Recommendations & Conclusions
18 items
2
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Department failed to meet basic requirements to report publicly ministers’ meetings with external parties. The Ministerial Code requires all departments to report meetings that ministers have had with external parties and any hospitality received, in the interests of transparency and accountability. The Department properly declared only four of the …
Government response. The Department has strengthened reporting and quality assurance processes, including PPS and ministerial clearance for each entry, and has updated the register of ministerial meetings.
HM Treasury
3
Conclusion
Seventeenth Report - Government’s contr…
Accepted
The Department did not deal with potential conflicts of interest, despite clear concerns about Randox’s political connections. The Department 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 …
Government response. The government agrees with the Committee’s recommendation. The department has written to the Committee on 31 October 2022 setting out its response as requested. Companies may be excluded from bidding for government contracts where a conflict cannot be effectively.
HM Treasury
4
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The award of the first Randox contract did not receive adequate scrutiny from senior officials and the role of ministers in signing it off was unclear. The Department’s then Second Permanent Secretary had some visibility of the first contract awarded to Randox, but he did not approve it as we …
Government response. The government published guidance for Ministerial involvement in commercial activity and the contracting process in July 2022, outlining the expected role and involvement of Ministers.
HM Treasury
5
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Department failed to hold Randox to account for its performance against its first contract and awarded it another £328 million extension without competition. The Department did not set out any key performance indicators for Randox in its first contract and only introduced performance measures such as test turnaround times …
Government response. The government agrees with the Committee’s recommendation and states that DHSC Commercial Policy outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances, and all contracts are subject to DHSC’s contract management operating …
HM Treasury
6
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Department did not do enough work to determine whether Randox was making excess profits from its contracts with Randox. Randox’s published accounts do not yet cover the entire period of the contracts we considered, but they already show how Randox has substantially increased its profits and expanded its business …
Government response. The Government Commercial Function has published the The Sourcing Playbook which sets out the key commercial principles that underpin commercial activity across Government and provides commercial, finance, project delivery, policy and other professionals with comprehensive guidelines, rules and principles that …
HM Treasury
7
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Department failed to record in its own published transparency releases that Randox had attended four meetings on testing with ministers in 2020, although it did declare four other meetings involving ministers and Randox. Minutes or records of discussions were kept for two of these meetings.10 The Ministerial Code requires …
Government response. The department has undertaken a review of historic ministerial diaries and updated the register where necessary, strengthened reporting and quality assurance processes, and reinforced transparency requirements across ministerial private offices.
HM Treasury
8
Conclusion
Seventeenth Report - Government’s contr…
Accepted
The Ministerial Code further requires that hospitality received by ministers in a ministerial capacity is declared on departments’ quarterly transparency releases.14 During 8 Q 35, C&AG’s Report, para 13 9 Qq 85, 90–91, 122 10 C&AG’s Report, para 2.25 11 Cabinet Office, Ministerial Code, May 2022, para 8.14 12 Information …
Government response. The government agrees with the Committee’s recommendation to strengthen its transparency processes and ensure that it enforces requirements and takes action where they are not followed. They have undertaken a review of historic ministerial diaries and has, where necessary, updated …
HM Treasury
9
Recommendation
Seventeenth Report - Government’s contr…
Accepted
In addition to the wider efforts to improve basic documentation, the Department told us that it had introduced measures such as spot checks by the principal private secretary to reinforce the importance of proper record-keeping in private offices. The Department explained that the measures were designed to ensure staff in …
Government response. The department has written to the Committee on 31 October 2022 with the details requested by the Committee, regarding how its commercial refresh will bring record-keeping up to standard.
HM Treasury
10
Recommendation
Seventeenth Report - Government’s contr…
Accepted
Regulations governing public contracts require departments and other bodies to identify and manage conflicts of interest in the procurement process. The Procurement Bill, published in May 2022, reinforces these requirements and would also explicitly require departments and bodies to prepare conflicts of interest assessments before contracts are awarded.18 The Department …
Government response. The government recognizes that the experience of COVID-19 shows it could be better at ensuring consistency in the management of conflicts of interest, and it updated commercial guidance in May 2021. The department has completed its implementation of this PPN, …
HM Treasury
11
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Department did not appear to have considered potential concerns about Randox’s political connections in its decision making, such as Owen Paterson’s lobbying on behalf of Randox, hospitality offered to Matt Hancock by Randox’s managing director, or the company’s donations to the Conservative party. The Department said that it had …
Government response. The Department has written to the Committee on 31 October 2022 setting out its response regarding information on declared private interests and how it was used to identify potential conflicts of interest in its procurement decisions.
HM Treasury
12
Recommendation
Seventeenth Report - Government’s contr…
Accepted
Consideration of potential conflicts of interest is also relevant to other contracts with testing suppliers. Some suppliers offering testing services were referred to the Department by ministers, MPs or Number 10. The Department marked supplier offers as ‘VIP’ if they had been referred from these sources and the suppliers were …
Government response. The government has strengthened its approach to ensure that conflicts of interest are not just documented, but also communicated and acted on by those awarding contracts, updating commercial guidance and introducing clear processes, and the Procurement Bill continues to place …
HM Treasury
13
Conclusion
Seventeenth Report - Government’s contr…
Accepted
The negotiation and approval processes for the first contract awarded to Randox in March 2020 were unclear and not fully documented.25 The Department said that standard processes were in place at the time for commercial specialists to negotiate contracts, which included checking accreditations for services and tests, considering supply chain …
Government response. The department has written to the Committee on 31 October 2022 with the details requested by the Committee, regarding details of when and how its commercial refresh will bring record-keeping up to standard and ensure that this is the case …
HM Treasury
14
Conclusion
Seventeenth Report - Government’s contr…
Accepted
The first contract did not receive the level of senior scrutiny and sign-off that we would expect for a contract of this size, particularly one awarded without competition. The contract was signed by a deputy director in the Department after officials received authorisation to proceed with the contract from Lord …
Government response. The Government Commercial Function published guidance for Ministerial involvement in commercial activity and the contracting process in July 2022, clarifying the role of ministers in procurement processes, including contract discussions and approvals.
HM Treasury
15
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Cabinet Office did not approve the first contract with Randox, as it would normally do for contracts worth over £10 million in line with its regime of commercial spending controls. The Department did not submit the Randox contract for approval before it was awarded, but said it brought the …
Government response. The department has written to the Committee on 31 October 2022 with the details requested by the Committee regarding when and how its commercial refresh will bring record-keeping up to standard.
HM Treasury
16
Recommendation
Seventeenth Report - Government’s contr…
Accepted
The Department did not include key performance indicators (KPIs) in its first contract with Randox against which it could judge how the company was performing. The Department said the reason it had not set performance measures in the contract was because its focus at the time was on building the …
Government response. The government agrees with the Committee’s recommendation and states that DHSC Commercial Policy outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances, and all contracts are subject to DHSC’s contract management operating …
HM Treasury
19
Recommendation
Seventeenth Report - Government’s contr…
Accepted
Despite issues with the performance of the first contract, in October 2020 Randox was awarded a contract extension worth £328 million (around two and a half times the value of the original contract), again without competition. At the time, the Cabinet Office questioned why the Department had not used a …
Government response. The DHSC outlines best practice methodology and processes which applies to all procurements and contracts, irrespective of the circumstances, including setting performance indicators and using these to hold providers to account via ongoing monitoring and reporting of KPIs.
HM Treasury
22
Conclusion
Seventeenth Report - Government’s contr…
Accepted
The Department did not monitor the profitability of Randox before deciding to award contracts to the company. The Department said that when contracts were awarded in 2020, it did not have the time or the ability to undertake this sort of monitoring.44 The latest accounts Randox has filed with Companies …
Government response. The Government Commercial Function has published the The Sourcing Playbook which sets out the key commercial principles that underpin commercial activity across Government and provides commercial, finance, project delivery, policy and other professionals with comprehensive guidelines, rules and principles that …
HM Treasury
23
Conclusion
Seventeenth Report - Government’s contr…
Accepted
Randox’s published accounts do not yet cover the entire period of the contracts we considered. Its accounts for the year to 30 June 2021 reflect how the company has already expanded as a result of increased business through the pandemic. At June 2021, 40 Qq 22, 49; C&AG’s report, para …
Government response. The Government Commercial Function has published the The Sourcing Playbook which sets out the key commercial principles that underpin commercial activity across Government and provides commercial, finance, project delivery, policy and other professionals with comprehensive guidelines, rules and principles that …
HM Treasury