Rachel Reeves Exposes £2 billion Spent on Crony Contracts

Labour goes after the government’s crony contracts as they ramp up the pressure on the government’s misuse of public funds.

Attribution: Chris McAndrew
Attribution: Chris McAndrew
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LONDON (Labour Buzz) - The pandemic has been tough on everyone unless of course, you happen to be friends with someone from the government. As Rachel Reeves revealed in a speech £2 billion has been spent on what she calls ‘crony contracts’. 

Speaking from Labour’s headquarters on Southside she is expected to call on the government to ‘clean up its act on contracts.’ She will contrast the way in which the government has treated workers with the money it has lavished on its friends and contracts.

“While this Tory government has denied key workers in our public services a pay rise, they paid 900 management consultants at Deloitte £1,000 a day to work on test and trace,” she says. 

“The beating heart of our country is the key workers who have kept us going through this last year. That’s why we applauded them. Children weren’t banging pots and pans for management consultants. They were clapping our key workers.

She will also reveal Labour’s alternative plan which would see public contracts brought back in house and an expansion of the freedom of information act to ensure more transparency.

The public is, she says, ‘paying the price for this government’s mismanagement and waste’.

For the most part, the media has turned a blind eye to the ongoing contracts scandal. Byline Times proved the exception and has kept a running update on what it calls ‘Boris Johnson’s Crony Contracts’. They include £800 million in COVID contracts to donors who gave £8 million and £5.9 million to a colleague of Dido Harding. Harding is, of course, the head of test and trace who turned out to be the only person in the country who didn’t think viruses mutated. 

Last year’s NAO report found that the government had dolled out £10.5 billion worth of contracts without a proper tender process and that those with contacts with the government were ten times more likely to be successful. The government even developed a VIP lane so that these firms could bypass the usual checks and balances. 

Many of these contracts failed to deliver. There was the £253 million given to Ayanda Capital for 50 million face masks which turned out to be duds. The CEO Andrew Mills was an advisor to the government’s board of trade at the time. He claimed his conscience was clear despite the NAO finding that normal standards of transparency in the procurement process were not adhered to. 

In total, the government has admitted it procured almost 200 million pieces of faulty PPE, often from firms which had no track record in delivering PPE. This included £8.4 million to a dormant company with one director, called Taeg Energy for hand sanitiser. 

Another contract for specialists vials went to the landlord of Matt Hancock’s local pub after he sent a personal WhatsApp message.

Meanwhile, many companies with a long track record of delivering PPE struggled to get an audience. Instead at a time when the UK was desperately short of PPE, they were forced to sell it overseas. 

“People expect all of us seeking government to spend their money with care and respect – and a Labour government will,” added Reeves. 

“Labour will clean up government contracting by strengthening FOI, introducing a new Independent Anti-Corruption Commissioner, and an Integrity and Ethics Commission to make us a world leader in good governance and transparency.”

The Shadow Chancellor of the Duchy of Lancaster has written to the top ten Tory linked companies asking them how much profit they had made from the pandemic. She estimates that the money spent on these contracts could have paid for 1.4 million free school meals. 

Her speech comes at a time when Labour is cranking up the pressure on the Tories’ use of public funds. Chancellor Annaliese Dodds has said Labour will bring more value for money in public spending and will invite the NAO to perform a regular audit of public spending. She would commit the government to follow the recommendations of the report and commit it to respond to the report and implement recommendations.

The procurement is or should be, the biggest scandal of this pandemic. They took a public health crisis and used it as an opportunity to enrich friends, colleagues and donors. However, it’s a scandal which has largely been ignored by the mainstream media, with independent outlets such as Bywire and the Good Law Project left to take up their slack. 

This is, then a scandal on two fronts. It’s about the government’s failure to use public money properly during a public health scandal, but it’s also about the media’s failure to hold that same government to account. It also shows the importance of independent media in doing a job that the mainstream seems to be unable or unwilling to do.  

(Written by Tom Cropper, edited by Klaudia Fior)

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