New analysis identifies systemic bias, opaque accounting and uncontrolled pricing in former government’s handling of COVID-19 procurement raising corruption questions over billions in public spending.

Behind the Masks:  Corruption red flags in COVID-19 public procurement is the most in-depth analysis of public procurement and contracts issued in the wake of the COVID-19 pandemic and involved reviewing over 5000 contracts across 400 public bodies.

By analysing publicly available data on UK public contracting, official reports, litigation in the courts, and public interest journalism researchers identified 135 high-risk contracts with a value of £15.3 billion with three or more corruption red flags.[1]

Transparency International UK now urges authorities to investigate these high-risk contracts and has written to the National Audit Office, Public Accounts Committee and Chancellor Rachel Reeves with a detailed overview of the findings and the contracts involved.

Rigorous analysis of these contracts uncovered four key issues in the UK’s pandemic response and billions of pounds of potentially mismanaged public contracts.

• Political connections: at least 28 contracts worth £4.1 billion went to those with known political connections to the party of government in Westminster. This amounts to almost one in ten pounds spent on the pandemic response
• VIP Lane for PPE: 51 contracts worth a total of £4 billion went through the unlawful ‘VIP lane’, of which
  • 15 contracts worth £1.7 billion were awarded to politically connected suppliers
  • 24 contracts worth £1.7 billion were referred by politicians from the party of government at the time or their offices.

• New inexperienced suppliers: eight contracts worth a total of £500 million went to suppliers no more than 100 days old.
• Uncompetitive procurement: the UK government awarded over £30.7 billion in high-value contracts lacking competition – equivalent to almost two-thirds of all COVID-19 contracts by value.

Transparency International UK researchers attribute these failings to the widespread and often unjustifiable suspension of procurement checks and safeguards, costing billions to the public purse, and eroding trust in political institutions.

The report’s release comes as the public hearings for Module 3 of the COVID-19 inquiry begin on 9 September. Transparency International UK, as part of the UK Anti-Corruption Coalition, has core participant status in the inquiry. This report will be used as the basis for their evidence for Module 5 (Procurement) due to commence public hearings in Spring next year.[2]

Behind the Masks, a follow-up to 2021’s Track and Trace which provided an initial assessment of problematic procurement practices during the pandemic, draws from a wider pool of data to provide a more comprehensive and up-to-date review of COVID-19 contracting corruption risks, and sets out a series of recommendations on how to address them going forwards.

Daniel Bruce, Chief Executive, Transparency International UK said:

“The scale of corruption risk in the former government’s approach to spending public money during the years of the COVID pandemic was profound. That we find multiple red flags in more than £15billion of contacts amounting to a third of all such spending points to more than coincidence or incompetence.

“The COVID procurement response was marked by various points of systemic weakness and political choices that allowed cronyism to thrive, all enabled by woefully inadequate public transparency. As far as we can ascertain, no other country used a system like the UK’s VIP lane in their Covid response.

“The cost to the public purse has already become increasingly clear with huge sums lost to unusable PPE from ill-qualified suppliers. We strongly urge the Covid-19 inquiries and planned Covid Corruption Commissioner to ensure full accountability and for the new government to swiftly implement lessons learned.”

Recommendations

Transparency International UK makes 15 sets of recommendations across three key areas that would help guard against a repeat of the COVID-19 debacle, set the record straight and better protect the public purse. [3]

None of the proposals are expensive to implement. Indeed, several align with the intended reforms of the Procurement Act 2023 [4] with many of the others being easily implementable reforms.

1. Pursue: Those entrusted with protecting the public purse, including the COVID-19 Corruption Commissioner, should actively pursue and investigate the 135 high-risk contracts we identify in this report, worth a total of £15.3 billion.
    
2. Progress: The UK Government should progress its procurement practices by harnessing technology to streamline buying goods and services, while improving financial accountability.

• Reduce the contract publication threshold to £2 million, mandating disclosure before activation of the contract, and monitoring publication to allow better public scrutiny.
• Implement stronger parliamentary oversight through the introduction of a sunset clause on emergency procurement powers and restricting direct awards exclusively to those addressing the immediate crisis.
• Introduce data quality checks and apply unique identifiers across all procurement platforms to improve quality and consistency, allow efficient analysis of the data and enhance transparency of public spending. 
   

3. Protect: Governments should protect lives and the public purse by strengthening institutional safeguards against impropriety, providing greater openness about attempts to secure public contracts and more robust measures to hold to account those engaging in misconduct. 

• Ensure the regulatory bodies overseeing ministerial conduct are truly independent and have the ability to initiate investigations and propose sanctions.
• Introduce a new statutory offence of corruption in public office to replace the current unclear common law offence of misconduct in public office.
• Improve transparency over lobbying through enhanced departmental disclosures and by creating a new statutory and comprehensive lobbying register to enable public scrutiny of those trying to influence the award of public contracts.

ENDS

Notes to Editors

Transparency International UK is the UK’s leading independent anti-corruption organisation and part of the global Transparency International movement.

[1]  The analysis of COVID-19 contracts used 14 red flags covering three aspects of the procurement process (risks in the procurement process, risks in the supplier profile and poor contract outcomes) as well as cross-cutting risks to help identify those that should be subjected to heightened scrutiny.

A full list of all 14 red flags can be found in Annex 3 of the report.

[2] https://covid19.public-inquiry.uk/modules/procurement-module-5/

[3]  Implementing these recommendations lies mainly with the UK government, but many also apply to the devolved administrations, notably in relation to procurement regulations and guidance. In the interest of preventing the issues outlined in this report, all UK governments should consider how they can deliver the objectives of the recommendations in the report within their competencies.

[4] Currently, procurement regulations are different in Scotland for public authorities that are not cross-border bodies or carry out reserved functions.