UK ‘wasted’ BILLIONS fighting Covid-19 as inadequate crony firms were awarded govt contracts
A New York Times investigation into the UK’s handling of the pandemic reveals misuse of government funds on a massive scale during its Covid-19 response, calling it “one of the greatest spending sprees in Britain’s postwar era.”
The report, titled ‘Waste, Negligence and Cronyism: Inside Britain’s Pandemic Spending’, was published on Thursday. In it, the Times says that “about $11 billion went to companies either run by friends and associates of politicians in the Conservative Party, or with no prior experience or a history of controversy.”
The newspaper based its findings mainly on data provided by Tussell, a research firm that has been tracking UK government contracts and spending in response to Covid-19 since the pandemic began in February.
According to Tussell, the government has spent almost $22 billion on personal protective equipment (PPE), its Test and Trace Programme and hospital supplies.
The Times analyzed the list of companies that had been given contracts to supply PPE and found that billions of dollars in contracts were given to companies connected to, among others, Conservative politician and former investment banker Lord Paul Deighton, who quickly awarded massive contracts to multiple firms where he had financial interests or his own personal connections.
At the same time, many companies that were “often better qualified” to produce PPE but went through the usual channels, submitting applications for contracts online, didn’t even receive a response, according to the Times.
It also says that in the frenzy of scrambling for supplies at the beginning of the pandemic in March, the government ignored the rules of awarding procurement contracts, failing to carry out proper checks and setting up a “VIP lane” for streamlining applications of well-connected firms.
“Dozens of companies that won a total of $3.6 billion in contracts had poor credit, and several had declared assets of just $2 or $3 each. Others had histories of fraud, human rights abuses, tax evasion or other serious controversies,” the report says.
Astonishingly, a few were even set up “on the spur of the moment or had no relevant experience” and yet still won contracts, it added.
The Times gives one example where a company called Ayanda Capital, whose senior board adviser was also a member of a government body, received nearly $340 million to provide PPE.
When it delivered $200 million worth of face masks, it turned out that they were not fit for purpose because “the ear loop fastenings did not match the government’s new requirements.”
The UK’s Department of Health and Social Care, the body in charge of procurement, disputed the claims and issued a statement to the Times, insisting that all contracts were awarded with “proper due diligence.”
Labour Party MP Meg Hillier, who chairs the Public Accounts Committee, expressed her frustration to the Times: “The government had license to act fast because it was a pandemic, but we didn’t give them permission to act fast and loose with public money.”
This isn’t the first time the media has cried foul at the UK government’s coronavirus response measures.
In November, the Guardian reported that the chair of the vaccine taskforce, Kate Bingham, came under scrutiny for allocating more than £670,000 ($900,000) to pay public relations consultants. Bingham just so happened to be married to a Tory MP who went to Eton college at the same time as Prime Minister Boris Johnson, and she herself attended a private school with Johnson’s sister.
Also last month, the Financial Times reported that the UK had spent more money on combating Covid-19 than “almost all comparable countries but still languishes towards the bottom of league tables of economic performance in 2020 and deaths caused by the virus.”
The FT quoted the independent Office for Budget Responsibility as saying that the British economy was set to shrink by 11.3 per cent in 2020, and that the government would need to borrow some 80 percent more than other leading G7 countries to cover its pandemic-related financial problems, while the UK death toll from Covid-19 was expected to be 60 percent higher.
The publication said the poor performance was due to the government’s failure to stop the virus from spreading in the spring and autumn.The total number of coronavirus infections in the UK now stands at almost 2 million, making it the seventh worst-affected country worldwide, with more than 65,000 deaths to date.
The newspaper based its findings mainly on data provided by Tussell, a research firm that has been tracking UK government contracts and spending in response to Covid-19 since the pandemic began in February.
According to Tussell, the government has spent almost $22 billion on personal protective equipment (PPE), its Test and Trace Programme and hospital supplies.
The Times analyzed the list of companies that had been given contracts to supply PPE and found that billions of dollars in contracts were given to companies connected to, among others, Conservative politician and former investment banker Lord Paul Deighton, who quickly awarded massive contracts to multiple firms where he had financial interests or his own personal connections.
At the same time, many companies that were “often better qualified” to produce PPE but went through the usual channels, submitting applications for contracts online, didn’t even receive a response, according to the Times.
It also says that in the frenzy of scrambling for supplies at the beginning of the pandemic in March, the government ignored the rules of awarding procurement contracts, failing to carry out proper checks and setting up a “VIP lane” for streamlining applications of well-connected firms.
“Dozens of companies that won a total of $3.6 billion in contracts had poor credit, and several had declared assets of just $2 or $3 each. Others had histories of fraud, human rights abuses, tax evasion or other serious controversies,” the report says.
Astonishingly, a few were even set up “on the spur of the moment or had no relevant experience” and yet still won contracts, it added.
The Times gives one example where a company called Ayanda Capital, whose senior board adviser was also a member of a government body, received nearly $340 million to provide PPE.
When it delivered $200 million worth of face masks, it turned out that they were not fit for purpose because “the ear loop fastenings did not match the government’s new requirements.”
The UK’s Department of Health and Social Care, the body in charge of procurement, disputed the claims and issued a statement to the Times, insisting that all contracts were awarded with “proper due diligence.”
Labour Party MP Meg Hillier, who chairs the Public Accounts Committee, expressed her frustration to the Times: “The government had license to act fast because it was a pandemic, but we didn’t give them permission to act fast and loose with public money.”
This isn’t the first time the media has cried foul at the UK government’s coronavirus response measures.
In November, the Guardian reported that the chair of the vaccine taskforce, Kate Bingham, came under scrutiny for allocating more than £670,000 ($900,000) to pay public relations consultants. Bingham just so happened to be married to a Tory MP who went to Eton college at the same time as Prime Minister Boris Johnson, and she herself attended a private school with Johnson’s sister.
Also last month, the Financial Times reported that the UK had spent more money on combating Covid-19 than “almost all comparable countries but still languishes towards the bottom of league tables of economic performance in 2020 and deaths caused by the virus.”
The FT quoted the independent Office for Budget Responsibility as saying that the British economy was set to shrink by 11.3 per cent in 2020, and that the government would need to borrow some 80 percent more than other leading G7 countries to cover its pandemic-related financial problems, while the UK death toll from Covid-19 was expected to be 60 percent higher.
The publication said the poor performance was due to the government’s failure to stop the virus from spreading in the spring and autumn.The total number of coronavirus infections in the UK now stands at almost 2 million, making it the seventh worst-affected country worldwide, with more than 65,000 deaths to date.