No evidence suggests the UK government’s COVID-19 testing contracts with a health company were awarded improperly, but the audit trail was inadequately maintained, a watchdog has found.
The National Audit Office (NAO) on Thursday published the result of its investigation into the government’s COVID-19 contracts with Randox Laboratories Ltd.
According to the NAO, 22 polymerase chain reaction (PCR) testing services and goods contracts worth up to £776.9 million ($1.02 billion) were awarded to Randox or its strategic partner Qnostics Ltd between January 2020 and December 2021, and 60 percent of the total value of the contracts (£463.5 million, $610.5 million) was awarded directly without competition, under emergency procurement rules.
The watchdog said the government “had to act quickly and in exceptional circumstances to scale up COVID-19 testing activity, given the lack of mass testing capacity in the UK” at the start of the COVID-19 pandemic.
According to the NAO, the Department of Health and Social Care (DHSC) first awarded a £132.4 million ($174.4 million) contract to Randox for testing services on March 30, 2020, after ruling out a competitive tender “due to the need to move quickly.”
The DHSC also told the watchdog that it “could not award the contract from an existing framework as the value of the contract exceeded the framework limit.”
But the NAO has found a number of inadequacies in the department’s records of the contracts.
The DHSC didn’t provide any documentation on detailed contractual negotiations and consideration of potential conflicts of interest for the initial contract, the watchdog said.
After reviewing documents provided to Parliament, it also identified four ministerial meetings for which the DHSC didn’t record Randox’s attendance on its quarterly transparency releases.
In a response to the NAO’s report, Randox later said it could “categorically state that the awarding of contracts was not on the agenda at any of these meetings.”
The NAO also said that in the years 2020 and 2021, meeting minutes were only kept for two out of eight meetings on testing involving ministers and Randox.
According to the watchdog, private correspondence exchanges between then Health Secretary Matt Hancock and the then MP for North Shropshire Owen Paterson—who was a paid consultant of Randox—were recently made available to the DHSC.
Hancock “told us he did not forward all of these messages to the Department at the time as they were not substantive discussions and so he was not required to do so,” the report reads.
“These messages were not inconsistent with what the then secretary of state saw as his ministerial responsibility to drive progress, rapidly building testing capacity with Randox and other suppliers.”
Both Hancock and Paterson told the NAO that they were not involved in the negotiations of contracts, which “were handled by officials.”
“The gaps in the audit trail mean that the NAO is not able to provide positive assurance in the normal way, but it has not seen any evidence that the government’s contracts with Randox were awarded improperly,” the NAO said.
His resignation came after an attempt by the government to spare him from a 30-day suspension while shaking up the disciplinary process for MPs at the same time was met with enormous cross-party backlash.
Commenting on the report, Gareth Davies, the 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.”
But he added, “Even taking these exceptional circumstances into account, the documentation of the decision-making process for such large contracts was inadequate.”
Davies said the previous reports on government procurement activities during the COVID-19 pandemic—produced by the NAO and by Nigel Boardman, chair of the Audit and Risk Assurance Committee—have “recommended improvements to ensure an adequate audit trail is maintained even when the priority is speed of action.”
“[The] government has already started to implement some of these improvements, and we will follow up progress,” Davies said.
Labour MP Meg Hillier, chairwoman of the Commons Public Accounts Committee (PAC), accused the government of playing “fast and loose” with spending public money.
“[The] government grasped the urgent need to increase the scale of testing early in the pandemic. But while it was fast on procurement, it was fast and loose on [the] process,” she said.
“The Randox contracts illustrate that proper transparency by [the] government is vital. [The] government didn’t document decisions properly and the public is right to raise questions about whether it was playing with a straight bat.”
Randox welcomed the NAO’s findings, saying the fact the watchdog found no evidence of wrongdoing in the awarding of contracts “vindicates” its insistence that the process was in keeping with official protocols.
Regarding the four ministerial meetings in which the DHSC didn’t document Randox’s attendance, the company said, “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.”
Responding to the report, Hancock said it “confirms a total clean bill of health on ministers’ work with Randox during the pandemic.”
“The report found no evidence of wrongdoing because there was no wrongdoing—just lots of hard work to expand testing capacity,” he said.
Lord Bethell, who was minister for technology, innovation, and life sciences in the DHSC from March 2020 to September 2021, said the NAO’s conclusion that there was no impropriety “puts to bed wild speculation and conspiracy theories.”
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 NAO concludes there is no evidence that the Government’s contracts with Randox were awarded improperly.”
