Conservatives seek to hike up council tax to fund the billions wasted on crony contracts

 In COVID-19, News

Last March, the Chancellor told councils that he would fund them to do “whatever it takes” to get communities through the pandemic. On the back of that promise, councils set to work correcting the Government’s failures on personal protective equipment distribution, contact tracing, shielding and much more, but the Government did not repay those costs. Instead, they left councils facing a £2.5 billion funding black hole. That is not my figure; it comes from the Conservative-led Local Government Association. If the Government had not broken their promises, there would be no need to plug the gap now with a council tax increase.

Perhaps the Government could not find £2 billion to prevent a council tax rise because they had already stuffed the money into their friends’ pockets. Despite stark warnings from the National Audit Office last November, the Government have handed out £2 billion in crony contracts to companies with close personal links to senior Conservative party politicians.

More than 500 companies were fast-tracked for covid-related contracts simply because they had relationships with Conservative MPs.

That made them 10 times more likely to secure contracts than other businesses that could well have done the job better.

Here are some examples:

  1. The chairman of Clipper Logistics donated £725,000 to the Conservative party. He was rewarded with a £1.3 million contract to set up an Amazon-style PPE distribution network. Instead of the next-day delivery service that care workers were promised, they had to wait so long to receive any PPE at all that town halls had to pay to go out and find their own.
  2. Then there is Randox, which pays the Conservative right hon. Member for North Shropshire (Mr Paterson) handsomely to act as an adviser. The Government gave Randox a contract worth half a billion pounds last year to provide covid tests, but they were so defective that 750,000 had to be recalled.
  3. Serco, of course, is responsible for the Prime Minister’s “world-beating” test and trace system, which is so world-beating that the Government’s Scientific Advisory Group for Emergencies described it last year as having only a “marginal impact” on reducing the spread of the virus. It never worked properly, but it cost £22 billion. Serco’s chief executive is the brother of a former Conservative MP and his wife has donated thousands of pounds to the Conservative party. The company counts among its former senior executives the current Minister for Health. The Government handed Serco a £108 million contract for a failing system that could have been run better by directors of public health for a fraction of the cost, and then Ministers rewarded that catastrophic failure with another £57 million contract for “management services support” at testing sites.

This is not the behaviour we would expect in an advanced democracy such as our great country; it is the wilful incompetence and endemic cronyism that we would expect in a tinpot dictatorship.

  • Steve Reed
    Steve Reed Member of Parliment for Croydon North

Steven Reed is Labour MP for Croydon North and Shadow Minister for Children and Families. In 2018 his private member’s bill on reducing violent mental health restraint became law. In June 2019 he launched Labour’s civil society strategy outlining radical plans to empower citizens and communities.

Steve chairs the Cooperative Councils Innovation Network, co-chairs the All-Party Parliamentary Group for London, was Leader of Lambeth Council 2006-12 where he led the council’s children’s services to become best-rated in the country and pioneered the public-health approach to tackling violent youth crime. He worked in publishing for 16 years and was an elected trade union branch secretary.