come.”

A government spokesperson said proper due diligence was carried out for all contracts and collaborations with the commercial sector had strengthened the pandemic response.

“As a result of public and private sector organisations working together at pace, we were able to protect our NHS and strengthen our response to this unprecedented global pandemic,” he said.

But shadow health minister Justin Madders MP said significant questions remained about government accountability over this spending, with scrutiny vital because of the intense pressure coronavirus has placed on public sector finances.

“When we’ve got nurses, who have literally put their lives on the line for the last six months, protesting on the streets because they haven’t had a decent pay rise for a decade, you’ve got to ask whether all the money that’s been put into this has been spent wisely,” he said.

“And of course when a government is faced with decisions like that, it’s only right that every item of government expenditure is closely examined.”

Spending on personal protective equipment

HuffPost UK analysed data on all public sector spending under emergency Covid-19 procurement powers from March to July this year, to find out which firms won out in the government’s pandemic spending boom.

The data provided by Tussell, a company that publishes information on UK government contracts, shows industries supplying products and services vital to battling the pandemic – such as personal protective equipment (PPE) and testing – have seen the........

© HuffPost


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