In a highly critical report published today, the House of Commons public accounts committee says that “woefully inadequate record-keeping”, failing to meet even basic requirements to publicly report ministers’ meetings with external parties or deal with potential conflicts of interest, “despite clear concerns about Randox’s political connections” means it is “impossible to have confidence” that the £777 million of contracts – many without competition – “were awarded properly”.
Owen Paterson was a Conservative MP who was registered as a paid lobbyist to Randox. However, the standards committee found that he had broken lobbying rules by his contact with Matt Hancock.
Initial instructions from Conservative whips were to MPs to vote against his suspension. The government later changed their mind.
The committee found no evidence that the department of health or social care took any care to avoid potential conflicts of interests when it awarded Randox contracts. This was despite officials being aware of Owen Paterson’s contacts with Matt Hancock, as a paid consultant for Randox while he was still a sitting MP, and the hospitality Hancock received from Randox in 2019.
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The committee says that “even allowing for the exceptional circumstances at the start of the pandemic, basic civil service practices to document contract decision making were not followed and DHSC “failed in its duties to be transparent about meetings that its ministers had with Randox” leaving “the role of DHSC ministers in approving the contract confused and unclear”.
Following the initial £132 million contract – awarded with no competition and without any performance measures – Randox struggled to deliver the expected level of testing capacity: yet the government still awarded Randox a contract extension worth £328 million seven months later, again without competition.
Randox then saw a hundred-fold increase in its profit in the year to June 2021 – but the government did not consider supplier profit margins or the potential for excess profits in its decision-making on the contracts.
Dame Meg Hillier, the MP who chairs the committee, said: “The NAO has been careful to stress that it has not seen any evidence that the Government’s contracts with Randox were awarded improperly. Randox was awarded contracts worth hundreds of millions. However, there was not much evidence. Many of the contracts were won without competing tenders from companies that may have been more capable, or perhaps without the upfront capital.
“Add to that the failure to include any performance measures in the first contract, or any protection against excess profits, and this looks just like the rushed policy and contract-making that we’ve seen across so much of the Government’s response to the pandemic. We are repeatedly reminded of the crisis that we were in as a nation. But acting fast doesn’t mean acting fast and loose.”
A spokesperson for Randox has blasted today’s report as “deeply flawed and wrong in assumptions,” stressing that the company was pursuing legal action.
They also said PAC had not made “any contact” with the firm during the “deliberations or in its preparation of this report,” accusing the report of making conclusions based on “wrong and unchecked assumptions about the company.”
A spokesperson for the DHSC said in response to the report: “There is no evidence that the government’s contracts with Randox were awarded improperly, as has been concluded by the National Audit Office.
“To suggest otherwise is misleading. We were able break transmission chains and save tens to thousands of lives by building the largest UK testing industry. Contracts with Randox and other suppliers made a significant contribution to our national response to Covid,” they continued.