MPs criticise award of Covid-19 contracts to medical company

The UK government’s “woefully inadequate record-keeping” means it is “impossible to have confidence” that £777mn of contracts won by medical diagnostics company Randox as part of the country’s Covid-19 testing programme were awarded properly, according to a new report.

The Commons public accounts committee on Wednesday accused The Department of Health and Social Care of failing to “show any evidence of taking any care” over potential conflicts of interest, despite officials being aware of contacts between former Conservative minister Owen Paterson, a paid consultant to Randox, and the then health secretary Matt Hancock.

Between March 2020 and December 2021, the government awarded 22 contracts to Randox for the supply of PCR testing services and goods, with a maximum total value of almost £777mn.

In a report about the government’s contracts with Randox, the public accounts committee said the health department set out key performance indicators for the company in its first deal, worth £132mn, only in July 2020, a month after it was originally expected to end.

It added that the department had failed to hold Randox to account for its performance against this contract and had awarded it a £328mn extension without competition.

The committee said: “Woefully inadequate record-keeping by the department makes it impossible to have confidence that all its contracts with Randox were awarded properly.”

The committee also found that the department did not do sufficient work to determine whether Randox was making excess profits from the contracts.

Randox reported a profit of £177mn in the year to June 2021, more than 100 times greater than its earnings in the 18 months to June 2020.

Committee chair Dame Meg Hillier said the National Audit Office, parliament’s spending watchdog, had been careful to stress it had not seen any evidence that the government’s contracts with Randox had been awarded improperly.

But she added much of the company’s business had been won “without any competing tenders from companies who may have had better capacity to deliver, perhaps without the upfront capital”.

The committee criticised the health department for failing to deal with potential conflicts of interest, despite concerns about Randox’s political links.

In October last year, a parliamentary committee recommended Paterson be suspended from the House of Commons for 30 days after he was found to have broken lobbying rules, partly in relation to Randox.

Outgoing prime minister Boris Johnson initially backed an attempt to block Paterson’s suspension but reversed course following a backlash. Paterson later resigned.

The committee noted that the health department had said “that it did not believe that Randox had gained any benefit from its direct engagement via Mr Paterson or any other route”.

In response, Randox said: “The [public accounts committee] report is deeply flawed and wrong in assumptions it makes and the conclusions it draws about Randox.”

As the UK’s largest diagnostic company, “Randox was uniquely situated to respond to the national need when Covid-19 emerged in early 2020”, it added.

Randox said: “At no stage, either during its deliberations or in its preparation of this report, did the [committee] make any contact whatsoever with Randox. Consequently many elements of its report relating to Randox are false.”

Randox also said the issues raised about internal health department record keeping were a matter for the department.

The committee said Randox had been made aware on June 21 that the MPs’ inquiry was taking place, and its broad scope, but not been told of its conclusions.

It added that Randox had been sent an advance copy of the report on Monday as a courtesy.

A spokesperson for Paterson said he “played no part whatsoever in the awarding of Covid contracts to Randox”.

A spokesperson for Hancock said: “This report completely exonerates ministers. It finds no wrong doing . . .

“Randox was the UK’s largest testing provider. Not to work with them during this unprecedented global pandemic would have been a dereliction of duty.”

The health department said: “There are robust rules and processes in place to ensure that conflicts of interest do not occur . . There is no evidence that the government’s contracts with Randox were awarded improperly, as has been concluded by the National Audit Office. To suggest otherwise is misleading.”

The government’s contracts with Randox and other suppliers “made a significant contribution to our national response to Covid”.