Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Crown Commercial Service (CCS) failed to sufficiently manage and consider conflicts of interest for the...
Conclusion
Crown Commercial Service (CCS) failed to sufficiently manage and consider conflicts of interest for the appointment of contractors. Lex Greensill was appointed as senior adviser to government on supply chain finance in November 2011 and continued to provide advice to government until March 2017. In July 2012 he set up a company (Greensill Capital) which subsequently participated in the provision of supply chain finance to government. In November 2017 Greensill Capital emerged as the key subcontractor and financial guarantor to Taulia, which was appointed in March 2018 as the sole supplier to the Supplier Early Payment Solution framework. Greensill Capital facilitated an operational contract to provide private finance into the pharmacy reimbursement process and, therefore, Lex Greensill stood to gain from his relationship with government. CCS has stated that when it first became aware that Greensill Capital had been appointed as subcontractor to Taulia, it did not consider Lex Greensill’s previous engagement with government sufficient grounds under the regulations to reject Taulia’s bid. Ex-senior civil servants with privileged access to government officials by virtue of previous senior roles in the civil service on taking up private sector positions exploited this access. This was the case with Greensill Capital’s staff who provided a credible face when promoting the Earnd salary advance scheme and other Greensill Capital products to NHS leadership – winning over their confidence. Recommendation: The Department and CCS should formalise the process for considering conflicts of interest, to ensure that actual and perceived conflicts of interest are managed appropriately.
Government Response
Acknowledged
HM Government
Acknowledged
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 In 2020, the National Audit Office and the Boardman Review recommended that additional, practical guidance be made available for all in-scope organisations regarding the management of conflicts of interest in commercial environments. As a result, on 20 May 2021, the Cabinet Office published Procurement Policy Notice (PPN) 04/2021 covering the issue of conflicts of interest in awarding contracts and interpretation of the relevant exclusion provisions where contractors commit certain breaches. 2.3 The Crown Commercial Service (CCS) ensures that their framework procurement process considers conflicts of interest and has recently carried out checks to ensure that each stage of it fully complies with PPN 04/2021; this includes updating the templates it uses as part of the framework procurement evaluation process. This is to ensure contemporaneous confirmation is explicitly sought and captured that CCS teams and other interested parties in the procurement have considered and declared any perceived or actual conflicts of interest. 2.4 The Department of Health and Social Care (the department) has completed its implementation of the PPN 04/2021. It has introduced a clear process to ensure that conflicts of interest are considered at appropriate stages of the procurement lifecycle, which includes a review of the declaration forms in line with the PPN. 2.5 As part of the annual contract management assurance process for 2022-23, the department will ensure that all of 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.