Chumocracy first in line as ministers splash Covid cash

As a former head of MI5, Lord Evans of Weardale spent a career defending British democracy against immediate threats. Last week he warned against a more insidious danger to public life.

Gabriel Pogrund and Tom Calver www.thetimes.co.uk

Evans was making a speech in his role as chairman of the committee on standards in public life — the anti-corruption watchdog — on whether the country was now in a “post-Nolan age”.

That refers to Lord Nolan, first holder of the position, who was drafted in to clean up Westminster 25 years ago when it emerged that MPs had been bribed in cash to ask questions in parliament.

The verdict given by Evans at a virtual conference was damning. “Quite simply,” he said, “the perception is taking root that too many in public life, including some in our political leadership, are choosing to disregard the norms of ethics and propriety that have explicitly governed public life for the last 25 years and that, when contraventions of ethical standards occur, nothing happens”.

Those warnings are given new urgency this weekend as it is revealed that the government has awarded £1.5bn of taxpayers’ money to companies linked to the Conservative Party during the coronavirus pandemic. None of the firms were prominent government suppliers before this year.

In normal times, ministers must advertise contracts for privately provided services so that any company has a chance of securing the work. A person’s connections are not supposed to help.

The government is also legally required to publish details of awarded contracts within 30 days, so the public knows how its money is being spent.

During the pandemic, neither has happened. Facing a sudden need to deliver millions of items of PPE, test kits and vaccines, ministers used emergency procedures to award work directly.

According to Tussell, a data provider on official spending, Whitehall departments have taken an average of 72 days to publicise who has received money, meaning public debate has often moved on before decisions can be scrutinised.

It is a less straightforward situation than the bribery or “cash-for-questions” scandal investigated by Nolan. As the government mounted a war effort to combat Covid-19, it has instead resembled more of a “chumocracy”.

This is a world in which ministers have turned to friends with links to the Conservatives because of a mixture of trust, convenience and a panicked need to deliver, rather than a desire to benefit themselves financially.

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The end result, however, is arguably similar: friends of the Conservatives have played a central role in responding to the pandemic, securing high-profile positions and contracts along the way.

This pattern of conduct became visible in May, with Britain in lockdown, when Boris Johnson and the health secretary Matt Hancock turned to trusted contacts to run parts of the pandemic response.

Baroness Harding, a Conservative peer and the wife of John Penrose, a Tory MP, was appointed to run NHS Test and Trace. The former TalkTalk executive, 53, had spent a career in the private sector before Hancock awarded her the position, announcing it in a tweet.

In the same month Kate Bingham, a family friend of Johnson’s whose husband, Jesse Norman, is a Tory MP and Treasury minister, was appointed to oversee the vaccines taskforce. She accepted the position after decades in venture capital, having received a personal call from the prime minister.

According to a speech that Bingham, 55, gave to a group of US venture capitalists, she responded to Johnson’s offer by saying: “I’m not a vaccine expert, why should I be the right person?”

Then there is the layer of “chums” who have been brought in as advisers and intermediaries between Whitehall and outside companies. Some have sat in on meetings with ministers and contacts who go on to secure lucrative contracts.

In March, for example, Lord Feldman of Elstree, former chairman of the Conservative Party, was quietly appointed as an unpaid adviser to Lord Bethell, a hereditary peer and nightclub baron turned health minister.

According to a government source, Feldman’s role, which was never announced publicly, was to assist Bethell, 53, in his “work with industry” during the pandemic.

That included sitting in on a phone call on April 6 between Bethell and Meller Designs, which supplies high-street shops with home and beauty products. It is owned by David Meller, who would have been a familiar face to Feldman.

Meller, 60, is a Tory donor who has given more than £63,000. Most of that came during Feldman’s spell as chairman, when he was responsible for fundraising. Meller Designs later secured £163m in PPE contracts.

Government transparency data suggests such coincidences are not unusual.

Three days later, on April 9, Owen Paterson, a Conservative MP and former secretary of state for Northern Ireland, took part in a phone call with Bethell and Randox, a Northern Irish diagnostics company. Randox pays Paterson £100,000 a year as a consultant.

It is also linked to Harding, who sits on the board of the Jockey Club, the horse racing body. Its biggest annual event, the Grand National, is sponsored by the company. Paterson’s late wife, Rose, also sat on the Jockey Club board.

It is unclear why Paterson, 64, was on the call, but government sources say it was a “courtesy call” to discuss testing and the MP was involved because of his role for Randox. The company has received £479m in government testing contracts this year, acquiring more orders even after it had to recall half a million tests because of safety concerns.

Whole organisations have achieved remarkable penetration within Whitehall during the pandemic, often under the cloak of secrecy. They include Portland Communications, a political lobbying firm whose clients include HSBC, Pfizer and BAE Systems. It employs a number of former Tory advisers.

In March its chairman, George Pascoe-Watson, was parachuted into government, again without any announcement, to advise Harding and Bethell on strategy and communications.

It is understood that Pascoe-Watson, a former political editor of The Sun, participated in their daily calls, prompting civil servants to raise concerns about “appropriate channels”. A source said: “Nothing happened. They loved him.”

Pascoe-Watson appears to have made the most of his access, sending advance information about policy to paying clients. He also defended the government against criticism on social media, while failing to disclose his role.

For instance, when The Sunday Times revealed that Bingham had charged the taxpayer £670,000 for boutique PR consultants last week, he responded on Twitter: “Only in this country could we shaft a true hero.”

He also said that Bingham and Harding, whom he advises, should be cherished. “We should celebrate that two highly distinguished women are in critical roles in this country,” he said.

For months, Pascoe-Watson was joined by Lord O’Shaughnessy, a Tory peer who served as David Cameron’s policy chief. Today it can be revealed that he was both a paid “external adviser” to the Department of Health and Social Care (DHSC) and a paid Portland adviser at the same time.

The apparent conflict of interest went further when, in May, O’Shaughnessy took part in a call with Bethell and Boston Consulting Group (BCG), a client of Portland’s. BCG has received £21m in Covid-19 contracts, with some of its advisers paid £7,000 a day.

Over the past month, a number of ministers appear to have acknowledged that some contracts have not given value for money.

Lord Agnew, the Cabinet Office minister, has expressed frustration with the amount spent on consultants, writing in a leaked letter that Whitehall had become “infantilised” by reliance on outside professionals. He even floated the idea of creating an in-house consultancy of civil servants, called Crown Consultancy.

Yet when it comes to those who have received high-profile roles, or large contracts, the government has been outwardly defensive. Last week, Johnson himself wrote in support of Bingham.

Hancock has rewarded Harding for her work on NHS Test and Trace, which Sage advisers say has had a “minimal impact” on Covid-19 transmission, by appointing her as head of the National Institute for Health Protection, the successor body to Public Health England.

When details of Feldman’s role emerged, the government thanked him.

Such conduct might help to explain why Evans last week added: “It is not unusual or wrong for governments to want to appoint people who share their views, and political activity is not a bar, but it cannot be a reason for appointment. Merit must be at the heart of the system, not cronyism or patronage.”

He added: “The government’s ability to lead the country through the coronavirus crisis will be strengthened, rather than undermined, by an adherence to high standards.”

Last night the DHSC said: “As part of an unprecedented response to this global pandemic we rightly have drawn on the expertise of a number of private sector partners who provided advice and expertise to assist in the vital work.

“As a result of public and private sector organisations working together at pace, we were able to strengthen our response to the pandemic.”

Pascoe-Watson said: “I was honoured to be asked to serve the NHS Test and Trace service in my personal capacity as an unpaid adviser. I fully declared my role and responsibilities at Portland Communications to the DHSC.”

O’Shaughnessy said he was proud to be involved, adding: “This role, which involved providing policy advice to DHSC ministers and officials around testing innovation, was approved by the permanent secretary and declared in my register of interests.”

INSIDE TRACK: THE LOBBYIST

EMAIL 1

Pascoe Watson to clients — 12.30pm, 15 October

All,

I have been privately advised that tier 2 restrictions will be imposed on London until at least the spring of next year. This will be subject to review every few weeks. But the decision-makers have told me personally that spring is likely to be the first opportunity to lift the restrictions (1). The impact of this is clear. No meeting of people from different households INSIDE (a house, a bar, a restaurant) and essential travel only. Offices and schools remain exempt although the advice is to wfh rather than travel.

1 “The decision-makers have told me personally that spring is likely to be the first opportunity to lift the restrictions”

Publicly, ministers had refused to be drawn on when London’s tier 2 restrictions might be eased. The health secretary, Matt Hancock, said the situation would be “reviewed fortnightly”

EMAIL 2

GPW

George Pascoe Watson, chairman of Portland

Portland to clients —29 October

From a senior partner at Portland

National restrictions

We are told that as it stands, it is likely that the PM will announce next week that he is prepared to “sacrifice November to save December” (1)

● This would mean London and the South joining the rest of the country in tier 3 restrictions

There are discussions ongoing about whether this should be extended to a new tier 4 which would be closer to national lockdown (2) (and could include closures of non-essential retail)

● If no action is taken, the whole country will be in tier 3 restrictions by Dec 11 anyway, which means Christmas will happen with no social contact 6 So it seems inevitable there will be fresh restrictions on London and the South in November

● Should it be tier 3 — that means bars and pubs to close (unless they serve full meals) and restrictions on travel. They could go further but the PM would not countenance a French system of carrying papers

● The PM hopes that if this strategy is implemented then he will be able to lift restrictions in December for the sake of the economy and for families to enjoy Christmas

He particularly wants hospitality and retail to benefit from the Christmas period (3)

● They are then weighing up a week’s break from restrictions over Christmas — during which people will have to take responsibility for their own behaviour and they will be warned to be very careful about who and how they mix with others

This debate in ongoing for the next few days but as it stands, a decision is due by the middle of next week.

1 “We are told that as it stands, it is likely that the PM will announce next week that he is prepared to ‘sacrifice November to save December’ ”

On October 31 — two days after the email was sent — Johnson announced a lockdown lasting until December 2. He later said the country would “open up again in December” if the measures worked.

2 “There are discussions ongoing about whether this should be extended to a new tier 4, which would be closer to national lockdown”

The day the email was sent, the communities secretary, Robert Jenrick, said the government was doing “everything in [its] power to avoid a blanket national lockdown”. Two days later the stricter measures were announced.

3 “He particularly wants hospitality and retail to benefit from the Christmas period”

On October 31 , Johnson said that he wanted to “give people the chance of some shopping and economic activity in the weeks … up to Christmas and beyond”.