HOUSE OF COMMONS

LONDON SW1A 0AA

Rachel Reeves MP,

Shadow Chancellor of the Duchy of Lancaster,
House of Commons,
London
SW1A 0AA

20 November 2020

Dear Rachel,

You and your colleagues have raised a number of questions about the Government’s response
to Covid-19 and the procurement of PPE. I thought it would be helpful if I sought to address
some of your arguments, as well as make a few additional points for clarification.

You have heavily criticised the involvement of private sector companies in our response to
the pandemic. Do you not agree, however, that the private sector, working alongside the
public sector, was and must remain a crucial part of our response to the pandemic, including
in helping to procure PPE? Will you not join me in paying tribute to the private sector
workers who have worked on the frontline alongside their colleagues in the public sector?

In April, you were arguing that ‘more can be done to harness the willing and the talents of
British manufacturers’. You called on ‘Government to strain every sinew and utilise untapped
resources in UK manufacturing’; demanding a ‘national effort which leaves no stone
unturned’. Yet more recently you claimed that the Government has ‘consistently tried to
privatise throughout this pandemic’ and argued that the Government is ‘addicted’ to
outsourcing. Could you clarify whether Labour’s view is that the involvement of the private
sector is a good or a bad thing in the Government’s response to the pandemic?

Furthermore, you used to complain that we were moving too slowly. The Labour leader, Sir
Keir Starmer, said back in April that the Government was ‘slow on protective equipment
and…slow to take up…offers from British firms’. In May, you then argued that we should
move faster on procurement, arguing that ‘in a crisis, we need to move at pace’. But more
recently your criticism has inverted to suggest that we were moving too fast, complaining that
it was ‘unacceptable that so many public contracts have been awarded without tender’. On
Wednesday the Labour leader, despite his repeated pressing for faster action on PPE
procurement by the Government, complained to Parliament that ‘more than half of all
contracts relating to the pandemic…were handed out without competitive tender’ and
demanded that from now on ‘all Government contracts...be subject to proper process.’ Please
allow me to reassure you on a few points and seek further clarification of your views.
First, awarding contracts without tender is permitted under the proper process. Regulation 32
2.c of the Public Contracts Regulations (2015), which predates the pandemic, explicitly
allows for emergency procedures including direct award. Is your view and that of the Labour
party that the circumstances of the pandemic did not constitute ‘extreme urgency’? As you
will know, the shortest amount of time possible to run a competition is 25 days. Is your view
that in a very rapidly moving global market for PPE, where international demand far
exceeded supply, that the Government should have held competitions for every contract?

Second, all PPE procurement went through the same eight checks, including quality checks,
price controls and other due diligence, and were assessed to the same standards. Is your view
that the civil servants carrying out these official checks failed in their due diligence?

Third, as you will know direct awards and similar emergency procedures have been used by
Governments abroad including across the EU (such as in Germany) and in New Zealand.
Were those countries wrong to use such procedures?

Fourth, direct awards have been used by public authorities across the UK in response to the
pandemic. The Labour-run Welsh Government issued guidance in April setting out how
‘procurement staff should continue to use existing flexibilities in the public procurement rules
to minimise timescales and/or administrative resource. These flexibilities include...use of the
negotiated procedure without prior publication – i.e. direct award, that is available in some
cases for reasons of extreme urgency.’ Is it your view that the Welsh Government was wrong
to issue this guidance and should withdraw it?

Finally, in June your own local council, Labour-run Leeds City Council issued a contract for
‘the supply of urgent PPE during the Covid-19 pandemic from key suppliers who have
available stock on an urgent and ad-hoc basis, relying upon Public Contract Regulation 32 (2)
(c), “Negotiated Procedure without Prior Publication”.’ Is it your view that your council was
wrong to use this procedure and have you written to them to say that? Would you place any
such correspondence in the public domain for purposes of transparency?

Turning to procurement more broadly, you have drawn attention recently to alleged problems
with various private companies. Yet back in April you welcomed the Government’s progress
in contracting with suppliers, saying: ‘It is good that agreements have been struck with some
manufacturers to produce PPE.’ At the time, you went so far as to demand that we ‘give
assurance that any UK company ready and willing to produce PPE to the right standard will
not be overlooked by the Cabinet Office.’ You argued that we should be ‘utilising all our
small UK textile companies’ and you wrote to the Government with a list of suppliers whom
you proposed we should contact urgently, including:

• A football agent ‘offering to provide “ventilators’’;

• A ‘historical clothing company’, currently manufacturing sixteenth century bodices,
which was offering to make a small number of hospital gowns;
• An events company offering ‘masks and respirators from China’;
• A ‘private legal practice in Birmingham with only two employees’ that claimed to be able
to procure gowns; and
• An individual with a GoFundMe page offering to make couture gowns.
Given your criticism of the performance of some companies, do you now agree that your own
suggestion that we should consider contracting with ‘any UK company’ was naive?

Turning to Serco, you have several times demanded that Government should ‘ditch’ or ‘sack
Serco’ most recently in a video that you tweeted yesterday. I note that just five months ago
Leeds City Council entered into contract with a group of suppliers including Serco. Have you
suggested to Leeds City Council, your local council, that they should ‘sack Serco’? If so,
could you put your correspondence into the public domain for purposes of transparency?

I also note that within the last 12 months, Labour-run councils including Hounslow, Newham
Borough and North Tyneside Councils have entered into contracts with Serco, as have
Labour-controlled councils including Cumbria County and Milton Keynes. Have you
contacted each of these councils arguing they should ‘sack Serco’?

Regarding Deloitte, you wrote to me several months ago asking about their ‘experience’ on
PPE procurement. Have you registered those concerns with the Labour-run Welsh
Government, given that only two months ago, NHS Wales procured with Deloitte
Consultancy Services to support [the] supply of PPE?

Your party leader promised that Labour would ‘engage constructively’ with Government, and
yet the Shadow Education Secretary told Labour activists that they should not ‘let a good
crisis go to waste.’ Will you take this opportunity to welcome the successes that this
Government has achieved, working alongside the private sector, including rapidly
manufacturing over 15,000 mechanical ventilators for use by the NHS, sourcing over 32
billion items of PPE and building the capacity to carry out more than 500,000 tests per day?

I hope you will recognise that, in responding to an unprecedented public health crisis, the
Government acted rapidly to ensure we had the equipment we needed. As a recent NAO
report noted, this Government ‘secured unprecedented volumes of essential supplies
necessary to protect front-line workers’. The Audit Office also found that ‘ministers had
properly declared their interests’ and ‘found no evidence of their involvement in procurement
decisions or contract management’. Whilst the Government will always look to improve
procurement processes and to learn lessons, we will not apologise for doing everything
possible to protect NHS and care workers, and the citizens for whom they do so much.

With every good wish,

The Rt. Hon. Michael Gove MP

Member of Parliament for Surrey Heath