Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Accepted
The Department did not deal with potential conflicts of interest, despite clear concerns about Randox’s...
Conclusion
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 Rt Hon Matt Hancock MP, the then Secretary of State for Health and Social Care, as a paid consultant for Randox while he was still a sitting MP, and the hospitality Mr Hancock received from Randox in 2019. For its first contract with Randox, the Department failed to identify any conflicts of interest, incorrectly 1 Letter from Matt Hancock, 20 May 2022 6 Government’s contracts with Randox Laboratories Ltd stating at the time that consideration of conflicts of interest was not applicable to that contract award. The Department was not able to answer clearly how it makes sure that those involved in procurement give due consideration to potential conflicts of interest in their decision making, even where interests are properly recorded or declared. The Procurement Bill, published in May 2022, contains new requirements on departments to record conflicts of interests relating to contracts. We are also concerned about the Department’s prioritisation of testing suppliers through VIP and priority routes, including those referred by ministers, MPs or Number 10. Suppliers that came through these routes were awarded £6 billion out of the £7.9 billion total of testing contracts awarded between May 2020 and March 2021. Recommendation: Alongside its Treasury Minute response, the Department should write to us to clarify the information it had on declared private interests and how it used this information to identify potential conflicts of interest in its procurement decisions. In addition to the expected new requirements to record conflicts of interest, government should strengthen its approach to ensure that conflicts of interest are not just documented,
Government Response Summary
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.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation Recommendation Implemented 3.2 The department has written to the Committee on 31 October 2022 setting out its response as requested. 3b: PAC recommendation: In addition to the expected new requirements to record conflicts of interest, government should strengthen its approach to ensure that conflicts of interest are not just documented, but also communicated and acted on by those awarding contracts. 3.3 The government agrees with the Committee’s recommendation. Recommendation Implemented 3.4 Specific legal duties in the Public Contracts Regulations require government departments to take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures, so as to avoid any distortion of competition and to ensure equal treatment of all bidders and suppliers. Companies may be 15 excluded from bidding for government contracts where a conflict cannot be effectively remedied. 3.5 The government recognises that the experience of COVID-19 shows it could be better at ensuring consistency in the management of conflicts of interest. Updated commercial guidance on the management of actual and perceived conflicts of interest was published in May 2021 (PPN 04/21: Applying Exclusions in Public Procurement, Managing Conflicts of Interest and Whistleblowing) 3.6 The department has completed its implementation of this PPN, having introduced a clear process to ensure that conflicts of interest are considered at appropriate stages of the procurement lifecycle, including a review of the declaration forms in line with the PPN. The UK Health Security Agency (UKHSA) is in the process of updating its conflicts of interest policies in response to the PPN. 3.7 The department will ensure that all its contract managers (officials) routinely complete a conflicts of interest declaration during their involvement in managing contracts. All contractors working for the department are required to complete the conflicts of interest form. 3.8 The Procurement Bill currently going through Parliament continues to place legal duties on contracting authorities with respect to the prevention and remedy of conflicts of interest.