The National Audit Office points out significant transparency holes in the Government’s approach to the healthcare giant Randox, which won COVID contracts worth hundreds of millions

The Department of Health and Social Care (DHSC) sidestepped normal transparency rules in relation to the contracts awarded to the testing company Randox, that won COVID-19 deals worth more than £400 million without competition, the National Audit Office (NAO) reveals today.

The contracts were the subject of a major parliamentary row earlier this year when private messages revealed that former Conservative minister Owen Paterson, who was at the time employed by Randox, had personally lobbied the then Health and Social Care Secretary Matt Hancock to consider the firm for Government work.

Paterson last year faced a 30-day suspension from Parliament for breaching lobbying rules, in relation to his previous efforts to advocate on behalf of Randox, but resigned before Parliament voted on his suspension.

Boris Johnson had intervened on Paterson’s behalf in an effort to relax parliamentary standards rules, but backed down amid the public and political uproar. The Conservatives subsequently lost Paterson’s North Shropshire seat to the Liberal Democrats in a by-election, losing a 23,000-vote majority.

The NAO report reveals that, in total, Randox and its strategic partner Qnostics Ltd won £776.9 million in business during the pandemic through 22 different contracts.

Almost all of the contracts were for the provision of testing services, and 60% (£463.5 million) of the total value of the contracts was awarded directly without any competition under emergency procurement rules. By 18 October 2021, the DHSC had paid Randox £407.4 million for its testing contracts.

The DHSC told the NAO that a competitive tender process was ruled out due to the need to move quickly, and that it could not award the contract from an existing framework – essentially a contract already agreed by the department between multiple potential suppliers – as the value of the contract exceeded the framework limit.

The NAO’s enquiries revealed that Randox attended eight meetings with ministers – mainly with former junior Health minister, Lord Bethell – but only four were declared on the public record under transparency rules. Minutes were taken at only two of the eight meetings. Meetings that were not made public, during which no minutes were kept, included ministerial decisions of the need to recall some of Randox’s tests, and the growing backlog of cases being tested by the firm.

The NAO pressed the DHSC to reveal all the documentation it held on Randox contract negotiations and whether any conflict of interest issues had arisen.

The watchdog sought access to Whitehall records of discussions and ministerial meetings with Randox, and private email accounts held by former ministers and special advisors. Altogether, 11,000 items were checked but little or no documentation emerged. The NAO also revealed that no work had been done on price comparisons for the services that Randox was set to provide – or the level of profit margins the company would make from the contracts.

The watchdog then insisted that the department also check the email accounts of senior ministry officials who were in charge of the deals, including Dido Harding, who formerly ran the UK’s ‘Test and Trace’ operation. The DHSC provided all the emails except those held by Dido Harding.

The NAO concludes that the gaps in the audit trail mean that it is not able to provide its normal conclusions, but that it has not seen any evidence that the Government’s contracts with Randox were awarded improperly.

“The overriding need to create a high volume testing capacity rapidly at the start of the COVID-19 pandemic meant that standard public procurement approaches were not appropriate. Even taking these exceptional circumstances into account, the documentation of the decision-making process for such large contracts was inadequate,” Gareth Davies, the head of the NAO, said.

Dame Meg Hillier, Labour chair of the Commons Public Accounts Committee, said: “Government didn’t document decisions properly and the public is right to raise questions about whether it was playing with a straight bat.

“Over 75% of testing contracts were awarded to ‘high priority’ companies, including those referred by ministers, MPs or Number 10. The public needs to trust that their taxes are spent on the basis that it’s what you know, not who you know.”

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