Randox lobbying scandal: Chisholm ‘disappointed’ in DHSC’s procurement process for £500m contracts

Cabinet Office perm sec’s concerns revealed as Owen Paterson’s lobbying texts published
Randox testing. Photo: Ed Rooney/Alamy Stock

By Tevye Markson

08 Feb 2022

Civil service chief operating officer Alex Chisholm was “disappointed” by the way the Department of Health and Social Care awarded contracts worth nearly £500m that are now at the centre of a lobbying scandal, newly-published documents have revealed.

The government has been forced to publish correspondence showing how former MP Owen Paterson lobbied then-health secretary Matt Hancock on behalf of a healthcare firm for the Covid contracts.

The documents, released after pressure by opposition MPs, reveal Chisholm’s disappointment at DHSC’s procurement process for the Randox contracts.

Randox was awarded deals worth almost £500m during the pandemic without other firms being given the opportunity to bid for them.

The messages show that Paterson exchanged a series of messages with Hancock in January 2020 about the services that Randox could potentially offer in developing Covid-19 tests.

Paterson contacted Hancock again a month later, complaining about Public Health England’s "incomprehensible" delayed response to Randox, with the health secretary forwarding on his concerns.

DHSC awarded Randox a £133m contract to carry out Covid tests in March 2020 and then a second contract, worth £347m, in October 2020. Randox did not have to compete for either contract under emergency regulations used to speed up the procurement of goods and services to support the government’s Covid response.

Cabinet Office permanent secretary and civil service COO Alex Chisholm raised concerns about the lack of a competitive process in September 2020, ahead of the second contract being awarded.

He said: "I am disappointed that, despite entering into the original contract on 30 March, DHSC have not moved to organise and conclude a competitive contract process and are now in a position where extension by direct award is the only viable option.

“Can we please insist on a written commitment from DHSC to initiate a competitive process in time for new contracts to be let from March 2021. At least the price has been negotiated down and is now comparable to benchmarks, and quality has been good."

Lord Theodore Agnew, who resigned last month as Cabinet Office and Treasury minister over Covid fraud failings, said in an email on the same day: “I’m very worried about pricing. Given the huge volumes, we are paying dramatically over the odds.”

The documents were published by health secretary Sajid Javid, who told parliament the service Randox provided was “integral” to the government’s Covid response.

He added: “There are robust rules and processes in place to ensure that all contracts are awarded in line with procurement regulations and transparency guidelines. Ministers are not involved in the assessment and evaluation process for contracts.”

A spokesperson for Matt Hancock said the publication proves he “did nothing wrong”.

“Matt cannot control who contacts him, but he followed protocol and Owen Paterson's lobbying was flagged to officials,” the spokesperson said.

"To suggest Matt should have ignored the UK’s biggest existing testing capacity because he was being contacted by Owen Paterson is absurd and would have been a dereliction of duty.”

Randox said the papers show that the contracts were awarded in “full compliance with government procedures and protocols in place at a time of the emerging pandemic".

“The awarding of the contracts reflected Randox’s extensive diagnostics capabilities within the UK and 40 years of experience in that field,” a spokesperson for the company said.

“It is clear from these papers that the company has delivered a vital and core part of the UK’s testing capacity.

“Randox remains proud of its performance and delivery of Covid-19 testing throughout the pandemic. To date Randox has reported almost 24 million PCR results and has played a key role in both keeping people safe and sustaining vital national infrastructure.

“Unlike other laboratories Randox was able from the outset to provide whole-system capabilities to deliver the tests. Both the World Health Organisation and the UK government agreed this capability was crucial to combating the pandemic.”

The Paterson lobbying scandal – how it unfolded

Paterson resigned as an MP in November, having faced suspension from the House of Commons for breaking lobbying rules by approaching the government on behalf of two companies which he was a consultant for.

Parliamentary standards commissioner Kathryn Stone found Paterson had breached lobbying rules. She described his lobbying for Randox and Lynn’s Country Foods, for which he was paid more than £100,000 per year, as an “egregious case of paid advocacy”.

She recommended a 30-day suspension from the Commons, which would have seen Paterson face a recall petition from his constituents.

The government attempted to save Paterson by establishing a new committee to reconsider his case and whether a new standards system was needed but was forced into a U-turn after a backlash from Tory MPs.

Paterson then resigned, saying he wanted to leave the “cruel world of politics”.

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