This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
Date Published: 27 July 2022
During the COVID-19 pandemic, the Department of Health & Social Care (the Department) awarded contracts worth almost £777 million to Randox Laboratories Ltd (Randox) for COVID-19 testing services and goods. However, the Department’s poor record-keeping means that we cannot be sure that all these contracts were awarded properly. Even allowing for the exceptional circumstances at the start of the pandemic, basic civil service practices to document contract decision making were not followed. The Department further failed in its duties to be transparent about meetings that its ministers had with Randox. The potential for conflicts of interest was obvious, but the Department neglected to explicitly consider conflicts of interest in its awarding of contracts to Randox.
Randox’s first contract for COVID-19 testing services was awarded in March 2020 without competition and did not receive the scrutiny we would expect from the Department’s senior civil servants. The role of the Department’s ministers in approving the contract was also confused and unclear. Gaps in the audit trail meant that it was not possible for the National Audit Office to provide positive assurances in the normal way, but its report also stated that it had not seen any evidence that the government’s contracts with Randox were awarded improperly.
Randox struggled to deliver the expected level of testing capacity against its first contract, which did not set out any performance measures. Yet the Department still awarded Randox a contract extension worth £328 million seven months later, again without competition. Randox benefited from substantial capital investment which was included in the price the Department paid for its first contract with Randox, and the company saw a hundred-fold increase in its profit in the year to June 2021. However, the Department did not consider supplier profit margins, including any profit share or the potential for excess profits, in its decision making on contracts with Randox.