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Mon 25 October 2021

The company has now been awarded deals worth close to £60 million during the pandemic, reports Sam Bright

A company with a chairman who is a Government health and procurement advisor has won a new £20.6 million COVID-19 contract from the Department of Health and Social Care (DHSC), Byline Times can reveal.

New Government records show that the department has awarded a lucrative deal to HSL Pathology LLP for the provision of PCR testing services. The contract started on 1 June this year and will run until 31 March 2022.

The chairman of HSL Pathology is Lord Patrick Carter of Coles – a former investment banker and health entrepreneur. According to the HSL Pathology and Government websites, Lord Carter is also the chair of the DHSC’s Health Procurement and Efficiency Board – which investigates the areas in which the NHS can make cost savings. Additionally, he has chaired independent Government reviews into the future of NHS pathology services. He was made a life peer in 2004 and takes the Labour whip.

Byline Times exclusively reported in February that HSL Pathology had been awarded a £38 million contract for PCR testing services, and this latest contract takes its overall haul close to £60 million. The first contract was awarded without normal competition procedures, whereby the second was won on a framework agreement – effectively a shortlist of firms that can bid for certain Government work.

Founded in 2015 in partnership with two NHS trusts, HSL Pathology provides independent diagnostic and pathology services. The firm lists virology – the identification of viruses within the body – as one of its main services. HSL is owned by Sonic Healthcare, one of Australia’s largest diagnostic companies with 37,000 staff and annual revenues of £6.2 billion. One of the firm’s other directors, Dr Vanya Gant, advises the Government’s innovation agency – Innovate UK.

HSL Pathology is evidently a specialist medical firm and there is no evidence to suggest that the company is an unsuitable public sector supplier – nor is there any direct evidence that anyone associated with the firm used their political connections to secure the contracts in question.

However, these deals correspond with many others during the Coronavirus pandemic, which have posed conflict of interest concerns. As calculated by Byline Times and The Citizens, contracts worth at least £3 billion have been awarded to firms with links to the Government and the Conservative Party during the crisis. A number of individuals associated with these firms have subsequently donated some £615,000 to the governing Conservatives.

The Government’s own guidance warns that a blurred boundary between commercial and official interests can be corrosive to public trust in the system. The rules note that Government departments should even seek to avoid perceived conflicts of interest – whereby a public official’s private interests could potentially improperly influence a procurement decision, even if they have not intervened in the process.

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In fact, the guidance provides an example of a perceived conflict of interest that echoes the above details about HSL Pathology and Lord Carter. It cites the hypothetical example of a senior figure in a department who has known connections to a company that is engaging in a public sector procurement process. The Government official has no involvement in the decision to award a contract or not, but there is a reasonable perception that such influence could take place.

These concerns have been supercharged during the pandemic, as the Government has leaned heavily on private suppliers. The country’s testing and contact-tracing system has an overall budget of £37 billion, with 50% of its staff contracted from outside consultancy agencies. The Government has also spent some £15 billion on personal protective equipment (PPE) from private firms and is currently spending £6.7 million a week on storage costs.

A report from the independent spending watchdog, the National Audit Office, also found that the Government had failed to appropriately record a number of potential conflicts of interest when awarding contracts. In the case of one firm, awarded PPE deals worth hundreds of millions of pounds, officials failed to log that a senior figure working for the company was also a Government trade advisor.

“Proper due diligence is carried out for all Government contracts and we take these checks extremely seriously,” a DHSC spokesperson said. “As a result of our partnerships, including this agreement with HSL, we have been able to rapidly expand our testing capacity.”

HSL Pathology was approached for comment.

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