McDonnell calls for ban on private sector contracts in UK Covid response

Labour’s John McDonnell has demanded a ban on all private sector contracts being used for the UK’s coronavirus response services in a bid to end “rampant” conflicts of interest that have been exposed during Covid.

Calling for a moratorium on pandemic outsourcing, the former Shadow Chancellor highlighted the appointment of Tory peer Dido Harding as head of the test and trace programme – despite her having no experience working in healthcare.

The Hayes and Harlington MP also called attention to a former neighbour of Health Secretary Matt Hancock being awarded a contract for millions of NHS Covid-19 test vials – despite him having no prior experience in producing medical supplies.

The news revealed by The Guardian last month led to Labour’s deputy leader Angela Rayner calling the situation a “disgrace” and saying it showed the government was “making a mockery of the sacrifices that the British people have made”.

Unveiling his demand today, McDonnell said: “The public is fed up with story after story of contracts being handed out to government cronies, leading to billions of wasted money and policy failures.

“Hard-working civil servants are being bypassed and left demoralised as the government hollows out the skills we need to build to deal with future crises.

“Only a moratorium on this scandalous practice can give us the breathing space to refocus and introduce procedures that will ensure the probity and effectiveness of the pandemic processes.”

A National Audit Office report recently found that half of all Covid contracts, worth £10.5bn, have been handed out without a competitive tender process and that applicants with political contacts were ten times more likely to be successful.

The NAO concluded that it could not “give assurance that government has adequately mitigated the increased risks arising from emergency procurement or applied appropriate commercial practices in all cases”.

The bold demand by McDonnell today for a halt to private sector contracts amid the Covid crisis comes ahead of an online discussion this afternoon with barrister Jolyon Maugham, the founder and director of the Good Law Project.

Maugham’s organisation revealed leaked documents in October showing that the Cabinet Office was “directly feeding its contacts into the procurement process, outside the normal public channel” to help “VIPs” win government contracts.

The leak exposed a “startling opportunity for price gouging by favoured suppliers”, the Good Law Project found, with questions only being asked if prices offered were more than 25% above the average paid to other suppliers.

“The information that government would buy at 25% above the price paid to ‘regular’ suppliers was a licence to make enormous margins – 35-45% – on contracts sometimes worth hundreds of millions of pounds,” Maugham said.

The Good Law Project is joining with a cross-party group of MPs to sue Hancock on the basis that the Department of Health is responsible for “egregious and widespread failure to comply with legal duties and established policies”.

The Department said it could not comment on legal proceedings but that the processes set up are “in line with procurement regulations for exceptional circumstances” and government transparency guidelines are being followed.

Public and Commercial Services Union (PCS) union general secretary Mark Serwotka will also join the event hosted by McDonnell, along with Jatinder Hayre of Keep our NHS Public and Guardian journalist Juliette Garside.

The event is being organised by Claim the Future, a campaign group launched by McDonnell over the summer to help set out a socialist vision for a post-coronavirus economy by encouraging activists to “strategise, organise, assemble”.