The stench of corruption around the multi-million contracts awarded by the government in response to the Covid pandemic has become so bad that even The Times has felt obliged to sound a warning note, fearful of the public backlash that too naked a display of greed, nepotism and outright fraud might trigger. It is getting hard to convince everyone that we are ‘all in it together’ when every new day brings fresh proof that the government and the capitalist class for which it fronts are all in it for themselves. It seems that currently the establishment ‘Thunderer’ is on a mission to save the kleptocrats from themselves.
Listen to Clare Foges, writing in The Times on 19 October 2020, hoisting storm cones. “As the scale of the coronavirus threat emerged early this year, most scented danger. Others caught the whiff of something else: the gravy train to end all gravy trains. Weekly come the stories of huge sums of public money spent with seeming disregard for value, without tender or transparency, for services of dubious value or poor quality, to companies and consultants which often have close links to power. Though public attention is fixed on lockdowns and curfews, a bad smell grows — and the government would be wise to start clearing the air” (Clare Foges, ‘Time to stop the coronavirus gravy train’, The Times, 19 October 2020). Otherwise, runs the subtext, capitalism itself might be given a bad name, and that would never do.
But the trouble about finding and dealing with bad apples is that you pretty soon find that the whole capitalist barrel is corrupt. The cumulative effect of a drip feed of partial disclosures of dodgy contracts, shell companies, cronyism and looting of the public purse, rather than clearing the air, is further to undermine public confidence in capitalism itself. The Times is to be congratulated on having unwittingly contributed to this welcome outcome by its recent detailed coverage of the Covid-gate scandals now enveloping the government.
The first major governmental failure over Covid to hit the headlines concerned the supply of Personal Protective Equipment (PPE) to frontline staff in the NHS. Having failed to act either on the findings of a 2016 simulation, which drew attention to the unpreparedness of the country in the event of just such a pandemic, or on similar warnings from the World Health Organisation, the government went into a blind panic, belatedly splashing money around to compensate for its earlier inaction.
In one bizarre example, in its haste to be seen to be doing something urgent to address the problem, the government enlisted the dubious assistance of a sweet manufacturer in County Antrim. It dished out contracts worth £107 million to Clandeboyes, despite the company having no prior expertise in making face masks or surgical gowns, or in anything else much apart from wholesaling confectionery, a fact that might have surfaced had the contracts been subject to any kind of competitive tendering. Such free market competition, supposedly giving a meritocratic boost to best practice, was conspicuous by its absence.
On a larger scale, Ayanda Capital, a company whose expertise was in currency trading and private equity, secured a £252 million PPE contract, supplying 50 million masks that had to be trashed because they did not conform to safety standards and could not be used. Ayanda is controlled by the Horlick family via a holding company in the tax haven of Mauritius, and has connections with Liz Truss, the secretary of state for international trade and president of the Board of Trade. A senior adviser to the Board of Trade, Andrew Mills, is also listed as an adviser to Ayanda Capital.
Another weird bonanza winner was Pestfix, a pest control company with more expertise in chasing rats than fighting Covid.
Send in the consultants
But the biggest snouts in the trough were such behemoths of the financial consultancy world as PwC (Price Waterhouse), KPMG (Kleinwort Benson/Peat Marwick) and McKinsey. Their expertise lies in making lots of money, tailoring audits to flatter their corporate clients or dreaming up glossy mission statements – not in helping the state engage seriously with the pandemic.
In the article cited earlier Foges cannot resist quoting an uncharacteristically truthful statement from Dominic Cummings, which has him declaring that the Whitehall procurement system “hugely favours large established companies with powerful political connections — true corporate looters”. Sure enough, KPMG was paid just shy of a million pounds for doing just three months’ work on Harrogate’s Nightingale hospital; PWC notched up 20 contracts with a combined value of £24 million; and McKinsey grabbed 16 contracts totalling £38 million.
One of the contracts landing in McKinsey’s lap was one for £560,000 to launch the ill-fated test and trace programme. By a curious coincidence, the woman who was chosen to run the programme, Tory peer Dido Harding, herself previously worked at McKinsey, the company chosen to handle the public relations circus and projecting the “vision, purpose and narrative”. Other consultants have left their fingerprints all over the botched programme, with 1,100 consultants from Deloitte now drafted in and Boston Consulting Group executives pulling in up to £6,250 a day.
The abject failure of the government’s test and trace programme, rammed through in an attempt to sideline the NHS, local authorities and local community structures, trying to reinvent the wheel from scratch, proved to be a disaster. By the week ending 7 October, only 62.6 % of close contacts of people testing positive for Covid were reached by the system.
Sooner than take responsibility for this unholy mess, Dido Harding is concentrating her efforts on damage limitation, busily backpedalling on the grandiose claims made earlier, bleating that that the test and trace programme, costing £12 billion, was never intended to be a “silver bullet”. It’s a little late to manage the expectations so blithely raised by McKinsey’s praise singers at the outset.
Bring in the outsourcers
On the ground level of test and trace, the donkey work of answering phones, setting up testing centres and posting off tests is being shouldered by one or other of the outsourcing outfits which have long since battened on every area of public service, from the NHS to social care to prisons to refuse disposal. In the case of test and trace the outsourcers of choice included Serco, G4S and Mitie, all familiar faces.
Serco has been anxious to distance itself from any responsibility for the mishaps around test and trace. In fact the scope of its activity in this area has been enormous, and enormously profitable. Serco has directly employed or subcontracted 4,000 people in Covid testing at 125 of the 500, plus another 5,000 engaged in tracing positive cases. But Serco downplays its involvement in test and trace now it has become toxic, saying that its involvement has been “limited and specific”, and does not include “the design and management of the whole programme, the NHS App, the IT systems, the booking of tests, the provision of test kits, the test laboratories, delivering test results or the identification of contacts of people who have tested positive” (Robert Lea, ‘Test-and-trace gives Serco profits a boost’, The Times, 17 October 2020) You wonder what Serco’s 9,000 employees were actually doing.
But whilst seeking to minimise its role in the cock-up, Serco has not been reluctant to profit mightily from its involvement. Serco has been having a good plague, with profits expected to clock in at between £160 and £165 million. And its specifically Covid-related services are understood to be on a 4% profit margin.
According to openDemocracy, Serco’s contact tracing contract allows the company to oversee its own monitoring (i.e., police itself) and rules out automatic penalties for underperformance.(See Sam Bright, ‘Government procurement scandal continues with £43.8 Million PPE Contract for dormant firm’, The Times, 2 September 2020) The absence of any penalty clause was admitted by the health minister Helen Whately in October 2020. All the profits and none of the responsibilities: a rogue’s charter whose writ rules across the public sector and all of public life.
What all this comes down to is this: whilst ordinary families have been struggling through the current health emergency, looking to the country’s leaders to offer some help and guidance, all that the government’s pals in the City, the great finance houses and the outsourcing bandits have had in their sights has been a fantastic opportunity to raid the public purse with impunity. Conversely, the opportunity it opens up to workers is the chance to learn a hard lesson: that the interests of the tiny class of capitalist exploiters whom the system serves run directly counter to the interests of the working class, from whose unpaid labour all value is derived. This has never been more true than right now, when we are collectively getting mugged whilst being told by the mugger that we are all in it together. It’s time to watch and learn.