One of David Cameron’s sternest predictions was that “the far-too-cosy relationship between politics and money” was “the next big scandal waiting to happen”. He was right. It has happened – and he is part of it.
When the Covid-19 pandemic is over, there will be cause for many inquiries. While some decisions had to be made at speed, balancing horrific risks against appalling costs, at no point did this reality apply to how public money was spent. When billions of pounds gushed from Rishi Sunak’s Treasury last year, the scope for abuses of the system was obvious. There was no case for neglecting normal procurement checks and accounting rules. Yet that is precisely what happened.
In the case involving Cameron, an Australian entrepreneur, Lex Greensill, built a multibillion-pound business offering a controversial product – supply chain financing, which allows suppliers to big businesses to be paid earlier for a fee. Greensill’s rapid rise opened political doors in the UK, and while Cameron was still prime minister he appointed Greensill as an adviser to help the coalition government cut spending. After leaving government, Cameron joined Greensill’s company, Greensill Capital, as an adviser.
Last year, with trouble in the offing, the supply chain company attempted to borrow cheap, 100% government-backed loans from Sunak’s lavish Covid corporate financing facility. By borrowing money from the CCFF, Greensill Capital would have been able to lend more money to its borrowers. But granting Greensill access to the CCFF would have meant bending the rules for the finance company, which didn’t qualify for the scheme.
Cameron, who was probably hired by Greensill for just such a crisis, reportedly sent multiple texts to Sunak in April 2020 and furiously lobbied senior officials at the Treasury to give Greensill Capital special access to the CCFF. Cameron did nothing illegal and, to their belated credit, Treasury officials turned him down. Greensill has since filed for bankruptcy.
Cameron was perhaps unlucky. The catalogue of payments, fees and strange contracts surrounding the pandemic emerges by the day. When it came to creating a test-and-trace infrastructure, Whitehall cosied up to Deloitte, Serco and the Boston Consulting Group (as of January this year, the Department of Health and Social Care had spent £375m on private consultants to work on the test-and-trace system since the start of the pandemic, which equates to an average of £163,000 a consultant).
The National Audit Office revealed that “VIP contracts” were raced through for companies with “political” connections, which were around 10 times more likely to obtain contracts for personal protective equipment than suppliers that came through the ordinary lane. The owner of a luxury dog food company took a cut of a PPE deal worth £258m, and was likely paid £1m. A former investment banker said their company made £17m after it supplied masks that were deemed unsuitable by the NHS. Dominic Cummings was instrumental in the process of awarding a contract worth half a million pounds to a company run by his “friends” to conduct research into the public’s understanding of coronavirus. A staggering £23bn has already been blown on Boris Johnson’s “world-beating” test-and-trace system, which the Treasury mandarin Lord Macpherson recently dubbed “the most wasteful and inept public spending of all time”.
By anyone’s account, this has been a financial outrage. It is a racing certainty that Johnson will dismiss it as trivial given the triumph of the vaccination programme. Yet one right does not excuse a hundred wrongs. As the unemployed head for the food banks, friends of this government know they have done very well. Those who assisted them must be held accountable.
That means Johnson and Sunak. They have risen to popularity largely through their readiness to spend and squander stupefying amounts of public money. Sunak is now struggling to find that money other than by merely printing it, which means the taxpayer will be hit again. As a certain prime minister once said, this was a scandal waiting to happen. It should be first in the queue for a future inquiry.