Conflict of Interest Concerns Over£15 Million COVID Contract
A new Government deal raises further questions about its approach to conflict of interest transparency
A logistics company whose chairman has worked in senior Government positions has been awarded a £15 million COVID-19 contract – posing questions about conflict of interest and how they are evaluated by the Government.
In November 2020, Wincanton Plc was awarded the year-long contract to store and distribute rapid COVID-19 testing devices – known as lateral flow tests. This deal was a call-off from a framework agreement – essentially a shortlist of firms that are able to bid for certain elements of Government work.
Wincanton was one of 25 companies shortlisted under the £2.5 billion framework for the “provision of logistics and warehousing to be utilised by central Government departments and all other UK public sector bodies.” The framework was signed in October 2020 by the Crown Commercial Service and ends in November 2024.
The non-executive chairman of Wincanton, appointed in 2018, is Martin Read – who also sits as the chairman of the Government’s Senior Salaries Review Body (SSRB). The SSRB provides independent advice to high-ranking Government ministers – including the Prime Minister, the Secretary of State for Health and the Home Secretary – about the pay of civil servants and managers.
Read was also formerly a non-executive director on the UK Government’s Efficiency and Reform Board – which worked with the Treasury and Government departments to recommend savings and to improve the performance of public services. In addition, Read used to chair two Government-owned companies.
Wincanton firmly maintains that Read does not contribute to the day-to-day running of the company and had no involvement in its bid to provide logistics services to the COVID-19 testing programme.
What’s more, Wincanton is evidently an appropriate supplier, given its size and expertise. Indeed, the logistics firm, founded in 1925, posts annual revenues of more than £1 billion and has more than 17,000 employees.
Rather, issues stem from the fact that potential conflicts of interest are not declared by the Government, when contracts are released to the public. Basic financial details are spelled out – about the value of the deal and its length – but journalists are relied upon to spot potential conflicts and bring them to public attention. That includes the case of the Wincanton contract.
When we asked if Read’s potential conflict of interest was declared in the contract tendering process, Wincanton stated it had “satisfied all the requirements set out including those related to transparency”, but did not clarify if the firm had expressly detailed Read’s links to the Government – or if it had been asked to.
“Wincanton is proud to have secured this contract. We took part in a detailed, competitive procurement process run by the Crown Commercial Service,” a spokesperson for the firm added.
The Department of Health and Social Care, meanwhile, said “there is no conflict of interest arising”.
These questions around conflicts of interest are particularly pertinent, given the ongoing Greensill scandal, involving former Prime Minister David Cameron.
The Sunday Times and Financial Times have exposed how Cameron lobbied senior Cabinet ministers on behalf of the financial services company, asking for it to be included as one of the lenders in the Government’s pandemic emergency loans scheme. Records show that the former Prime Minister texted and called Chancellor Rishi Sunak, in attempt to achieve a favourable outcome for the company.
It has been reported that Cameron holds share options in the firm that were worth millions, before the firm filed for insolvency protection at the beginning of March.
The UK’s statutory lobbying register – set up by Cameron’s own Government in 2014 – provided no record of his lobbying. Cameron was also under no obligation to register his lobbying activities with the Advisory Committee on Business Appointments (ACBA). Indeed, ACBA’s rules only cover the two years immediately after ministers and senior officials leave their positions. Cameron stood down as Prime Minister in 2016 and began lobbying for Greensill in 2018.
The case of Wincanton is measurably different to Greensill – as there is no evidence to suggest that Read lobbied on behalf of the company. Yet, it chimes with the Government’s general resistance to transparency, in relation to potential conflicts of interest.
For example, a report from the National Audit Office (NAO), the spending watchdog, in November found “a lack of documentation recording the process for choosing the supplier, the justification for using emergency procurement, or any considerations around potential conflicts of interest,” in relation to contracts awarded during the pandemic.
This was epitomised in the case of Ayanda Capital – a firm awarded deals worth £250 million to supply face masks. The contract was brokered by Andrew Mills, who was simultaneously a member of the Government’s Board of Trade and a senior advisor to Ayanda. However, “the due diligence checks, carried out on 2 May as part of a second round of due diligence on Ayanda, did not include Ayanda’s senior advisor and did not identify any conflicts of interest,” the NAO report reads.
The Government’s apparent lack of concern about potential conflicts of interest is particularly concerning, given that contracts worth more than £3 billion have been awarded to Conservative donors and associates during the pandemic so far – according to our calculations.
Calls are growing for MPs to reform the system, so the links between Government contractors, officials and ministers – both past and present – is fully and transparently recorded. As the past year has demonstrated – the current system is increasingly causing a crisis of trust among the general public.