The Department of Health and Social Care failed to adequately document key decisions on Covid testing contracts worth hundreds millions of pounds, a report by the National Audit Office has found.
Between January 2020 and December 2021, DHSC awarded testing contracts to Randox worth around £777 million, with 85% of the total value of the contracts awarded without competition.
The NAO said gaps in the audit trail due to inadequate documentation means it cannot provide positive assurance about the contracts in the normal way, but the watchdog added that it had not seen any evidence that the contracts with Randox were “awarded improperly”.
The report acknowledges that the government had to move very fast at the start of the pandemic to increase testing capacity but says this was not an excuse for the lack of documentation.
Gareth Davies, head of the NAO, said: “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.
“Our previous reports on Covid-19-related procurement and those of Nigel Boardman have recommended improvements to ensure an adequate audit trail is maintained even when the priority is speed of action. Government has already started to implement some of these improvements, and we will follow up progress.”
The government's Randox conctracts were at the centre of a lobbying scandal last year, when it emerged MP Owen Paterson, an MP at the time, had lobbied then-health secretary Matt Hancock on behalf of the healthcare firm for the Covid contracts.
Basic information about the emergency procurement process, including evidence of approvals, was not recorded in the department’s established systems, the NAO report has found.
The department had to sift through officials’ email accounts to find evidence on its decision to award Randox the first testing contract. It provided an email from the then Minister for Life Sciences, giving authorisation for civil servants to proceed with the contract. But the then Minister told the NAO he did not think he was being asked to formally approve the contract.
DHSC was unable to provide any documentation to the NAO for its first Covid testing contract with Randox, worth £132m.
The NAO said DHSC also provided incomplete or no documentation on other significant aspects of the procurement of the contracts, including detailed due diligence, detailed contractual negotiations leading to the first contract award, and consideration of potential conflicts of interest.
Failure to record ministerial meetings
The watchdog’s report on the government’s Covid contracts with health firm Randox also found the department failed to fully disclose four ministerial meetings with Randox and keep full records of ministerial discussions involving Randox.
A Randox spokesman said the four ministerial meetings which were not fully documented by DHSC were not related to the awarding of contracts.
“While we cannot comment on government minuting of meetings, Randox can categorically state that the awarding of contracts was not on the agenda at any of these meetings,” the spokesman said.
A government spokesperson said: “As the public would expect, at the start of the pandemic we took every possible step to build the largest diagnostic industry in UK history rapidly and from scratch – which has helped to limit the spread of Covid and save lives.
“Building the scale of testing needed at an unprecedented speed required extensive collaboration with businesses, universities, and others, to get the right skills, equipment and logistics in place as quickly as possible – and contracts with Randox and other suppliers made a significant contribution to the UK’s response to Covid.
“There are robust rules and processes in place to ensure that conflicts of interest do not occur, and all contracts are awarded in line with procurement regulations and transparency guidelines.”
The spokesman also pointed to the NAO’s conclusions that there was no evidence that the government's contracts with Randox were awarded improperly.
Randox’s spokesman added: “We welcome the finding of the NAO report that there is no evidence of any impropriety in the awarding of government contracts to Randox.
“This independent finding vindicates what both Randox and the government have always said – that these contracts were awarded on merit and in keeping with government protocols and regulations at a time of acute national emergency.”