The Government kept "inadequate" records of negotiations towards more than £700m worth of Covid contracts handed to a firm linked to a Tory MP, an official probe has found.
Ministers attended eight meetings with testing firm Randox - twice as many as previously disclosed - but kept minutes for just two, according to the National Audit Office’s investigation.
The firm and its strategic partner Qnostics Ltd were handed £776.9 million with of contracts - 60% of which were awarded without competition under "emergency procurement" rules.
The firm had former Tory MP Owen Paterson on their payroll as a consultant.
And documents released last month revealed he had personally lobbied then-Health Secretary Matt Hancock for the firm - and asking him to "kill" news stories making claims about his involvement with the initial £60m deal.
Before the NAO’s report today, the government had admitted to four ministerial meetings with Randox since the start of the pandemic.
But the NAO identified a further four where the Department of Health and Social Care (DHSC) had failed to record Randox’s attendance on official transparency releases.
They also found documents which “indicated” one-to-one telephone calls between ministers - including Mr Hancock and former life sciences minister Lord Bethell - and representatives of Randox, including Mr Paterson.
DHSC could not confirm to the NAO whether the calls took place, or any notes from the discussions.
Gareth Davies, head of the NAO, said: "Even taking these exceptional circumstances into account, the documentation of the decision-making process for such large contracts was inadequate.”
Meg Hillier, chair of the Public Accounts Committee added: "Government grasped the urgent need to increase the scale of testing early in the pandemic. But while it was fast on procurement, it was fast and loose on process."
Deputy Labour leader Angela Rayner said: “Far from vindicating ministers from the Randox scandal, this damning report lays bare the sleaze and cover up running rife at the heart of this Conservative Government.
“This report shows that Steve Barclay, now No10 Chief of Staff, misled Parliament over the Randox papers, claiming that the NAO had access to documents when they did not. He must urgently come to Parliament and correct the record.
“Ministers also breached their own transparency rules multiple times and failed to identify potential conflicts of interest relating to the first Randox contract. Had this work been done, the dodgy links between Owen Paterson, Tory ministers and Randox could have been identified at an early stage, protecting taxpayers' money."
While the body found no evidence contracts were handed out improperly, the gaps in records meant they were "not able to provide positive assurance in the normal way.”
The report read: “This report should not be considered as offering positive assurance over any of these contracts which are not detailed in the report or as offering any legal opinion on the use of public procurement regulations.”
Despite this, Mr Hancock claimed the report had given ministers a “clean bill of health”, adding “the report found no evidence of wrongdoing because there was no wrongdoing.”
The report noted Mr Hancock had used private email and WhatsApp to discuss Randox with Mr Paterson.
He did not disclose all the messages to DHSC officials at the time, telling investigators he did not believe they were “substantive” discussions, and he was not required to do so under Cabinet Office rules.
He later made his phone available to investigators and to the department.
The report also notes the Information Commissioner is investigating the use of private correspondence channels at DHSC, but has yet to publish its report.
DHSC was “unable to provide” key evidence to investigators about decision making - and because notes were not recorded in the department’s existing systems, they had to search several officials’ email accounts to find it.
“The Department gave us incomplete or no documentation on other significant aspects of the procurement,” the report reads. “Including detailed due diligence, detailed contractual negotiations leading to the first contact award, and considering of potential conflicts of interest.”
Records seen by the NAO suggest officials did not think conflicts of interest rules applied to emergency direct awards.
“This reflects an incorrect understanding of the relevant regulations,” the report reads.
A spokesperson for Mr Hancock said: “Mr Hancock warmly welcomes this thorough report by the NAO, which confirms a total clean bill of health on Ministers’ work with Randox during the pandemic.
"The report found no evidence of wrongdoing because there was no wrongdoing - just lots of hard work to expand testing capacity.
"While the department will no doubt reflect on the technical issues that need to be addressed, the report sets out that Ministers and Officials in the Department were doing their very best to save lives in what was a quick moving and unprecedented situation.
"Mr Hancock's thoughts remain with the victims and their loved ones."
Ms Hillier, chair of the Public Accounts Committee, said: “Government grasped the urgent need to increase the scale of testing early in the pandemic. But while it was fast on procurement, it was fast and loose on process.
“The Randox contracts illustrate that proper transparency by government is vital. Government didn’t document decisions properly and the public is right to raise questions about whether it was playing with a straight bat.
“Over 75% of testing contracts were awarded to ‘high priority’ companies, including those referred by ministers, MPs or Number 10. The public needs to trust that their taxes are spent on the basis that it’s what you know, not who you know.
“As with many of the COVID response schemes, lessons must be learned about delivering at speed.”
A spokesperson for Randox said: “We welcome the finding of the NAO report that there is no evidence of any impropriety in the awarding of government contracts to Randox.
“This independent finding vindicates what both Randox and the Government have always said, that these contracts were awarded on merit and in keeping with government protocols and regulations at a time of acute national emergency.
“During the pandemic, Randox delivered more than 25 million gold standard PCR tests, becoming the first laboratory in the world to process more than 100,000 tests daily.
“In doing so, Randox played its part in helping save tens of thousands of lives, keeping vital sectors of the economy open and enabling essential overseas family and business travel.
“The report states that four ministerial meetings took place which were, apparently, not fully documented by the DHSC.
“While we cannot comment on government minuting of meetings, Randox can categorically state that the awarding of contracts was not on the agenda at any of these meetings.”
