Rachel Reeves calls on Government to clean up crony contracts

In a speech today (Monday) Labour’s Shadow Chancellor of the Duchy of Lancaster, Rachel Reeves, will call on the Government to urgently clean up its Covid procurement as it emerges almost £2 billion in total has been spent on “crony” contracts going to Conservative friends and donors.

Reeves will reveal that

• The amount of money spent on contracts awarded to companies that have links to the Conservative Party has almost doubled since the first wave, rising to nearly £2 billion following Labour’s original tally of £1 billion in October 2020, and despite stark warnings from the National Audit Office in November.
• That the total cost of contracts that have gone to Tory friends and donors could have provided free school meals to every one of the 1.4 million pupils who are eligible - for over 3 years.
• Of the £23.1 billion the public sector has spent on Covid, 85% - or £19.7 billion - have been awarded by central government, highlighting the centralisation of outsourcing not attuned to local needs.
• And that she had written to the top 10 companies with Tory links that have won contracts to ask how much profit they had made from the pandemic.

In her speech from Labour Party headquarters in Southside, she will demand the Government takes urgent action to stop cronyism consuming its outsourcing and contracts by urgently restoring tendering rules with improved transparency to scrutinise contracts.

And she will urge the Government to claw back taxpayer money on contracts that haven’t delivered what they’ve promised, to counter increasing concerns from the public on waste of funds.

She will also outline key policies a Labour government would put in place to tackle the increasing lack of transparency, cronyism and taxpayer waste at the heart of the Government’s outsourcing practice, including:

• Introducing the biggest wave of insourcing of public services back in-house for a generation.
• The expansion of the Freedom of Information Act to be applied to all new public service contracts delivered by private companies.
• The creation of an Independent Anti-Corruption and Anti-Cronyism Commissioner to replace the current toothless and far from independent anti-corruption tsar.
• Introducing an Integrity and Ethics Commission to guarantee standards in government.

Rachel Reeves MP, Labour’s Shadow Chancellor of the Duchy of Lancaster, said:

“This Government has eroded not only our public services to the brink of collapse, but so much of what it means to be an honourable and transparent government.

“While this Tory Government has denied key workers in our public services a pay rise, they paid 900 management consultants at Deloitte £1,000 a day to work on test and trace.

“The beating heart of our country is the key workers who have kept us going through this last year. That’s why we applauded them. Children weren’t banging pots and pans for management consultants. They were clapping our key workers.

“The public is also paying a high price for this Government's mismanagement and waste. This current Tory Party is rife with conflicts of interest. It’s all cheques and no balances.

“People expect all of us seeking government to spend their money with care and respect – and a Labour government will.

“Labour will clean up government contracting by strengthening FOI, introducing a new Independent Anti-Corruption Commissioner, and an Integrity and Ethics Commission to make us a world leader in good governance and transparency.”

Ends

Notes to editors

• Free school meal calculation: Annual outlay per child * number of eligible children = total annual outlay
  £440 * 1,440,788 = £633,946,720; Tory connected company outsourcing / annual outlay = number of years it can fund £1,967,932,365 / £633,946,720 = 3.104255142; IFS, 28 October 2020, https://www.ifs.org.uk/publications/15148
• Labour analysis of Tussell government procurement data reveals that throughout the COVID crisis nearly £2 billion in government contracts have been directly awarded to companies that have links to the Conservative Party.

Arcadis

• Arcadis LLP was directly awarded a £1.5 million consultancy contract with the MoJ on 20 April.
• Furthermore, the company has been awarded two contracts worth over £500,000, by the DHSC, to carry out analysis on waste water for traces of Covid.
• Gavin Barwell became a non-executive advisor at Arcadis at the beginning of June 2020.

Clipper Logistics Ltd

• This retail logistics firm took charge of PPE deliveries at the end of March.
• It has been reported that Clipper Logistics has been given a £1.3 million contract by the Government to distribute PPE.
• 10 months on, the Government has still not published this contract on its Contracts Finder database.
• Clipper Logistics’ Chairman, Steven Parkin, has donated £725,000 to the Conservatives since 2016.

Computacenter (UK) Limited

• The DfE and DHSC have awarded Computacenter 11 contracts since the start of the Covid pandemic.
• Computacenter became one of the Government’s Strategic Suppliers in October 2020, supplying a range of IT services to government departments.
• In September 2020, the DHSC commissioned Computacenter to review the technical service provision of the NHS Test and Trace programme, in a contract worth £83,800.
• In November 2020, DfE awarded Computacenter a £87m contract to supply laptops for children who were home-learning.
• Computacenter was co-founded by Sir Philip Hume. In 2013, he donated £10,000 to Nick Herbert, the then Conservative MP for Arundel and South Downs and in 2019, his wife Janet Hulme, gave £100,000 to the Conservative Party.

Dragontown Ltd.

• Dragontown Ltd. were awarded a contract worth £675,000 to supply PPE to Guys’ and St Thomas’ NHS Foundation Trust.
• Lady Xuelin Bates is a Director of this company. She is the wife of Tory peer and former minister Lord Bates. She has donated over £30,000 to the Conservative Party since 2014.

Faculty Science Ltd

• Faculty Science Ltd received £400,000 to provide a data scientist to MHCLG, as well as a further £264,000 from BEIS to “conduct analyses and develop decision support tools for policy-makers regarding the likely impact of the Covid-19 outbreak on business and industry”.
• They also received a £2.33 million contract for the provision of support to the NHSX AI Lab.
• In February last year, Faculty Science Ltd was awarded a £930,000 contract for the supply of strategic support to NHSX AI Lab.
• Faculty CEO Marc Warner’s brother Ben was reportedly recruited to No. 10 last year by Cummings after running the data modelling for the Conservative Party’s general election campaign.
• Until September 2020, Cabinet Office minister Lord Agnew also had a £90,000 shareholding in the company.

Globus (Shetland) Ltd.

• Globus (Shetland) Limited won a £93 million contract for the supply of respirators.
• Since 2016, this company has donated £365,668 to the Conservatives.

Hanbury Strategy

• The Cabinet Office paid Hanbury £580,000 to research “public attitudes and behaviours” regarding Covid-19. The Treasury paid £68,000 for focus groups in June and a further £171,000 for July: https://www.gov.uk/government/publications/cabinet-office-spend-data (Cabinet Office, Expenditure over £25,000, August 2020)
• The firm was founded in 2016 by Paul Stephenson, Director of Communications for the Vote Leave campaign, and Ameet Gill, David Cameron’s strategy director
• The Conservative Party spent over £700,000 with Hanbury during the 2019 General Election

Medacs Healthcare

• In December 2020, Medacs Healthcare was given a £350 million contract by the DHSC for the provision of temporary support staff.
• Medacs Healthcare plc is owned by the Impellam Group, a company chaired by Lord Ashcroft, Conservative party donor and former Party treasurer.

Meller Designs

• The Government has awarded six contracts for PPE to Meller Designs worth over £100m, including one worth £65.8 million and another valued at £22 million.
• The company is co-owned by David Meller, who has donated £65,000 to the Conservative Party in the past decade.

Ocean Footprint

• The DHSC awarded Ocean Footprint £5.2m for the urgent supply of face masks at the beginning of April: https://client.tussell.com/award_notices/437455-79759f2d07a335e54ce2350b57a00ddc-ocean-footprint-supply-of-ppe-masks (DHSC, 06/04/2020, Procurement Notice ID: 2020/S 094-225705)
• One of the four directors of Ocean Footprint listed on Companies House is Julian Henry Malins – the brother of former Tory MP, Humfrey Malins.

PPE MedPro Limited

• In June 2020, PPE Medpro was awarded an £80.9 million PPE contract.
• Later the same month, it was awarded a second contract worth £122 million.
• According to Companies House, the company had only existed for month, having been incorporated on 12 May.
• It has been reported that PPE Medpro was founded by Anthony Page on the day he quit as the secretary of the company that deals with Tory Baroness Mone’s commercial brand. Mr Page is also a director of finance firm Knox Group, founded by Baroness Mone’s fiancé.
• In May, an additional £80.9 million was awarded to PPE Medpro, but this was only published in October 2020.

P14 Medical

• P14 have been awarded three contracts to supply PPE, one worth £156 million another worth £116 million, and the third valued at £4 million.
• Steve Dechan, the director of P14 Medical, is a Conservative councillor on Stroud Town Council and campaigned for the local MP Siobhan Baillie at the 2019 election.

PA Consulting

• PA Consulting received £12 million for consulting on the Ventilator Challenge,[3] plus an additional £1.5 million as part of the supporting in the provision of the scheme: https://www.contractsfinder.service.gov.uk/Notice/4e78eebb-05da-41b2-8de3-f245b1a8b674?origin=SearchResults&p=1 (Contracts Finder, 29 June 2020)
• It also received a contract worth £250,000 for consultancy support for the implementation of staff passports to enable staff to more quickly transfer between services especially the Nightingales.
• In total, PA Consulting has been awarded 12 contracts worth nearly £25 million.
• Former Chair of the LGA and Conservative Councillor Sir Merrick Cockell has been a Senior Advisor at PA Consulting since 2014.

Public First Limited

• In 2020, Public First has been awarded contracts worth over £1 million.
• Public First is owned by James Frayne, with whom Dominic Cummings established the New Frontiers Foundation think tank in 2003. In 2011, Michael Gove appointed Frayne as Director of Communications at DfE.
• Public First's directors are Frayne and his wife Rachel Wolf, who wrote the 2019 Conservative manifesto. In 2010, Rachel Wolf’s New Schools Network was awarded £500,000 by the DfE to set up free schools. No other organisation was asked to bid for the work, which was not publicly advertised.

Randox

• Last year, Randox was awarded three contracts worth nearly £500 million for testing services.
• In March 2020, it received a £133 million contract for the provision of testing. It was then awarded a second contract in October worth £347 million.
• The company pays Owen Paterson to act as an adviser.

Serco

• Serco has been awarded £108 million for running the national contact tracing service, with the option to extend for a longer period up to a value of £410 million in total.
• In addition, Serco received £45.8 million out of a potential £90 million from DWP for emergency call centre support to vulnerable customers under self-isolation.
• And it has been awarded £57 million for “management services support” at testing sites.
• It also received a £3 million contract from the healthcare support services for the NHS in Scotland.
• Health Minister Edward Argar previously worked as a senior executive at Serco. The CEO, Rupert Soames, is brother to former Tory MP Sir Nicholas Soames.
• Camilla Soames – Rupert Soames’ wife – donated £4,995 to the Tories in November 2019.

Topham Guerin

• This company was awarded a £3 million contract to work on Covid-19 messaging in March. However, the contract was not published until July.
• Topham Guerin worked on the Conservative Party’s digital and social media campaign during the last general election.