Public “truly sick” of Tory cronyism, says Rachel Reeves

Rachel Reeves has declared that people across the country are “well and truly sick” of Conservative cronyism following further reports of Covid-related public contracts being handed out to those with close links to the Tory Party.

Commenting on reports from OpenDemocracy of a major contract being given to a healthcare company controlled by Tory donor and former party chairman Lord Ashcroft, she slammed the government’s dodgy record on public procurement.

A £350m contract was awarded to Medacs Healthcare plc by the Department of Health and Social Care last month, which is a subsidiary of Impellam Group whose largest shareholder is Ashcroft. Ashcroft has donated millions to the Tory Party.

Reeves tweeted: “So many Tory-linked businesses have been given public contracts. People are well and truly sick of the Tory government’s cronyism, incompetence and waste throughout this pandemic.”

Medacs Healthcare is an outsourcing company that specialises in providing staff to NHS, social care services and private healthcare providers and has been advertising for positions in the government’s vaccination roll-out project.

The contracts states that the company will also provide a “temporary workforce to support medical and clinical services in laboratories or to assist the national testing programme in response to Covid-19”.

The deal between the government and Medacs Healthcare is described as a “call-off from a framework agreement”, which means that the lucrative public contract was awarded without an open and competitive tender process.

Ashcroft has been a longstanding donor to the Conservative Party. He has made numerous contributions over the years, including one instance in 2010 in which he made a single donation of £5.1m and a £175,000 gift given to the party last year.

Commenting this morning, Reeves said: “People are understandably furious seeing businesses owned and run by the friends and donors of the Tory Party being awarded huge multi-million-pound public contracts throughout this pandemic.

“Cronyism, incompetence and waste have been everyday features of this government’s approach to outsourcing and ministers show little willingness to learn lessons from the National Audit Office investigations.”

Labour has repeatedly criticised the government over its approach to awarding contracts in the Covid crisis and has demanded “transparency so the government can be properly held to account for their use of the public’s money”.

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

In response to the report, which also highlighted wastage of public money on unusable personal protective equipment, the Cabinet Office admitted that the government had bought 184 million items not fit for purpose in the pandemic.

Labour leader Keir Starmer highlighted this answer from the Cabinet Office during a subsequent Prime Minister’s Questions session last year and accused Boris Johnson of “spraying public money at contracts”.

He added: “Will the Prime Minister finally get his priorities right, stop wasting taxpayers money and give police officers, firefighters, care workers and other key workers the pay rise they so obviously deserve?”

It emerged earlier in the public health crisis that the Conservative administration had wasted £150m of taxpayer money after it signed a contract with private equity company Ayanda Capital earlier this year for unusable face masks.

The Good Law Project launched legal action last year after Cabinet Office documents were revealed that it said showed special pathways outside of normal procurement processes had been set up to help “VIPs” win government contracts.

The government has released data on contracts worth over £16bn handed out last year. Of those, around half went to companies with political connections, no prior experience or a controversial record on tax evasion, fraud or human rights.

Around £3.6bn awarded in the government response to Covid has been given to politically connected companies, with either former ministers or advisers on their staff or with members who have donated to the Conservative Party in the past.