Labour pledges to ‘clean up cronyism’ with insourcing plans

Emma Bowden, PA
·3-min read

A Labour government would “clean up cronyism” and deliver the “biggest wave of insourcing of public services for a generation”, a shadow minister has pledged.

Shadow Cabinet Office minister Rachel Reeves accused the Conservative Party of being “rife with conflicts of interest” as she urged firms awarded contracts during the pandemic with Tory links to disclose their profits.

Research by Labour unveiled on Monday suggests the value of contracts awarded to companies with connections to the Tories amounts to almost £2 billion.

In a speech broadcast online from Labour’s central London headquarters, Ms Reeves said there was a “litany of failures” from outsourcing.

“That is why under Keir Starmer’s Labour government we will see the biggest wave of insourcing of public services for a generation,” she said.

“It will save money and ensure better, more responsive, more resilient, accountable local services for all.”

She said lessons should be learned from the “successful” coronavirus vaccine rollout by the NHS and GPs, which she said provided “vital experience” and “local knowledge”.

Comparing this to the outsourced NHS Test and Trace programme, the shadow minister said she “deeply regretted” that the scheme is not carried out by the health service or local councils.

She said a Labour government would follow the lead of US President Joe Biden’s administration in introducing an integrity and ethics commission.

This will have the powers and resources to “prevent corruption” and remove conflicts of interest in all areas of Government, outsourcing and appointments, Ms Reeves said.

Meanwhile, the shadow minister said a “shadow state” had emerged and called for the Freedom of Information Act to be applied to all new public service contracts delivered by private companies.

“Labour in government will clean up cronyism in contracting through greater transparency, accountability and citizens’ rights,” she said.

Ms Reeves accused the Government of “turning to their contact lists” to procure personal protective equipment (PPE) during the first wave of the pandemic in April of last year.

Last November saw the National Audit Office (NAO), the public spending watchdog, publish a scathing report which criticised the way normal standards of transparency had been set aside.

The NAO said firms recommended by MPs, peers and ministers’ offices were given priority as the Government sought PPE for the NHS in the first phase of the pandemic.

During the speech, Ms Reeves revealed she has written to the top 10 firms with Tory connections that secured contracts during the Covid-19 crisis in a bid to unveil their profit levels.

“We deserve to know how and if friends and donors of the Tory Party have cashed in on a national emergency,” she said.

“This is no way to run our country, and we need answers.”

She also called on the Government to “wind down” the use of emergency procurement and urged for taxpayer money to be clawed back if new contracts have failed to be delivered fully.

Prime Minister Boris Johnson’s press secretary Allegra Stratton defended the Government’s approach.

“The National Audit Office has made clear that there is no evidence of ministerial involvement in procurement decisions or contract management,” she told reporters.

“We have robust rules and processes in place to make sure there is no conflict of interest.”

She said there was a “rigorous” eight-stage checking process in place, despite the need for speed in procuring PPE in the early days of the pandemic.

“We had to act very quickly, but even though we acted very quickly there were eight checks that were observed and, of course, in the fullness of time all public contracts will be published and people can look at them,” she added.