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Covid-19: PPE Procurement

Volume 723: debated on Thursday 24 November 2022

I remind all Members that “Erskine May” states that the conduct of Members of the House of Lords can only be criticised on a substantive motion, and therefore not during these exchanges. Also, as there is the prospect of further legal proceedings concerning some of the contracts entered into, I remind Members of the sub judice resolution and the requirement not to refer to live cases.

(Urgent Question): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the due diligence and performance management performed on the public procurement of personal protective equipment during the covid-19 pandemic.

Thank you, Mr Speaker. I will try to stay in my lane.

Sourcing, producing and distributing PPE is, even in normal times, a uniquely complex challenge. However, the efforts to do so during a pandemic, at a time when global demand was never higher, were truly extraordinary. Early on in that pandemic, our priority was clear: to get PPE to the frontline as quickly as possible. All of us in this House will remember that moment, and how desperate we all were to see PPE delivered to the frontline.

During the course of the pandemic—nearly at its peak—400 staff were working on sourcing protective equipment, and tens of billions of items were sourced. We worked at pace to source new deals from around the globe, and we always buy PPE of the highest standard and quality, and at the best value for money. Over the course of the programme, due diligence was done for over 19,000 companies, and over 2,600 companies made it through that initial due diligence process.

With huge demand for PPE all across the world, and with many countries introducing export bans, our risk appetite had to change. We had to throw everything behind our effort to protect those who protect us and those who needed it most. We had to balance the risk of contracts not performing and supplies being priced at a premium against the crucial risk to the health of frontline care workers, the NHS and the public if we failed to get the PPE that we so desperately needed.

As well as due diligence checks, there was systematic price benchmarking. Prices were evaluated against the need for a product, the quantity available, how soon it was available and the specification. Many deals were rejected or renegotiated because the prices initially offered were not acceptable.

There are always lessons that we can learn from any crisis, but we must not lose sight of the huge national effort that took place—I thank the officials who worked on it—to protect the most vulnerable while we tackled one of the greatest threats to our public health that this nation has ever seen.

Thank you for granting this urgent question, Mr Speaker. I welcome the Minister to his place—I think this is the first time we have met at the Dispatch Box—but to be honest, to his defence of due diligence I would say, “What due diligence?” Last night, documents seen by The Guardian revealed yet another case of taxpayers’ money being wasted, with a total failure of due diligence and a conflict of interest at the heart of Government procurement.

In May 2020, PPE Medpro was set up and given £203 million in Government contracts after a referral from a Tory peer. It now appears that tens of millions of pounds of that money ended up in offshore accounts connected to the individuals involved—profits made possible through the company’s personal connections to Ministers and the Tories’ VIP lane, which was declared illegal by the High Court. Yet Ministers are still refusing to publish correspondence relating to the award of the Medpro contract, because they say that the Department is engaged in a mediation process. Can the Minister tell us today whether that mediation process has reached any outcome, and what public funds have been recovered, if any? Will he commit to releasing all the records, both to the covid-19 public inquiry and to this House, once the process is completed?

Rightly, there are separate investigations into Baroness Mone’s conduct, but the questions that this case raises are far wider. It took a motion from the Opposition to force the Government to release records over the Randox scandal. Will they agree today to do the same in this case without being forced to do so by the House? Can the Minister say now what due diligence was performed when awarding the Medpro contract?

Today’s reports concern just one single case, but this Government have written off £10 billion just on PPE that was deemed unfit for use, unusable, overpriced or undelivered. Worse, Ministers appear to have learned no lessons and to have no shame. As families struggle to make ends meet, taxpayers spend £700,000 a day on the storage of inadequate PPE. Can the Minister confirm whether the Government’s new Procurement Bill will still give Ministers free rein to hand out billions of pounds of taxpayers’ cash all over again?

Order. Can we please stick to the rules of the House on time limits? I do not make the rules; the rules are meant for us all. This is happening too often.

The right hon. Lady asks two main questions, the first of which is what we are doing on PPE Medpro. It has been widely reported that it had an underperforming contract. Let me set out what we do in such cases. The first step is to send a letter before action, which outlines a claim for damages. That is followed by litigation in the event that a satisfactory agreement has not been reached. To answer the right hon. Lady’s question directly, we have not got to the point where a satisfactory agreement has been reached at this stage.

On the high-priority group, let us be clear about what it was and what it was not. Approximately 9,000 people came forward. All Ministers will have had the experience of endless people ringing them up directly to try to help with the huge need that there was at the time. Many of us, as Back Benchers, will have been approached by constituents who were keen to help and needed to be referred somewhere. All that the route did was handle the huge number of contacts coming in to Ministers from people offering to help. Let me be clear that it did not give any kind of successful guarantee of a contract; indeed, 90% of the bids that went through it were not successful. Every single bid that went through the route went through exactly the same eight-stage process as all the other contracts—it looked at the quality, the price and the bona fides of the people offering to produce.

On the point about PPE that has not been useful, I set out in my answer the extraordinary context in which we were operating. There was a global scramble for PPE. People were being gazumped: goods would be taken out of the warehouse if people could turn up with the cash quicker than them. It was an extraordinary situation in which we had to act in a different way. Loads of us will remember standing up in this House and saying to Ministers, “What are you doing to get more? More, quickly!” That was the context in which we were operating.

Does my hon. Friend agree that if we had not wasted billions of pounds of taxpayers’ money on PPE, we would not have to increase taxes as much as we are doing? What has happened to the £122 million that was spent on 25 million gowns supplied by the company referred to earlier? Those gowns were not fit for purpose and were never used.

That was the underperforming contract that I referred to in my previous answer, and I set out the process that we go through when we take action on underperforming contracts. There is the initial letter before action, and then a process in which we look to see if a satisfactory agreement can be reached. If not, that leads on to litigation. Of course, there was wasted PPE—my hon. Friend is absolutely correct about that—but I have already set out the context of the global scramble and the huge amount of PPE that was successfully delivered, saving lives and protecting workers in our NHS.

From the moment we learned about the existence of this VIP lane for the politically connected, it was almost inevitable that it would come to this. This get-rich-quick scheme to fast-track cronies, politically connected pals and colleagues was never going to end well. I suspect that today’s revelations, however shocking, are simply the tip of a very large iceberg—an iceberg that could yet sink this ship of fools.

Transparency International UK has flagged as a corruption risk 20% of the £15 billion given out by the Tories in PPE contracts at the height of the pandemic. As we have already heard, they are spending £770,000 every single day to store much of that useless equipment in China. One Tory politician who had absolutely no background in PPE procurement personally made millions from those contracts, so do the Government plan to investigate proactively how many others like that are in their ranks, or are they content to sit there and watch this dripping roast of sleaze, corruption and scandal unfold on its own?

Of course we take action whenever we find underperforming contracts, and I have set out how we do that. We are working our way through that. I say simply to the hon. Gentleman that we were all desperate to get PPE for our health and social care workers and for everybody who was responding to the pandemic. Inevitably, some of those contracts were not going to perform, and we are now taking action against all those underperforming contracts. On the idea that the “politically connected”, as he says, had some sort of greater success, they were our constituents—they were getting in touch with all of us, they had to be referred on somewhere, they had to be managed and they went through the same process as every other contract.

I think there is a little rewriting of history here. At one stage in the pandemic, getting PPE was the most important thing, and I remember Members on both sides demanding quicker action from the Government. The Minister has explained the situation fully, and I regret that the Opposition are making political points from what was actually a great success in protecting our NHS staff. Does the Minister agree with me or with that lot?

My hon. Friend is completely correct. Some have short memories. Many of us stood up in this House to chivvy Ministers, asking, “Why aren’t you going faster? Why don’t you do more? Take the risks, get the stuff—we need it.” That was the priority. Many Members want it both ways: they criticised us at the time for not going fast enough or taking enough risks, and now they do not accept that we are going through all the contracts that did not perform.

Is it not clear that slack management in the Department led to get-rich elements of the British ruling establishment taking money from the NHS at a time of national crisis? Their watchword was “greed” rather than “public service”. Where is the right hon. Member for West Suffolk (Matt Hancock)—I have notified him of my intention to mention him—who was in charge of the NHS when all this was going on? Is he still in Australia getting his £400,000 for eating unspeakable parts of the anatomy of various beasties?

I cannot comment on the latest goings-on in the jungle but the answer to the hon. Gentleman’s point is the same as I have given before: there is a clear process, which every PPE supply bid, regardless of where it came from, went through.

During my time as a member of the Public Accounts Committee, we have looked closely at the procurement of PPE. The National Audit Office found that

“ministers had properly declared their interests”,

and that Ministers were not involved in procurement decisions. Is the reality not that the civil servants making these decisions were doing their best to secure PPE supplies for the NHS and the frontline in the face of a global pandemic? While we need to learn lessons from how this was handled, some of the people commenting here seem to forget the intense pressure we were under at the time.

My hon. Friend is completely correct. When Mrs Justice O’Farrell went through these cases, she noted in her summing up that given the time-sensitive nature of the work, it was not irrational for the Department to decide that it was prepared to take more risk than usually would be acceptable, because of that extraordinary context that is so quickly forgotten in the questions we are hearing in the House today.

The Minister has made much of the context of the time and the speed and the calls for PPE, but what my and, I am sure, everybody else’s constituents wanted was PPE quickly and appropriately. Earlier this year the High Court ruled that the Government’s VIP lanes were not only inappropriate, but unlawful, and in breach of the obligation of equal treatment. Does the Minister appreciate that constituents across the country are calling for an explanation? Will he back the Liberal Democrat amendment to ban VIP lanes for all future Government contracts?

I have set out the challenge. We had a situation where MPs and Ministers were all being contacted by constituents who were desperate to help and who either had contacts with suppliers or were suppliers themselves of PPE. They could see on the TV every night the desperate need for PPE, and they were keen to help in that huge national effort. I have talked about the scale of the operation to supply and source that PPE in the extraordinary circumstances we were in. A way had to be found to manage all those contacts we were getting. All of us were getting in touch to try and offer help, so a way had to be found to manage all these things, and that is what I have described this morning. All these things, to reiterate, went through the same rigorous process as every other contract.

The Minister says that lessons will be learned about Government procurement from this PPE scandal. Will he look at the contracts that the Home Office has for accommodating and feeding asylum seekers, which are ripping off the hotels and the food suppliers, causing asylum seekers to live in malnutrition and squalor? These contracts have many of the same characteristics—vast profits and executive salaries, and an opaque network of subcontractors run by people who may not pass fit-and-proper tests—

Order. I think the hon. Lady is stretching things a bit too far. [Interruption.] I know it is lessons learned, but it is too clever and not clever enough. We will leave it at that.

Today’s revelations show further evidence that the Government’s VIP lane was possibly criminal and was exploited by Members of the Government party. Will the Minister today commit to publishing in full the names of the Ministers, MPs or officials who referred firms on to that fast-track lane? Stop being evasive. We need to know what corruption happened.

I have good news for the hon. Member. We published the information about who referred in which contracts in November 2021.

I heard what the Minister said earlier about the process and how meticulously it was followed for every company that applied for contracts during covid. What is it about the individuals or companies that had associations with the Conservative party or Ministers that made them so adept at getting through the process?

As I said, 90% of them did not get a contract, so it was not that they were being given some sort of guarantee of a contract. That scheme was a way of managing the contacts that were happening with Ministers. They were being directly contacted by MPs from across the House and all sides of it. There had to be a way of understanding what was happening with each of those bids, because otherwise it would have been completely overwhelmed. To reiterate: all the bids went through exactly the same process—not done by Ministers, but by civil servants—of checking the quality, the price and whether they could realistically deliver. There was no difference in the process that they went through.

These are issues that many Opposition Members in particular have been raising for a long time. My Ministerial Interests (Public Appointments) Bill, now in its third iteration, has its Second Reading next Friday. Given the current situation, and given that my Bill would help to address some of the issues of transparency, can the Minister assure me that the Government will now incorporate that into their programme?

I will look closely at all the suggestions that the hon. Member makes. I have not had a chance to look at the Bill, but I am sure that we are always in the market for constructive ideas.

At the same time as the Government were being obstructive and deliberately attempting to block Northumbria Healthcare NHS Foundation Trust in the north-east from providing PPE from a factory of its own, people who were closely connected to the Government were making millions from PPE. Minister, is that just a strange coincidence?

The people who came through the high-priority route were not politically connected people, except in the sense that they were being referred by MPs across the House. I do not know the exact details of the north-east supplier that the hon. Gentleman mentions. If he gets in touch, I will be happy to take that up and provide him with a full explanation of what the issue was with that bid for a contract.

I thank the Minister for the answers he has given. There was a heavy use of direct award contracts to purchase PPE items. As of April 2021, £371 million had been paid for PPE direct award contracts in Northern Ireland. Does the Minister agree that, in hindsight, there should have been better insight into the supply chains of this PPE, where it came from and who was making it, given the reports that PPE contracts were given to Chinese firms using labour schemes?

The hon. Gentleman always makes constructive suggestions, and today is no exception. He knows that we have an ongoing inquiry into the lessons that can be learned and a dialogue with the Health and Social Care Committee about many of these issues. Given its heritage, Northern Ireland was an important supplier of textiles and PPE equipment. Inevitably, given the global balance of production, a lot of items did come from China, as he says, but as part of the lessons learned, we should be thinking about domestic supply.

We have all seen the shameful Guardian front page this morning, but the front page that sticks in my mind is the one showing nurses in bin bags—not PPE on the frontline, but bin bags. This was at a time when Luton Borough Council was facing another cut of £11 million. People are struggling, so why are this Government not lifting a finger to get our money back? They could start by releasing the records after the mediation process.

The hon. Lady’s question takes us back to that extraordinary moment when we had a huge crisis of PPE, and we were desperate and doing every conceivable thing we could to get the PPE that those nurses needed; that is what I have been referring to in my answers this morning. It is just not true that the Government are not lifting a finger to get the money back. We have a process, and there is a substantial team in the Department working on it right now.

The Minister said that constituents contacted many of us looking for the ability to access contracts to aid PPE procurement. He told the hon. Member for Ilford South (Sam Tarry) that the information was published last year. Can he confirm for the House how many Conservative MPs were able to provide access to the VIP fast-track line, and how many Opposition MPs were able to? It is a fairly simple question.

I do not have that information to hand, but I have a seat on the edge of Leicester, an important textiles town, and I had loads of constituents get in touch with me to ask, “Where can I go?” We sent them on to a mailbox, and after they were in that mailbox, they went through the usual process that every other supplier went through.

For Tory peers and other chums of the Conservative party to have been profiteering at taxpayers’ expense from shoddy, unusable PPE, especially through the VIP procurement lane, at a time when people were locked down in their homes and tens of thousands of people, including my loved ones, were dying is absolutely sickening, shameful and unforgiveable. Given that The BMJ estimates that the Government have written off approximately £10 billion in unusable, undelivered or shoddy PPE, will the Minister take the opportunity to apologise to bereaved families for the amazing lack of integrity at the heart of the whole process?

I set out earlier what the high priority route was and was not: it was absolutely not a guarantee of any kind of contract; it was a way of managing the huge numbers of contacts and offers for help that we were all receiving. It delivered something in the order of 5 billion items of PPE, all of which helped to save lives and protect workers in our NHS and social care settings. Of course, we had to take up those offers of help and respond to them when people wanted to help in the middle of a huge national and global crisis. We had to process those offers, but they were processed in exactly the same way as every other bid for a contract.

After Lord Agnew resigned, he wrote in the Financial Times:

“Fraud in government is rampant. Public estimates sit at just under £30bn a year. There is a complete lack of focus on the cost to society, or indeed the taxpayer.”

The Economic Crime and Corporate Transparency Bill, which is currently in Committee, is full of holes and the Government have refused sensible requests by the Opposition to fill those holes. Will the Minister reconsider those amendments in the light of the rampant corruption in Government?

We keep all those things under review, but the Economic Crime and Corporate Transparency Bill is part of addressing some of the issues that the hon. Lady is concerned about. We are blurring together two different issues slightly—[Interruption.] Let me finish the point. Lord Agnew was talking about the loan scheme, but that relates to the same issue of the need for pace, which all hon. Members were calling for at the time. There was a need to get loans out to small businesses, which saved tens of thousands of jobs in my constituency and, I am sure, her constituency as part of the huge and unprecedented £400 billion spend to preserve lives and livelihoods.

BCB International in my constituency, which is an accredited bona fide pre-pandemic supplier to the Ministry of Defence, adapted production lines to produce a range of PPE. It supplied the Welsh Government and other public bodies such as the police, yet in spite of repeated attempts, it did not get a look in—or even a reply—from the UK Department of Health and Social Care. Today, we might have heard why. Despite the shoddy way that he was treated, its managing director Andrew Howell has offered to meet the appropriate personnel to discuss any possible low-cost, legal and easy solutions to maintain British supply security of essential equipment. Will the Minister now facilitate that meeting?

I mentioned that due diligence was done on more than 19,000 companies—a huge number of companies and people got in touch to offer to help—but let us continue that conversation. I am happy to talk about the particular issue that the hon. Lady raised.

The Welsh Labour Government received £874 million for PPE as its population-proportionate share, but spent only £300 million—about a third of the money given. That suggests, says Cardiff University, that the UK Government could have saved £8 billion, or £300 a household across the UK, had they used public authorities, health authorities and councils instead of private profiteering contractors known to Ministers. Will the Minister look carefully at the Welsh model and, in future, use the public sector rather than private sector cronies known to Ministers such as the former Health and Social Care Secretary, the right hon. Member for West Suffolk (Matt Hancock), who is out in the jungle making more money for himself?

Inevitably, a huge amount of the PPE that is produced in the world is produced by private companies. There is no world in which we could avoid the use of private companies to supply PPE.

My colleagues on the Public Accounts Committee are at an important evidence session this morning, otherwise I have no doubt that many more of them would be here. The report on PPE contracts, which was unanimously agreed by the Committee earlier this year, stated:

“At no point was consideration given to the extent of the profit margin that potential suppliers would be taking on payments for PPE. Neither was consideration of any potential conflicts between individuals making referrals through the VIP lane and the companies they were referring. We”—

the Public Accounts Committee, unanimously—

“are therefore unsurprised to see the reports of excessive profits and conflicts of interest on PPE contracts.”

Yet if today’s Guardian reports are correct, the extent of lobbying of Cabinet Ministers, one of whom is back in the Cabinet, by a senior Conservative politician went significantly further than the Public Accounts Committee was aware of at the time. Can the Minister confirm that the reports of additional lobbying in today’s Guardian are accurate and, if they are not accurate, can he come back with a statement to confirm that?

I read the same article as the hon. Gentleman. I notice that it did not lead to a contract—the case that was mentioned in The Guardian—but more generally, absolutely, there are many lessons to learn about this process. However, we were having to pay, in some cases upfront, for PPE because, as part of the global scramble for PPE that I have described, if we were not prepared to go that extra mile, we would simply not have had the PPE and we would have had more nurses without the vital protective equipment that we all needed.

I am sure that many MPs on this side of the House had no idea that a VIP lane existed for PPE contracts, but even if I did know about a VIP lane for referring contracts, if a constituent came to me and said, “Alan, I have never worked in a PPE environment. I’ve never ordered it before, but I’ve got a great plan. I can order it from China. Just refer me to a Minister”, I would not have done that because it would be impossible to do proper due diligence. So it beggars belief that this Government accepted recommendations from companies with no involvement and no expertise in PPE contracts, and still awarded these billions of pounds of contracts. Instead of mediation with PPE Medpro, is it not the case that a full investigation is needed and, if the Government are not going to do it, surely we need a public inquiry into PPE procurement.

We are prepared to litigate whenever a company did not provide. There is a process, which I set out earlier. In many cases, there were people who did have important contacts in China and in other countries where PPE was being produced, and it was important to pursue all those leads because we needed to have that. But, to the hon. Gentleman’s point, due diligence had to be done and was done on all those cases in the same way. I have talked about the scale of the challenge and the 19,000 companies on which due diligence was initially done, and the huge drop-off between that number and the 2,648 companies that actually made it through that filter. So we can see in the difference between 19,000 and 2,648 that there was a huge amount of filtering done by the team of 400 people who were working so hard to try to get the PPE that we needed to the nurses and doctors in our NHS.