Government Contracts: Randox Laboratories

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Thursday 10 February.

“In response to the greatest public health emergency that we have faced for a generation, the Government engaged with many businesses—big and small—as part of an unprecedented national effort. On 3 February, we responded to the humble Address and laid the documents before the House. We are committed to transparency and helping the House perform its valuable scrutiny, and the department dedicated significant resources to reviewing about 11,000 records to identify the 35 relevant documents. They show how we took every possible step to build the huge infrastructure for testing that we now have in this country—the biggest testing programme in Europe. The programme has done so much to stop the spread of this deadly virus and given us all hope that we can learn to live with Covid-19.

Randox has been globally recognised in the diagnostics industry for nearly 40 years, and even as early as March 2020 had lab-based PCR testing capacity for Covid-19. Robust rules and processes are in place to ensure that all contracts are awarded in line with procurement regulations and transparency guidelines, and that any potential conflicts of interest with respect to commercial matters are appropriately managed. Direct awards, such as in this case, are permitted by public contract regulations for reasons of extreme urgency brought about by unforeseeable events. I am sure that no honourable Member would deny that the situation was one of extreme urgency.

As the House would expect, Ministers of course have a role in approving contracts, but their approval relies on the impartial evaluation conducted by civil servants. I reinforce to honourable Members that Ministers are not involved in the assessment and evaluation process for contracts, and that the documents given to the House show no evidence that any of those principles has been breached. Instead, they plainly show that we did everything in our power to keep this country safe at a time of crisis, as the British people would expect.”

My Lords, at the heart of this Question is almost £500 million of public money, awarded in two public health contracts to Randox Laboratories without competition. My honourable friend asked this Question in the Commons and raised the dissonance in what has been said by the Government over the months since the issue was first raised. I have two questions for the Minister. Does he agree with the former Minister of State for Efficiency and Transformation, the noble Lord, Lord Agnew, that the Government were paying dramatically over the odds for Randox products? If so, can he explain why the Government then entered into a second, more lucrative, contract with the firm? Secondly, the chief operating officer for the Civil Service requested the restoration of competitive tendering by March 2021. Can the Minister set out how many further contracts have been issued after that date without tender and explain why the emergency procurement rules are still in place almost a year later, given that we are coming, as the Prime Minister just told the Commons “out of Covid”?

I start by thanking the noble Baroness for those questions. On her first point, we should remember the stage that the Government were at at the beginning of the crisis. People were dying every day and there were panics; they were not sure what was out there. Clearly, they were going out looking for suppliers for testing and other equipment. There were a number of approaches and different meetings, but one thing that has been quite clear is that all contracts were awarded according to the Public Contracts Regulations 2015. I have been reassured about this by officials. Authorities are permitted to procure goods, services and works via direct award, using Regulation 32 of the Public Contracts Regulations 2015, in exceptional circumstances, such as extreme urgency, without competing or advertising the requirement. I contend that the beginning of the Covid crisis was such an emergency, and that is one reason it was awarded without competition. There are clear procedures, we are committed to openness and transparency and details of the contracts are available online.

The decision on whether to procure a product from a supplier ultimately sits with departmental officials once the offer has cleared assurance steps. These include clinical acceptability and financial due diligence. I often get emails from people who have sat next to me somewhere who say, “I have this fantastic product”, but I have to reply to them and say, “I’m very sorry—I will copy officials into this but I can take no further part”.

I shall try to answer on the emergency procurement procedures, but I want to make sure I have the right note. Clearly, there are unforeseeable circumstances such as, for example, the rapid onset of omicron at the end of 2021. That also required UKHSA to act with extreme urgency. We used Regulation 32 in some cases at the end of last year to supply LFTs over the Christmas and new year period due to increased demand. The use of Regulation 32 was necessary because our DPS 2 procurement had reached its limit of extension and there was no time to run additional procurement. I am sure the noble Baroness and others will remember the end of last year, when people just could not get hold of testing equipment and we were trying to buy as much as we could on the world market.

My Lords, since the start of 2020, Randox has secured almost £620 million of government contracts and the firm has been shown repeatedly to produce goods which are faulty or do not work. It got those contracts using personal contacts. Will the Minister undertake that there will be an independent investigation of those contracts and recovery of any public money spent on faulty goods?

At the time of the award of the original contract in March 2020, almost no UK supply was available and Randox was able to provide an end-to-end testing service. The department then engaged with a number of suppliers in its effort rapidly to build from scratch the largest testing industry in UK history. That has played an important role in stopping the spread of Covid-19 and saving lives. The service that Randox provided was a very important part of that.

A number of Randox home testing kits were recalled in the summer of 2020 after tests found that swabs were not sterilised. A Public Health England investigation did not find any instances of swabs causing ill health. Randox agreed to provide new Covid-19 self-test kits. The contract was necessary to meet the increase in testing needed. An independent assessment in June 2020 had placed Randox ahead of other laboratories, and Randox was meeting its delivery targets by September 2020. Without Randox, we would not have been able to meet the volume of testing needed over the winter period.

My Lords, I declare an interest in that Randox Laboratories is a major employer in a constituency that I represented for 10 years in the other House. It cannot be challenged that Randox Laboratories has been globally recognised in the diagnostics industry over many years. Therefore, can the Minister place on record the Government’s appreciation for firms such as Randox that rose to the health emergency and exercised their best efforts to achieve our unprecedented national effort?

I thank the noble Lord for reminding us of the importance of all the companies that supplied equipment or scaled up at pace or were able to meet the initial requirements. It was a time of panic; thousands were dying, and we did not have equipment. This was a time before the vaccine. The department and its officials tried to speak to as many people as possible around the world to find out what was available, what could be done and what the timescales were. Clearly, as the noble Lord said, Randox played an important role in meeting the testing requirements initially.

My Lords, the Minister suggests that the Government were panicking. Does he agree that panic in a laboratory or when one is dealing with tests of this kind is not satisfactory? Is not one of the problems that it is clear that Randox’s methods were not satisfactory and would not stand up to absolutely accurate testing? Is it not the case that the Government still cannot tell us what percentage of its PCR tests were inaccurate or in some ways contaminated?

I used the word panic because I think everyone was panicking. People just did not understand what was going on. They did not understand the pace of coronavirus; they did not even understand the disease itself and the transmission of it. I was reading over the weekend a couple of books on the history of the virus so far, where it broke out and what people thought it was originally, and some of the reassessments of historical epidemiology. Clearly, we needed testing performance. Randox was the only company at that time, in March 2020, that was able to provide that capacity at the scale needed. As I said earlier, where we identified problems, we made Randox aware of them and it supplied new kit.

My Lords, the Government held a full-scale exercise in 2016 based on pandemic flu, Operation Cygnus. Anybody who reads the report of that exercise today can see that there was a looming problem with PPE. Between 2016 and 2020, the Government did nothing about that identified problem, so that, when 2020 came, we domestically produced only 1% of the PPE that was required in the NHS. Why was so little done to be ready for something that had been predicted in advance?

The noble Lord makes a point about predicting it in advance, but it is very easy to say that with hindsight. Let us look at a number of different countries and the WHO: some people argue that the WHO and Public Health England had only one job, and they were not prepared for it. Clearly, people were caught unawares; we were not the only country to be caught unawares.

We did the exercises.

There were countries all around the world which were not prepared. That is why everyone scrambled on to the international market; it is why prices were paid at the time that, with hindsight, would not be paid nowadays. It is important to remember where we were at that stage, what we were trying to get hold of, the world market and our understanding of the virus, and at a time when there was no vaccine.