Labour demands ministers end use of emergency Covid procurement rules

Labour has called on ministers to ensure an end to the use of emergency rules introduced for the procurement of public contracts at the height of the pandemic.

In a letter to the Crown Commercial Services, the body that oversees public procurement, Jack Dromey MP today asked whether the emergency guidance issued last year suspending normal procurement rules are still in place and, if so, “what justification there is for this guidance and when will it be withdrawn?”

“The seriousness and scale of threat the pandemic posed last year was unlike anything this country has faced since 1945. Clearly, during a time of crisis, such emergency regulations may need to be invoked,” Labour’s shadow paymaster general wrote.

“However, as the country has overcome the tragedy of the initial waves of the pandemic, it is less clear whether such regulations should continue to be the basis of procurement guidance to public bodies.”

The Cabinet Office issues the ‘procurement policy note’ 01/20 during the first wave of cases in March last year, setting out the guidance for public bodies that needed to procure goods, services and work with extreme urgency.

The note permitted authorities to procure using regulation 32(2)(c) of the public contract regulations 2015, which says that emergency procedures can be used where “for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with”.

Commenting on the issue this afternoon, Dromey said: “These emergency rules have led to billions of pounds of taxpayers’ money being handed out on dodgy contracts and opened the door for the shocking levels of lobbying that the Owen Paterson case exposed. The government must act now to revoke these emergency rules, clean up how public contracts are awarded and put an end to this scandal.”

Paterson, the now resigned former Tory MP, was found guilty of lobbying on behalf of two companies that paid him £112,000. One of those, Randox, was awarded a £600m contract outside of the normal procurement process and without tender.

Other ministers have also been implicated. Lord Bethell said he has deleted messages related to handing out public contracts and on Wednesday the government confirmed that a minute of a meeting between Bethell and Randox could not be found.

The government caused outrage earlier this month as ministers whipped Conservative backbenchers to reject a 30-day suspension of the MP recommended by a cross-party parliamentary committee but U-turned following a public backlash.

Below is the full text of the letter sent today.

Dear Simon,

I am writing to you regarding the emergency information and guidance issued by the Cabinet Office in March 2020 regarding public procurement regulations and responding to the Covid-19 pandemic.

In March 2020, the Cabinet Office issued the procurement policy note (PPN) 01/20[1] which set out the guidance for public bodies who needed to procure goods, services and work with extreme urgency. The note made clear that due the exceptional circumstances of the time, authorities would be permitted to procure using regulation 32(2)(c) of the Public Contract Regulations 2015[2]. This states that, “insofar as is strictly necessary”, emergency procedures may be used where:

“for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for the open or restricted procedures or competitive procedures with negotiation cannot be complied with.”

The seriousness and scale of threat the pandemic posed last year was unlike anything this country has faced since 1945. Clearly, during a time of crisis, such emergency regulations may need to be invoked. However, as the country has overcome the tragedy of the initial waves of the pandemic, it is less clear whether such regulations should continue to be the basis of procurement guidance to public bodies.

Emergency procurement procedures, specifically regulation 32(2)(c), have already been the subject of reports investigating the risks it posed to public money and concerns regarding transparency in the awarding of contracts, potential conflicts of interest and the use of unsuitable suppliers[3].

Following recent revelations regarding the awarding of public contracts during the pandemic and the role of Cabinet Ministers in this process, I am concerned that such inadequate procurement processes should not be allowed to continue. While coronavirus remains an ongoing threat to the health and wellbeing of the country, the exceptional circumstances of last March are no longer apparent.

I would therefore be grateful if you could confirm if official guidance continues to allow for emergency procurement procedures, and if so, what justification there is for this guidance and when will it be withdrawn?

I look forward to your response on this matter. I am sending a copy of this letter to Alex Chisholm, Chief Operating Officer of the Civil Service and Permanent Secretary for the Cabinet Office.

Yours sincerely,

Jack Dromey MP
Shadow paymaster general