‘All cheques and no balances’: Labour blasts Boris Johnson over £2billion cost of ‘crony contracts’

Labour tore into the Government over Covid ‘cronyism’ today, claiming that contracts worth £2billion have been handed to firms run by friends or donors to the Conservative party.

Shadow Cabinet Office minister Rachel Reeves attacked a lack of oversight of how eye-watering amounts of taxpayers cash has been spent.

She also called for the cash to be clawed back by the Government if the contracts have failed to be delivered fully, and outline proposals to boost transparency for outsourcing and the tendering process.

Last November saw the National Audit Office (NAO), the public spending watchdog, publish a scathing report which criticised the way normal standards of transparency had been set aside.

In a speech broadcast online this morning Ms Reeves accused the Government of overseeing an ‘an unseemly gold rush’ of PPE contracts last year and a ‘VIP fast lane with even less scrutiny’ for firms to gain other deals.

She said: ‘This crisis has been an opportunity for the friends of the Tory Party to profit.

‘There is no respect for public money which needs to be used for the public good. We are all paying a high price for their mismanagement and waste.

This current Tory Party is rife with conflicts of interest. It’s all cheques and no balances.’   

Ms Reeves said she had written to the top 10 firms with Tory connections that secured contracts during the Covid-19 crisis in a bid to unveil their profit levels.

She said a Labour government would follow the lead of US President Joe Biden’s administration in introducing an integrity and ethics commission.

This will have the powers and resources to ‘prevent corruption’ and remove conflicts of interest in all areas of Government, outsourcing and appointments, Ms Reeves said.

Meanwhile, the shadow minister said a ‘shadow state’ had emerged and called for the Freedom of Information Act to be applied to all new public service contracts delivered by private companies.

Last November saw the National Audit Office (NAO), the public spending watchdog, publish a scathing report which criticised the way normal standards of transparency had been set aside.

The NAO said firms recommended by MPs, peers and ministers’ offices were given priority as the Government sought PPE for the NHS in the first phase of the pandemic. 

Ms Reeves vowed to reverse the current Government’s record of outsourcing with ‘the biggest wave of insourcing of public services for a generation’ if Keir Starmer wins power in 2024.

Highlighting the £22billion cost of the struggling test and trace contract run by Serco she added: ‘There is hardly a day that goes by where there isn’t a story about a disturbing government contract during this pandemic. It has caused real public outrage.’    

Last month it was revealed just one in 100 Government Covid-19 contracts worth an eye-watering £17.3billion was awarded by competitive tender – raising more questions about whether the taxpayer has been getting value for money during the pandemic.

Companies with no experience of supplying masks, gloves and aprons won lucrative Government deals in the ‘shambolic’ scramble for contracts – with critics calling it the ‘Wild West’.

The Institute for Government (IfG) said it has found ‘little evidence’ of competition for deals handed out between March and last July at the height of the scramble for PPE for the NHS.

 The IFG said there was clear evidence that when firms battled for a contract it cost the Government less, shaving 2.5 per cent off the deal on average.

The Conservative Party accused Labour of attempting to ‘score political points’ with Ms Reeves’ intervention.

‘Throughout the pandemic British businesses have worked with our public services to help in the fight against coronavirus by delivering a wide variety of support, including PPE, hand sanitiser and ventilators,’ a Tory spokeswoman said.

‘Yet at every turn throughout the pandemic, Labour have tried to play politics and score political points.

‘The Conservatives are getting on with the job, rolling out the vaccine and delivering on our commitments.’