Simon Rushton By: Simon Rushton
Senior Lecturer in Politics and International Relations
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21 Dec 2020 : Profiteering

There is a murky grey area between government contracting and looting of the public purse. In the UK, the COVID-19 crisis has seen government and private contractors increasingly operating in this grey area, and with little sense of shame. The repeatedly demonstrated incompetence of the UK government (in particular the government of England) has drawn much of the attention. But finally, towards the end of 2020, there has started to be some more serious investigation into where the money has gone (and is still going). 

A recent National Audit Office report on government procurement during COVID-19 (available here) covered the period up to 31 July 2020 (i.e. approximately the first 5 months of the UK’s pendemic response). In that period, the report found, the UK government used emergency procurement measures (bypassing normal rules and regulations) to award £18 billion worth of contracts. That amount will have increased significantly in the months since July. 

Some of these contracts have attracted media attention, including multiple cases where large contracts for the supply of goods (such as PPE) and services (such as PR) were awarded to companies with no track-record or expertise in the relevant area. Comparisons with former Transport Minister Chris Grayling’s handing of a £14 million Brexit ferry contract to a company with no ferries have abounded. Quite rightly, much has been made of the close personal connections between cabinet ministers and some of the beneficiaries of these contracts. Having run Health Secretary Matt Hancock’s local pub was qualification enough for securing a contract to supply the government with COVID-19 test kits. The term ‘Chumocracy’ has been widely used to describe what would, in other countries, simply be described as straightforward corruption.

Importantly, COVID-19 has not just revealed how government (and those close to government) act during a time of crisis, when an emergency allows normal financial rules to be bypassed. It also shines a light on much longer-running issues surrounding routine government outsourcing. Outsourcing and consultancy companies were already running many government functions, and have gladly taken the opportunity to make hay while the virus has spread. Serco were handed a £108 million pound contract under the emergency procurement rules to run the track and trace system up to August 2020. Although the system was widely derided as a total failure, Serco’s contract was renewed – again without the need to tender. Deloitte, according to Private Eye, had 1,114 consultants working on the management of the test and trace system in July, at a cost of £38.8 million per month. 

In these cases, COVID-19 has merely highlighted and exacerbated a problem that existed long before: the provision of poor quality and vastly over-priced services to government by private contractors with seemingly no accountability, and no risk that failure will affect the likelihood of them being awarded future contracts. This is not a story about a pandemic emergency, but about the deliberate destruction over the last few decades of the state’s ability to deliver public services, in favour of private companies. Interestingly, the justifications for contracting out have shifted over time: away from the claim that private companies can do things more efficiently and effectively (no-one in their right mind would now believe that), towards the claim that they are the only ones with the ability to do them at all. The roll-back of the state is almost complete.

In general, I am not a fan of the use of war comparisons to describe disease response. But there is one similarity between COVID and war: the pandemic has provided the biggest opportunity for large-scale profiteering at the expense of the taxpayer since the wars in Iraq and Afghanistan. 



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