Crisis breeds corruption: could shifty Covid-19 contracts lead to legislative reform?
The past year saw a burgeoning number of government contracts awarded with haste and shielded from scrutiny by the dual cloaks of necessity and urgency.
The Covid-19 crisis has created a fertile environment for corruption and fraud. At the outset, concerns centred on the risks posed by fraudsters seeking to profit from the financial shock of the pandemic. Those fears proved well founded – in March 2020, fraud reports rose by 400%. Over time, concern spread to suspected abuse of the government’s financial support schemes. Recently, there has been a shift in focus away from fraud and towards allegations of cronyism in the awarding of government contracts.
A steady stream of news stories about the award of contracts to well-connected but inexperienced suppliers, an unfavourable National Audit Office (NAO) review and, most recently, a High Court finding of unlawfulness against the Health Secretary all lead to the uncomfortable realisation that, while distracted by the threat of outside fraudsters and the pandemic itself, the UK public purse may well have fallen victim to an inside job.
The link between crisis and corruption is nothing new. The Prevention of Corruption Act 1916 was itself an emergency measure prompted by growing public outcry about the awarding of large government contracts by the War Office. The Act was striking: it introduced a presumption of corruption – not replicated in the current law – in cases where payments were made to employees of public bodies with responsibility for the award of contracts.
Parallels can be drawn with the present day. The past year saw a burgeoning number of government contracts awarded with haste and shielded from scrutiny by the dual cloaks of necessity and urgency. The wartime parliamentarians responded boldly with tough new legislation, but it remains to be seen how today’s parliamentary response will compare.
Whilst periods of crisis give rise to reprehensible conduct, they can also give way to meaningful law reform
Whilst the challenges of the pandemic required governments worldwide to move at pace, the degree to which the UK seemingly abandoned proper process is cause for concern. An NAO review of over 8,600 contracts awarded up to 31 July 2020 highlighted a lack of transparency and inadequate documentation of key decisions in relation to the government’s ‘high-priority’ tender access lane, the retrospective awarding of contracts, how suppliers were chosen and how government managed conflicts of interest. The growing disquiet culminated last month in the High Court, where the government’s failure to comply with the Crown Commercial Service transparency policy and principles was deemed unlawful.
These issues may yet be examined by our criminal courts. Section 2 of the Bribery Act 2010 creates an offence of being bribed. It is wide in scope but (broadly) criminalises the receipt of an advantage in return for the improper exercise of a public function. The advantage need not be money. It could be an offer of employment. Although proximity in time is evidentially helpful, it is by no means essential. It applies to those exercising public functions at all levels.
Although the Ministerial Code imposes scant restrictions on former Ministers returning to employment in the private sector, even in the field for which they had responsibility, the offence would encompass involvement in the improper award of a contract subsequently rewarded by a position on the board.
The improper awarding of contracts may also fall within the scope of the notoriously difficult to prosecute common law offence of Misconduct in Public Office (‘MIPO’). However, the piecemeal development of this offence has left the law in a state of disarray and confusion.
The questions being asked about public procurement are unlikely to go away. History has demonstrated that whilst periods of crisis give rise to reprehensible conduct, they can also give way to meaningful law reform. In a timely development, the Law Commission in December 2020 laid before parliament its recommendations to reform the law of MIPO, recommending the introduction of a specific offence of ‘corruption in public office’. The current crisis may well be the impetus needed for parliament to take seriously the need to strengthen the law this area.
Neil Swift is a partner at Peters & Peters Solicitors.