Dark Money Investigations: News

UK government blocked release of companies in ‘VIP’ COVID lane

Exclusive: Department of Health and Cabinet Office ‘requested’ that National Audit Office withhold details of firms given lucrative government contracts

Jenna Corderoy
Jenna Corderoy
20 May 2021, 12.00am
Matt Hancock's health department, along with the Cabinet Office, 'requested' the list of companies be kept private
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Tom Nicholson/Reuters/Alamy

The British government told the official spending watchdog not to divulge the names of companies that were directed to a ‘VIP lane’ to win lucrative COVID contracts.

The National Audit Office (NAO) found that firms referred to the high-priority list were ten times more likely to be given government contracts to supply personal protective equipment (PPE).

But the spending watchdog has refused to publish a list of the 493 suppliers in the VIP lane after the Department of Health and Social Care (DHSC) and the Cabinet Office stepped in to block its release.

In an FOI response to openDemocracy, the NAO said the two government departments had “requested” that it keep the list of suppliers – which includes 47 suppliers that were awarded contracts – private because its release “would have a detrimental impact on both suppliers and [the departments’] own commercial operations”.

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The NAO went on to say that releasing the information would damage its relationship with the government.

The comments come as more details about the controversial VIP lane have come to light. During a legal challenge brought by the Good Law Project and the health non-profit EveryDoctor, emails showed civil servants were “drowning in VIP requests” that “do not hold the right certification or do not pass due diligence”.

This week, the court heard how ministers “lobbied” officials to chase the progress of contracts for the supply of PPE. It was also revealed that the government’s bank was concerned about the level of due diligence carried out by DHSC before millions were handed out through the VIP lane.

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A report by the Public Accounts Committee in February revealed the total value of contracts awarded to suppliers through the VIP lane was £1.7bn.

Jolyon Maugham, director of the Good Law Project, said: “There's something very troubling about a situation where the National Audit Office – a body that exists to ensure public money is spent properly – understands its role to be conditional on having a good relationship with those doing the spending. How can we be confident that it will expose wrongdoing where it does so only by consent?”

‘Reputational damage’

openDemocracy has obtained emails showing that the government told the NAO not to release company names, partly because it would risk “reputational damage” to the firms.

It explained that the PPE contracts had “generated so much public and media attention, most of it extremely negative”.

A government official added: “We consider that it would compromise the suppliers concerned, and also the DHSC itself.”

MPs, journalists and campaigners have for months been trying to access the list of company names, amid accusations of government cronyism.

Last month, Labour MP Rachel Reeves wrote to Cabinet Office minister Michael Gove to ask whether he will publish the full details of the VIP lane, including the companies listed, and “put forward any links to Conservative friends and donors, real or perceived conflicts of interest for proper scrutiny”.

Transparency International has also called for full transparency over the VIP lane in a recent report. The ‘Track and Trace report’ found that knowledge of the VIP lane appeared to be ”confined to only those within the party of government in Westminster”.

Steve Goodrich, head of research and investigations at Transparency International UK, said the government has “serious questions to answer over how it has managed offers of PPE” and that a “full disclosure should help prove ministers have nothing to hide”.

The NAO found there were no criteria for referrals to the high-priority lane and the source of the referral was not always recorded

The NAO’s investigation into government procurement during the pandemic, published last November, found that a high-priority lane was established by a cross-government team to assess potential PPE leads from politicians and government officials. The PPE team considered that “leads from these sources were more credible or needed to be treated with more urgency”.

The NAO also found that there were no criteria for referrals to the high-priority lane and that the source of the referral was not always recorded. Fewer than 250 sources for the leads were recorded, 144 of which came from the private offices of ministers.

In further emails obtained by openDemocracy, the Cabinet Office told the NAO how it can rely on a particular FOI exemption to avoid releasing the company names. It added: “This is of course a matter for you.”

It went on to say: “We are also exploring whether other exemptions may also apply.”

The Cabinet Office has also rejected openDemocracy’s request for the names of suppliers that were placed in the high-priority lane, saying that it could deter potential future bidders.

It added that releasing the names of ministers and officials who referred companies to the high-priority lane would “make it less likely that individuals would provide the Cabinet Office, and/or other parts of government, with commercially sensitive information in the future”.

‘Government’s responsibility to decide’

In its investigation, the NAO only revealed the names of two companies that obtained contracts through the high-priority lane: Ayanda Capital and Pestfix, which was put in the lane by mistake. In December, the Guardian revealed the name of another company – PPE Medpro – that won a government contract through the high-priority lane.

In late April, the Good Law Project revealed the names of four more companies that were awarded contracts through the VIP lane.

A National Audit Office spokesperson said: “It would not be appropriate for us to release all data provided to us by the government, or for the audit process to be the method by which this data is obtained. It is the government’s responsibility to decide whether it should release the information it holds and the FOI Act provides the route for challenging these decisions.”

A Department of Health and Social Care spokesperson said: “We have been working tirelessly to deliver PPE to the frontline.

“The government issued a public call to action to support the increased requirements of PPE, resulting in over 24,000 offers of support from over 15,000 suppliers. These offers were prioritised based on volume, price, meeting clinical standards and the time required to deliver those items. All leads, no matter from what channel, went through the same eight-step process, including quality checks, price controls and other due diligence.”

This piece was edited on May 25 to reflect that EveryDoctor is a co-claimant in the VIP lane legal challenge.

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