More than half a billion pounds has been paid out by Scottish public bodies during the coronavirus crisis without any scrutiny.
Analysis by the Herald on Sunday of public contracts show more than 160 were awarded by the NHS, Scottish Government, local authorities, and others directly to suppliers without any competitive process.
Some of the firms given work directly include those with links to the SNP, as well as companies with no apparent track record of delivering the services they were paid for.
The UK Government has come under fire for the same thing, with a lawsuit ongoing in the High Court to compel the government to publish all the details of the contracts awarded directly to firms without them being put out to tender.
Despite being criticised by the SNP, Scottish Government ministers and other public bodies have also handed out contracts directly to firms, blocking others from bidding for the work.
At least 169 contracts identified by The Herald on Sunday as being coronavirus-related have been given out in the past 18 months without being offered to other firms.
Their value comes to more than £539m, and cover call centres, PPE, housing and care home places, IT support, hand sanitiser and consultancy work.
Among the companies handed lucrative deals include Pursuit Digital, whose co-founder Patrick Byrne is an independence supporter and prior to the pandemic worked with the SNP carrying out telephony support during the independence referendum.
Pursuit Digital was awarded a £10.2m contract without it being put out to tender to handle NHS Test and Protect by NHS National Services Scotland (NHS NSS).
This caused outrage among opposition politicians after Scottish ministers said the contact tracing work was not being outsourced.
Last month, the company’s sister firm Pursuit Marketing won a £1m contract to supply call centre support for social care PPE supplies, although this work was put out to tender.
The firm said that its owner’s political views had “no bearing on our operations” and added that their award for PPE call centre work is for six months.
The spokesman added: “This follows a short-term contract awarded at the height of the pandemic where we were able to digitally transform the distribution and auditing of PPE supplies to social care providers across Scotland, helping ensure it got to those who needed it.
“Based on the success of this project, and for a short period between September 2020 and March 2021, Pursuit also provided call centre capacity to NHS Test & Protect and this work is now being carried out by other contractors.”
Edinburgh City Council awarded £635,725 to companies for PPE supplies at the start of the pandemic, including drinks company Gleann Mor Spirits, which specialises in creating small batches of gin, whisky and other spirits. Nine other firms were given a share of the funds for PPE, including corporate branding and merchandising companies, without the contracts being scrutinised or offered to other firms.
The council said the firm was asked to provide “alcohol-based hand gel” which was in “very short supply” at the start of the pandemic, adding: “Although we had outstanding orders for 15,000 bottles of hand gel from a contracted supplier, delivery was held up at the country of origin’s borders.
“That’s why we worked with Gleann Mor, a local company, to raise purchase orders for £38,600 worth of alcohol-based hand gel for use by frontline Council workers, including those delivering services to some of the most vulnerable people in the city.”
A spokeswoman said the contract was given in line with “Contract Standing Orders which were temporarily altered by our Leadership Advisory Panel on 31 March 2020 for reasons of extreme urgency, given the global pandemic. The product supplied by Gleann Mor was made to World Health Organisation standards. Once supplies became available again we reverted to our contracted suppliers. Our priority throughout was to ensure the safety of our staff and service users.”
The Student Loans Company (SLC) also paid out £765,000 in public funds after its telephone and IT systems were unable to cope with the pandemic, as hundreds of employees worked from home.
Three awards related to the pandemic were handed out by the company without being put out to tender – one to Virgin for telephone systems and two to Price Waterhouse Coopers for cyber defence and IT services.
Notices of the contracts state the SLC’s “working at home solution proved not to be able to support the volume of calls” being received and explained that although it had planned to upgrade its systems by the end of last year, a “new solution” was needed earlier as the current system “was not allowing staff to answer calls.”
The SLC said it had awarded the contracts in line with regulations, adding: “At the start of the pandemic, Government asked SLC to maintain our essential services in delivering finance to students and universities. As a largely office-based organisation, this required SLC to equip colleagues to deliver our services remotely.
“The contracts with PWC and Virgin Media were awarded compliantly in accordance with the Public Contracts Regulations 2015 to enable the on-going delivery of our essential services during the pandemic”.
Campaigners say the awarding of contracts in this way, without them being put out to tender, could have resulted in costs being much higher than if the work had been offered out for competition.
Jolyon Maugham, of the Good Law Centre, also said some of the awards were questionable.
The Good Law Centre has been involved in bringing a legal case against the UK Government for its awarding of contracts without proper scrutiny, to firms with links to the Conservative party or individual ministers. As is the case in Scotland, the UK Government awarded large number of contracts without them being put out to tender, and published details of the awards months after the cash had been handed over.
Mr Maugham said: “You look at some of these contracts and you think really? They were really the best supplier available?
“The public understands very well there was a pandemic and stuff needed to be bought in a hurry.
“But the price of retaining public trust is transparency - and I think in Holyrood, as in Westminster, Government has been too slow to offer proper explanations for some of these questionable spending decisions."
Labour’s Daniel Johnson said the total spend was “scandalous”, and accused the SNP of hypocrisy.
He said: "That almost half a billion pounds in public contracts were doled out by the Scottish Government [and others] without proper competition is simply scandalous.
"This shows a complete and utter disregard for public finances and exposes the SNP's faux-outrage at Matt Hancock for doing the same thing for what it is - hypocritical pearl-clutching.
"Scotland deserves better than two governments who are more than happy to through millions of pounds of public money out the door."
The Scottish Greens said the Auditor General should be “closely scrutinising” the spending decisions but said that offering work out to tender is not always the best way to get value for money.
Patrick Harvie, the party’s co-leader, said: “The Greens have our concerns about competitive tendering in general, and we don’t believe that market competition is always the best way to achieve value in public services or public contracts.
“But in the unique circumstance of the pandemic, with some contracts being awarded very quickly, Ministers have a responsibility to provide the greatest possible transparency about the decisions they have made, especially where contractors expect to make any profit.
“I trust the Auditor General will be closely scrutinising this significant expenditure.”
The Scottish Government said of the Pursuit Marketing contract: “Pursuit Marketing was awarded a contract to support the Social Care PPE support centre after a competitive procurement process via the Additional Call Centre Service Capacity Framework Agreement.
"This framework enables a range of qualified and approved suppliers to provide additional support for specific NHS-led activities as part of our continuing national pandemic response.”
On the other contracts given directly to firms, a spokesman said: “A number of direct awards were made for reasons of extreme urgency as part of our developing national response to an unprecedented global pandemic.
"This enabled NHS Scotland to meet the additional demands of the Scottish Health and Social Care sector during the current Covid-19 pandemic.
"All award procedures were in alignment with the Public Contracts (Scotland) Regulations 2015.”
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