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‘Impossible’ to know if Randox contracts were awarded properly

In a highly critical report published today, the House of Commons public accounts committee says that “woefully inadequate record-keeping”, failing to meet even basic requirements to publicly report ministers’ meetings with external parties or deal with potential conflicts of interest, “despite clear concerns about Randox’s political connections” means it is “impossible to have confidence” that the £777 million of contracts – many without competition – “were awarded properly”.

Last November Conservative MP Owen Paterson, who had been registered as a paid lobbyist for Randox, stepped down after the standards committee found he had breached lobbying rules in his contact with former health secretary Matt Hancock.

Conservative whips initially instructed MPs to vote against his suspension before the government subsequently U-turned on the issue.

The committee says the department of health and social care did not show any evidence of taking any care over potential conflicts of interest when it awarded contracts to Randox. This was despite officials being aware of Owen Paterson’s contacts with Matt Hancock, as a paid consultant for Randox while he was still a sitting MP, and the hospitality Hancock received from Randox in 2019.

The committee says that “even allowing for the exceptional circumstances at the start of the pandemic, basic civil service practices to document contract decision making were not followed and DHSC “failed in its duties to be transparent about meetings that its ministers had with Randox” leaving “the role of DHSC ministers in approving the contract confused and unclear”.

Following the initial £132 million contract – awarded with no competition and without any performance measures – Randox struggled to deliver the expected level of testing capacity: yet the government still awarded Randox a contract extension worth £328 million seven months later, again without competition.

Randox then saw a hundred-fold increase in its profit in the year to June 2021 – but the government did not consider supplier profit margins or the potential for excess profits in its decision-making on the contracts.

Dame Meg Hillier, the MP who chairs the committee, said: “The NAO has been careful to stress that it has not seen any evidence that the Government’s contracts with Randox were awarded improperly. But then, in the case of the hundreds of millions of pounds of contracts awarded to Randox, there was precious little evidence to see. Much of the business was won without any competing tenders from companies who may have had better capacity to deliver, perhaps without the upfront capital.

“Add to that the failure to include any performance measures in the first contract, or any protection against excess profits, and this looks just like the rushed policy and contract-making that we’ve seen across so much of the Government’s response to the pandemic. We repeatedly hear the reference to the crisis we were facing as a nation. But acting fast doesn’t mean acting fast and loose.”

A spokesperson for Randox has blasted today’s report as “deeply flawed and wrong in assumptions,” stressing that the company was pursuing legal action.

They also said PAC had not made “any contact” with the firm during the “deliberations or in its preparation of this report,” accusing the report of making conclusions based on “wrong and unchecked assumptions about the company.”

A spokesperson for the DHSC said in response to the report: “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. By building the largest testing industry in UK history from scratch and at pace, we were able to break chains of transmission and save tens of thousands of lives. Contracts with Randox and other suppliers made a significant contribution to our national response to Covid,” they continued.

Responding to the report, a spokesman for former Health Secretary, Matt Hancock said, “This report completely exonerates Ministers. It finds no wrong doing, because there wasn’t any – just a huge amount of hard work to build the biggest testing system the country has ever seen, at speed and under exceptional circumstances”.  He added, “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”.