12 March 2025

(10.00 am)

Lady Hallett: Mr Sharma.

Mr Sharma: My Lady, the first witness is Tim Jarvis.

Mr Tim Jarvis

MR TIM JARVIS (affirmed).

Questions From Counsel to the Inquiry

Mr Sharma: Mr Jarvis, you have provided a witness statement to the Inquiry. The reference for it is INQ000527570. Would you be able to confirm, please, that that statement is true to the best of your knowledge and belief.

Mr Tim Jarvis: Yes.

Counsel Inquiry: You have also, in preparing your evidence, considered the witness statement of Sarah Munby on behalf of the Department for Business, Energy and Industrial Strategy which we’ll come on to. And that is INQ000517443.

Mr Jarvis, I wonder if I could please begin with your background and experience. From 2018 until April of 2020, you were the Director of Consumer and Competition Policy at BEIS; is that right?

Mr Tim Jarvis: That’s correct, yes.

Counsel Inquiry: And on 27 April 2020 until September 2020, you became a director in PPE Make, also at BEIS, the Department for Business, Energy and Industrial Strategy?

Mr Tim Jarvis: That’s correct.

Counsel Inquiry: And since then, or forgive me currently, you are the Director General at OFGEM, the energy regulator; is that right?

Mr Tim Jarvis: That’s right.

Counsel Inquiry: Mr Jarvis, could I start, please, with the UK Make Programme. Would you be able to assist the Inquiry with what it was and why it was set up?

Mr Tim Jarvis: Yes, so the programme was set up in response to the challenges that we were obviously seeing in March, April 2020 to obtain PPE.

There was very little PPE manufactured in the UK at that point, and there was – the view was that there was capacity within the UK manufacturing sector that could meet some of the demand that we were struggling to fulfil from other sources.

Counsel Inquiry: The UK Make team was a joint team, was it not?

Mr Tim Jarvis: It was originally envisaged as a joint team. Effectively what it became was a group of officials from the Business, Energy and Industrial Strategy department that I led, and that we worked supporting teams that were already embedded in the DHSC.

Counsel Inquiry: We have heard from other witnesses about the call to arms which was made on 10 April, and on that date, the Department of Health and Social Care released a UK-wide plan for the national effort to procure PPE, and as part of that call to arms, it was said that the government would welcome support from other manufacturers who wished to offer their production facilities for the manufacture of PPE in the UK?

Mr Tim Jarvis: Yes.

Counsel Inquiry: Could we have up, please, INQ000513154.

You were appointed to the PPE Make Programme on around 27 or 28 April of 2020. This document predates that by a week or so, but could we turn, please, to page 2 of this document, just to provide some context about the reasons for why the Make team was established and the kinds of problems it was established to solve.

Could we zoom in, please, to number 3, what we have found. Here it says:

“The Make team has a significant role to play in providing PPE for the next 90 days. However it is probably underpowered in number and capability of people. It is not sufficiently connected to the pillar to give it the demand signal and escalate issues. [Although] Some manufacturing has been brought online … This not at the pace [which is] needed to meet demand.”

If we could zoom out from that. And then into number 4, please.

And the recommendation which is made, again at this stage, this document coming from the NHS prior to your appointment, was to put in place:

“… a rapid expansion of size, capability and remit of the Make team to increase the UK manufacture of PPE by an order of magnitude.”

And the third bullet point, second from the bottom, was a:

“Move to a wartime process for compliance and bureaucracy.”

Was that essentially the approach and the understanding that you had to the UK Make team when it was established in April?

Mr Tim Jarvis: Yes, my understanding was that the systems and processes in DHSC were not set up to procure its pace and engage with new manufacturers based in the UK, and so my role was to bring in a team to help make that happen, and trying to move that at a faster pace.

Counsel Inquiry: Could we turn, please, to page 2 of that document. Forgive me, the following page. And again. And again. And again. One more, please. Keep going. One more. One more. That’s it.

I’m sorry, Mr Jarvis.

This sets out the operating principles. I’d just like to explore with you, please, whether this also reflects your understanding as you came into your position. It sets out that we’re going to make because we can’t buy enough in time. The description that:

“This is a wartime supply chain …

“The country is at our disposal …

“We will need to re-tool …”

And that:

“Engineering is the answer …”

In headline terms again, was this your understanding of the situation with respect of UK manufacturing when you started at the UK Make team in April?

Mr Tim Jarvis: Yes.

Counsel Inquiry: The UK Make team was led by Lord Deighton who, on 19 April of 2020 was appointed by the then Secretary of State for Health and Social Care, Mr Hancock, to lead the national effort to produce PPE. And the remit or the brief to Lord Deighton was to coordinate the end-to-end process with domestic manufacturers to feed them into, what we’ve looked at with the other witnesses, the eight-stage process.

You were appointed on 27 or 28 April 2020 and, as you’ve mentioned, your role was to lead a small team. How many officials did you lead within BEIS?

Mr Tim Jarvis: I think there was around eight when I started and I think it went up to around ten.

Counsel Inquiry: Just in terms of the remit and the limits of your remit as part of leading that team, what were you being asked to do? Were you being asked to involve yourself in procurement decisions or what was your day-to-day role?

Mr Tim Jarvis: So it was very clear that procurement decisions remained with DHSC. What my role was, was to try to ensure that we could maximise the opportunities from UK manufacturers to provide PPE and to be part of that supply chain. So my role was to help identify companies that could contribute to that and to make – and to help them through the process. But the procurement decisions and the decisions on which companies to sign contracts with remained with DHSC.

Counsel Inquiry: So the procurement decisions remained within the Department of Health and Social Care, and your role within BEIS was to provide contact and expertise with – interfacing with manufacturers and business representative organisations that could help scale up the domestic manufacture of PPE?

Mr Tim Jarvis: Yes, exactly.

Counsel Inquiry: We’ve heard from a number of witnesses, not least Professor Manners-Bell, that very little PPE was manufactured in the UK. This was a largely high-volume but low-margin business of which many – much manufacturing capacity had been essentially offshored. Was that your understanding of the position as you entered into UK Make, about the landscape of UK manufacturing?

Mr Tim Jarvis: Yes, so my understanding was that over a period of time the UK has moved to more specialist manufacturing, where we’ve been quite successful and competitive, but moved away from the high-volume, low-margin type of manufacturing that generally characterises the PPE market.

Counsel Inquiry: One of the features, if I can turn to this subject, about the use of external advisers within UK Make, one of the features of UK Make was that Lord Deighton brought in a number of external advisers and supply chain expertise from the private sector to assist in the endeavour of UK manufacture. Could you talk us, please, with your role in relation to working with those external advisers and whether you think that was a successful approach or not.

Mr Tim Jarvis: Yes, so my role was to support those advisers. They were given the challenge of trying to identify relevant manufacturers to work with, and to see if they could bring them into the system.

What they brought, which we didn’t have in government, was detailed commercial experience of supply chains to the role – the role of government generally in procurement is to put offers out there and then consider proposals from the private market. What we were looking at here was going out to the private market and going out to companies, and asking them to consider making something that they probably never made before, and that’s where we needed the expertise, the people that Lord Deighton brought in were able to offer. And I think that was hugely successful in terms of engaging with companies in a way that enabled them to start being able to manufacture at pace.

Counsel Inquiry: So the expertise that came from the private sector was with respect to supply chains and commercial expertise, and things of that nature.

What experience had those external advisers had with the interface they now had with government, and what was your role in facilitating that?

Mr Tim Jarvis: So generally not a huge amount. I think – I understood some of them had previously worked in a public procurement environment for the London 2012 Olympics but generally in terms of working within central government they did not have that experience, and that’s where my team, I think, added some value in helping them to navigate that landscape.

Counsel Inquiry: One of the ways in which the UK Make team worked was in what are called, in your evidence and also the evidence of other witnesses such as Lord Deighton and Sarah Munby on behalf of BEIS, is sprints. Could you help us, please, with what sprints are and how they assisted in the UK Make team and the scaling up of domestic manufacturing?

Mr Tim Jarvis: So sprints is essentially a project management tool. In this context what they were used for was to identify product categories where we knew there was a shortage, and the sprint process was to evaluate the market and what was available, what the gap was between what was available and what was needed, and what UK manufacturing capacity might be available to help fill that. So that would be looking at companies that operated in those markets, or related markets, and trying to identify where there was potential for those companies, supported by government, to be able to start manufacturing.

Counsel Inquiry: Is it right that the way in which the sprint teams worked was that there was a dedicated timeframe in which a specific piece of work needed to be completed?

Mr Tim Jarvis: Yes, it was very tightly managed. I think it was probably no more than a week, so in a sense the team were given their marching orders to look at a product and to come back within a few days and say what they’d found and what they thought was possible to be done.

Counsel Inquiry: And so within a week, there was a priority product which was identified for each sprint team, and what they were required to do was to find the suppliers and establish a supply chain design; is that right?

Mr Tim Jarvis: Yes.

Counsel Inquiry: The sprint teams were divided up into, I think, six, each dealing with a category of PPE. Could you help us, please, the categories of PPE were films, eye protection, three face masks, gloves, gowns and chemicals. But in relation to dividing this up into categories, what assistance was that to the focus and the speed at which the UK Make team was able to scale up domestic manufacturing?

Mr Tim Jarvis: So for each of those categories the team brought in by Lord Deighton and supported by my team would look at what products were needed, and the volume of them, and would then start a process of contacting companies that were identified that we could – that could manufacture at pace, and at large volumes. So what my team did in that time was to link people with, for example, in the Business department we have sector teams who work with particular types of product and the type of manufacturing. So, for example, there is a chemicals team that works with people that produced plastics, for example.

So what we did was facilitate those sort of introductions because they would have the contacts and the names of the companies that operated in those markets. So that sprint process was really to try to identify and move quite quickly to bring those companies online.

Counsel Inquiry: And that identifies, if I may say so, clearly what the expertise was within BEIS: that the connections within industry and the connections with business representative organisations was the area in which BEIS had the specialist expertise; would that be fair?

Mr Tim Jarvis: That’s right, so we had sector contacts and we also had regular contact with the business representative organisations, who themselves, of course, had contacts.

Counsel Inquiry: Could I ask you, please, to just touch upon your relationship and how it worked with Lord Deighton. What were you briefed to do, and what problems were you tasked with solving?

Mr Tim Jarvis: So I saw my role as to support Lord Deighton to do what he thought needed to be done to meet the challenge that we’d got in front of us. And that involved a range of things, really. It involved ensuring that he could bring in the people that were needed to help support the sprints and the product categories that they developed into. So we needed to regularise their arrangements and bring them in so they could work within government.

There was a lot of managing the incoming requests and incoming contacts from external organisations, wanting to know what was happening so I would help to facilitate meetings, for example, with the business representative organisations, help manage that process so that there was a flow of information, and that where there were barriers that emerged to moving at pace, where could – you know, my team could be used to try to help break down some of those barriers and make the process move more quickly. So whether that would be in helping to connect people with people who could advise on innovative manufacturing techniques to enable companies to operate 24/7 rather than less frequently than they might have done before the pandemic, for example, we could put them in touch with those contacts, whether it was helping them with the regulatory processes.

So we very much saw our role as supporting those product categories to make sure that UK manufacturing could play its part in meeting the demand, the shortfall that we had.

Counsel Inquiry: I’d like to move on, please, to a number of areas in which UK Make seemed to innovate in terms of its approach to the procurement of PPE. The first I want to touch on, please, is the focus that was placed on large domestic manufacturers. The Inquiry has received quite a lot of evidence about one of the consequences of the call to arms being that there were tens of thousands of offers of assistance into the Department of Health and Social Care, the Cabinet Office, and so forth.

The focus within PPE Make was on a number of large-scale domestic manufacturers. Could you help us, please, with how those manufacturers were selected, what your role in that was, and how BEIS assisted in that?

Mr Tim Jarvis: Yes. So the decision was made to move from what was essentially a reactive approach to the offers that were coming in, which as you know were very large in number, to focusing on companies that could produce at scale. So my role on that, within each product category, the lead for that category would be looking at companies that were operating in related markets.

So, to give you an example, I don’t think anyone in the UK was producing plastic aprons prior to the pandemic but there were companies that did produce plastic products and had similar sort of techniques, so I would – the way we supported that was by connecting those product categories with, for example, the chemicals team who had contacts in that industry so they could identify the big companies that potentially could operate at scale, and then it was a question of contacting those companies to see if they could help, and what they would need to be able to bring that product online.

Counsel Inquiry: The number of domestic manufacturers that were identified at the outset was just short of 200. I think it’s around 140 to 170. And of those, about 37 were awarded contract in the PPE Make Programme. What was, in broad terms, the criteria that was applied to selecting those companies that were going to be put forward for the award of contracts?

Mr Tim Jarvis: I think, in very broad terms, it would have been about the ability to produce at scale and at pace, and that would have been the driving factors. And obviously there would then be a process to ensure that those contracts were value for money in the context of the market that we were operating in at the time.

Counsel Inquiry: Could I ask you, please, for your reflections on whether you consider that approach worked in terms of PPE Make, to focus on a number of large manufacturers, small in number, but that were able to pick up the pace?

Mr Tim Jarvis: Yes. I think it did work. I think it was a decision that I think Lord Deighton made very quickly on coming – on taking up, that that would be the approach that we should take, and I think the timeframe that was being spent sifting through large numbers for what would have been relatively small-scale production was instead diverted towards companies that could produce at scale. And I think that was how we were able to stand up the manufacturing capacity that we could, and produce the PPE domestically that we were able to do, from what was essentially a very small amount pre-pandemic to quite a considerable contribution to the overall demand by the time we left.

Counsel Inquiry: Could I ask you, please, about a problem which you refer to in your witness statement, a frequently recurring problem, which was the speed at which regulatory approvals were able to be obtained for those UK manufacturers offering their support.

Could you talk us through, please, what those problems were at the beginning and how easy or how difficult it was to solve that regulatory approvals problem.

Mr Tim Jarvis: Yes, I mean, the way the system was set up for peacetime, if you like, was quite a long lead-in of regulatory approvals. So companies would go through quite a lengthy process with a range of different regulators, depending on the product that they were producing and what it would be used for, that they would need to go through and get approvals at each stage, and that would involve being – tests being carried out on the product. And my understanding was that the way that system worked would then – had a long lead-in at the front and then once companies had become approved, then the process would be very smooth, and they would produce with relatively little friction.

That process didn’t work in the period that we were operating in because we needed to get people manufacturing very quickly. So the challenge was to try to make that process as smooth as possible and to speed it up so that we could, rather than having this long front end before companies could start manufacturing, we could expedite that and get companies manufacturing in time to meet the demand that we had.

Counsel Inquiry: My Lady’s Inquiry has heard evidence from Mr Gove about the difficulty with trying to speed up regulatory approvals and then hitting what he described as the brute facts of safety. And was that a problem which you in your department were trying to tackle with speeding up this regulatory approvals process?

Mr Tim Jarvis: Yes. I mean, there was never any question of there being any compromise on the quality of the product and the standards it needed to meet. What I think we were able to do, and the system as a whole was able to do, was to try to accelerate the processes and to ensure that particularly, for example, where different regulatory bodies might have a decision to make in relation to the same product, that that could happen simultaneously rather than over time, which I think was what would usually happen.

So it was clear that the products needed to meet the standards that were required. The question was how could we make sure that the manufacturer understood what those standards were, and what designs would meet those standards to enable them to bring those products to market.

Counsel Inquiry: What did you and your team do with the manufacturers to help them through that process?

Mr Tim Jarvis: So the direct contacts with the manufacturers were largely led by the product category leads working to Lord Deighton. What we did was where they met a barrier, if you like, where they wanted to make a product but weren’t sure about the, you know – to give an example, if you wanted to make aprons, what thickness of aprons was the right amount that was needed to meet the required standards? We would make sure that those companies were given that information as quickly as possible. So we had somebody attached to each team who could basically follow up on these individual enquiries, find the right regulatory authority, find the right person in that regulatory authority to tell the company what they needed to be able to do.

Counsel Inquiry: Was the way that it worked, was it essentially to take a manufacturer from the beginning, the introduction, the triage, through the eight-stage process that we heard Mr Marron give evidence about, and to guide them through that process? Is that the way that it worked?

Mr Tim Jarvis: Yes.

Counsel Inquiry: Could we have up on screen, please, INQ000475332.

This is a Covid-19 strategy deep dive meeting, and a briefing for it. The purpose is for the Secretary of State’s attendance at the Covid-19 deep dive.

Could we turn to page 3, please. Thank you.

“PPE and Regulation”. So one of the ways in which the manufacturers were assisted was by providing them with the guidance and the documentation that the manufacturers needed. Another way of unblocking some of those issues with regulation and the speed of approvals is set out here:

“In normal circumstances … PPE is a highly regulated product … governed by [as you’ve already referred to] strict quality assurance processes, through third-party conformity assurance and testing, with the law requiring it meet the essential health and safety requirements.”

Those are the brute facts, the requirement of safety within the manufacture of PPE, which you said there is no compromise on. Is that right?

Mr Tim Jarvis: Yes.

Counsel Inquiry: And then there are set out there a number of changes to the systems which are considering regulation and approval. One of them, regulatory easements put in place by the Office for Product Safety and Standards whose witness we’re going to hear from next. The second was that the Cabinet Office had established a decision-making committee comprising senior decision makers and regulators from the Cabinet Office, the MHRA, the Health and Safety Executive, and the OPSS. And then finally, that the OPSS is supporting key new suppliers to help them navigate the regulatory regime.

That took place – that meeting took place on 21 April, so early on or just before your appointment to the PPE make team. By the time that you had started in your work, had you noticed that there was a speeding up of regulatory approvals or was this a persistent problem from your perspective?

Mr Tim Jarvis: It’s quite hard to give a definitive answer on that because I wasn’t aware of what it was like before. I mean, I think that there were certainly processes in place and an awful lot of resource and people, particularly from OPSS being put into supporting these processes. So I think, and my understanding of how long they normally take, which I think is, you know, months if not years, it was being very concertina’d so I think it was moving more quickly. But I think, when it came to the bit that I was working on and responsible for, which was working with UK companies, I think what we saw our role was very much was to try to take those companies through that process as quickly as we could and as efficiently as we could, which meant docking into some of the things that are described here.

Counsel Inquiry: Could we have a look, please, taking this forward a little further in the chronology, at INQ000477708. This is one of a number of emails which you’re involved in, setting out updates about the way in which the system appeared to be working.

If we could turn, please, to the following page and to paragraph 4.

As I say, this on 4 and 5 May, and this is picking up the same theme about regulation and regulatory processes, setting out how the implementation unit can assist, taking forward recommendations for training of procurement staff, increasing the use of pre-approved designs, increasing testing house capacity. And you make the suggestion, which I think you’ve referred to already, about a regulatory expert at the point of each new major deal.

Could you help us, please, with just a couple of points arising from this. First of all, pre-approved designs. What is that a reference to and how was that going to assist those involved in the manufacture of PPE?

Mr Tim Jarvis: So what we were looking at was would it be possible to develop a template design, if you like, that you could simply provide to a manufacturer and then say to them “If you make within this template, then therefore – if you do that, then your product will meet the regulatory requirements that are there”, rather than the slightly iterative process that I think would normally operate, where companies would make something and adapt it and try and make sure that it complied.

So that’s what we were trying to develop for each of the individual products, and by placing somebody within each category, we were trying to help them through that process, either with a, sort of, formal template or simply just guiding them through the process.

Counsel Inquiry: We’ll come back to pre-approved blueprints a little later. Could I turn then, please, to testing house capacity. Could you help us, please, with what is a testing house and what function does it play in relation to the approval of PPE which is being manufactured?

Mr Tim Jarvis: So I think your next witness is probably better qualified to talk about this than I can. I can give you my perspective from the time –

Counsel Inquiry: Of course.

Mr Tim Jarvis: – but I think, in order to be able to meet the appropriate regulatory standards, products had to be tested. And the testing house facilities were generally located near the manufacturing, for obvious reasons, and there was some testing house capacity in the UK, but not for every test and it was quite stretched. So one of the tasks that my team undertook was trying to understand what was available, and what could be maximised, how could we make the most of what we had in the time that we had available to meet the requirements.

So I wasn’t close to exactly what was needed for each product but we knew that testing was part of it and we knew that for certain products, there were certain types of tests that we had to find somebody who could do it.

Counsel Inquiry: And so what was happening was testing house capacity, and we’ll consider this with Mr Russell, who is following you, is that the testing houses, by and large, were based overseas, close to where the manufacturing was located. So, for example, with respect to PPE it may go through testing houses based in China, but because the United Kingdom did not have a pre-existing domestic manufacturing capacity or at least a very small one, the testing house capacity in the UK was a bottleneck, wasn’t it?

Mr Tim Jarvis: I think it risked being one. My understanding was that we were able to take the companies that we eventually ended up working with through that process and to meet the – to get the testing done to enable them to get their product to market, but it certainly risked being one.

Counsel Inquiry: And was that in a similar way, as you described, to taking them through the eight-stage process? This was perhaps a sort of handholding that with a manufacturer, you’d be able to take them through the process for having products approved?

Mr Tim Jarvis: Yes.

Counsel Inquiry: Could we have up on screen, please, INQ000475400.

This, again, is taking you a little further into the chronology.

And over the page, please. The top of the page. This is an email from you on 22 May, and you make this observation:

“If I’m honest, I think we still have some way to go here on the decision-making process. I know there has been a bit of a reset moment with the decision making committee but my own view is we need a more radical overhaul of the whole process and a wider discussion which I would welcome the opportunity to be a part of.”

Is this part of the same problem, this regulatory approvals process that was holding back the UK manufacturing capacity and ability to procure?

Mr Tim Jarvis: Yes, I mean, I would draw a distinction between what we needed to do to get the 37 companies that you referenced earlier through the process and what we might need longer term. And so I think what I was reflecting here was that if you were going to set up a system that was going to try to bring multiple manufacturers into it, multiple UK manufacturers into it, then probably what we had would need the sort of radical overhaul that I was talking about.

I think we managed to take those companies – the companies that we worked with through this process in time to – and prevent it being a bottleneck. But I think that the radical overhaul I’m reflecting there is what might be needed, I think, for a longer term strategy where you’re looking to engage multiple – potentially looking to engage multiple manufacturers in, yeah.

Counsel Inquiry: So this proposal here, you’re reflecting back on the fact that although you’ve been successful with taking manufacturers through the process, at some point in the future, if this were to go – going to become a problem, that a radical overhaul of the system ought to be considered because it would speed up the process; is that fair?

Mr Tim Jarvis: Yes.

Counsel Inquiry: Thank you. Could we take that down, please.

I’d like to turn, please, to another subject. We’ve referred to the focus on large-scale domestic manufacturers. I wonder, please, if you could help the Inquiry with what efforts, if any, were made to engage smaller, regional and locally based manufacturers, either by BEIS or by other institutions within government.

Mr Tim Jarvis: So I believe that there was some work undertaken locally and regionally with companies that potentially could help, and, you know, the nature of procurement meant that sometimes these products would be getting procured locally. So we supported that to some extent, so there’s a Cities and Local Growth team within the Business department at the time that was regionally based and had a regional presence and would have contacts with manufacturers, and, if you like, would be able to have – adopt a similar role to the one that we were undertaking at a national level, really, which is to link people in with the right bits of the system to see if they could start to produce. But the focus of my team was predominantly on the national and the large-scale manufacturers.

Counsel Inquiry: So from your vantage point, the focus in the centre of government was really on the larger-scale manufacturers, but of course there were local and regionally-based manufacturers who might be involved in domestic manufacturing and also in supplying directly to NHS trusts and suchlike?

Mr Tim Jarvis: That’s right, yeah.

Counsel Inquiry: Could I ask, please, about an institution which is called the High Value Manufacturing Catapult. Could you explain to the Inquiry what that is and what role that played in assisting with the manufacture of PPE in the UK.

Mr Tim Jarvis: Yes. So this was a part of government which I hadn’t experience of before, but they are – receive funding from government to support innovative manufacturing techniques, and they were put – I was put in touch with them very early on in my time in this role as an organisation that would potentially be able to help.

And what they did was to help individual manufacturers with techniques and processes that would help them be more productive, using innovative techniques. So I think the example I gave earlier was of companies that were perhaps offering – operating only during the day, and would then be able to move to 24/7 manufacturing with some additional support, and some manufacturing techniques. So they were basically specialists – and they were regionally based, so we were able to put them in touch with companies depending on where they were based.

Counsel Inquiry: Again, your role within BEIS was to facilitate that.

Mr Tim Jarvis: Mm.

Counsel Inquiry: To make sure that local manufacturers could be put in touch with local HVMC – “catapults” I think they’re called?

Mr Tim Jarvis: That’s right.

Counsel Inquiry: And to make sure that, if there was assistance required at the local level, that BEIS would be able to facilitate that, to make the introduction?

Mr Tim Jarvis: Exactly.

Counsel Inquiry: Could we have up on the screen, please, INQ000475418.

To take you forward again a little further in the chronology, and you’re making some reflections in this email about what the PPE Make team has been able to achieve in the short time in which it’s been in operation, if we could go to the penultimate paragraph, please. This is from you:

“Pre-Covid, UK manufacturers supplied less than 1 per cent of the PPE used by [the] NHS and social care. We now have contracts in place with UK manufacturers across 8 of the 10 categories and expect UK manufacturing to be supplying 20% of our significantly increased UK demand over the next 12 months. Most of these manufacturers are making PPE for the first time and have benefited from a range of government support …”

A reference to:

“… (CBILS [which is the Covid (sic) Business Interruption Loan Scheme], support with sourcing raw materials and machinery to convert processes and specialist advice from the manufacturing catapults).”

Which you’ve just referred to.

And you referred to the contract with government enabling “25-30 UK companies with direct contracts to bring back furloughed staff and in many cases to take on new staff”, and you give an example of one company in the West Midlands having doubled its workforce, with an additional 220 staff, and, with the help of the local catapult, moving to 24/7, ie around the clock production.

From that vantage point, Mr Jarvis, had you viewed the UK Make programme essentially to have been a success?

Mr Tim Jarvis: Yes, I think it was, and I think it – what we were able to combine, largely, very much, I think, with the support of the people that Lord Deighton brought in, who had the commercial expertise – so when I talk there about support with sourcing raw materials and machinery to convert processes, I mean it was those people that were able to make that move at a speed that I think we would not have been able to do in government on our own.

And I think the challenge that we were given at the beginning, which you referred to, was that there was a gap between what we could procure overseas and what was needed, and I think that the manufacturers that we were able to set up were able to fill that gap.

Counsel Inquiry: This problem that UK Make had solved was one which was being solved as the crisis evolved, wasn’t it? And so the UK Make team had really only started to get going when Lord Deighton was appointed and when you were appointed in about the end of April, and so in those crucial months between the failure of the just-in-time contracts, which we’ve heard was back in February, and the standing up of the UK Make programme, some vital months were lost, were they not?

Mr Tim Jarvis: I think potentially.

Counsel Inquiry: And looking forward, if I may, to what there might be in the event of a pandemic in the future, there are a number of lessons from the way in which the UK Make programme operated, in terms of approaching and distilling the manufacturers, in terms of streamlining regulation, in terms of working with local manufacturers, which, if there had been the benefit of time, and even with the benefit of hindsight, would contribute to better preparedness for a pandemic in the future. Would you agree with that?

Mr Tim Jarvis: Yes.

Counsel Inquiry: Could we have a look, please, at one of your email updates, this one on 29 June, at INQ000475422. And just over the page, please. The second paragraph from the top. You were in the process at this stage, again at the end of June, so coming towards the fastest scale-up of domestic manufacturing, you’re providing some reflections.

You’re considering the economic viability and the broader desirability of UK manufacture and a number of aspects of this were in progress: product strategies and analysis of the costs and benefits of UK manufacture; what form government support could take; the role of regional manufacturing, and also the potential role of innovation. So, for example, in relation to re-usable PPE.

And could we have a look, please, at INQ000477747.

This, again, taking it forward in the chronology to 29 July. The third paragraph from the bottom. And again, this is an email from you to Lord Deighton and others, forwarded on to others. You are providing your reflections about what has been learned as a result of UK Make and what this may mean, looking forward into the future.

You say:

“Looking [forward] ahead, BEIS will want to be apprised of DHSC’s procurement strategy … and [targets of] domestic production.”

And you note that:

“There is a strong UK base there for most categories to respond positively to … tenders though … there are risks … if tendering opportunities are not made available.”

You go on, if we could turn over the page, please – forgive me, if we turn back, it’s the next paragraph.

“The other area where I am focusing is regulation and enforcement.”

And you speak there about OPSS, again whose witnesses we’re going to hear from in a moment, about a more streamlined arrangement in the future, better clarity of roles between them and the Health and Safety Executive. You refer to legislative change and:

“… needs to be done in the context of wider product safety issues …”

But you say that you’re comfortable that OPSS are now seized of the need to prioritise PPE in their thinking.

Then you say this:

“In the meantime, I think we should be developing a mechanism for a future crisis whereby HMG can publish approved standardised designs for each product required. These designs could be used by manufacturers without the need for full product approval by a notified body.”

And you refer again to the role of OPSS.

So again, providing your reflections based upon your experience at PPE Make, UK Make, streamlined regulatory approvals, and pre-approved blueprints for designs, are some of the things which in the future preparing for a pandemic ought to be considered; is that fair?

Mr Tim Jarvis: Yes, I think it is, because I think what you – it is unrealistic, I think, to expect UK manufacturing to be competing in normal times with other countries for the sort of low-value, high-volume products that were needed. But what you would want in the future is to be able to stand up that capacity in a crisis, and one of the things I think that would make that simpler are the sorts of things that I’m talking about here that you would basically be able to have an off-the-shelf-type template design that you could give to manufacturers and you would already have the contact with those manufacturers, and they would know that they might be called upon in a crisis. I think that’s the sort of resilience system you’re looking to get towards.

Counsel Inquiry: Could we turn, please, to the lessons learned on behalf of the Department for Business, Enterprise (sic) and Industrial Strategy, some of which reflects what you’ve described as lessons learned as a result of UK Make, and some which go a little further. And there is some overlap between your evidence, the lessons learned on behalf of BEIS, and also some of the recommendations made by Professor Manners-Bell.

This is INQ000066032, and if we could turn, please, to pages 5 and 6. I’ll just take you briefly through this lessons learned document on behalf of BEIS.

If we could zoom in, please, to “UK competitiveness” and at the bottom of the second sentence, the final sentence of that paragraph, it’s recommended that:

“… DHSC include a full cost to serve analysis from the procurement team in their work to build a resilience model to determine to which extent UK manufacturers should continue to be encouraged to enter the market.”

So that’s to work out whether it would be cost effective at a point in the future to scale up domestic manufacturing the way that it had been during the pandemic; is that right?

Mr Tim Jarvis: Yes.

Counsel Inquiry: And then the paragraph below, again the second or rather the final sentence: our advice is that where such a policy to be pursued, that is support for domestic manufacturers, grants are the most effective tool and the reason for that is that they are an injection of cash direct to the company and they don’t have associated costs and administrative burden of other approaches.

If we could turn, please, to local manufacturing. And again, a theme which is represented in your evidence, which is that with some foresight and planning, there could be more support, perhaps even from the centre of government, on local and regional manufacturers.

And then the same document, we don’t need to turn to it, considers the suggestions and the recommendations which you’ve made in respect to blueprints for designs for manufacturers and building it into wider government responsibilities to the regions and local areas around the United Kingdom.

And so Mr Jarvis, would you agree that if, in the event of a pandemic in the future, that with some planning and foresight, we have the beginnings here of what might be considered to be an emergency industrial strategy for the support of domestic manufacture of medical equipment such as PPE?

Mr Tim Jarvis: Yes, I think that’s right. I think, if you accept that UK manufacturing is going to be part of your resilience strategy for individual products, and that won’t always be appropriate, but where it is, I think what you want is a set of processes and enable that to be stood up at pace, recognising that it’s unlikely to be there in normal times. And so I think the things that we talked about there would form part of a resilience strategy for DHSC and looking at what products are essential in there, and then what part domestic manufacturing might play in part of that resilience alongside stockpiling and diversity of supply.

Mr Sharma: Mr Jarvis, thank you very much for giving your evidence?

I don’t have any further questions for you, but there are some Rule 10s from Scottish Covid Bereaved and from FEMHO.

Lady Hallett: I think it’s Mr Thomas first.

Questions From Professor Thomas KC

Professor Thomas: Good morning, Mr Jarvis, can you hear me?

Mr Tim Jarvis: Yes, I can, yes.

Professor Thomas KC: I’m representing the Federation of Ethnic Minority Healthcare workers. In paragraph 2.6 of your statement you describe leading a small team of BEIS that worked closely with the DHSC procurement team. Was there a specific role or individual within your team who was expressly concerned with or responsible for ensuring equality in PPE use and fit, including the adherence to the Public Sector Equality Duty and the requirement to eliminate discrimination?

Mr Tim Jarvis: So all of our work would be governed by the Public Sector Equality Duty. I mean, I think we were involved on the supply side rather than the demand side, so what we were given, if you like, were products that needed to be bought and the specification, and our role was to identify people who could manufacture to that standard. So that was the role that we played.

Professor Thomas KC: There’s a DHSC slide dated 12 June 2020 – we don’t need to call it up, I’ll just tell you what it says – for the Programme Delivery Board List, under “Strategic risks”, that there is “a risk that we do not provide inclusive product specification for all end users, for example ethnic minorities and those with hearing disabilities”.

And this was marked as a medium risk on the likelihood and impact.

The reference, my Lady, is INQ000339236_0029. That’s the slide’s Programme Delivery Board dated 12 June 2020.

Mr Jarvis, my question is this: how was this risk assessed and monitored within the procurement processes that you oversaw?

Mr Tim Jarvis: I wouldn’t have had visibility of that, because I think the decisions on what was to be procured and what was to be commissioned would have been taken within DHSC. So that would not have come across my work beyond what we were being asked to source in the markets that we were working in.

Professor Thomas KC: That leads me to my final question, which is, again, was the Public Sector Equality Duty considered in relation to this risk and procurement decisions – discussions that you were privy to?

Mr Tim Jarvis: I don’t know.

Professor Thomas: Thank you, my Lady, those are my –

Lady Hallett: Thank you, Mr Thomas.

Ms Mitchell.

Ms Mitchell is that way.

Questions From Dr Mitchell KC

Dr Mitchell: I’m obliged.

Mr Jarvis, I appear as instructed on behalf of Aamer Anwar & Company on behalf of the Scottish Covid Bereaved. Touching on one of the last matters you discussed, the issue of UK manufacturing as part of resilience strategy, what I would like to know is what, if any, discussions did you have with the Scottish Government in relation to developing capacity to manufacture PPE during the pandemic?

Mr Tim Jarvis: I think, from memory, there was a meeting with the devolved nations that I attended where we shared our experience of trying to work with domestic manufacturers, and – but I can’t remember anything beyond that.

Dr Mitchell KC: Okay. Were you aware if there were other discussions that took place, perhaps with other colleagues, or do you think that was the sum total of the discussions?

Mr Tim Jarvis: No, I think there was good coordination, and we were – I mean, for example, one of the companies that we worked with were – Honeywell, were based in Scotland, so we would have been talking to officials from the Scottish Government about that, and that that was a regular part of the discussions. They just weren’t discussions that I was regularly involved with.

Dr Mitchell KC: Thank you. That perhaps takes me on to my next question, which is, in his report – I don’t need it brought up – Mr Manners-Bell recommends that a structure should established to enable formal communications between the UK Government and devolved administrations on PPE and healthcare equipment issues.

Did you experience any difficulties in communication between the Scottish and UK Governments?

Mr Tim Jarvis: I didn’t experience any, no.

Dr Mitchell KC: No. When you say, “I didn’t experience any”, does that suggest that you knew others did, or was that – (overspeaking) –

Mr Tim Jarvis: No, no, it wasn’t meant to be a pointed comment. I just wasn’t aware.

Dr Mitchell: I’m obliged.

My Lady, no more questions.

Lady Hallett: Thank you very much indeed, Ms Mitchell.

Mr Jarvis, thank you for all you did to contribute to making UK Make a success. Thank you so much for your help and thank you for coming today in what I know must have been very difficult circumstances for you. We all hope you understand how sorry we are for your loss.

The Witness: Thank you.

Lady Hallett: Thank you.

Very well, I shall take an early break now, and return at – I’ll have a slightly longer break – 11.25.

(11.04 am)

(A short break)

(11.25 am)

Lady Hallett: Ms Shehadeh.

Ms Shehadeh: My Lady, the next witness is Graham Russell.

Mr Graham Russell

MR GRAHAM RUSSELL (sworn).

Questions From Counsel to the Inquiry

Lady Hallett: I hope you haven’t been waiting too long.

Ms Shehadeh: Can you give us your full name, please.

Mr Graham Russell: My name is Graham John Russell.

Counsel Inquiry: And before we get on to the witness statements that you’ll be speaking to, I believe you wanted to say a few words?

Mr Graham Russell: Yes, thank you very much.

I would like to express my sympathy to those who were, and continue to be, affected by the Covid pandemic, and particularly to those where shortage in the supply of PPE or failings in the protection offered by PPE contributed to their loss.

I also want to thank my fellow regulators in OPSS, in other national bodies and in local government, who worked tirelessly and professionally throughout the pandemic to mitigate these two risks.

I know we were not always successful, and that’s a matter of deep regret to me as a lifelong regulator, and I appreciate the opportunity provided by this Inquiry to address these issues and the lessons learned.

Thank you.

Counsel Inquiry: You have provided this Inquiry with a witness statement which is document reference INQ000562460. Is what is written in that statement true to the best of your knowledge and belief?

Mr Graham Russell: It is.

Counsel Inquiry: You’re also going to be assisting us with the passages of the statement provided on behalf of what was formerly BEIS and is now DBT, the statement of Sarah Munby, which is INQ000517443, insofar as it relates to the activities of OPSS and its work with other regulators in relation to PPE; is that right?

Mr Graham Russell: Yes.

Counsel Inquiry: We are grateful for your assistance in that regard.

In terms of your own professional background, you are the chief executive at OPSS; is that correct?

Mr Graham Russell: Yes.

Counsel Inquiry: And you were in that position during the pandemic; is that right?

Mr Graham Russell: I was.

Counsel Inquiry: In 2018, OPSS, which is the Office for Product Safety and Standards, was created, and you were in fact the chief executive from the outset; is that correct?

Mr Graham Russell: That’s correct.

Counsel Inquiry: And since then you’ve also held the position of director within the Competition, Markets and Regulatory Reform Division of BEIS?

Mr Graham Russell: Yes.

Counsel Inquiry: Is that correct? Is that in addition to your role as chief executive of –

Mr Graham Russell: No, that is the way that the OPSS is represented in the department.

Counsel Inquiry: Understood. You have, if I can put it this way, an extensive background in the regulatory sector, you began in Trading Standards and have worked in regulation ever since; is that right?

Mr Graham Russell: Yes.

Counsel Inquiry: And you have shared some of your experience in a book which you co-wrote with Professor Chris Hodges in 2019 called Regulatory Delivery, which sets out a model for improving the efficiency and effectiveness of the work of regulators?

Mr Graham Russell: Yes.

Counsel Inquiry: And in 2023 you were asked to chair the Organisation for Economic Co-operation and Development’s Regulatory Policy Committee.

Mr Graham Russell: Yes.

Counsel Inquiry: Before we ask you about your work during the pandemic, it may be helpful if we explain some key terms that are going to crop up a lot.

Can I ask you to describe in simple terms, what is a market surveillance authority?

Mr Graham Russell: Yes, so a market surveillance authority is the regulator charged with delivering the functions – called market surveillance – that are intended to ensure that compliance with a given set of regulations is achieved, and then there are a set of processes that those regulations used that might involve intelligence-led inspections or border checks, et cetera. But the overall term is called “market surveillance”.

Counsel Inquiry: And in the UK, in the context that we’re going to be discussing, market surveillance was delivered by local authorities, the Health and Safety Executive, Health and Safety Executive Northern Ireland, and the Medicines and Healthcare products Regulatory Agency; is that right?

Mr Graham Russell: Yes. They have defined spheres of operation. So MHRA is for, in this context, medical products, HSE is the market surveillance authority for PPE in the workplace, and Trading Standards is the market surveillance authority for consumer PPE or PPE outside the workplace. We also have access to the secretary of state’s powers, so although we’re not designated to the market surveillance authority we can also act in those consumer spaces.

Counsel Inquiry: And what is the difference, please, between a market surveillance authority and an enforcement body?

Mr Graham Russell: I’m not sure there’s practically a lot of difference. A “market surveillance authority” is the term used in certain legislation to define that set of functions.

Counsel Inquiry: All right –

Mr Graham Russell: Enforcement isn’t –

Counsel Inquiry: Sorry. In terms of enforcement powers, some of these market surveillance authorities that we’re discussing have those enforcement powers, but they all have different enforcement powers, is that right?

Mr Graham Russell: The legislation gives them powers, yes, which tends to differ between the legislation. You’re right.

Counsel Inquiry: And in the context of PPE regulation can you tell us what a notified body is?

Mr Graham Russell: Yes. So – and this isn’t specific to PPE. A notified body is the term that the European Union use, and therefore in the period that we’re considering was the relevant term, for an organisation that is authorised to carry out third-party conformity assessment, and in the context of PPE for categories 2 and 3 – so PPE has three categories, 1, 2 and 3, 3 being the most significant and Covid-related PPE was category 3. A notified body is a body that is authorised to carry out the conformity assessment required to put category 3 PPE on the market.

Lady Hallett: It’s probably my age, Ms Shehadeh, but you’re softly spoken, and Mr Russell, I’m afraid you’re rushing your words together at the end of a sentence, so between you I’m having to rely on the transcript. If you could –

Ms Shehadeh: Of course.

Lady Hallett: – sort that out, both of you, I’d be really grateful.

Sorry to interrupt.

Ms Shehadeh: Of course.

You’ve briefly touched on this, but putting it simply, the Health and Safety Executive is responsible for, as you said, health and safety in the work places, but it also is responsible for regulating equipment that protects the wearer. Is that right?

Mr Graham Russell: So PPE is defined as items that are intended to protect the person wearing them. And where PPE is being supplied for the purpose of use in the workplace, then the HSE is the market surveillance authority.

Counsel Inquiry: We are using the term “PPE” more widely, so not in its technically correct sense. We are using the term “PPE” to mean items worn to prevent the spread of coronavirus. In that sense, is it right that some of the items we think of as PPE might in fact be medical devices which fall within the remit of the MHRA?

Mr Graham Russell: Right. So PPE has a definition, in law, and the way it’s regulated is in accordance with that definition. I accept that PPE is also used more colloquially and differently by different people but yes, PPE is, in law, is products designed to protect the wearer or holder of the products. MHRA regulate medical products, and – this not my area of expertise now, but in very simple terms, those are devices that contribute to, amongst other things, the protection of the patient.

There are products that are intended to deliver both of those purposes to protect the wearer and the patient or a third party, and they’re sometimes called dual-use products, and they would have to be brought to market with conformity assessment against both of those regimes.

Lady Hallett: It sounds a bit complicated.

Mr Graham Russell: I think they come from very different places so although we’re talking about PPE in that context, actually, PPE covers a vast range of items, and has to be – the law has to be flexible enough to cover all those different places. The specific product that, I don’t know, someone in a healthcare setting might be wearing, has to protect them as a person, because their employer has an obligation to protect them. And PPE is the last line of resort – if you can’t stop the risk, then PPE is the last line of resort to protect that person.

But there’s also the need to protect the patient or other people, and those two are not the same risk. So if you think about a mask, are you trying to make sure the wearer doesn’t inhale something, or are you trying to make sure they don’t exhale something? And those two things are not exactly the same, and they come from very different – they come from a different regulatory regime. One of my tasks or our task in the pandemic was to ensure that that complexity did not become a problem for people seeking to supply products into the market.

Lady Hallett: It speaks for itself, doesn’t it? If PPE is designed to protect the wearer, if it’s designed to be used in the workplace, and if it’s designed also to protect the patient, you have three different regulatory systems in operation; is that right?

Mr Graham Russell: I may have misunderstood you, my Lady. I think two systems.

Lady Hallett: Two?

Mr Graham Russell: I think the designing of the wearer – sorry, the protecting of the wearer, sorry, and protecting from, in a medical sense, the patient.

That doesn’t mean that you have to, you know, the same product can do both things, but the person putting it on the market needs to know that it will do those things and needs to attest that it will do those things.

Ms Shehadeh: The attesting that it will do those things, was that the idea behind a conformity assessment certificate, C markings, and so on, evidence that the party putting the product on the market had checked that it was fit for use in its intended setting?

Mr Graham Russell: That’s right. If I may just say a word about that?

Counsel Inquiry: Please.

Mr Graham Russell: Not all products that are put on the market in the UK need to have third-party accreditation. PPE has these three categories, the lowest category is very low risk, things like gardening gloves, and there, self-declaration is adequate. The highest category, category 3, which Covid-related PPE is category 3, you need conformity assessment of the product and also of the production so that there’s an assessment you will be able to make that product to that standard consistently.

So the manufacturer or the importer, the person placing it on the market, makes that declaration, but the law also requires them to have third-party accreditation and that’s where the notified bodies come in.

Counsel Inquiry: And what – (overspeaking) –

Mr Graham Russell: That is because of the perceived high level of risk attached to those products.

Counsel Inquiry: And what is it that the notified bodies are responsible for doing?

Mr Graham Russell: So they would receive, in normal times before the easements that we’ll probably come on to, but they would receive from the manufacturer/importer, a request to have the product conformity assessed, they would supply information, technical files, background design material, and so on. And then the notified body would then either themselves carry out testing, or require testing to be carried out or look at results from other testing, and they would make an assessment of whether that product complied with the requirements, and for category 3, as I say, that would be about the product itself but also about the production process.

Counsel Inquiry: And is that a time-consuming exercise?

Mr Graham Russell: In normal terms, yes.

Counsel Inquiry: Are you able to tell us roughly how long that would take?

Mr Graham Russell: If you just bear with me, I think this is something from BSI, I think, sorry, British Standards Institution, that a mask in normal times might take 12 weeks for that process.

Counsel Inquiry: Twelve weeks?

Mr Graham Russell: For that process.

Counsel Inquiry: So that’s in normal times. Perhaps we’ll come on to now to what took place during the pandemic. We’ve touched upon, with our previous witness, Mr Jarvis, the idea of regulatory easement.

Mr Graham Russell: Mm-hm.

Counsel Inquiry: One of the roles that OPSS took on during the pandemic was to advise on and implement regulatory easement; is that right?

Now, this was an EU-wide initiative, wasn’t it? It wasn’t specific just to the UK. The EU issued a recommendation, Commission Recommendation 2020/403, which opened up the possibility of introducing a regulatory easement including in the UK.

There were two regulatory easements that were introduced ultimately in the UK. What was their effect?

Mr Graham Russell: I don’t know if it would be helpful, but it might be helpful to just say a little bit about the challenges that the pandemic brought to PPE regulation and therefore why the easements were useful. I don’t know if it would be –

Counsel Inquiry: We’ll certainly come on to that. If we could just deal with – (overspeaking) –

Mr Graham Russell: So the easements, narrowly, there were two easements recommended by the European Union decision, one related to where a product would be approved by a notified body and it allowed the notified body to authorise the person placing that on the market to do so before that process was completed, provided it had begun and provided they had to receive sufficient assurance that the essential health and safety requirements would be met, and that easement was clarified by the European Union in July of 2020 to say that that would also require the Market Surveillance Authority to assert that for that product.

And then second easement was where the government were purchasing themselves for healthcare settings and for that route, the easement was that the market surveillance authority could approve products without full conformity assessment, and where standards being used for that product were parallel and equivalent.

And that was, for example, used for some US standards which were not for the UK standards but were deemed by the market surveillance authority to achieve the requirements.

Counsel Inquiry: Thank you. And prior to bringing into force easements in the UK, the government gave careful consideration to the risk balance.

Can we display, please, INQ000475266.

This is an email dated 24 March 2020. And it shows here that the:

“Secretary of State approved the non-legislative ‘easements’ on measures to secure the supply of cleansing products and personal protective equipment”.

And:

“He was keen [to ensure] these were taken forward in a measured way that continued to offer high levels of protection for consumers and workers (particularly NHS workers).

“He wants these measures to be focused on businesses that will deliver quality and safety to maintain supplies of essential products … and not opening up a free-for-all for all the disreputable”.

Thank you, we can take that down.

So really, there was a balance, a balancing act to be carried out here, wasn’t there, between speed of supply, speeding up conformity, really, and ensuring that inadequate PPE didn’t reach the front line?

Mr Graham Russell: Yes. The challenge that we faced as regulators throughout the pandemic was to achieve two things: one was to increase the supply of PPE, because it was needed, but second was to avoid unsafe PPE reaching the people who would use it. And I think balance might be taken to imply that there was some compromise of essential health and safety requirements and if that was the meaning of the word, then I would say there wasn’t a balance. There was no compromise and I think the Secretary of State reflected that, and I think later comments by the Cross-Government Committee reflected the same thing as well, that there was no willingness to compromise on essential health and safety requirements.

What was being looked for was ways of getting safe product to the frontline quicker.

Counsel Inquiry: Can we display, please, INQ000269653.

This is a letter written by the OPSS sent to the market surveillance authorities on 25 March 2020. We can see there there’s some emboldened text, and it urges both speed and pragmatism in the assessment of PPE needed urgently across the NHS.

Can you help us with what was meant by pragmatism?

Mr Graham Russell: Yes. And I think the subsequent sentence that you’ve highlighted there possibly makes the point:

“Where international standards are being followed …”

And this is the second easement I spoke about:

“… you should be pragmatic … [focusing on] the safety and effectiveness of the product, rather than the full conformity [assessment] …”

And I think that as what is meant by “pragmatic” in that sentence.

Counsel Inquiry: And the market surveillance authorities were asked to prioritise this over market surveillance work for the clearance or otherwise of non-compliant PPE that is necessary for protection against Covid-19 to ensure that it meets health and safety requirements.

So was this an urging to really prioritise processing assessment of PPE so it could reach the frontline quickly?

Mr Graham Russell: Yes, and I think what is meant in that sentence is that market surveillance authorities, particularly local authorities in this context, although HSE in this letter, aren’t only responsible for PPE, and what we’re saying is: because of the nation’s needs for more PPE to reach the frontline, we would like you to prioritise that in your work.

Counsel Inquiry: Thank you. We can take that down.

In March and April of 2020, did OPSS observe any specific challenges, either that it itself was encountering or that HSE or other market surveillance authorities were experiencing in relation to this market surveillance work?

Mr Graham Russell: I’m not totally sure I understand how wide you want me to take my answer to that question.

Counsel Inquiry: Well, let’s focus in on businesses importing PPE to the UK, and ensuring that that was compliant. Were there any specific challenges around that?

Mr Graham Russell: Okay. You’ll have to stop me if I go too wide on this. I’ll do my best.

Before the pandemic, PPE, which is a highly technical and highly important product, and subject, as we’ve just discussed, to conformity assessment processes that are not always in place for every product – so it has a highly regulated environment in that sense – was not subject to a large amount of enforcement energy. Which might sound slightly counterintuitive but, actually, reasonably well regulated businesses, notify bodies doing a prescribed job, and fairly well informed people purchasing, were locked into a fairly robust supply chain.

I’m not saying any of that was simple or there weren’t challenges but, compared to other areas that market surveillance authorities might be responsible for, PPE wasn’t the area, necessarily, that risk assessment said was where the enforcement effort should be.

When the pandemic broke all three of those things, so the suppliers were suddenly faced with massive expansion, new suppliers came in, existing suppliers had to ramp up their production, if you ramp up production, quality can fail, there was all sorts of challenges for suppliers in the UK and globally. Just-in-time contracts weren’t delivered on because of the increasing demands, some countries put export bans on – there’s all sorts of things about the supply that really massively changed.

The notified bodies did not have enormous capacity to suddenly expand their activity. It’s capital intensive, it’s highly skilled, you can’t simply say, “Let’s do 100 times as much as we did yesterday.”

And the people purchasing the products were not simply those highly experienced, highly competent people that they had been. At a national level, at a regional level, and even at a local level, people had a scramble for these products.

So those three things all changed at the same time. None of those were in anyone’s control. And so the regulatory effort that was necessary to avoid the unsafe PPE that began to flood into the market reaching the front line was significant.

And so the – to answer your question directly, the regulators, yes, faced in – I think you said in March and April, but I wouldn’t limit it to that – faced enormous challenges in trying to get safe PPE. There was massive public demand. The government was very aware of that, ministers were very aware of that. We need to make sure that people working in these highly dangerous situations are not being exposed to unnecessary risk. But at the same time we have people wishing to supply, sometimes with good intent, sometimes with bad intent, products that will not make those people safe. And so holding those two things in that situation, which was evolving obviously on a day-by-day basis was the regulators challenge.

Counsel Inquiry: So the pandemic and the ramp-up of production and sale of items that were presented as PPE, it represented an enormous stress test on the regulatory systems, didn’t it?

Mr Graham Russell: Yes.

Counsel Inquiry: And in your view, were the regulatory systems prepared? Were they in a good place to face all of that when, finally, the markets were disrupted in this way and PPE became a much more commonly available item?

Mr Graham Russell: I can speak with more confidence about OPSS than I can with others, to answer that question. We were created in 2018 and we were literally in a growing phase at this point. We had just started to build incident management capability, and I know that we’ve learnt a lot of lessons from this pandemic which is now in our incident management planning. And so the short answer, had we done that before, the answer was no, so therefore we were not as well prepared as we could have been.

I think that other regulators are in different places and, you know, would have different answers to that. The other area, I think, is the coordination of market surveillance activity. Going back to my Lady’s question about the complexity of the system, one of the ways of resolving complexity is good coordination, and I think we built systems very quickly in those early weeks, which again might be taken to say that we didn’t have them in place beforehand.

Counsel Inquiry: Should they have been in place beforehand, do you think?

Mr Graham Russell: That’s a really difficult question to give a one-word answer to, because it’s very easy to say “Yes, here is a problem, we should have been ready for it.” But we have to risk base all our prioritisation decisions, and you can’t be ready for everything. I would hope – I think I’ll answer it this way, if I may – I would hope that we’re more ready now than we were then.

Counsel Inquiry: What is the basis for that hope, if I may ask? What has is being done now to ensure that the coordination between regulators, and indeed OPSS itself, is in a better position?

Mr Graham Russell: So I think there’s a number of things, probably three main things. The first is that we, as OPSS, have a much more robust incident management approach which was built prior to 2020 but was definitely expanded in 2020 and has continued to be developed since then.

The second is that in our work with other national regulators, sharing incident management approaches, building coherence between them, recognising the things like the regulators coordination committee that worked well and building that into our thinking, I think that’s – I think that’s put us in a stronger place.

And I think the third is just the culture that we all have, that we’ve learnt from experience, I think is in an important part of our thinking going forward.

Regulation isn’t just about processes and laws; it’s about how professional people bring their culture and their values to the work they do. And those things were not just in the regulatory field, but those things were challenged in the pandemic. We had to change our ways of working, and that – those are lessons that are learnt at a personal level just as much as at an organisational level.

Counsel Inquiry: In terms of collaboration, of working together, I’d like to ask you about two specific working groups that OPSS was involved with. The first was the Decision Making Committee and the second the Regulatory Co-ordination Cell. So the Decision Making Committee, the DMC, was a DHSC, Cabinet Office and NHS England committee, and its primary purpose was to provide decisions as to whether a specific product met essential health and safety requirements.

What was OPSS’s involvement with that working group?

Mr Graham Russell: So this is the higher-level, cross-government, effectively, cabinet advice group. And we facilitated that, we both brought information to it and took actions away from it. We connected that group with others particularly around technical, regulatory and scientific expertise.

I think it’s correct – well, I know it’s correct to say that that group did not assume regulatory authority for decision making. So, in that sense, regulators came to the DMC with questions or questions were brought for them to answer, but it remained the responsibility of the relevant market surveillance authority as to whether a product was – if approval was necessary, whether a product was proved.

Counsel Inquiry: And is it right that in April 2020 OPSS raised a concern that the DMC was working too slowly?

Mr Graham Russell: I’m not saying we didn’t. I don’t have a specific recollection of that actual statement but we were certainly very keen that the processes moved as quickly as possible.

Counsel Inquiry: And what was slowing processes down?

Mr Graham Russell: In the DMC?

Counsel Inquiry: Yes.

Mr Graham Russell: I think it was really important that – for any policy or for any policy decision you want to hear a wide range of voices. You want proper consultation to occur. You want, you know, particularly across government, there are different voices from DHSC, the Health Department, Treasury, my department, Business. They all have different perspectives. And that’s right. But in a time of pandemic, you also want decisions to be made quickly, and I think getting that right sweet spot between hearing people but making decisions quickly, I think we probably were – were probably trying to push for decisions to be made more quickly.

Counsel Inquiry: All right. We’ll turn to the Regulatory Co-ordination Cell. This was established on 29 April 2020, and it brought together OPSS, HSE, HSE Northern Ireland, and the MHRA; is that right?

Mr Graham Russell: Yes.

Counsel Inquiry: And what was the purpose of that group?

Mr Graham Russell: This group arose out of – almost from day one we’d been having conversations with those organisations on specific topics, and effectively the group – we decided to create it as a group and give it a little bit of a sort of secretariat and governance role but, actually, it grew out of existing conversations and those conversations were at a pragmatic level, if you like, a tactical level around deployment, resources, challenges, what different regulators were seeing.

It was – from our point of view, it was our way of discharging our responsible for coordination of market surveillance around PPE and medical devices. But I think everybody saw the value, and it was meeting incredibly frequently in those early days. Everyone saw the value in having a place where things could be discussed.

Again, this was not making decisions on behalf of a market surveillance authority. At every point it is the market surveillance authority that is given the statutory powers to make decisions, and having a group or committee enables conversations to be held, enables ideas to be kicked around but it doesn’t discharge that decision-making responsibility.

Counsel Inquiry: Was it necessary to bring all these disparate parties together, because responsibility for regulating PPE was fragmented and quite complex?

Mr Graham Russell: I think if we accept that it’s fragmented and quite complex, then that’s a good reason to bring the parties together. So I’m not quite sure if I’ve answered your question.

Counsel Inquiry: Do you accept that the regulatory landscape was, at the time, fragmented and complex? You’ve already described, you have the MHRA, with a different remit, of course, to the Health and Safety Executive, and they have different enforcement powers, and then OPSS has its own enforcement powers. You’ve talked about the sharing of market intelligence, you’ve talked about strategic objectives having to be shared, conversations having to be had. Does that all arise from a fragmented system?

Mr Graham Russell: I think when we think about any regulatory system there will always be boundaries and there will always be connection points. And as I said earlier, the fact that products can be used by different people in different places for different purposes, where regulation is intended to mitigate a given risk, means that you will always have to bring together those different purposes.

You can brigade all them together into one regulator, but all you’ve done is brought those conversations into the regulator, you haven’t changed the need for the conversations. And you will always have a boundary. So if you had a PPE regulator, you would still have the boundary between where those products interface with consumer products that are or aren’t defined as PPE. You will always be able to find the boundary and that boundary can be called fragmentation.

So in that sense, whether it’s over complex or over fragmented, I think is a more difficult question than whether it’s complex and fragmented. What I would say is that the way you resolve those things is through good use of data, good use of coordination, shared objectives across regulators and good communication, and I don’t think that’s specific to this question of PPE.

Lady Hallett: Can I just challenge you, if I can. You seemed to be more ready to accept it when Ms Shehadeh challenged you, but I’ll take that.

If you have – let’s take a mask and if you’re going to have two regulators looking at whether or not it should be authorised, they’re going to have to look at the design, they’re going to have to look at the efficiency, so are you not risking duplication if two different regulators are saying: “Right, well, this mask keeps germs in or keeps a virus in or bacteria in, and it stops them from going out as well”, if you’ve got two different regulators, one looking at does it stop bugs going in and one regulator looking at does it stop bugs going out, doesn’t that necessarily have a duplication of effort or does that not arise?

Mr Graham Russell: I think two things, if I may, my Lady.

Lady Hallett: I’m sorry to use such a simplistic example.

Mr Graham Russell: No, no, no, I don’t want to trivialise it either by my example, so that’s why I’m just taking a moment.

If that mask was also used in a bakery where there’s big issues with dust in the air and PPE required for that, then where do you draw your line? Do you say, at the moment we have that mask regulated for PPE by the HSE and we have it regulated for medical devices by the MHRA, and there’s the line that you’ve described. If we have it regulated in the healthcare setting by one person because it was managing two risks, you would still have a line for its use elsewhere. So that’s why I said you can’t avoid fragmentation; the question is where you put the lines and how you manage that.

I think the second thing, and I’m possibly a little bit on the edge of my knowledge here, is that I suspect the risks you’re describing are rather more complex than you or I know, and it isn’t necessarily simple to say, “Let’s have a device that protects the patient and the user”.

My understanding is that those dual-use products are not highly prevalent, that actually products are understood, but one of my recommendations would have been that I think we could, either in statute or in guidance, provide for that situation.

I’m advised that it’s not a problem in working, but clearly in the pandemic where people who were not used to working in that situation had to make decisions. This was one of the things that they found challenging and I think we could have – that could be clearer.

Lady Hallett: Sorry, the recommendation would be for dual-use products? In other words, let’s again use the mask, a mask designed to protect the wearer and the patient. So a mask to be used in a healthcare setting designed to protect the wearer and the patient. What, that basically there should be provision for there just to be one regulator for a dual-use product?

Mr Graham Russell: My recommendation would be that there should be clarity on how that product is brought to market so it is absolutely clear in the labelling and the bringing to market of that product what it is being designed for and, for example, that might allow – we now call them an approved body since we left the EU, but a notified body, approved body might then be able to bring that together into one approvals process, for example.

Lady Hallett: Sorry to interrupt.

Ms Shehadeh: Not at all.

During the existence or during the working life of the Regulatory Co-ordination Cell, were there discussions between regulators as to whether products were dual use in that way, and which regulator should take the lead on a specific item?

Mr Graham Russell: There were. Yes. And there was some attempt to bring clarity to that question. I don’t, from my reading of the file, I don’t think it was a frequent and prevalent question, but it was a question.

Counsel Inquiry: Let’s move on to sector business guidance for PPE that was published by the OPSS during the pandemic. OPSS published a number of different pieces of guidance. There was guidance for high-volume manufacturers; is that right?

Mr Graham Russell: Yes.

Counsel Inquiry: There was also guidance for those who were supplying items for use by the NHS?

Mr Graham Russell: Mm-hm.

Counsel Inquiry: And there was guidance for small-scale manufacturers. Each of these pieces of guidance was updated several times during the course of the pandemic, wasn’t it?

Mr Graham Russell: Mm-hm.

Counsel Inquiry: So returning to the guidance for high-volume manufacturers, that was updated I think some seven times between 2 April 2020 and 7 September 2020. Is that about right?

Mr Graham Russell: I think so.

Counsel Inquiry: And the guidance for small-scale manufacturers, between 2 July 2020 and September 2020, there were four versions of that guidance; is that right?

Mr Graham Russell: I think so.

Counsel Inquiry: Why did this guidance have to be updated so many times?

Mr Graham Russell: In a sentence, because it had to be authoritative, and the facts were changing – or sorry, as a nation, our understanding of the facts were changing.

In normal times, guidance should be consistent and authoritative and changed infrequently because change has an impact on producers. You know, they have to get to know the new guidance, they have to work out what they need to do to change, they have to implement that, that all costs money, and it probably reduces compliance while they’re making those adjustments and so it’s not a good thing.

So regulators work hard to – and it’s sometimes why guidance comes at slowly, you know, to produce guidance that has a decent shelf life and will give people authority for as long as possible.

The problem here was that what we knew about the pandemic, what we knew about the disease, what we knew about control measures, what we knew about the authorisations that could be given to businesses and how we could reduce process for them was changing – in the periods you’ve described, was changing very rapidly. And I think we set out in Sarah Munby’s statement for each of those changes, the rationale behind them.

In hindsight, you could look back and say, were each of those changes necessary? Because sometimes a change might happen and then a week later, it might change again. And, of course, if you knew it was going to change again a week later you wouldn’t have done the first.

But we were under a requirement to ensure, as far as possible, that we made it as simple as possible for businesses, large and small, to produce or import safe PPE. And so giving them guidance that was as clear as possible and as precise as possible, was part of responding to that.

So it’s not just about how often we change the guidance, there’s also, you know, why did we have different guidance for large and small? Because, as we got to understand their challenges better, we realised that their responses were very different, and so we tried to write guidance that was going to be as useful to them as possible.

Counsel Inquiry: In terms of large and small, we’ve heard earlier this morning that there was tailored help for some of the high-value manufacturers.

Mr Graham Russell: Mm-hm.

Counsel Inquiry: Did OPSS have a role in assisting high-volume manufacturers at the direction or suggestion of Cabinet Office?

Mr Graham Russell: Yes, in at least two ways. So one was working with organisations like PPE Make and others, where they were in touch with suppliers or potential suppliers to try to help work through the system, because as has been identified, PPE is complex and technical. So we did that. But also, specifically, we were asked by Cabinet Office to work with ten businesses identified, I think, by Deloittes. This was in the fairly early stages, and I think, in some ways, it sort of preceded some of the thinking that PPE Make then took forward, and the idea was to try and establish, by working with these businesses, whether we could, I guess, do three things, really: one was whether we could help them to map their way through the regulatory process. The second was whether we could help other businesses to do the same, as a result of learning from them; and then the third was if we could, as an organisation, better understand what the regulatory challenges were. And then put that understanding through this filter, is this “It’s really hard to deliver the essential health and safety requirements?” That is just really hard. How do you help them deliver them? Or, actually, this isn’t an essential health and safety requirement, it’s something that could be, in some way, eased.

And I think putting them through that filter and seeking to understand that, in concert with, in that case, the Health and Safety Executive, was part of working with the businesses.

So yes, I hope that it helped those businesses to navigate their way through, but I also know that it helped us to understand.

Counsel Inquiry: So these were the top ten businesses that were producing items such as eye protection, gowns, hand sanitiser, and so on.

Mr Graham Russell: Mm-hm.

Counsel Inquiry: Would you have expected the top ten businesses involved in this to be familiar with the regulations and the processes and perhaps not to require the assistance of OPSS?

Mr Graham Russell: If I’m correct, these are the top ten businesses seeking to come into the market rather than the top ten businesses in the market.

Counsel Inquiry: I see. These are new entrants to the market?

Mr Graham Russell: As I understand it.

Counsel Inquiry: And you’ve told us about attempts made to assess whether the processes could be simplified. I’d like to ask you about a different now, and that is Operation Safeguard and the work done around enforcement?

Operation Safeguard was an enforcement operation at UK ports established in May 2020 to provide more support to local authority Trading Standards teams, because there was a significant influx of non-compliant PPE arriving at UK points of entry; would you agree with that so far.

Mr Graham Russell: Yes. Yes. It was building upon existing activity for that purpose.

Counsel Inquiry: And the idea was, of course, to prevent potentially unsafe or non-compliant PPE from entering the consumer market and circulating around the UK?

Mr Graham Russell: Not just the consumer market. The workplace market as well.

Counsel Inquiry: The workplace market as well. Thank you.

Is it right that Border Force invited OPSS to assist them specifically at Heathrow Airport?

Mr Graham Russell: Yes. The reason I pause slightly is, prior to the pandemic, there were existing activity sets at ports and at borders. OPSS had taken responsibility for organising and funding the work of local authorities quite recently before that, and therefore there were local authorities present at Heathrow.

Border Force are the border authority and have the statutory mandate, and they then make, although it doesn’t quite look like this on the ground, it’s actually Border Force that are making the referral to the local authority or whoever that might be, the market surveillance authority. Border regulation is a regulatory set in itself.

Counsel Inquiry: And what was the OPSS role in relation to Operation Safeguard?

Mr Graham Russell: So we were responsible for bringing together and coordinating the activity that was required, using intelligence to prioritise and deliver resources, which did include OPSS staff at some points when there wasn’t sufficient resource from other regulators. And essentially, using a database to identify where the challenges are arising, and then to deploy resources to seek to detect and deter that activity, which at that level is exactly the same as we do all the time, it’s just that there were specific increases in volumes, and specific increases in patterns. And in normal times – so the system works on a profiling system where you look at what the challenges are, which are the products that are likely to be dangerous, which are the suppliers that might be presenting a particular risk, and you put that into a database.

PPE wouldn’t necessarily feature as a high-risk product for the reasons I alluded to earlier, but clearly, the demand in the UK from customers, from workplaces, from the worried people, in principle not from the NHS because in principle the NHS purchase should be through the separate track, but we can’t say what happened in every hospital and every care location.

That increase in demand very quickly led to people, for good and bad motivation, seeking to bring those products into the UK. And that was visible through patterns of trading. So, for example, I remember at Doncaster airport, which had relatively small amounts of freight, there was an uptick in freight and almost all of it was PPE.

Counsel Inquiry: Sorry to cut in. So OPSS was able to spot those trends, spot those peaks in activity, and liaise with Trading Standards and local enforcement teams to assist them where they should –

Mr Graham Russell: Yes.

Counsel Inquiry: – be concentrating their efforts; is that right?

Mr Graham Russell: So in that particular example, I think it was actually the local authority that had become aware of that change. They asked us whether we could work with Border Force and others to deploy resource, and we then put that through the intelligence system and resource was deployed, and that was dealt with.

But that was very obvious because it’s a spike in behaviour. It’s a little bit more difficult to see that same pattern at Heathrow or at Felixstowe, which is the principal seaport. And what happened was the spike in imports was at airports first because obviously you don’t have the lag in supply, and then over weeks it then moved into more traditional sea-based supply.

Products like PPE are not normally supplied by air because the value doesn’t justify that, but there was a spike in air, which we saw at those airports, including East Midlands where the major parcel activity is, and then over time it then moved, particularly to Felixstowe but others, also to other ports, but also by that time, the intelligence profiles were clearer and we were able to work with the local authorities to carry out that work.

And then HSE and MHRA would respond to referrals where necessary, either to do checks or to confirm conformity of product.

Counsel Inquiry: All right, thank you very much for that.

I just want to move on to a specific issue that was raised by the British Safety Industry Federation. Is it right that the British Safety Industry Federation, which is the trade body that represents supplies of PPE in the UK, raised an issue and said that the market was still awash with non-compliant respiratory protective equipment, raised this issue with the Health and Safety Executive but the OPSS was made aware of this. One of the issues highlighted by the British Safety Industry Federation was that their members were seeing others selling non-compliant PPE without sanction, and that most causing them to lose market share but, of course, it was causing a loss of confidence.

Would you accept that there were sellers of non-compliant PPE that were acting without being sanctioned by any authority with enforcement powers during the pandemic?

Mr Graham Russell: It was certainly the intention to locate and sanction anyone who was supplying non-compliant material, including PPE. I think what BSIF are referring to there, and we had – that referral came through HSE in the way you’ve described, but also they came to one of our business reference panels and said something similar. We were conducting virtual business reference panels to understand business needs at the time.

And I think they were probably talking about more than one stream of activity. So one stream was businesses that were not following the regulatory process or were not waiting for the completion of the regulatory process, and/or were using non-genuine – they were very concerned, I remember, about fraudulent certificates being used. So that, in a sense, was that one stream.

They were also concerned about what we’ve just been talking about, about imports that were not being checked at the border of entirely non-compliant and potentially unsafe material.

Counsel Inquiry: Can I ask you this: they used the phrase “awash with non-compliant PPE”; in your view, was OPSS and were the enforcement authorities actually winning the fight against non-compliant PPE entering the UK markets?

Mr Graham Russell: The way that the regulatory system works in the UK outside of what we’ve been talking about earlier for the prescribed items, the way that it works is that most items do not need to go through a check before they’re put on the market. We don’t have a border protection in that way, where every item coming into the UK is looked at. So therefore there is no data on how many items of non-compliant PPE were available on the market in the UK. Neither do people, you know – so in that sense I can’t answer your question because I can’t say what ratio there was.

What I can say is that we took those remarks very seriously. That’s partly why we ramped up the prioritisation around the border and continued to do so through the pandemic. The other place you look for, for information to answer your question, is intelligence and complaints from what people are buying and whether they are seeing significant issues, and we did not see an uptick in people saying, “Oh, I’ve bought this PPE and actually it’s no good.” We didn’t have that, we didn’t receive that intelligence.

Counsel Inquiry: All right, thank you. I’m going to briefly move on to the way that OPSS and the Health and Safety Executive assisted the DHSC with goods that it procured as part of the Parallel Supply Chain, and so those are the goods that were then kept in a warehouse at Daventry before being distributed onwards to the NHS and social care.

Can we have up on screen, please, INQ000477693. Thank you.

This table sets out some of the work that was being done to check the PPE that was held in Daventry.

We can see there at the bottom row:

“Downstream Processes – Daventry and VIP/non-VIP Donations.”

“A hub has been created at Daventry for all PPE procured by CO/Deloitte in the four streams in the top row.”

There was assistance given by:

“The Army, HSE and … OPSS [who all] have a presence at Daventry to assist with the sorting of PPE, ensuring documentation is uploaded … for OPSS [your organisation]/HSE/MHRA.”

There was a great deal of work being done physically at the Daventry warehouse to ensure that goods were compliant. What were the main challenges that OPSS observed in trying to ensure that non-compliant PPE did not leave that warehouse?

Mr Graham Russell: So the Daventry supply route was the supply route for government-purchased into the NHS front line. It didn’t exclusively use the second easement, but a lot of it would have used the second easement, and so it became massively significant in terms of making sure that hospital settings and NHS settings across the country were properly protected.

We were alerted fairly early on, I think in April, that there were problems with that supply chain and that there were blockages occurring there, and we were asked whether we could assist with understanding what was going wrong, and also resolving that.

So our functions, over time, were, first of all, that we – initially in discussions and then, secondly, with people on site, we tried to identify what the problem was.

Counsel Inquiry: Yes.

Mr Graham Russell: Then we tried to identify who the resources were that could resolve that, and that would be regulators – the HSE were involved very early on, other regulators became involved – logistics and decision-making governance.

We then resolved those problems and, in resolving them, created a proof of concept of how they could be resolved in future, and then wrote processes that would enable that to be done. So it wasn’t just a matter of resolving that backlog, but how do you avoid that happening.

Part of that was data gathering, and we created a secure share point site that other regulators and logistics handlers could use so that the information could flow more freely about what could be approved and what couldn’t.

I think one of the problems was that, because of the things we’ve talked about earlier, about the expansion in supply and the challenges with getting those products approved, products that couldn’t be immediately approved were forming, if you like, a barrier to other products flowing through. Because previously product had flowed through quite smoothly. So there were products that couldn’t be approved. There were also products that could be approved but people didn’t know they could, and HSE gave some very helpful clarity on CE marked products and things like that, started to break that down.

But what really had to happen was that those blocking products, if you will, had to be moved so that products that could flow through quickly did so, and then the blocking products needed to be cleared as quickly as possible. But it did vary enormously how easily that could be done. It might be that additional information could be sought, additional certification, confidence in testing.

For some products there was testing to be arranged through approved bodies. For some products, there was reworking that was necessary. That wasn’t really very prevalent in this case because of the time lags. For some products it could be deployed to other uses with a lower hazard context, and for other products, they couldn’t be released.

But all of that segmentation had to be done and then the logistics that followed from that had to happen. And that was really what we were about, was that coordination.

And I think the reason we were there was a combination of technical expertise, role of market surveillance coordination, but also, as part of government, we were very conscious of the problems that were being caused by these blockages.

So we deployed quickly to that, and then having done that and built that capacity through training others, we then handed that over relatively quickly, although I note my team think it took us too long to hand it over, but I think we handed it over quite quickly. And then we – but then we continued. There were some problems that happened in July, I think, and through into August, September, where we then coordinated efforts of regulators to resolve those things.

Counsel Inquiry: All right, thank you for that detailed explanation. I just want to ask you to take a bit of a step back and offer some reflections.

You’ve already discussed what you foresee as difficulties with trying to, particularly around dual-use items, ensure that there is a third regulator or some sort of different responsibility.

Can I just put to you, there’s a recommendation that’s featured in the Boardman Review, and we have that at INQ000055876, at page 6. Recommendation 26.

Nigel Boardman, as you may know, carried out a review of a number of aspects of government response to the pandemic. Regulation 26 of his report was that:

“Regulation in the health sector needs a clear structure and the Government should encourage the [NHS] and regulator community to consider appointing a ‘lead regulator’ with clear definitions around the roles of regulators to make final decisions regarding products in times of crisis.”

To be clear, the Health and Safety Executive in their witness statement to the Inquiry are not in favour of a lead regulator. Neither, it appears, is the MHRA.

Given your oral evidence to us this morning, it doesn’t appear that you necessarily are. But can I just ask you for your response to that recommendation: “a ‘lead regulator’, with clear definitions around … roles of regulators” around products specifically in times of crisis, like a pandemic.

Mr Graham Russell: Yes. It’s – we’ve alluded to this a little already. It’s not a simple question with a simple answer.

The comment I made earlier about dual-use products was a specific comment about those products, which are fairly narrow and defined. And I think there is grounds for greater clarity in how those products are both placed on the market and also approved.

But I think “lead regulator” here is quite a lot wider than that. And the challenges – and this is something, you know, we get asked to comment on not just in the UK but around the world, it’s a live question – the challenges are that you want regulators who are competent and agile and flexible, and have sufficient scale to be able to deliver the regulatory activity that’s needed at a given point in time.

And small, focused regulators set up for this purpose and this purpose, don’t have those features, and can tend to give you a– can tend to not give you the flexibility you need.

There are reasons why you want regulators to look at problems, and deliver outcomes. And to be honest, from the – you know, we looked at this at the time, and the RCC, the Regulatory Co-ordination Cell, looked at this and discussed it, and we’ve looked at it since, and I’ve looked at it in preparation for today, and I’m not entirely sure that I fully know – if what is being suggested here is structural change to create a regulator for – well –

Counsel Inquiry: The recommendation is to appoint a lead regulator.

Mr Graham Russell: Yes.

Counsel Inquiry: So for a regulator to take the lead and to take responsibility for making final decisions on those specific products needed during a pandemic.

Mr Graham Russell: Yes. And as I say, I think there’s – I think there’s a role for regulators to be well coordinated and for regulators to know who’s in charge in a given situation, and for everyone else to know that. And that’s why, in response to my Lady’s questions earlier, I said for that narrow facet of a dual-use product, then, yes, I don’t think either – in any sensible times you would want: get it cleared by this agency and then go to someone else and start again. And if you can bring that together, if that’s what we mean by a lead regulator, that has some value in that narrow context.

But, to me, what is most important is that you have good protocols, good coordination, good use of data, so that regulators can act as one. And so that, to the business community, or the supplier community, they are presenting as one.

Now, whether you do that through a single point of contact is a matter of debate, but that’s the –

Counsel Inquiry: Can I just jump in there. I’m very conscious of time.

Some might be listening to your evidence and might be thinking: well, regulators are bought together in various ways through various means during the pandemic. Shouldn’t there just be one regulator that subsumes the roles of both, at least with responsibility for items that we know are going to be needed in a health or hospital care setting? What would be your response to that?

Mr Graham Russell: I don’t think that would be the most flexible solution. There’s a principle in regulation called the risk reflex response, which is a nice way of saying that we too often design solutions for the last thing that happened, and the danger is that we create a regulator that would have been the perfect regulator, perhaps, for this context, but the next context, even in a health setting, will be different. And as the example I gave earlier hopefully illustrated, if you say that this mask is regulated by this agency if it’s going to a hospital and a different agency if it’s going to a bakery, you haven’t actually created a non-fragmented system. And you haven’t necessarily given a better healthcare outcome, either, because you’ve got the business then dealing with two different regulators, possibly giving different requirements.

You will always have fragmentation, and you can’t avoid fragmentation simply by redrawing the lines.

Ms Shehadeh: Thank you.

My Lady, I am conscious that there are questions from others but I have dealt with all –

Lady Hallett: Thank you. I can just follow up that last – you told me fairly early on in your evidence, Mr Russell, that a face mask, I assume by that you mean the kind we’re talking about in a healthcare setting, or just a face mask –

Mr Graham Russell: Yes, my Lady.

Lady Hallett: – normally takes 12 weeks, you said. So what kind of face mask were you talking about?

Mr Graham Russell: That was information from BSI regarding – before the easement regarding face masks, that’s right, took 12 weeks. I don’t have information which face mask that would be, I’m sorry.

Lady Hallett: It sounds like it might well be the kind we’re concerned with. And would that involve more than one regulator, do we think, that process?

Mr Graham Russell: I think what they would be thinking about where there is PPE.

Lady Hallett: Right, and would that have involved more than one regulator?

Mr Graham Russell: It shouldn’t do.

Lady Hallett: How long did it take to get approval for face masks during the pandemic?

Mr Graham Russell: The figure they cited was two to five weeks, I think it was two weeks to start with but then they got quite a lot of failures and it was five weeks by the time they had sort of managed to eliminate that.

Lady Hallett: Right. Thank you.

Mr Weatherby.

Mr Weatherby is just there.

Questions From Mr Weatherby KC

Mr Weatherby: Thank you very much.

Mr Russell, I ask questions on behalf of the Covid Bereaved Families for Justice UK group. Just a few questions from me. You’ve touched upon my first point already, which is about planning, and you indicated that OPSS had done some work on incident management capability, but it hadn’t come to fruition before the pandemic. Have I understood that correctly?

Mr Graham Russell: I think it matured significantly through, and after the pandemic.

Mr Weatherby KC: Yes. So I think it follows from that that you would accept that it would have been better, had you had contingency planning in place prior to the pandemic?

Mr Graham Russell: I think we could have had better contingency planning, yes.

Mr Weatherby KC: Yes. Well, what contingency planning was there, given the evidence that you’ve given? You’ve indicated that, in real time, your activities developed via the easements, and you have put various matters in place which I’ll come to in a minute, but what contingency planning was there at all?

Mr Graham Russell: In OPSS?

Mr Weatherby KC: Yes.

Mr Graham Russell: Yes, so we had an incident management plan which involved – non-specific to PPE or the pandemic, we had an incident management plan which involved protocols for how we worked as an organisation, how we deployed resources, and also how we worked with others, I think particularly at that stage it focused on how we worked with local authorities, but also with other national regulators, and it looked at how we made decisions and how we both escalated and de-escalated our incidents. So a classic incident management plan.

But it was, having only been around for two years, it was in its early stages of development.

Mr Weatherby KC: Yes.

Mr Graham Russell: The pandemic taught us a number of lessons about that which have now influenced it.

Mr Weatherby KC: Yes, so some contingency planning but could have been better?

Mr Graham Russell: Yes.

Mr Weatherby KC: Given that the OPSS was formed in 2018, you’ve given that as a reason why it wasn’t as developed as it might be but, of course, the work of the OPSS hadn’t been invented in 2018, had it? So do you think it might have been possible to have been more developed with your contingency planning by the onset of the pandemic?

Mr Graham Russell: Before 2018, product safety regulation in total was delivered by local authorities. And one of the reasons why the OPSS was set up was because that had a consequence, in terms of things like this, the ability to bring a national level of resource to a problem.

Mr Weatherby KC: Yes. Okay. All right. I’ll move on.

Could we have up INQ000477692, please.

And this, I’m moving on to Daventry, and as you’ve told us, Daventry was a distribution centre during the pandemic, where, I think you’ll agree, it’s where screening was carried out to ensure that goods were safe for release to the NHS. Is that a fair way of putting it?

Mr Graham Russell: Yes.

Mr Weatherby KC: Now, I hope it’s up on the screen in front of you.

Mr Graham Russell: Yes.

Mr Weatherby KC: This is an email thread, and I want to start at page 2, the bottom of page 2. And this is 14 April and it’s an email from Sarah Smith who was the deputy chief executive of the OPSS; yes?

Mr Graham Russell: Yes.

Mr Weatherby KC: And it’s to another member of staff and it’s asking for help, second paragraph:

“We have a situation at the PPE distribution facility at Daventry there we need to put some key resource on the ground to find out what is going on and support decision making by OPSS and others including HSE on whether PPE can and should be released for use by the NHS.

“The task is still quite unclear and part of putting a good person in there is to see what is needed going forward.”

And it goes over the page, but there’s nothing more that we need to look at on page 3.

Then, moving up, there’s a helpful response from the staff member, and then Sarah Smith says:

“Thanks … for the speedy and positive response.”

This is at the top of page 2.

“Thanks … for the speedy and positive response.

“Clearly loads to work through.”

Then going up again to the first page, the top of the page:

“Thanks for your patience.

“We have [a person] at Daventry this morning doing an initial triage and dynamic risk assessment.

“Our current working assumption is subject to [the person’s] feedback and the advice today is that we look to deploy a team from Monday. We have also been in dialogue with [somebody else].”

Yes?

Mr Graham Russell: Mm-hm.

Mr Weatherby KC: So that thread started on 14 April, and the bit I’ve just read out was two days later. I’m afraid I don’t know what day of the week 16 April was, but it refers then to deploying a team the following Monday. So we’re getting into certainly the second half of April by that point.

Mr Graham Russell: Mm-hm.

Mr Weatherby KC: Now we know from other evidence – I think Brigadier Prosser is going to give evidence next week – that Daventry had been up and running since sometime in the second half of March?

Mr Graham Russell: Mm-hm.

Mr Weatherby KC: So are we seeing here a position where the processes for clearance and technical assurance or screening were still unclear and with a lack of resource by this point, the second half of April?

Mr Graham Russell: I think, as I understand it, the particular challenges that I alluded to that were causing the problem that we were seeking to resolve through this action, accumulated as the increase in supply occurred into Daventry. So it wasn’t there under normal times. As more product was purchased and supplied, so it came in. But as it came in, these four challenges that I alluded to earlier as to why things couldn’t quickly clear started to accumulate.

And then the solution to that had to be – and as that started to happen, we were then contacted, and clearly what you’ve just then read is the early stages of that dialogue.

Mr Weatherby KC: Yes.

Mr Graham Russell: But we were seeking to resolve it not only by going physically to the location but also working with MoD, Cabinet Office, the various other people, to try to understand what was –

Mr Weatherby KC: Yes, I follow that, but what I’m putting to you is that here we are in the second half of April, the facility has been up and running for certainly several weeks. There’s a problem, isn’t there, with the quality and reliability of screening processes up until that point? Goods presumably are going out to the NHS, and they’re not being properly screened?

Mr Graham Russell: I don’t think that anything you’ve just said indicates that goods were going out that weren’t properly screened, no.

Mr Weatherby KC: Right. Well, can you correct me? Can you put me right? If what I’ve just read out to you – I mean, effectively your office is scoping and trying to provide resources to screen materials which comes primarily from new suppliers, and is potentially problematic, and it isn’t being done. So which part of what I’ve put to you isn’t right?

Mr Graham Russell: So the problem that we were seeking to address, and that is being alluded to in those emails, is a problem of blockage of supply not coming through, rather than any suggestion of unsafe supply being made.

The procedures for ensuring conformity were in place before the pandemic and, subject to the easements, were in place during the pandemic. But the problem that we were tasked to resolve was the combination of those factors and the change in those processes was leading to product not coming through Daventry fast enough and there becoming a backlog, as opposed to a suggestion that unsafe items were being released.

Mr Weatherby KC: Well, I’m not going to take that any further. I’ve put the point to you, and you’ve answered it.

Moving on to a final point, that in the corporate statement of Sarah Munby, and just for the record, paragraph 9.29, she states that:

“The process at Daventry included a visual inspection by HSE and MHRA to check for discrepancies in the documentation and consideration as to whether further testing would be needed.”

Can you help us with when those visual inspections were introduced?

Mr Graham Russell: When they were introduced?

Mr Weatherby KC: When they were.

Mr Graham Russell: So again, those, as I understand it, those activities were designed to address the question of whether this product could be cleared for release into the supply chain.

Mr Weatherby KC: Yes.

Mr Graham Russell: That is not describing the conformity assessment process, either in normality or under the easement. It’s looking at, is there a reason why this item has been detained?

Mr Weatherby KC: Yes, I follow that, but can you –

Mr Graham Russell: Sorry, and that –

Mr Weatherby KC: – (overspeaking) –

Mr Graham Russell: – that would follow from the deployment which we made on the dates that you said, was it 16 April and – (overspeaking) –

Mr Weatherby KC: Right. So this is a pre-screening, if you like, to work out what needs to be looked at and what doesn’t; is that a fair way of putting that?

Mr Graham Russell: I don’t think it’s a pre-screening.

Mr Weatherby KC: Well, how would you describe it?

Mr Graham Russell: It’s a consideration of material that has been detained to identify whether and how it can be released.

Mr Weatherby KC: Well, the Sarah Munby statement which I’ve just paraphrased indicates that it checks for consideration as to whether further testing would be needed.

Mr Graham Russell: That’s right.

Mr Weatherby KC: Yes.

Mr Graham Russell: So if, as I – as I said fairly quickly, earlier, if a product had been detained, then there were various ways that that could then be released.

Mr Weatherby KC: Yes.

Mr Graham Russell: It might be documentary checks could be clarified; it might be, you know, that suppliers could be contacted and asked to supply more information, and that would be documentary. It might be that that was not adequate to give the confidence necessary for a release, and therefore testing would be – would enable you to build that confidence. And so –

Mr Weatherby KC: I may have used the wrong term but basically, this was a starting point to determine whether further screening was necessary or not? And it came into being after the dates that we’ve looked at in the middle of April?

Mr Graham Russell: I hope I’m not being pedantic but I’m struggling with “starting point”. This is product that has come in through a conformity assessment process, but has not been released, because there have been issues arising from that. So I don’t think it’s a starting point.

Mr Weatherby KC: I wouldn’t take it any further.

Final point, Ms Munby goes on to say, again for the record paragraph 9.31, that the inbound assurance process “had solidified” by May 2020, and involved Clipper Logistics taking photographs of inbound PPE which would then be sent to OPSS.

Is that a process that you’re familiar with?

Mr Graham Russell: And that’s what I was alluding to when I talked about identifying the problem, resolving it, and then building processes that avoided it in the future.

Mr Weatherby KC: Right. So, following on from what we discussed, the process eventually, by May, was that the logistics company was taking pictures of some of the PPE, emailing it through to your office, and then there would be a visual inspection of those photographs?

Mr Graham Russell: By us or by the HSE. But just to be clear, this is the product that had been detained because there wasn’t confidence it had conformity. The product where there was confidence that there it had conformity assessment was flowing through at Daventry. This with not that check. This was the check where there was a problem or perceived to be a problem and people on the ground were saying, “Can we get the regulator to clear this particular thing for this reason?”

Mr Weatherby: Thank you very much.

Lady Hallett: Thank you, Mr Weatherby.

Thank you very much indeed, Mr Russell. Those are all the questions we have for you. It’s good to see somebody who is such an enthusiast in their field after so many years practising in it.

The Witness: Thank you.

Lady Hallett: So thank you very much for your help.

The Witness: Thank you very much.

Lady Hallett: I shall return at 1.50.

(12.50 pm)

(The Short Adjournment)

(1.50 pm)

Lady Hallett: Mr Wald.

Mr Wald: My Lady, our next witness today is Mr Steve Barclay.

Mr Steve Barclay

MR STEVE BARCLAY (sworn).

Questions From Lead Counsel to the Inquiry for Module 5

Lady Hallett: I hope we haven’t kept you waiting too long, Mr Barclay.

Mr Steve Barclay: Not at all, my Lady.

Lead 5: Please state your full name for the Inquiry.

Mr Steve Barclay: Stephen Paul Barclay.

Lead 5: Mr Barclay, thank you for providing to the Inquiry a witness statement. It’s INQ000574180, which you have signed. Can you confirm to the Inquiry that it’s true to the best of your knowledge and belief.

Mr Steve Barclay: I can.

Lead 5: Thank you for that.

We know from it, Mr Barclay, that from 13 February 2020 until 15 September 2021, you served as Chief Secretary to His Majesty’s Treasury.

Mr Steve Barclay: That’s correct.

Lead 5: Or CST, as the abbreviation goes. For the duration of the period that’s within the scope of the Inquiry you also served as Chancellor of the Duchy of Lancaster from 15 September 2021 to July 2022.

Mr Steve Barclay: (Witness nodded)

Lead 5: And of possible relevance as we get on to other matters in a few moments, you had two stints serving as Secretary of State for the Department of Health and Social Care, first from 5 July to 6 September 2022, and also from 25 October to 13 November 2023.

Mr Steve Barclay: Correct.

Lead 5: All right. Thank you.

Now I want to establish first with you, if I may, the role of the CST, which is something that you address in your written evidence. It’s a ministerial office within the government and the second most senior ministerial office within the Treasury. That’s right, isn’t it?

Mr Steve Barclay: It is.

Lead 5: And that person, for the relevant period you, reported to the Chancellor?

Mr Steve Barclay: Correct.

Lead 5: Yes. The CST is responsible for public expenditure, which includes spending reviews and strategic planning, in-year spending control, public sector pay and pensions, efficiency and value for money in public service and procurement?

Mr Steve Barclay: (Witness nodded)

Lead 5: And those are the areas within its remit that are most relevant, to public procurement generally and emergency public procurement in particular? That’s right, is it not?

Mr Steve Barclay: (No audible answer)

Lead 5: Your day-to-day duties in that role involved you in interdepartmental and Treasury meetings, stakeholder engagement, budget management, and also you had decision-making authority, including in relation to approving budgets and influencing economic and fiscal policies, all of that under the guidance of the Chancellor?

Mr Steve Barclay: Correct.

Lead 5: In that role, you also used procurement principles and regulations which are codified in the government document “Managing Public Money”, and sets out the main principles for dealing with resources in the public sector organisations within the UK.

Mr Steve Barclay: Correct.

Lead 5: That’s right.

All right, I want to now put up on the screen a couple of paragraphs from the opening, within this module, and a graph with which you may well be familiar.

So the references for that are, firstly, PHT000000149, and it’s pages 122:

“The level of spending on … healthcare equipment was not anticipated by anyone, including His Majesty’s Treasury. To take the example of PPE alone …”

And you, of course, Mr Barclay, were involved in more than just PPE but here:

“To take the example of PPE alone, the Treasury’s spending envelopes, that is the total amount of money it plans to spend over a set period of time, expanded 138-fold from £100 million to £13.8 billion …”

Yes?

Mr Steve Barclay: Correct.

Lead 5: And that is illustrated – let’s just move on, before we go to the graph, to the next paragraph, or page 5, from 9 on, starting “These sums”.

“These sums, vast as they are, have understandably been the subject of considerable public interest and media attention.

“One of the questions which has been, and continues to be, posed is whether, during the course of the crisis which faced the country, the public purse was exploited for personal gain by those with close connections to government and officials. There has been a substantial amount of public discourse about whether there was corruption, cronyism, and misuse of public money carried out under cover of protecting frontline health and social care workers, as well as the public, from Covid-19 infection. The Inquiry had considered not only referrals by those with connections to the then … Conservative Party, but also those … political parties including the Labour Party.”

Now, it’s principally the first paragraph that I wanted to draw your attention, but as we will move to, and I know you address in your written evidence, the Treasury, and you particularly did have some, some degree – some role in guarding against the misuse of public funds, didn’t you?

Mr Steve Barclay: I did.

Lead 5: Let’s now turn to that graph. It’s INQ000474916. I don’t know whether you are familiar with this. You may even have seen it on Day 1 of this module. Are you familiar with it?

Mr Steve Barclay: Not particularly this one, but obviously the underlying message, yes, that spending increased extremely quickly.

Lead 5: Extremely quickly. And even beyond the date by which PPE expenditure was tailing off, if not finishing? June or July of that year?

Mr Steve Barclay: Yes.

Lead 5: And likewise, expenditure on ventilators had already taken place by that period?

Mr Steve Barclay: It had.

Lead 5: Yes. All right.

Thank you. I think that can now be taken down.

But it helps us frame the degree of spending increases, or spending envelopes, over that period.

You tell us in your statement that during the relevant time the Treasury’s role was one of overseeing public spending, but that was often delegated to AOs, accounting officers, given the urgent pace at which decisions were required.

Now, presumably, Mr Barclay, the role of overseeing was made extremely difficult in these circumstances. Is that fair?

Mr Steve Barclay: Yes, it is.

Lead 5: And once one delegates to AOs, the decisions that were made about expenditure, one is, in effect, removing oneself within the Treasury from that role of oversight. There’s a limited degree of oversight that can, in practical terms, be achieved once that transfer of roles is done.

Mr Steve Barclay: It becomes the accounting officer’s decision, yes.

Lead 5: Yes. To what extent, if any, was that decision-making process supervised, monitored, the subject of guidance from within the Treasury?

Mr Steve Barclay: Well, firstly, delegated envelopes are part of the consistent “Managing Public Money” approach. I think, what, Mr Wald, you’re drawing attention to is the vast increase in the delegated envelopes and the speed at which that envelope increased over a short period of time, and I think that needs to be viewed in the context of the pandemic that the country was facing, the scale of the challenge, and the imperative from the Prime Minister and the Quad, who ultimately set the envelope. My job as Chief Secretary is then to go and implement those decisions, but the decision on spending of that size of up to over 13 billion in England, over 15 billion across the United Kingdom, is set by the Prime Minister, with the Chancellor.

That decision reflected the imperative which was to focus saving lives at, and that was what drove that increase and I’m sure we will come on to the various stages of that.

Lady Hallett: Was the spending envelope basically the Treasury, on the authority of the Prime Minister, saying, “You can spend up to this amount but no more”? I mean, a budget would normally be “We expect you to spent about 30 million” or whatever, but an envelope seems to me is slightly different, isn’t it?

Mr Steve Barclay: So conditions will be attached to the envelope and one of the key mitigations that the Treasury put in place was to impose conditions alongside that increase. But the envelope then gives the accounting officer authority to spend within that quantum, and the reason for that was the need for speed, and the fact that it was simply not practical for so many contracts to be coming to the Treasury. And indeed, I think in Chris Young’s statement to the Inquiry my Lady, he talks about some days there being as many as 11 contracts, an average of almost four a day.

So in those early days, what emerged was that it wasn’t practical for individual contracts to come to the Treasury, and that is why the Quad and Number 10 decided to allocate a spending envelope to speed up those, so that the bureaucracy didn’t stop us securing those essential PPE contracts to save lives.

Lady Hallett: Thank you.

Mr Wald: Mr Barclay, you speak of a balance at paragraph 11 of your written evidence. The balance, it needed to be a balance between public spending principles, but also with the flexibility required to meet the urgent health response spending.

Did you think at the time, and secondly, looking back now, do you think the right balance was struck, in terms of public expenditure, the need for speed, the need for flexibility?

Mr Steve Barclay: Well, I think first, if you look at the first envelope that was put in place for £100 million, that was in the context of the NHS having just two weeks of supply. And that is why there was such an urgency, because the imperative was to ensure we didn’t run out of essential protective equipment for frontline services, and that is why the procurement process needed to be speeded up.

Second, there was a huge global challenge with countries competing against each other.

And third, the existing suppliers couldn’t meet demand. So there’s a requirement to go to new suppliers, most of whom were overseas, particularly in China, and there was also questions in China as to whether it had a further wave as to whether that supply could be secured moving forward.

And therefore, what characterised that early phase, which is addressed, I think, in the Treasury corporate statement, is the urgency of securing supply. And that in turn shaped the decision that the Prime Minister and the Quad took to set an envelope which was what then as CST, I was implementing.

Lead 5: Given that urgency, Mr Barclay, the requirement to maintain value for money for which – to which you refer in paragraph 12 of your statement, and proper spending processes, was extremely difficult, if not impossible, to maintain. Is that a fair characterisation of the position?

Mr Steve Barclay: I think what characterised the position is that value for money changes at a time of national crisis. And so, if I refer, Mr Wald to my private office’s email on 22 March, they say, and I quote:

“CST feels deeply uncomfortable with this and doesn’t feel like there’s been the correct level of due diligence. However, CST feels he has been given no choice other than to approve.”

And that is because I accepted that with just two weeks of supply then it was necessary at a time of national crisis to assess value for money differently to what would have been the case, if I refer back to your opening graph, when the original PPE budget had been set.

Lead 5: I think, Mr Barclay, the answer to my question is yes. One cannot apply the same principles to assessing value for money in an emergency where public procurement, say of PPE, is of vital importance as one would normally, but one cannot even apply it in any meaningful sense. If one is told that the stocks are about to expire and that there is an urgent need to procure, it’s simply not possible to know or to ascertain whether the price being paid is the going rate or is twice the going rate.

Mr Steve Barclay: I’d respectfully say that the principles can be consistently applied in terms of value for money as a Treasury test. What I am suggesting, my Lady, is the application of that principle changes because what constitutes value for money is then different. So was I comfortable, as a chief secretary, that the government was paying eight times, or at some points 14 times the pre-pandemic price? Of course I wasn’t. But did I respect that the priority which I agreed with was to protect lives, then we needed to pay what the global market rate was at that time, and that is why the test for value for money, the principle would be applied but the test would be different to what it would have been before the pandemic.

Lead 5: And how did you and others within the Treasury inform yourselves as to what the global market rate was at a given moment in time?

Mr Steve Barclay: Well, that couldn’t be for me to assess. That is why we had a delegated envelope in order that the accounting officer for the Department of Health could make that assessment, because again, consistent with managing public money before the pandemic, it is for the contracting parties, in this case the Department of Health, to make those assessments on the counterparties, the value for money, and other conditions such as checking whether the stock is suitable. That is for the contracting parties not the Treasury.

Lead 5: You were dependent – sorry, had you not finished your answer?

Mr Steve Barclay: Well, I am very happy –

Lead 5: You were dependent on the judgments made by the Department of Health and the DHSC when it came to understanding what the going rate was?

Mr Steve Barclay: Yes.

Lead 5: Yes. And I suppose that is what I meant when I said that an assessment of value for money couldn’t have been conducted within the Treasury; it was conducted on the basis of say-so from others.

Mr Steve Barclay: Well, my point is that is consistent with what would happen before a pandemic, where the accounting officer would have, within their spending envelope, the authority. What was different was the size of spend that was being allocated.

So again, if I refer back to the email of 23 March from David Williams, who was the accounting officer in the Department of Health on this issue, he says that he is satisfied with the purchase from a regulatory and propriety perspective and he is satisfied “that in the circumstances, this purchase represents value for money.”

And that was consistent with the approach that is set out in “Managing Public Money”.

Lead 5: Save that, Mr Barclay, your deep discomfort and your frustration, we see that you experience sentiments such as these at various points in the correspondence, would in normal circumstances have been met with a greater explanation or the provision of greater detail in order to allay your concerns. In these situations or in this situation, you really had to just go on the basis of what you were told by the DHSC?

Mr Steve Barclay: Yes, I mean, I was often, and I think the correspondence, my Lady, will show this, not least the times of emails, bank holidays, very late at night, weekends and so forth, with very, very quick turnaround, was a reflection of the global competition with countries for contracts. The fact it was a suppliers’ market, the fact that they could demand terms in terms of upfront payments that would not normally be agreed to, and that both drove the spending envelope that was allocated to the Department of Health, but also shaped the value for money judgement they were reaching and communicating to us in the Treasury.

Lead 5: All right. I will come back to the emails, you’ve mentioned one of them. It’s not the only one in which you express concern or discomfort, but before I do that, I just want to deal with the three phases that you identify in your written evidence. You describe them as the Treasury’s approach shifting through three overlapping phases. Firstly, you identify a phase that runs from March to May of 2020. And you characterise it in this way:

“With an overriding priority on health outcomes, [the Treasury] supported emergency spending with a higher risk appetite due to the urgency of the situation, accepting trade-offs like higher costs for healthcare supplies as the alternative could have been loss of life.”

And I think that’s what you were referring to a few moments ago. That characterises that first phase, is that right, March until May 2020?

Mr Steve Barclay: It does, and again, the fact that this was a cross-government decision led by the Quad can be seen from the fact that the Cabinet Office procurement policy, which was issued in March, expressly indicated a higher risk appetite, including instructions delegating payments in advance to accounting officers. So again, it wouldn’t be normal, outside of a crisis, for such advance payments to be paid for supplies, but the Cabinet Office guidance allowed that, because it reflected the urgency with two weeks’ of supply left, that all efforts should be made, and the concern that other countries were going to out-compete us to secure those supplies.

Lead 5: Now, we’ve spoken about the information that was provided to you, and the judgements that were provided to you by the DHSC. Was any other data available to the Treasury in making the judgements that informed phase 1 funding?

Mr Steve Barclay: In terms of what other – Mr Wald, could you just clarify, are you meaning on-demand modelling or some of the –

Lead 5: Whatever it might be. What I’m interested to understand, and I’m going to come back to it towards the end of our exchanges on recommendations, is, was there any reliable source of data that could inform what the spending envelope should be and what individual decisions on a particular contract should also be?

Mr Steve Barclay: Well, I think it was very hard to know how much supply was going to be needed, because there was huge uncertainty around the direction of the virus. There was gaps in data in terms of inventory. There was insufficient data, for example, from NHS colleagues on the burn rate, and so the procurement was done within the context of a highly uncertain environment.

And as I alluded to earlier, Mr Wald, it was uncertain to what extent suppliers such as China could be relied on if, for example, the Chinese themselves had further waves of virus and needed more of their own supply.

So those early decisions were taken in a very fluid and uncertain environment.

Lead 5: Let’s move on to the second phase, if we may. That runs, according to your categorisation, from May 2020 until April 2021.

Now, the initial period of that saw increasing costs. We know from the table that we saw that they increased – they continued to increase until June or July of 2020. The spending envelopes do. But you say that as the pandemic progressed and costs rose, the Treasury focused on delegating increasing budgets to the accounting officers as the initial emergency sign-off processes were not effective as a longer term position, given the asymmetry of the information between departments, in part DHSC and the Treasury.

So, to understand that, just as costs rose, the Treasury handed over to accounting officers the task of making those detailed decisions in given cases.

Mr Steve Barclay: Well, I think the more material issue was the volume required exponentially rose, because as you will see with the delegation, the increased delegation on the envelope, that reflected an initial envelope for health needs, specifically. There were then later questions which we can come – you may choose to come on to around when PPE was to cover the opening of the NHS, that creates demand. It was to provide PPE to other departments such as prisons. That created further demand. There was then covering the devolved administrations, and so forth.

So the scope of what was being procured by DH was increasing, and that is why the envelope was expanded through the various phases.

Lead 5: And throughout these phases, or these – well, I’m talking about phase 2, as you describe it, but throughout this period there is what you describe as an asymmetry of information between departments, including between the Treasury and DHSC.

Mr Steve Barclay: Yes, because, as I mentioned earlier, it is the contracting party that has the information on the counterparts. So they know what commercial conversations they are having with suppliers in China. They are liaising with our embassy network as part of that. But those aren’t conversations that the Treasury is having; it is the contracting party, ie, the department, that is having those conversations, and it is therefore the department that will have the data and that sort of detail.

Lead 5: Nothing in principle, though, to prevent the sharing of that data, or the prevention of the siloing of data, is there? That data could be made available to more than one department?

Mr Steve Barclay: It should.

Lead 5: It could and should –

Mr Steve Barclay: It could and should, and I think a flavour of my evidence has been the concern I had around the siloing of data.

Lead 5: Well, I said I’d leave to the end but there’s no reason not to address it now in terms of recommendation. What data changes would you recommend to prevent this asymmetry that you describe in your evidence?

Mr Steve Barclay: I think it relates both to the Treasury and the Cabinet Office. And I think there were similar concerns from colleagues, Lord Agnew and others in the Cabinet Office. And I think bringing in external challenge, bringing in the commercial expertise in the Cabinet Office to help support the Department of Health – which had huge bandwidth challenges, because of the volume of contracts they were trying to deal with, the huge pressures that they were under – if requests came to Treasury at a very late stage, that limited our ability to help influence those contracts and those decisions, and what I was pushing for as Chief Secretary was for earlier sight of that data so that we could then challenge it more effectively.

Lead 5: In the event of a future pandemic that called for emergency procurement, those measures should be put in place, should they not?

Mr Steve Barclay: Well, I think the more we can break silos down, the better.

Lead 5: Let’s move in to phase 3, then, a period that you identify as running from April 2021 to October 2022, and you say this:

“[The Treasury] built on previous learning, managing spending peaks for effectively with less acute trade-offs between taxpayer and patient interests, and preparing for a return to pre-COVID spending arrangements.”

I just want to unlock, if I may, with you what you mean by “building on previous learning”. What at this point were the lessons that had already been learnt from the experience of the previous months?

Mr Steve Barclay: Well, I think first and foremost was around demand modelling. So one of the challenges, particularly early on, when many of the contracts were entered, was the uncertainty around demand modelling, what the path of the virus would be, what the burn rate would be on frontline services, the number of services that needed to be covered, the inventory data that they had, and I think a lot of Health colleagues found that challenging and it took some time to put in place the demand modelling and the data around that. But by the third phase, obviously, that had significantly improved.

Lead 5: All right, thank you.

You mentioned the devolved administrations a moment ago. I just want to pick up with you how – what was your role in ensuring that the devolved administration – and the role of the Treasury – had sufficient funding to cope with the challenges that they faced in terms of emergency procurement?

Mr Steve Barclay: Yes, so within the Treasury I would be the lead minister in dealing with the devolved administrations’ finance ministers, so not their health ministers but their finance ministers. And in terms of ensuring they had sufficient funding, firstly that was applied consistently, as it would before the pandemic, in terms of Barnett consequentials. So when additional money is allocated to England, an equivalence goes to Scotland, Wales and Northern Ireland. And then, secondly, a number of the big ticket spending items, including PPE, were then allocated through the envelope on a UK-wide basis. And therefore, we provided sufficient funding on advice with the Department of Health colleagues, as shaped by the Quad and the PM and the Chancellor’s setting of the envelope in order to provide that on a UK-wide basis.

Lead 5: Any difference in treatment of the devolved administrations themselves? Scottish Government, Welsh Government, Northern Ireland Executive?

Mr Steve Barclay: Not to my knowledge, Mr Wald.

Lead 5: Did they all have fiscal frameworks, for example?

Mr Steve Barclay: In what regard?

Lead 5: You tell us that there was a fiscal framework in the Scottish Government allowing for borrowing up to £3 billion for capital and 1.75 billion for resource purposes. Similar arrangements in Wales. But not so in Northern Ireland.

Mr Steve Barclay: That may be the case, I’d have to refresh, but there is legislation that applies to each of the DAs. What was in common was they were not under a duty to share data with the UK Government in terms of their burn rate. So, again, it pointed to some of the challenges, both around the demand modelling but also, where they’d incurred cost in that initial phase by procuring themselves, there was a challenge in terms of how that was then allocated.

Lead 5: Can we infer from that answer that you would say that it would have been preferable, that it would be preferable in future, that that sharing of data should take place?

Mr Steve Barclay: Yes, a consistent theme of my time in government has been a push for one version of the truth across government and the sharing of data across silos.

Lead 5: All right, Mr Barclay. You deal, in your written evidence in some detail, with a chronology of particular cases, demands for expenditure, that you had to deal with, that span from March 2020 all the way to September 2021.

Mr Steve Barclay: Yes.

Lead 5: So they span the three phases that you have identified. I don’t propose to go through all of them with you. Instead, I want to take some early examples of the pressures that you were placed under in order to understand and extract any emerging themes from those.

Let’s start, if we may. You mentioned conditions being placed. I think it was in answer to your question from the chair. You placed conditions on the spending envelopes, did you not?

Mr Steve Barclay: Yes.

Lead 5: Yes.

Let’s have brought up on to the screen, if we may, INQ000480114.

This is a letter from yourself dated 24 April 2020 to Matt Hancock and Michael Gove. If we can start with page 1, paragraph 1:

“I am writing to formally confirm the funding envelopes agreed between [the] Treasury … and the Department of Health and Social Care … for the procurement of ventilators … (PPE) and testing programmes …”

So that’s the purpose of the letter.

We then move down to paragraph 3, page 2 of 4. Sorry, it’s – yes, it is that half.

“As a result of this, [the Treasury] rely on the condition that … DHSC accounting officer was content with those approvals to ensure due diligence and scrutiny was being applied appropriately. To support this, [the Treasury] approved the appointment of a second accounting officer who took on his new responsibilities from the 6 March.”

Who was that, do you recall?

Mr Steve Barclay: It was David Williams.

Lead 5: But what this letter makes very clear is that the accounting officer was effectively there making the judgements that would otherwise be made within the Treasury?

Mr Steve Barclay: No, the accounting officer was making the normal decisions that an accounting officer would make in respect of their delegated envelope.

The reason a second permanent secretary was put in was reflecting the intense pressure in terms of the sudden quantum shift in the volume of contracts that the Department of Health had to enter. So the Department of Health would normally, within their spending envelope, be the contracting party, and their accounting officer would be responsible. What was happening was because they needed to secure so much supply in a very globally challenged market, and do so at such pace to save lives, because the critical issue driving the government’s approach was to ensure we didn’t run out of PPE; that was creating a massive pressure on the Department of Health, and that is why a second permanent secretary was appointed.

Lead 5: How many accounting officers were there?

Mr Steve Barclay: In the Department of Health?

Lead 5: Yes.

Mr Steve Barclay: All departments, at that point, would have one perm sec. I think it’s now much more common for departments to have two permanent secs, but from memory, although Treasury colleagues can clarify, I think it was the first time, other than in Treasury, that a department had a second permanent secretary. And again, it reflected the unique circumstances that we faced.

Lead 5: Let’s just look at the conditions to which you have referred. This is paragraph 11 of this letter. Page 3. There we are:

“These aim to ensure that we only enter into contracts with reputable companies who we can reasonably trust will fulfil these contracts and provide safe equipment, and that public money is protected as far as possible in these challenging circumstances. The conditions were specifically designed to avoid slowing procurement down and have been agreed with your officials. They will of course be kept under review and adjusted as necessary …”

Could you summarise with us what the conditions were?

Mr Steve Barclay: The conditions were set out in correspondence but, from memory, it was things like checking the quality of stock, because I was very concerned that we would procure stock that wasn’t fit for purpose. It was a particular concern of mine, because my career before coming into Parliament, had been in financial crime prevention, and – as a lawyer at Barclays, and my sort of concern there was if we paid for something at pace, do we have the ability to extract ourselves from that contract at a later point?

There were conditions linked to the checks that would be done, and there was an interaction there with Foreign Office guidance through the First Secretary and so on.

I think I can go to the bit in notes – I will have them in my notes what the full conditions are, if that’s helpful, Mr Wald.

Lead 5: If it’s easy to access, yes please.

Mr Steve Barclay: The conditions will have been set out in the delegation when we went – well, for the first £1 billion that’s where those would have been set out.

Lead 5: While you’re looking for that, can I just ask for INQ000534512, to be put up on the screen.

Lady Hallett: I don’t know if Mr Block or others could help? I don’t know if anyone in your team can help, Mr Block?

Mr Block: I think it’s an annex.

Lady Hallett: All right. Well, I don’t really want to take up too much time. Thank you, Mr Block.

Sorry to interrupt.

Mr Wald: We’ll come back to it, Mr Barclay.

You mentioned Lord Agnew earlier. Have you seen this email in which he expresses concern that he was being asked to agree a sum as large as one and a quarter billion in the course of a single day.

Mr Steve Barclay: Yes.

Lead 5: Yes. Was that exceptional? You spoke about large sums needing to be authorised in short periods of time.

Mr Steve Barclay: It wasn’t as exceptional as it should have been and it was, as I think the evidence shows in my comments, through my private office, there were repeated instances where we were asked for very large spending decisions with very, very little time, and on occasion that was escalated through Number 10 even before the Treasury had received the request.

Lead 5: It’s a reason you had deep, deep discomfort or deep concerns, isn’t it?

Mr Steve Barclay: Yes.

Lead 5: Because those principles, the principles that you applied when you were working at Barclays and that you were used to, simply couldn’t, in practical terms, be meaningfully applied?

Mr Steve Barclay: Well, the concern I was raising was around the data sharing, and the transparency. Because we were reliant on the accounting officer. That was consistent with the framework “Managing Public Money”. The concern I had was the quantums were of a very different order to what would be the case in peacetime, and whilst I agreed that the imperative was to save lives, and that is why the Prime Minister and the Quad had decided to have such big envelopes devolved, I felt equally that required a transparency of data around that and indeed, that is why in that letter you brought up a moment ago, Mr Wald, at the end you will see one of the things that I insisted on, was that that was shared with the Comptroller and Auditor General, because I spent four years on the Public Accounts Committee when I first entered Parliament and I felt it was important that the National Audit Office was notified in real time that we were delegating such large envelopes.

So the logic for delegating I thought was very understandable, but I thought that should be communicated to the National Audit Office because it was such an exceptional amount that was being delegated.

Lead 5: In effect, in the interest of transparency?

Mr Steve Barclay: Indeed.

Lead 5: Yes. And did you frequently take that step?

Mr Steve Barclay: I took it on number of occasions. So I think both when I refused the Department of Health’s request to retrospectively agree spend, which we may come on to, in the second phase, in January 2021, which forced the Department of Health accounts to be irregular and therefore notifiable by the NEO. I think we had two letters to him the previous April, you brought one up, but I was very surprised when, the day after that letter was sent, I then got a request to increase the envelope further by a further 3 billion from the Department of Health, particularly given that the Department of Health knew about the letter when I sent it, and therefore I requested that a second letter be sent to the Comptroller and Auditor General, making clear that it had then shifted from 1 billion to 4 billion. I also raised with the Treasury colleagues whether we should write to the Chair of the Public Accounts Committee, but on advice, it was decided not to do so.

So I hope one can see, Mr Wald, that there was a consistent pattern on my part of recognising the imperative of the remarkable times we faced and the need to save lives with a desire to have transparency around those decisions, including notifying the National Audit Office in real time that we were delegating such large sums.

Lead 5: I wasn’t going to take you as far as January 2021 but thank you for that evidence.

I would like to take you to another example within March 2020. This is the Meheco offer from a Chinese provider that you may recall.

Could we have displayed INQ000572255 and page 1 of it.

Lady Hallett: I think the Treasury team may have come up with the goods.

Mr Wald: Ah.

Mr Block: For Mr Wald, please. It’s a list of conditions.

Mr Wald: Okay, yes, I see, let’s deal with that now, then, before we get into Meheco.

I have been given an INQ number, it’s an email, perhaps it’s the annex to which reference has been made. It’s INQ000273559.

And it is around this time, I gather it’s 25 March. Ah, here we are. Second paragraph:

“Conditions for the delegated funding envelopes are that you must …”

Is this what you were looking for?

Mr Steve Barclay: Yes, I think, I don’t know if this is on PPE or ventilators because the paragraph above says ventilators, but a lot of the conditions were consistent across the piece. So how legitimate are the companies with which we are contracting? The certification of the equipment, because I was very concerned that, because of the pressure of speed, PPE might be bought that then, if it proved unsafe, our frontline services would be placing a reliance on it, which I was very worried that in the haste of procuring it, we didn’t want to give false comfort by providing frontline staff with PPE that wasn’t fit for purpose. And so I was signalling that that was a particular risk that I was concerned about.

And then we were recognising that because of the unique global market, there was a premium, but trying to bring some transparency to where the price was spiking above 25%. So again, not making it unduly bureaucratic, but trying to get some transparency around any outliers on the decision, ensuring that there was the right governance process there, using the local knowledge of our embassy team, and then pushing on demand management as well, and trying to avoid upfront payments but recognising that the reality of the market, and because it was a suppliers’ market, many suppliers were able to demand significant upfront payments as the price of contracting and securing those supplies.

Lead 5: All right, thank you, Mr Barclay, and thank you to Mr Block and others for the speedy retrieval of that reference.

Can I now take you to the reference that I was about to go to, INQ000572255. This is dated 22 March 2020 from your private secretary. It relates to an offer from a Chinese provider called Meheco, you may recall.

Mr Steve Barclay: Yes. I think this was part of a wider – I think they were asking for 100 million of which there was a 20 million specific contract, but it was part of the initial 100 million envelope that was allocated by the Quad to –

Lead 5: I just want to draw your attention to this bullet, it’s about seven down.

“The team continued to have [value for money] and propriety concerns with this purchase, although these are lower than discussed yesterday given it appears that Meheco is at least a legitimate company … However, the team are still concerned that the equipment may not work, no contract has yet been seen and payment in advance of receipt is inherently risky. Compared to the multiple asks we have signed off over the last week, this therefore carries by far the most risk from propriety, regularity, and value for money perspectives.”

That was not unusual, those concerns, in relation to particular offers, was it?

Mr Steve Barclay: Well, I would put it in the context of the first line, “The UK currently has 2-week supply.”

Lead 5: Yes.

Mr Steve Barclay: And the advice from my Director General, Cat Little, was:

[As read] “I don’t see how we can do anything else but approve this given the timescales. I would be keen to move to a delegated model as soon as possible.”

So again, it wasn’t that there wasn’t an awareness either in the Treasury or, I am sure, for Health colleagues to speak to, I’m sure they were also aware, but the reality was with two weeks’ supply the priority was to secure that supply for the front line.

Lead 5: Are you suggesting that had the supply been two months, a different approach might have been taken?

Mr Steve Barclay: Well, there would have been less urgency, yes.

Lead 5: Less urgency and therefore that value for money balance would have been struck differently?

Mr Steve Barclay: Correct.

Lead 5: All right. Let’s move on a couple of days. 24 March, and INQ000572260. This is in relation to approval that was sought by DHSC to pre-order 12.5 million testing kits for £75 million, which you may recall.

Mr Steve Barclay: Yes.

Lead 5: You were recommended to approve the order, given the government’s current objective to rapidly expand testing, and you did do so the same day. Yes?

Mr Steve Barclay: Yes.

Lead 5: You requested a detailed breakdown from DHSC on what demand modelling showed we would need against the supply curve of what equipment and staffing would be in place.

We see that the Treasury was saying, “Push DHSC hard on absence of detailed breakdown.”

Was the DHSC pushed hard and if so, what came of it?

Mr Steve Barclay: Well, the “he” is myself. So I was requesting that alongside these significant spending decisions, we needed to have clearer modelling data. As indeed, a moment ago we touched on the conditions. One of the conditions I set specifically, I think, to this order was “a clear plan for managing excess stock”, it’s either this order or another, it may have been a PPE one on that same day. But on the 24th, that was one of the conditions I set.

So throughout, we were pushing for better demand modelling. But to be fair to Health colleagues, it was hard for them to provide that data at that stage because there was such uncertainty over the path of the virus, there was uncertainty over the levels of usage within the NHS, because that data on inventory and burn rate was not available. And so the spending decisions were having to be taken without that information, and one of the things I was pushing for was to try to ensure that moving forward, we would get that information for future decisions.

Lead 5: And that’s reflected in a further email, if we could just have up on the screen INQ000572257. Page 1, and the first bullet point. There we are:

“The table highlighted below, setting out levels of supply before [and] after [Treasury] approval. Wants to show Munira how low DHSC let supplies go before coming to us for information and how little information DHSC have been giving us. I know you’re already working on this – can I check in on how long this will take to produce so I can manage expectations?”

Now, you said a moment ago, to be fair to DHSC, there were all manner of challenges that they faced in providing that information. Were they, in essence, requests for information that it would have been possible to accede to?

Mr Steve Barclay: Well, the Munira recall relates to a slightly different but related point. So what happened there was –

Lead 5: This is Munira Mirza?

Mr Steve Barclay: Yes, who was one of the Prime Minister’s key aides and Number 10 had had a complaint that critical orders were being slowed down by Treasury because we were asking questions on value for money and due diligence, specifically on 24 March 2020. It emerged that that suggestion was erroneous and the request had not actually been made to Treasury. But I think what it does is point to the significant pressure that Treasury officials were under to expedite orders, which in turn then placed me under pressure to expedite orders, because we were being called by Number 10 for not clearing quickly enough an order that we had not actually even received.

Lead 5: I think I want to move on now from the chronology, because even in that limited timeframe, we are seeing a number of themes in emerge or a number of systemic problems which is that the Treasury is extremely reliant on what it is told by the Department of Health. It is not able to perform the usual checks that it would perform in normal times, and really the only measure that you were scrupulous to undertake was to maintain high levels of transparency so that after the event it could be seen what was spent on what. Is that a fair summary?

Mr Steve Barclay: Well, firstly, I wasn’t doing this after the event, so I was notifying the National Audit Office in real time. So I first notified them when the envelope went to 1 billion. It subsequently, my Lady, went to over 13 billion within England and 15 billion UK wide so I wouldn’t accept that – (overspeaking) –

Lead 5: I wasn’t suggesting – just to be clear, I wasn’t suggesting, Mr Barclay, that you were acting after the event. I was suggesting that your transparency, your concern to maintain high levels of transparency, were designed to enable those that wished to, after the event, to explore what decisions were made in relation to public expenditure.

Mr Steve Barclay: In part. One of the key things I was pushing for was around the governance. How did we bring in the commercial expertise within the Cabinet Office to inform some of those contract negotiations around things like termination provisions? What was the right sort of wider governance, so particularly over the summer, in terms of the wider cross-departmental governance that was put in place over PPE? So again, it wasn’t simply within the Department of Health silo. So I was pushing to try to put in more governance, more conditions, recognising at the same time that the Prime Minister and the Quad had decided on the envelopes, and the envelopes were necessary, given it was a global market, other countries were willing to pay, the supply wasn’t secure from China because we didn’t know what would happen with the path of the virus.

And of course we didn’t know other factors. We didn’t know how quickly a vaccine would come on stream. We didn’t know if there would be further waves. So some of the PPE stock may have been more required, had, for example, the vaccine not been delivered at an earlier stage. So there was a very, very uncertain environment into which I was, one, recognising the paramount priority of the government was to secure supply for frontline services, but at the second, alongside that, we should put in as much governance and transparency as possible. And I was concerned, as I think the evidence shows repeatedly, around the lack of data sharing across government.

Lady Hallett: Just before you carry on, Mr Wald, in the middle of Mr Wald’s question was an assertion that there were systemic problems, and I wanted to get your take on whether you accept there were systemic problems, this point about having to rely on the DHSC. Or was it just inevitable because of the circumstances?

Mr Steve Barclay: Well, I think it’s inevitable, my Lady, that the contracting parties will have the information. I don’t think it is inevitable that if the Department is aware of information some weeks before, that is communicated to me as Chief Secretary the night before the contract must be signed. And we may come on to, but, you know, examples like that. And what I was frequently pushing for is when did the Department first know of this, and why has the request come to me at a point where, if I don’t agree, then the consequence is we lose critical supplies, which would put frontline services at risk: And that is what Cat Little’s email is referring to with the two weeks’ supply, but we may come on to with some other contracts, and you mentioned earlier Lord Agnew’s email where he talks of 1.5 billion and 24 hours to decide.

It was that late notification that was a source of frustration to me, as CST.

Lady Hallett: Thank you.

Mr Wald: Did you feel that the notification you received was later than it had to be?

Mr Steve Barclay: Yes.

Lead 5: Yeah. On numerous occasions?

Mr Steve Barclay: Yes.

Lead 5: And if you’re able to offer a view, why did that happen? Why were you not notified at a time sufficiently early to enable you to meaningfully respond to it, scrutinise, question, and do what one would expect a person in your role would do within the Treasury?

Mr Steve Barclay: Well, I think that’s probably more for Health colleagues to explain. I think it’s fair to say they were under huge pressure and extremely busy, and dealing with many things, but at the same time, I think if the request comes late to Treasury, then obviously the ability to challenge that is curtailed.

Lead 5: When you say “late”, we’ve looked at an example where stock was down to only two weeks remaining. That is a request that comes into Treasury late by reference to the available stock. Is that what you were referring to just now, or did you mean a request that related to an offer that might be lost within 24 hours?

Mr Steve Barclay: So there’s one – so I think that initial period in March was so early in the pandemic that, actually, the pressure on health was more because of the huge upturn in requirement. And therefore, potentially more understandable. What I am – alluded to is, for example, I think there was a £300 million contract, from memory, that came to me the night before where the company lost its option if it didn’t exercise it the next day. That was on domestic manufacture.

And I was very surprised that there hadn’t been detailed discussions with that counterparty before notifying me the night before the option expired.

I was equally surprised when the request to increase the delegation from 1 to 4 billion came the day after my letter to the National Audit Office was sent. And it struck me as surprising that that hadn’t come to me sooner.

Lead 5: So, in essence, had you had a bit more time, you would have imposed more scrutiny over offers that were incoming?

Mr Steve Barclay: Well, I think it’s not just that the Treasury would have been able to have – and officials – more time to scrutinise that, but also Cabinet Office colleagues who had specific commercial expertise would have had more time to be involved in those decisions.

Lead 5: And with that additional time and that additional scrutiny, whether it came from Cabinet Office or from Treasury, would have come a better prospect of achieving value for money; is that fair?

Mr Steve Barclay: I think the contracts would have been better. I think the challenge on demand modelling needs to be viewed within the context that most of the contractual spend was committed by – by early June, I think, from memory. Certainly April, May, and by June, most of that contractual spend was committed. And I think the demand modelling didn’t really start to come through in better form until the autumn.

So whilst I was pressing for that to come sooner, and believe it ideally should have come sooner, it probably wouldn’t have come soon enough to have shaped many of those orders in April and May.

Lead 5: All right. You mentioned that some of your colleagues in the Department of Health (DHSC) would be able to provide more detail on the reasons for that time lag, if it was a time lag. And we’ve heard from some DHSC witnesses and we are yet to hear from others.

I will take you to a part of Mr Chris Young’s witness evidence in a moment. He, of course, was the Director of Finance at the DHSC.

But before doing so, could I just invite you to comment on any other themes, any other emerging themes from the matters that you chronicle, you put in chronological order in your witness evidence, that we’ve not touched on.

We’ve looked at data inefficiencies, timing, the reliance that had to be placed on what the Treasury was told by the DHSC. Are there other emerging themes, as you look back and consider those events that you set out in your witness evidence?

Mr Steve Barclay: For me, throughout, data was the key, both data sharing but also data modelling. And, you know, that was sort of a paramount issue. I think the ability to scale was a challenge. So by the time DH and cabinet colleagues had put in place domestic manufacture to be able to scale that, the global price by then had started to fall dramatically, so we had missed the key period where most of the contractual spend had been incurred.

Lead 5: How might that have been addressed?

Mr Steve Barclay: So I think it was part of a lessons learned. I think there’s a– we were incredibly reliant on overseas supplies. Predominantly from China. And I think that drove a lot of the early procurement concerns in terms of reliability. So our ability to scale. There was very little domestic supply and there’s very little data at the start of the pandemic, and if you look at when the significant spend was incurred, it was in those first few months on PPE. And that was the critical period, that early phase, when most of the contractual spend was incurred. And at that point there wasn’t the demand modelling, there wasn’t the ability to scale domestic manufacturer, and that in turn then drove the reliance on overseas – (overspeaking) –

Lady Hallett: You weren’t properly preparing?

Mr Steve Barclay: Well, my Lady, we may come on to that, but if you look as an example at the Frankie Moslyn(?) decision, which actually, as Health Secretary, on advice from Lord Patrick Carter, I took the reluctant decision – I wanted to find a purpose for it, having spent so much money on it, but the commercial reality was actually the value for money decision on Lord Carter’s very good advice, was not to continue that, and that is because keeping stock, warehousing stock, stock going out of date, the amount of stock you would need for a pandemic of this size comes at a significant cost. So for me, it was the ability to scale that was the more critical issue, rather than whether we had lots of PPE stock for something of a scale that would have come at a very big price to hold.

Lady Hallett: That’s what I meant by lack of preparedness. Not just the size of stockpile, but the ability to scale up.

Mr Steve Barclay: My Lady, I think the key for me is the ability to scale rather than having lots of stock ready for a pandemic. Because that would go out of date and be expensive to store.

Mr Wald: When you say the ability to scale, do you mean onshoring, an independent manufacturing capability?

Mr Steve Barclay: So I think there’s an interesting question around within NHS tendering and procurement contracts, how one scores the value of resilience versus the best price, not least looking to the fact we have a spending review coming up and there will be professional department spends, and the reality was that, at the start of the pandemic, there was very little domestic manufacture.

Linked to that also, I think there is work that can be done and the Permanent Secretary of the Department for International Trade did some work on this, looking at what are the critical raw materials and other elements that one needs as part of that supply.

Lead 5: We may have moved out of your role as CST with that question, but I’m conscious that –

Lady Hallett: Blame me.

Mr Wald: Excuse me?

Lady Hallett: Blame me.

Mr Wald: Well, I was just conscious that you had a wealth of experience in other departments, so no harm, I doubt, in having your view on that.

We have also touched on lessons learned. Can I just take you, as I said I would, to part of Chris Young’s evidence. It’s INQ000563070. And he touches on a number of issues here, including that one about the requests that were made of DHSC, effectively for information that couldn’t be provided. He says this:

“Finally, I feel that despite the best attempts of all civil servants to find common ground; the risk appetite for procurement of PPE of HMT Ministers was not always aligned with that of the Prime Minister and DHSC. I found that particularly at the outset of the pandemic, where the focus was on obtaining PPE in order to save lives, the need for fast paced decision making was not compatible with the requests for information that were being made by HMT. These requests, whilst well-intentioned, were for information which was not readily available and distracted people from the immediate priority that had been communicated by the Prime Minister and DHSC Ministers.”

Do you think that’s fair comment?

Mr Steve Barclay: No. And let me explain why. I think firstly, as he says there, there was a frequency in those first few weeks, which is why we moved to the delegated model, and indeed, that was the case that the Department of Health made to the Prime Minister and the Quad, and why the initial hundred million pounds which went to 500, that then went to a billion pounds, that then went to whatever, £6 billion. That is exactly why the envelope was put in place.

I think to go to a spending envelope of over £13 billion just within England, and I would draw your attention, Mr Wald, to supps at the end of the year where there was over 55 billion of additional health spend, I think that is a stretch to suggest that Treasury colleagues and indeed Treasury ministers, who, when there’s over 55 billion of additional spend, and the envelope goes within a matter of two months to over £13 billion, are not reflecting the risk appetite of the Prime Minister and the Chancellor.

But I think at the same time, it is proper for Treasury ministers to be asking questions of value for money, but in a way that doesn’t impede those supplies getting to the frontline. And if one looks at the evidence submitted to the Inquiry, one will see repeated instances where I reluctantly agreed to spend, because I don’t want to see a contract lost because of its impact on the front line, but I flag concerns with that and the importance of conditions to try to better

protect value for money within that spend.

Lead 5: There’s a balance to be struck, isn’t there?

Mr Steve Barclay: Of course. billion that went to 9 billion that went to 13-point 4 Q. And I think what Mr Hall is – Mr Young, excuse me, is

suggesting here, is that there were times when that

balance was struck wrongly so that what was intended as

a legitimate request for detail became a distraction.

You would disagree with that?

Mr Steve Barclay: I would, and it was an argument that the Department of

Health ran with Number 10 on a number occasions,

which – I’ve alluded to the example with Munira.

There’s an example in the notes with the chief executive

of the UK Health Security Agency and I’m very keen to

put on record that Treasury officials worked remarkably

hard and long hours, to the point that one of my senior

officials, I was so concerned with the amount of work

she was doing, I spoke twice to the Permanent Secretary

to ensure that we were supporting. And that reflected

the massive amount of work we were doing to respond to

health in a timely fashion.

So the suggestion that the Treasury officials or

ministers were not responding in a timely fashion is not

one I accept.

Mr Wald: Thank you, Mr Barclay.

My Lady, I’m on my final topic which is lessons learned.

Lady Hallett: The trouble is we’re running out of time, Mr Wald. We have 25 minutes of CP questions and we have another witness, and another 20 minutes of CP questions for that witness too.

Mr Wald: Right, well, Mr Barclay, you’ve given your reflections, I think, on lessons learned. Is there anything you wish to add to them, and then I will sit down.

Mr Steve Barclay: I will take my cue from my Lady and be succinct. So no.

Mr Wald: So no, all right.

Lady Hallett: If anything does occur to you and you want to submit it in writing, I’ll be really grateful, obviously always ready to receive any thoughts, especially from someone who’s been in your position.

Are you in any problems, we take a break for the stenographer, I’ll reduce it to ten minutes because we are so short of time. Are you okay if we take the break now?

The Witness: Of course.

Lady Hallett: I shall return at 3.10.

(3.00 pm)

(A short break)

(3.10 pm)

Lady Hallett: Mr Wilcock.

Questions From Mr Wilcock KC

Mr Wilcock: Mr Barclay, I have been encouraged to be as quick as I can with you and I’m sure you’d appreciate that as well. I’m asking you questions on behalf of two Core Participants, one is the UK Covid Bereaved Families for Justice, and the second is the Northern Ireland Covid Bereaved Families for Justice.

Can I start out by asking you what might be called UK-wide questions. You looked at a letter that you wrote with Mr Wald just after you started giving evidence, where you explained why conditions have been put on funding envelopes, in order to ensure that contracts were only entered into with what you termed “reputable companies”. Do you remember looking at that letter?

Mr Steve Barclay: Yes, I do.

Mr Wilcock KC: And the phrase was:

“… reputable companies who we can reasonably trust will fulfil these contracts and provide safe equipment, and that public money is protected as far as possible in these challenges circumstances.”

Which I think we all understand.

Do you agree that, in deciding whether a question was reputable, you would have expected attention to have been paid, whether by the accounting officer or anyone else involved, to factor such as whether that company had only recently been established or had no prior involvement in PPE supply?

Mr Steve Barclay: Yes.

Mr Wilcock KC: Would it also have been relevant to consider the extent of company funds or historical turnover?

Mr Steve Barclay: Yes.

Mr Wilcock KC: What about the fact that the company had been introduced by an intermediary who stood to make significant profit from any contract with the company involved? Would that have been a red flag as to whether the company was reputable or not?

Mr Steve Barclay: Well, I think all three things are relevant. All issues relating to a contracting party are relevant to the department that is contracting with them.

Mr Wilcock KC: Do you agree that, sadly, a number of companies that the government/DHSC contracted with might be thought to have raised at least one of those red flags?

Mr Steve Barclay: Well, that would be for the contracting party, but I think if – so, in terms of what red flags there were, then those would be issues that would be looked at through the normal process by the accounting officer and the contracting party.

Mr Wilcock KC: I’m going to move on to a different topic and ask you to have a look at another document.

Can we have INQ000109535 on screen, please.

We will see this is a letter you sent to Matt Hancock on 16 July 2020.

And once it’s on screen, if we can go to paragraph 2.

You will see, I hope, that you wrote that it was:

“… disappointing to hear that the police, LAs [local authorities, I assume], some parts of the NHS and prisons have all incurred costs buying their own PPE …”

With her Lady’s leave, I’ll come back to the passage about the devolved administrations later on.

And you ended by saying:

“Furthermore, these organisations have been buying from the wholesale market, at inflated prices which DHSC has been supplying at cost price.”

Now, many of the people I represent view this situation as wholly inappropriate and tantamount to profiteering by commercial wholesalers at a time when PPE was significantly constrained.

Do you agree that purchasing items that DHSC had been providing at cost price at the inflated prices that the emergency had created amounted to such profiteering?

Mr Steve Barclay: Well, firstly, I think there were in the early phase, challenges that were experienced by the Department of Health in terms of their distribution. That is why the PPE portal was set up. But again, that was starting from zero base to set that up, and so there were challenges on distribution.

The reason for my letter to the Health Secretary was because I was concerned about the value for money of delegated funds allocated by the Prime Minister and the Chancellor then being used to supply wholesalers who then sold the other public bodies.

So that was done initially, on my understanding, by Health colleagues because of the distribution challenge, but I was very keen to see that curtailed because I didn’t regard it as value for money.

Mr Wilcock KC: Do you regard it as profiteering?

Mr Steve Barclay: By whom?

Mr Wilcock KC: By the people using the emergency to buy items – sell items at inflated prices?

Mr Steve Barclay: Well, I don’t think the Department of Health should be providing to wholesalers if the portal could be put in place in order that they could then distribute that directly, and that was the issue that I was pressing on.

Mr Wilcock KC: Thank you.

Now, the letter goes on to refer to forceful requests from local governments, other government departments, GPs and pharmacies to reimburse PPE costs that they have legitimately incurred because supply from DHSC was not available.

Can you tell us whether that actually happened? Were they reimbursed?

Mr Steve Barclay: Yes. And I think, as the notes submitted to the Inquiry showed, I had a meeting with the devolved administration finance ministers. The minutes of that meeting have a series of comments from those finance ministers reflecting on the constructive nature of that engagement. Part of that engagement was them raising concerns –

Mr Wilcock KC: We’ll come on to devolved administrations in a minute. At the minute I am just asking you about the local government department –

Mr Steve Barclay: Well, the same issue applied to both, which is my concern from a value for money point of view that we were not double funding, that we were not funding bodies to procure PPE directly, and also funding the Department of Health through the very quickly expanded envelope, that had gone up to over £13 billion, which had been provided on the basis that they were funding public bodies.

So, firstly, my concern was we didn’t want to be paying twice; and secondly, I was concerned about the inefficiency because part of the reason for having the larger envelope with the Department of Health was so that they could use our embassy network, they could use economies of scale, and if individual public bodies were then contracting, the risk was they were contracting at less advantageous terms compared to the wider UK fund.

Mr Wilcock KC: Mr Barclay, we understand you wanting to say what you want to say but if you answered just the question, we will definitely not fall out with my Lady –

Mr Steve Barclay: My apologies.

Mr Wilcock KC: – and go over the 20 minutes.

Was any assessment undertaken of the additional cost to the public purse of the necessary reimbursement, ie, the difference between the receipts, from DHSC sales at cost, versus the commercial price paid by what we might call community providers?

Mr Steve Barclay: My recollection is that the Health Secretary wrote to me in September following my letter, and subsequent work that the Department of Health had done to ensure that the envelope was then allocated to the respective bodies.

Mr Wilcock KC: Yes, but what was the additional cost? How much did the envelope have to be increased by?

Mr Steve Barclay: The funding for the envelope was already there. The funding for the envelope from 2 June had gone to the 13 billion level. So the envelope was there. Hence, the need for Health to reconcile that with the individual bodies.

Mr Wilcock KC: And can you say what the amount of that reconciliation would have involved?

Mr Steve Barclay: I can’t offhand but that would have been a discussion that Department of Health would have with the prison service, with the local authorities, with the police, so the quantum will vary depending on the amount – (overspeaking) –

Mr Wilcock KC: – (overspeaking) – I think we can understand why you might not be able to tell us immediately.

Can I move on to my second set of questions and they’re about how the devolved administrations fitted in to the UK-wide procurement approach. We heard evidence on Monday from Mr Manley, who was then the Director General of the Covid-19 at the Foreign Office between March and September 2020, and he told us that on 16 April, the Permanent Secretary of DHSC wrote to the devolved administrations to stress that they were going to trying to insist upon a kind of all-UK procurement approach. And I’d like, in that context, for you to look at INQ000336538, please.

While that’s coming up, I hope we’ll see that this is a letter of ministers of finance for the devolved nations, dated 12 May, to express their:

“… collective concerns in regards to the limited supply of PPE currently being delivered through the proposed UK wide procurement approach. This has resulted [the letter goes on to say] in the devolved governments incurring significant costs to secure sufficient PPE to protect our frontline workers.”

Then, in the third paragraph, the devolved – the ministers state that:

“… the DHSC cannot currently guarantee the UK Government-led PPE procurement can meet the needs of the devolved [administrations].”

Were you aware at that stage that the DHSC was unable to guarantee adequate PPE supply to the devolved administrations?

Mr Steve Barclay: Well, yes, that had been discussed with the finance ministers in the meeting I alluded to a moment ago. It is why the four nations protocol was being put in place. It is why I wrote to the Health Secretary in terms of encouraging him to address this. But again, it reflected, as in the earlier exchanges with Mr Wald, the fact that this was in May at the early phase of the pandemic when things were being worked at huge pace, distribution was a challenge, not just with the devolved administrations, but as per your earlier questions with local bodies such as the police and local authorities.

And it also reflected a challenge in that the devolved administrations were not under a duty to share their data with the UK government, so their burn rate on how much PPE they were using, they were not required to share with the UK Government. And to some extent, perhaps not surprisingly, they wanted the best of both worlds: to be able to procure independently whilst also having access to the UK-wide procurement pot.

So those were natural early challenges as we rapidly scaled up in those first few weeks, but what I hope my letter to the Health Secretary and my exchanges with the finance ministers showed, was how we approached that in a very constructive spirit from a UK Treasury point of view with finance minister counterparts in order to address that and a subsequent letter from the Health Secretary in September shows that that work was done.

Mr Wilcock KC: So that there is no misunderstanding, can we go back to the letter that you looked at with Mr Wald – INQ000109535 – and go to the passage I summarised, where you wrote that you were also disappointed that:

“… the Devolved Administrations are now seeking additional funding for existing purchases via the Barnett formula.”

Is that part of the exchanges you’ve just been telling us about?

Mr Steve Barclay: Yes, so there’s two issues. The UK-wide fund was to cover PPE, but there was a concern that the devolved administrations in those first, that early phase of the pandemic had themselves unilaterally procured PPE, and therefore there was a question whether that was paid through the UK-wide fund or whether the funding was allocated to England only, through the Department of Health, and then subject to Barnett consequentials that would then have applied to the Scotland administration.

Mr Wilcock KC: So, many people in Northern Ireland in particular would like to know, were you told at the time that you agreed the UK-wide funding approach, the first envelope, that perhaps the DHSC might be unable to guarantee devolved administration supply? Were you aware at that stage?

Mr Steve Barclay: Well, the Department of Health was moving at huge pace to secure supply. The issue from a Treasury perspective was had we provided sufficient funds to enable them to do so. And I think the quantum that had been delegated shows that we had provided sufficient funds.

Mr Wilcock KC: You think you had provided sufficient quantum?

Mr Steve Barclay: We had provided – by 2 June we had provided over 15 billion on a UK-wide basis.

Mr Wilcock KC: And you thought that was sufficient?

Mr Steve Barclay: Yes.

Mr Wilcock KC: Finally, can we please have INQ000377395 on screen.

This might have been part of the correspondence you told us about earlier, but it’s an email actually dated 15 May 2020 between various officials within the Welsh, Northern Irish and Scottish Governments about how they should respond to a letter from the DHSC looking for their views on the proposed four nations approach, where DHSC would manage a PPE fund on behalf of all four nations, on the basis that the Treasury believed that that was the most efficient way to procure PPE.

That’s the background to the correspondence.

But if we go to the last paragraph, we can see that the officials involved suggested that a better way than the one that was being suggested to manage the proposed sensible four nations approach would be, and I quote, “to form a new 4 Nations PPE Procurement Group”, to plan expenditure where “each administration would be an equal partner”, and:

“… its remit would be to plan future PPE expenditure. Where the PPE requirement of each nation overlap, this group could secure better value contracts. Where policies approaches have diverged, it would enable each nation to put in place local solutions either unilaterally or with one or more of the other nations.”

Were you aware of that proposal?

Mr Steve Barclay: Well, indeed, we had a meeting, just looking at my notes, with the devolved administrations’ finance ministers on 19 May, where in my response – obviously I haven’t seen the email which has been put up, which I presume was –

Mr Wilcock KC: Well, you should have done. It was meant to be given to your team.

Mr Steve Barclay: Okay, well, then the error will be with me, not anyone else. But in terms of that, if I look at the date, it’s 15 May.

Mr Wilcock KC: Correct.

Mr Steve Barclay: If I look at the minutes of the meeting on the following Tuesday, 19 May, the quotes show that the finance minister – the minister for Wales saying that the subsequent paper coming out of the exchange with officials:

[As read] “The paper was really helpful in recognising some of the challenges faced.”

The finance minister for Scotland:

[As read] “This paper is very helpful in setting out potential options, next steps.”

And in my remarks in the meeting:

[As read] “These are unprecedented times and unfortunately we are going to have to live with some uncertainty during it. There is no magic bullet to these issues given the crisis.”

Finance minister for Scotland:

[As read] “This would be really valuable, especially work to forecast on outcomes.”

And indeed that reflects an earlier letter on 12 May from the finance minister of Scotland, which pointed out:

[As read “All countries are chasing the same supply chains, which has become a sellers’ market. DHSC’s proposal for a four nations approach which delivers the PPE we require to meet our needs providing some flexibility to enable our procurement. If it doesn’t, respecting the … which you expressed last week that these costs are not double funded”, et cetera.

So I think the challenges we’re talking about again mid-May, a very early phase of –

Mr Wilcock KC: Everyone accepts that.

Mr Steve Barclay: – of this. The challenges were collective. The finance ministers were working very constructively together, and I would suggest that the minutes of the 19 May meeting shows that the UK Treasury was engaging very constructively with the finance ministers and very much engaging with the concerns raised.

Mr Wilcock KC: Are you able to tell us whether or not what resulted, in terms of the two possibilities?

Mr Steve Barclay: I think there will be a letter from me – a letter from Matt Hancock to me, dated 28 September:

[As read] “I appreciate the difficulties this situation has caused for non-NHS public services among departments working with … to reimburse them for the cost of clinical-grade PPE they have purchased.”

Then I think he went on to address the DAs in that letter but the substance of the letter was that there had been work over the summer to address the funding challenge that the DAs were facing through the UK-wide funding.

Mr Wilcock: Okay.

Thank you very much, my Lady. We have been given permission for other questions but in the circumstances, I’m not going to ask them now, but we may seek to raise them in written submissions later on.

Lady Hallett: Of course, and if there’s anything more you require in writing, Mr Wilcock, I am really grateful to you.

Mr Wilcock: We will do that as well. Thank you.

Lady Hallett: Mr Thomas.

Questions From Professor Thomas KC

Professor Thomas: Good afternoon, Mr Barclay, my name is Leslie Thomas and I’m representing the Federation of Ethnic Minority Healthcare workers. I will be brief in relation to the questions I ask you. I don’t think you have been asked about these issues yet.

Firstly, help us with this: what systems did you utilise to ensure that the Treasury’s Covid procurement adhered to public law principles of transparency, equality, and fairness in the use of emergency contracts and direct awards?

Mr Steve Barclay: Well, firstly we applied Managing Public Money, and as you will see from the records, I specifically sought advice from officials in April 2020 where the delegation of a billion pounds, the initial sort of significant delegation within the spending envelope, was consistent with Managing Public Money, and indeed asked if it was consistent with the ministerial code. And I was confirmed by officials to the affirmative that it was.

Secondly, as I alluded to earlier in evidence, at repeated points I ensured that there was transparency in communication to the National Audit Office and to the C and AG, to ensure that that was done.

And third, we worked with other government departments to ensure that there was wider government scrutiny, including external scrutiny, and indeed, for example, the Ernst & Young report that confirmed, I think it was early June, but there was an Ernst & Young report at quite an early stage, again confirming the challenges of supply and endorsing that the government’s approach was the right one.

Professor Thomas KC: Thank you. Your statement at paragraph 25, that’s INQ000574180, we don’t need to call it up, but I think we’ve got your statement there. You mention that the usual procedures were altered for expediency with senior officials overseeing these decisions.

My question is this: how did the Treasury ensure that the Public Sector Equality Duty was upheld during these changes, and were the equality impact assessments, EIAs, conducted before making procurement decisions affecting frontline healthcare workers? To put it in a nutshell, do you believe that the Public Sector Equality Duty played a substantive role in shaping equitable procurement practices as opposed to just being a tick-box exercise?

Mr Steve Barclay: Well, I would argue ensuring sufficient finance was in place to protect supply to frontline services was essential to meeting any such duty, not least because, within the NHS, often those communities most at risk were those most reliant on ensuring that we maintained PPE supplies. So I think firstly, securing supply was essential, and that is what the Treasury did.

Secondly, on the specific point of the delegation, from memory, I think that was to small sums of quantum of around £10 million but it reflected to the point earlier with Chris Young’s evidence, which was in that early phase of the pandemic, there were so many contracts it was necessary to reflect the urgency and the speed and have more flexible arrangements in place, and that is why the delegation was granted.

Professor Thomas KC: But, sorry, you haven’t answered my question, because what – part of my question was during these changes – and I fully appreciate that you needed to act with expediency. I get that. It was a pandemic. My question was: how did you ensure that the Public Sector Equality Duty and so, for example, impact – equality impact assessments – were conducted properly? How was this overseen?

Mr Steve Barclay: Well, that would be for the contracting party to do that, which would be the Department of Health. But again, I think there was a recognition that there was a huge urgency around the contracts but it would be for Health colleagues to address.

Professor Thomas KC: Urgency doesn’t mean that the Public Sector Equality Duty is thrown out, though, does it?

Mr Steve Barclay: No, but I – as I say, it would be for the contracting party to answer how they met that duty, but if I was pushed, my Lady, I would suggest that ensuring that there was sufficient supply of PPE to frontline services was consistent with that duty, not against it.

Lady Hallett: Thank you very much, Mr Thomas, I’m sorry, we’ve got another witness waiting in the wings. I’m really sorry.

Thank you very much indeed, Mr Barclay. I’m sorry if it seems a bit rushed. Sometimes the timetabling of witnesses works perfectly and other times not so perfectly, and I’m afraid we have one of your former colleagues waiting in the wings to give evidence.

The Witness: Of course.

Lady Hallett: So thank you very much for your help to the Inquiry, I appreciate how busy you must be, so really grateful to you and as I say, if anything does occur to you, please write in and we’ll bear it very much in mind.

The Witness: Thank you very much.

Lady Hallett: Thank you.

Mr Wald?

Mr Wald: My Lady, our next witness this afternoon is Lord Feldman, who is see is just taking up position.

Lady Hallett: I’m sorry you’ve had to wait. I think you have to think back to your days as a practising barrister, Lord Feldman, to remember that timetabling of witnesses doesn’t always work.

The Witness: No, no, it’s pretty good, though.

Mr Wald: If the witness could be sworn or affirmed, please.

Lord Andrew Feldman

LORD ANDREW FELDMAN (sworn).

Lady Hallett: Mr Wald.

Mr Wald: Thank you, my Lady.

Questions From Lead Counsel to the Inquiry for Module 5

Mr Wald: Please state your full name for the Inquiry .

Lord Andrew Feldman: Yes, Andrew Simon Feldman.

Lead 5: Thank you. And Lord Feldman, thank you also for providing to the Inquiry a witness statement. It’s INQ000540486, which you have signed. Will you please confirm that it is true to the best of your knowledge and belief?

Lord Andrew Feldman: Yes.

Lead 5: Yes. Lord Feldman, by way of background, I don’t think we’ll go quite far as back as your time at the Bar but you are – your current role, you are CEO of Teneo’s UK strategy and communications business, a PR and advisory company; is that right?

Lord Andrew Feldman: That is correct, yes.

Lead 5: And you were previously managing partner of Tulchan Communications until it was acquired by Teneo?

Lord Andrew Feldman: Yes, that’s correct.

Lead 5: You are also director of Andrew Feldman Associates?

Lord Andrew Feldman: Yes, that’s correct.

Lead 5: What does Andrew Feldman Associates do?

Lord Andrew Feldman: It is just a business where all of my non-Teneo interests, so non-exec directorships, philanthropic stuff, is managed through that.

Lead 5: Thank you.

Let’s move to the period in which we are focused for the purpose of this Inquiry and this module of this Inquiry. Between 23 March 2020 and 15 May 2020 you served as an unpaid volunteer assisting in the challenge of emergency procurement –

Lord Andrew Feldman: Yes, that’s correct.

Lead 5: – of PPE.

Lord Andrew Feldman: Yes.

Lead 5: And just of PPE?

Lord Andrew Feldman: It did occasionally – there were other bits of medical equipment that came across my desk, you know, that were – that were referred to me, but overwhelmingly, PPE.

Lead 5: You have served, over the course of a period of 18 years, between 2008 and 2016, as Chair of the Conservative Party?

Lord Andrew Feldman: Yes – well, I was deputy treasurer from 2005 to 2008, 2008 to 2010, I was CEO, and 2010 to 2016 I was chairman.

Lead 5: I see, thank you for that correction. You were first asked, were you not, to volunteer by Lord James Bethell on or around 20 March 2020?

Lord Andrew Feldman: Yes, that’s correct.

Lead 5: And you two knew each other socially and from your time as chair of the Conservative Party?

Lord Andrew Feldman: Yes.

Lead 5: He told you, did he not, that there were severe shortages of PPE and other critical equipment and supplies, and that the normal supply chain was not able to support the demand?

Lord Andrew Feldman: Yes.

Lead 5: Yes. What reason did he give you specifically for enlisting your assistance?

Lord Andrew Feldman: Well, he knew that when I left the Bar in 1995, my father was taken ill and I had to leave my chambers to go and run the family business which is a clothing manufacturing business, and I ran that full time for 10 years and part-time for another 12 years, so 22 years in total. And we essentially manufactured clothing for the UK high street, so, you know, lots of well-known high street names, and a lot of that sourcing, the overwhelming majority of the materials came from China and the manufacturing was from across Asia, so China, Vietnam, Sri Lanka, Bangladesh, so he knew that I understood supply chains, global supply chains, and understood sourcing.

Lead 5: Perhaps it’s a shorthand but is that the matter to which you refer at paragraph 4 of your statement when you say that your extensive business contacts would be useful to DHSC?

Lord Andrew Feldman: No, I – well, that’s partly, yes. But I think also, in my career both in politics and then subsequently in business I advise a lot of, and have advised a lot of different companies. I know a lot of businesses, a lot of businesspeople. You know, both from within the clothing business and beyond.

Lead 5: You say that with one sole exception, Bunzl, the contacts that you had or perhaps have, were not within the medical equipment and supply business?

Lord Andrew Feldman: That’s correct.

Lead 5: Did you feel or do you feel that that placed you at any disadvantage in the role you were asked to take up?

Lord Andrew Feldman: Normally speaking in, sort of, peacetime, I would have been surprised to get the phone call, but in this particular situation I understood from James and also just from reading the newspaper and watching the news that there were two massive challenges. One was that there was a desperate shortage of PPE and by which I soon discovered, it was days’ not weeks’ supply of PPE that were available, and that PPE, in particular things like masks and gowns, both in terms of the sourcing of the materials and the assembly of them, you know, resemble quite closely clothing manufacturing, because you buy the components and then you send them to a different factory to assemble them.

But I understood there was a desperate shortage in the UK, as I say, days of supply.

Then the second thing was that I knew that or I suspected that the vast majority, the overwhelming majority of those materials came from a small number of factories in China, and that the pandemic had broken out in China, so there were 1.4 billion people that needed equipment, and then the rest of the world was descending on those factories trying to get equipment.

So it wasn’t so much a question of needing deep technical knowledge; it was experience about how supply chains work and how one might be able to access different, you know, different sources of supply, and access those narrow – that narrow base of factories that were available.

Lead 5: I’ll come on to it in a few moments but part of the reason for asking that particular question, Lord Feldman, is that, unlike some of the other witnesses that have given statements and oral evidence to this Inquiry, an example would be Michael Gove, who appeared and gave evidence earlier this week, you triaged or assessed offers as they came in?

Lord Andrew Feldman: Yes.

Lead 5: Mr Gove described himself as a postbox –

Lord Andrew Feldman: Yes.

Lead 5: – simply referring on offers that came his way?

Lord Andrew Feldman: Yes.

Lead 5: But is it right that you, when an offer came your way, assessed the credibility or the solidity of that offer before troubling others with it?

Lord Andrew Feldman: Yes. So the way I would describe it is – I mean, just to give you some context, I was sitting on my own in my office at home. I was – I never met any – apart from Matthew Hancock and James Bethell, I never met any of the people I was interacting with physically. I never met Max Cairnduff or Andy Wood or Chris Hall or any of the other civil servants.

I had two civil servants assigned to me, who were two – and I was given a DHSC laptop, and they were to monitor all offers that I was given. And then they were to help guide me about how I could help, because I didn’t really, as it were, see behind the curtain. I didn’t really know how procurement was working in the department and I didn’t have visibility.

So my job was to – as I say, there was a very narrow possible source of supply in China for this equipment, and my job was to try, through a series of questions – you know, when I was given an offer or when an offer came in to me – to try to assess whether it was serious. That is to say, did that person have genuine access to potential large quantities of PPE in China? And did they have experience of dealing in China which would make that interesting? And then – and were they sort of – did they seem like credible people when I spoke to them? And then I passed it on.

But the process of technical assessment of the offer, deciding whether an order should be placed, at what price, the logistics behind it, that all went – was sort of handed over to civil servants.

Lead 5: So let me ask you this: was either your role or the criteria that you applied to a given offer defined, set down anywhere?

Lord Andrew Feldman: I mean – well, I had a volunteering contract, and I – but – and I was told by James what he wanted me to do.

Lead 5: Lord Bethell?

Lord Andrew Feldman: Lord Bethell, sorry. I was told by Lord Bethell what he wanted me to do.

Lead 5: And you directly reported to Lord Bethell?

Lord Andrew Feldman: I directly reported to him, yeah.

Lead 5: What did he tell you – if he gave you any description of your role –

Lord Andrew Feldman: Yes.

Lead 5: – what was it?

Lord Andrew Feldman: It was to … so, the – as I understood it, when I arrived, the reason he phoned me was because the department was totally overwhelmed by offers of PPE, both through the sort of the mailbox they set up and through recommendations from officials and MPs and ministers, and they couldn’t really cope with, sort of, sorting the wheat from the chaff, working out whether these offers were even remotely credible.

And he said, “I need you to cast your eye over some of the offers – they’ll be directed to you by officials, and to say – they might look good in the official email but is there anything behind them, and to give a sort of view. And if you think there is, then to either speak directly to – you know, speak directly to the officials, through the office, the sort of virtual office we set up for you, to sort put them into the flow and to help us to, you know, advance what could be interesting offers.”

And what I would say to you is, my sensation is that there were very, very few offers that were either not already being considered, you know, not through the existing supply chain, not being considered, you know, through, let’s say, China, you know, the embassy in China, that were credible. But you had to speak to a lot of people to establish, you know, the one or two or three or half a dozen that could be potentially interesting.

And so I could understand why they needed extra manpower to do that, because it was, you know – I think at one point there were 7,000 offers –

Lead 5: Let me just focus you, before I turn to the deluge of offers, to the second part of my question: the criteria that you applied in assessing whether an offer was worth pursuing.

Lord Andrew Feldman: Yes.

Lead 5: Was that left to you? Was that a judgement that you exercised without guidance or without criteria set out by anyone else?

Lord Andrew Feldman: I think it was for the most part, although what happened is I started to interact with people like Andy Wood and Chris Hall, Max Cairnduff – mainly Chris Hall – I started to get more of an understanding of the lessons that they were learning, of the things that were working and the things that weren’t working, and also a bit more context about the broader backdrop of the offers that were coming in and the sort of supply constraints.

So I would say that I started off with a short briefing and then I kind of had to learn on the job.

Lead 5: Chris Hall, we can turn to it if you wish to, in his statement says that “Lord Feldman … was very effective at generating new leads”.

Lord Andrew Feldman: Yes.

Lead 5: He also says that:

“His assistant frequently contacted the [High Priority Lane] seeking updates from the team in relation to contacts which Lord Feldman had introduced to the Buy Cell …”

Is that right? Did you frequently follow up to seek updates as to how offers that you had fed into the High Priority Lane were faring?

Lord Andrew Feldman: So, to answer the first part, which is – the way in which I provided interesting leads was by phoning people that my private office, the two officials, gave me to look up, or there was incoming – people who knew me or knew I was involved in the process approached me with offers of help. So those were the two main sources.

As I said, my actual knowledge of PPE suppliers in the world was, you know, confined to Bunzl. But –

Lead 5: So some came to you, others you went to?

Lord Andrew Feldman: Well, some came to – no, almost everything came to me, either through officials – well, everything came to me through officials or through people contacting me directly.

So – but what I would say, the description that he gives is these two very conscientious hardworking officials that were assigned to me, they kept a sort of record of every single interaction I had and they thought it was their job to then chase it up.

The truth is, I would have had no idea how to chase it up or, indeed, who to speak to. So they saw their job as: look, we’ve bought Lord Feldman in, he’s trying to help, he’s triaging all these opportunities, our job within the system is to make sure that they’re being followed up.

Lead 5: Did the majority of those who came to you know you through the Conservative Party?

Lord Andrew Feldman: It was a mixture. A real mixture. I had some who knew me – and remember, these are referrers, so the suppliers themselves, no, none – you know, none of them came to me through politics.

Some of the referrers, people like Lord Leigh, Lord Chadlington, they came to me because they knew me through politics, and then other people might contact me because, you know, they’d met me in business or they’d heard about – heard that I was doing the job. Often it was simply that they’d heard that I was doing the job.

Lead 5: When you were assessing an offer for its credibility, was affiliation to the Conservative Party of the referrer a factor in your assessment?

Lord Andrew Feldman: No, no, not at all. I was only interested in: is this something that’s going to, you know, help – help deal with this crisis? Is this a creditable offer of equipment? I wasn’t in the least bit interested about the political affiliation. And in fact, in terms of the suppliers themselves, I had absolutely no idea what their – you know, the people actually doing the supplying, I – for the vast majority of cases, I had no idea what their political affiliation was.

Lead 5: Let’s move on, then, to the request for updates.

Lord Andrew Feldman: Yes.

Lead 5: We’ve heard a little bit about that up until now in this module. We know from Chris Hall’s evidence – I think you’ve just confirmed it – you did, on occasion, follow up on offers that you had fed into the VIP Lane or the High Priority Lane.

Lady Hallett: Lord Feldman said that his officials did. He wouldn’t know how to.

Mr Wald: So you asked that that be done?

Lord Andrew Feldman: Well, not really, no. I think they just took it on themselves.

The point is that James Bethell was dealing with an urgent situation, and he was conscious that I didn’t really understand how the machine worked, and so what he did is he put in place, in 24 hours, the sort of – what looked like a mini private office. So I had two officials working virtually, I was given a DHSC laptop and a mobile phone, and I was – and then, you know, signed a volunteer agreement, filled out a declaration of interest or conflicts form, and off I went.

Now – so I think the officials were instructed by James Bethell, Lord Bethell, to make sure that if I was – that what I was doing was effective, that, you know, if there was a good lead, it wasn’t somehow lost in the system. So I think it was on their initiative, if I can say it that way.

Lead 5: Okay you’ve made that very clear.

Lord Andrew Feldman: Yes.

Lead 5: Let’s have look at INQ000551322, please:

“Adam – I’m getting a bit frustrated …”

Let’s take it from the bottom.

“Adam,

“This is very helpful. I have copied the UK PPE procurement team who I am sure will reach out to [redacted].”

So this is directly from you.

Lord Andrew Feldman: Yes.

Lead 5: Who is Adam, do you recall?

Lord Andrew Feldman: Adam is the person – so a little bit of context here. One – this was 12 April. Matthew Hancock, the Secretary of State, was extremely exercised about the shortage of gowns. I was told that there were three days’ supplies of gowns in the system. And he – and James Bethell, Lord Bethell had communicated that to me. And there was real anxiety that – and frankly, I was hearing it from my friends who are doctors on the front line that people were possibly going to be sent in in bin bags, you know, to turn patients on ventilators. It was very serious.

And an opportunity came in through this company called Nine United, a guy called Adam Dantzer, and he was – it came in to the Secretary of State, it came in to the officials, and I was asked to look at it. And it was quite exciting because he – the sort – Nine United was the procurement arm of a Danish retailer called Bestseller, a very large Danish retailer who was already supplying at scale to the Danish government. And I’ll be frank, these kind of things didn’t come in very often, it was a sort of hen’s tooth. You know, it was an established source of supply of gowns, I think they were offering over a million gowns a week, and it was already credentialised by the fact that it was being sold to the Danish government.

So I was excited by this because I knew – and this was at a time, you will recall, where a shipment of Turkish gowns came in, you know, which all had to be rejected and it was a front-page news story. So there was deep anxiety about it. So I was sort of excited about this and thought, well, this could be a real thing so I –

Lead 5: Why had you become frustrated, Lord Feldman?

Lord Andrew Feldman: Sorry, which one?

Lead 5: At the top:

“Adam, I’m getting a bit frustrated.”

Lord Andrew Feldman: Who am I writing to? Adam?

Lead 5: You’re writing to Adam.

Lord Andrew Feldman: Yes, and I’m just saying I’m getting a bit frustrated that this isn’t being picked up because I think this is a great opportunity.

Lead 5: Is that not an example of you following up on an offer, on a possible opportunity?

Lord Andrew Feldman: Yeah, yeah, and I’m not saying for one moment that I didn’t from time to time do that. I –

Lead 5: I thought you said that you wouldn’t know how, that others in your office – (overspeaking) –

Lord Andrew Feldman: Well, this is because I had already specifically referred it to – look, there’s a difference between, and this is important, there’s a difference between once I’d referred something, I think this was referred to Max Cairnduff. Once it had been referred to him and then Adam, the supplier, phoned me up and said, “Look, it’s not moving forwarded and I’m worried we’re going to lose the offer, I’m going to lose the opportunity to get the gowns”, it would be natural for me to say, “Oh, that’s annoying, that’s frustrating, I don’t know why no one is getting back to you, let me give it a chase.”

And I think that’s not the same as trying to understand how an offer which I’ve passed on has been acknowledged, is then progressing through the different phases of technical assurance and, you know, all the different phases of the system.

Lead 5: Let’s just look at – go back to here. Do you see on this, on the screen, it says:

“On behalf of Covid PPE Priority Appraisals Mailbox.”

Do you recognise that description? That’s the VIP Lane or the HPL.

Lord Andrew Feldman: To be honest, I didn’t really know – I mean, that was a mailbox I was told to send things to. I didn’t ever have this phrasing “High Priority Lane”. I didn’t really know what that was. That was just one of the inboxes, in the same way that I had Max Cairnduff’s email and Chris Hall’s email that I, sort of, my officials told me to send things to.

Lead 5: Let’s just finish up on this document if we could scroll up to the top of it.

“Max on it as well”, you say. This is all on a Sunday, isn’t it, 12 April?

Lord Andrew Feldman: Yeah.

Lead 5: And then if we go back, Matt Hancock:

“On PPE do you have good enough leads into the system?

“Ministerially it’s not technically James’s gig – do you feel like you can get the system to respond?”

That’s all to you.

Lord Andrew Feldman: Yes.

Lead 5: And then if we just look at the top, you reply:

“It’s getting much better. Max and Chris seem more on it. Yesterday I fed in 5 leads – 4 serious – and they followed up. When I sent stuff to Andy Wood it seemed to die … he was overwhelmed.

“This Danish offer is a bit different and requires some more flexible thinking – so it got stuck … Max now seems to be on it … although not sure why approval should take a few days.”

So this is an example, you would say, of an offer that is for some reason getting stuck and where you would intervene directly; is that right?

Lord Andrew Feldman: Well, I think that, you know, when I say it got stuck, what I’m referring to is it doesn’t even get past the first base, which is it’s not even being considered and the reason this is – and the bit that’s getting stuck is that there is an offer from the Danish Government to speak to the British Government about this route. So it’s the sort of early stage of credentialising the offer. That’s the bit that is concerning me, because I’m thinking this is something which is very unusual, it’s a very unusual type of offer because it’s already being used by another government, a friendly government, and so that’s the bit that I’m trying to sort of move through and it’s, you know, within the first couple of days of the interaction.

Lead 5: Understood.

I think it won’t be controversial that other offers that came in that didn’t catch your attention for whatever reason were unlikely to receive this sort of treatment unless there was some other senior referrer involved?

Lord Andrew Feldman: Well, I think I’ve explained to you why I thought this was very interesting, the combination of the timing, the product that was being offered –

Lead 5: Not quite what I was asking. You’ve explained why you were interested in this offer.

Lord Andrew Feldman: Yes.

Lead 5: There would have been a great many other offers of which you would have had no involvement, no knowledge, that simply wouldn’t have had this treatment. They wouldn’t have occupied any of your bandwidth –

Lord Andrew Feldman: You mean offers through other routes?

Lead 5: Through other routes.

Lord Andrew Feldman: I’ve got no idea.

Lead 5: You’ve got no idea?

Lord Andrew Feldman: Literally I’ve got no idea.

Lead 5: All right. You say in relation to the High Priority Lane that you were unaware of it until you saw media reporting about it?

Lord Andrew Feldman: Yes.

Lead 5: I’ve shown you one reference to an email that is a specific email for the High Priority Lane, but you never –

Lord Andrew Feldman: It’s not described as that though, is it? That’s not what the email says.

Lead 5: But you worked with Max Cairnduff, didn’t you?

Lord Andrew Feldman: Yes.

Lead 5: What did you think his role was? What did you think he did?

Lord Andrew Feldman: I know it’s hard to imagine because it’s sort of very not how these things work, but it was sort of like there was a curtain behind which different things were going on, the PPE Cell, the High Priority Lane, ways of, as it were, that the Civil Service was designing to manage the vast amount of suggestions that were coming in to them, which I was not privy to. I wasn’t at the meetings, I wasn’t in the discussions about the design of it. And it felt to me, if I can say, that this team were working really hard to sort of build the plane while they were flying it. You know, this all happened, this is 12 April, you know, the email exchange we’re looking at, this is within days of them actually coming together as a team and trying to work out how to manage these offers.

So I literally had no idea. For example, I didn’t know whether Max Cairnduff was Chris Hall’s boss or the other way round. I didn’t know the relative seniority, I didn’t know how they related to Andy Wood. They were just people whose emails I was given to get in contact with, and that’s the sort of nature of my role. And I think it was to some extent deliberate, because I think that I was seen as – I think Chris Hall describes me as an envoy, I think I was seen as a helpful envoy to triage some offers of help and feed them into the system but how the system processed them, what they did with them, was invisible to me, which is why, when something like the Nine United offer, you know, felt like I was very excited about it, and I couldn’t see what was happening, it’s because I literally couldn’t understand what was happening to it. I couldn’t see how it was being processed.

So I sort of thought: you know, don’t miss this one, I know we’re absolutely desperate for gowns and, you know, this is a million gowns a week, it’s possibly a really great opportunity. So that’s the context.

Lead 5: Lord Feldman, I’m conscious of time.

Lord Andrew Feldman: Of course.

Lead 5: Let’s move on, if we may.

Lord Andrew Feldman: Of course.

Lead 5: Paragraph 9 you tell us that you were –:

“I am aware that in the HPL list published by the DHSC, I am described the actual referrer to the HPL of three companies.”

Lord Andrew Feldman: Yes.

Lead 5: “Mazima (sic), SG Recruitment, and Skinnydip”.

Those, of course, are only – they’re the three that resulted in contracts, aren’t they?

Lord Andrew Feldman: I’ve now found out. I had no idea.

Lead 5: But you must know that you referred in many more than three offers into the High Priority Lane?

Lord Andrew Feldman: Well, that’s the point. I didn’t know – there were many more than three, I suspect, offers that I triaged that ended up in contacts, but they may not have been defined, which was a definition which was operated by the Department, as suitable for the High Priority Lane. So I have no visibility about the offers I triaged, those I recommended and those which ended up in purchasing. So I don’t really know but I’m now finding out through the evidence that’s been shared with me that three of the 18 that were referred, and which Chris Hall managed ended up in contracts.

Do you see there’s a distinction? Because I wouldn’t have known whether there were other offers that I might have put forward which weren’t handled through the High Priority Lane, but I wouldn’t have known that because I didn’t know how they were processed internally, what qualified for that description.

Lead 5: We know also from Chris Hall’s evidence that on some occasions you made explicit the connection with the Conservative Party and on other occasions you did not do so.

Lord Andrew Feldman: No, so let me explain that.

Lead 5: Well –

Lord Andrew Feldman: Because I can’t recall every single offer that I might put forward, and I haven’t seen all of the correspondence of every single offer that I put forward, I can’t say with certainty whether I, in every single case, disclosed the connection with the Conservative Party. What I was endeavouring to do was two things: first of all, to credentialise the offer by saying look, this has been introduced by somebody that I know, and the second thing, which I think is important, is to be completely transparent where there was a political connection, because I wanted – you know, I didn’t want the person handling the opportunity to find out subsequently and think that somehow or other I hadn’t been straight with them.

So I was trying to be very, very open and transparent in the way in which I communicated about the offers. I don’t – I mean, it may be that there are some offers that I didn’t do that, but I’m not – I can’t recall.

Lead 5: We can turn to it if it helps, but what Mr Hall says is that:

“In some cases I was unaware at the time that the supplier had any link to the Conservative Party, while in others Lord Feldman made the connection explicit.”

So I suppose the question for you, Lord Feldman –

Lord Andrew Feldman: Well, if I –

Lead 5: If I could just pose the question, please?

Lord Andrew Feldman: Sure.

Lead 5: I suppose the question for you, Lord Feldman, is this: if you were anxious, as you say you were, to be scrupulous about any possible connection to the Conservative Party –

Lord Andrew Feldman: Yes.

Lead 5: – in order that anyone handling the offer should be aware of that, why is it that it was only on occasion that you made that explicit, according to Mr Hall, but on other occasions you did not do so?

Lord Andrew Feldman: I think that he may be referring to offers that he saw which possibly are ones that I didn’t handle. So if you read it, “I was unaware at the time that the supplier had any links to the Conservative Party while in others Lord Feldman made the connection explicit.”

So, I don’t know, you’ll have to ask Chris Hall. He might have been referring to offers through other referrers of suppliers not me. But I think that, as I say, my recollection is that where there was a link, I made it explicit.

Lead 5: And where you made it explicit, it wasn’t at all for the purpose of vouching for them in any way “I know this person through my connections, you can rely on what they are saying or offering”?

Lord Andrew Feldman: No, I think what I said just now was that to some extent I was credentialising them. So if you imagine, I knew that there inboxes were full of thousands of offers of help. So I was sort of saying, “look, I know the person who has made this introduction is probably worth looking at.” You know, that’s another factor to take into your mind, plus the point about, you know, demonstrating the Conservative connection so that I was transparent about it.

Lead 5: Let’s take a concrete example, if we may, SG Recruitment.

Lord Andrew Feldman: Yes.

Lead 5: It was an offer that resulted in two awards of a contract, wasn’t it?

Lord Andrew Feldman: Mm.

Lead 5: One was for two million gowns, purchased at £23,899,000, via David Sumner.

Lord Andrew Feldman: Yes.

Lead 5: And the other was for hand sanitiser, purchased at £16,125,000 via Nick Mason?

Lord Andrew Feldman: Yes.

Lead 5: And you’re familiar with those two transactions?

Lord Andrew Feldman: Yes.

Lead 5: SG Recruitment was introduced to you by Lord Chadlington?

Lord Andrew Feldman: Yes.

Lead 5: Is that right? You knew him through your life in politics?

Lord Andrew Feldman: Yes.

Lead 5: The initial contact that was made was via text message?

Lord Andrew Feldman: Yes.

Lead 5: Yeah. SG Recruitment is not Lord Chadlington’s company but he made the introduction?

Lord Andrew Feldman: Yes, that was my understanding. I think he might have been the director of the – a director of it as well.

Lead 5: Well, we’ll come on to that. I think that’s right.

Lord Andrew Feldman: Yeah.

Lead 5: David Sumner was the principal of SG Recruitment?

Lord Andrew Feldman: Yes.

Lead 5: Did you understand what was meant by the “principal”?

Lord Andrew Feldman: I suspect – I think I probably took that to mean that he was the person running it.

Lead 5: Let’s have a look at INQ000510463, please.

David Sumner wrote to you on 21 April 2020?

Lord Andrew Feldman: Yes.

Lead 5: Did you know David Sumner before this?

Lord Andrew Feldman: No. I had spoken to him, I think – I can’t remember if I’d spoken to him before or after this email, but briefly, yes, that was the first time I had ever spoken to him.

Lead 5: You said on 20 April “This sounds very interesting.”

Lord Andrew Feldman: Yes.

Lead 5: What was the basis upon which you thought that this offer was interesting?

Lord Andrew Feldman: I think by this stage I’d spoken to him, I think he’d actually sent me an email just before this, on the 19th, setting out what he could offer, and then I think I’d spoken to him. I can’t remember the exact sequence, but I spoke to him – and what was interesting about him was that he was ex-military, ex-SAS, he was very – he had done a lot of business in Asia, was very, very connected to factories in Asia, and had what looked like an impressive team of people supporting him. So he sounded like someone, you know, just from speaking to him on the phone, who sounded interesting, and passed that test that I set out earlier of being deeply connected in the Far East. So as I say, I thought this could be interesting.

Lead 5: Did you form a view that he was – what was the term you used – a “good chap”?

Lord Andrew Feldman: Yes, I mean, look, I have to admit I had a slight soft spot for someone who told me they had served in the military and was ex-SAS and credentialised themselves in that way. So I probably did think he sounded like a sort of decent guy when I spoke to him. I can remember him being articulate and impressive and also, you know, into the detail.

Lead 5: And did you think that that assessment that you made of him personally was relevant to assessing the offer that he was making?

Lord Andrew Feldman: I think what it did was it meant that – it was – it was – it certainly meant that it was worth, I thought it was worth – the combination of all the things that I’ve set out meant that I thought that he was definitely someone that Chris Hall should take a look at.

Lead 5: In your statement you offer no further details about SG Recruitment and you tell us that you no longer have access to the laptop and email address that you were using at the time, because you returned those to DHSC in May 2020.

Lord Andrew Feldman: Mm.

Lead 5: The Inquiry, though, has obtained further correspondence which you have seen, I believe?

Lord Andrew Feldman: Yes, I’ve seen.

Lead 5: And, of course, we also have Lord Chadlington’s statement. Could we turn up his statement at INQ000530462, paragraph 6. We learn there that he was a non-executive director, a non-executive chairman of Sumner Group Holdings. He has told the Inquiry that he understood that one of the companies in the group has access to PPE.

Did he explain to you the nature of his connection to SG Recruitment?

Lord Andrew Feldman: Well, he – in the email that Sumner sent me, and in the – what I sent on to Chris Hall, I said Lord Chadlington is a director. So he must have – that must have been – I think that was in the original email. So, yes.

Lead 5: How did that affect the approach that you adopted to this offer?

Lord Andrew Feldman: Not at all, really.

Lead 5: As a non-executive director, did Lord Chadlington – did it not occur to you that Lord Chadlington held shares in SGH Limited, the value of which could be dependent on the success of the subsidiaries in the group?

Lord Andrew Feldman: I honestly can say at the time – obviously I’ve read all the materials now – at the time, I was – didn’t really, sort of – it didn’t really enter my consideration.

Lead 5: Now that you’ve had the opportunity to look back on it, should it have done?

Lord Andrew Feldman: Well, not really, because it’s disclosed. It’s transparent. Look, I think when – the way I look at this is when you’re in an emergency situation, you’re always looking at a balance of risk. And so it’s a factor to be considered. It’s certainly a factor I would expect the transaction team to consider when it gets to the next stage of assessing the offer, but I didn’t think that should, on its own, preclude me passing the offer on if I thought it was credible –

Lead 5: Well, perhaps not –

Lord Andrew Feldman: As long as it’s disclosed, as long as it’s sort of –

Lead 5: Look, Lord Feldman, you indicated a moment ago that one of the reasons why, on occasion, you declared a connection to a Conservative Party member, say, is to ensure transparency?

Lord Andrew Feldman: Mm.

Lead 5: Why would it not have been that upon learning that Lord Chadlington stood to gain from a contract were it to be awarded, you didn’t make that clear on the correspondence?

Lord Andrew Feldman: Sorry, when – when did I learn that? Just a few weeks ago, when I got his statement? I didn’t know that at the time.

Lead 5: Let’s have a look at INQ000533519.

Lord Andrew Feldman: David Sumner to me, yes.

Lead 5: There it is.

“Lord Chadlington …”

Towards the bottom –

Lord Andrew Feldman: “… sits on the board …”

Lead 5: “… currently sits on the board of SGH Global.”

Lord Andrew Feldman: Yes, I know. I knew that.

Lead 5: So it’s not couple of weeks ago, is it? This is April –

Lord Andrew Feldman: No –

Lady Hallett: I think there may be a misunderstanding, Mr Wald, with the question. I appreciate that appears to be the answer to your question but I think –

Lord Andrew Feldman: No, no, what I was saying is – this is what I was saying to you. This is a letter of 21 April –

Mr Wald: Yes.

Lord Andrew Feldman: – in which he says that. And when I refer the offer on, I say “Lord Chadlington is a director of the company”. It is on the face of that initial correspondence.

If you look at the correspondence, I was involved in the correspondence between 19 and 21 April. After that it sort of goes into the machine and they start to assess the offer. After 21 April, that’s the end of my involvement in this. I leave it. The machine then makes its assessment.

This the first couple of days of to and fro of emails and then it gets passed through to Chris Hall and the team to assess. And this is sort of – this is the – this is him setting out his credentials.

“Further to our telephone call yesterday …”

Is how the email starts, and then he – so we spoke, I thought you sound like an interesting guy, quite impressive, and then he’s credentialising himself at the bottom, and that’s what I was referring to when I said he seemed to have good credentials.

And more than just having been formerly in the military, but actually having relevant connections in the Middle East – in the Far East.

Lead 5: Let’s just have look at Lord Chadlington’s witness statement now.

INQ000530462, paragraph 51.

I’m afraid I don’t have a page number here. There we are, thank you.

“On 26 April 2020, I responded to an email which Mr Sumner had sent to me stating, ‘Fingers duly crossed. [Let’s] have a chat when we know where we are and what happens next, future orders etc. I should – after chatting to you – talk to DC and to Feldman …”

Is that “[David Cameron] and to [Lord] Feldman”?

Lord Andrew Feldman: Yes.

Lead 5: “… they’ve been batting for us on this and I want to say thanks for support. Peter’. Mr Sumner replied, ‘Most definitely. I will call as soon as payment confirmed which I expect will be tomorrow. [David Cameron] and [Lord Feldman] have been very supportive’, to which I responded, ‘Yes. Once money is in the bank we can discuss next steps. Have a good evening and speak tomorrow. Peter’.”

So what support is referred to here? Were you batting for Mr Sumner in this case?

Lord Andrew Feldman: No, not at all. First of all I can say that David Cameron, other than giving Pete Chadlington my mobile number, and that’s sort of in the evidence, that’s it. That’s the extent of his involvement. As far as I’m concerned, the extent of my involvement is the initial exchange between 19 and 21 April, which you’ve seen, and that’s it.

I think Lord Chadlington is possibly operating under a bit of a misapprehension about what my role was. You know, once the offer had passed into the system it was really a matter for Chris Hall and the rest of the team to make the assessment. That’s it.

Lead 5: All right.

Lord Andrew Feldman: He may have viewed me passing the offer on initially as being very helpful, but it’s not what I – it’s no different to what I’ve done for anybody who I thought had a credible offer of help.

Lead 5: Lord Feldman, let’s just, to complete the picture, turn to the other aspect of the SG Recruitment contract which was awarded. This is for hand gel.

Could we have INQ000526188 brought up, please.

And just to remind, this was for £16,125,000, which was the purchase price. You tell us at paragraph 12 of your statement:

“The solicitors for the inquiry have also shared with me an email from Lord Chadlington dated 19th April … [in which] Nick Mason, who apparently had access to PPE. I do not recall this email and I do not recall what happened as a result of this introduction.”

Well, here we have, the following day, “Someone else …” it’s entitled:

“Nick’s family are good friends with [someone] and with ours. He has access also to some PPE which may help in current crisis.”

Lord Andrew Feldman: Yes.

Lead 5: “Nick outlined to Andrew what you can provide.”

Lord Andrew Feldman: Yes, he only provided me with this email after my statement. So, do you see –

Lead 5: You received it in April of 2020, did you not?

Lord Andrew Feldman: Yes, but to my DHSC email account.

Lead 5: Does that mean you wouldn’t have seen it?

Lord Andrew Feldman: Well, I say it in my statement, I can’t recall seeing it. And then – because I don’t have access to it any more. And then you’ve produced it for the purpose of this Inquiry, and now, you know, I can now see it, and now I can remember it.

Lead 5: Let’s just – there may be a better version of it.

Can we turn up INQ000510462, please.

Ah, it’s possibly a worse version of it.

Lord Andrew Feldman: You can see that’s sent to my DHSC email.

Lead 5: I do see that.

Lord Andrew Feldman: Yeah.

Lead 5: “Nick’s family are good friends with [David’s] and with ours. He has some access to some PPE …”

You may have forgotten about this email until you were supplied with it a couple of weeks ago.

Lord Andrew Feldman: Yeah.

Lead 5: But we can now see that towards the end of April 2020, Lord Chadlington –

Lord Andrew Feldman: Yes, it’s the same day as the other one.

Lead 5: The same day, points out that “Nick’s family are good friends with [David’s] and with ours”. Why do you suppose that might have been pointed out in this email? What relevance could it have to an offer coming in?

Lord Andrew Feldman: Frankly, in my view, none whatsoever, but if the offer was interesting, you know, on its merits, then worth passing on.

Mr Wald: Thank you, Lord Feldman. Those were all the questions I had for you. I know there may be questions from others.

Lady Hallett: There are.

Mr Weatherby, I think you’re up now.

Mr Weatherby is just there.

Questions From Mr Weatherby KC

Mr Weatherby: Thank you very much.

Lord Feldman, I ask questions on behalf of Covid Bereaved Families for Justice UK group. Just a few questions from me. You’ve told us and I’m not going to repeat it, that your role was triaging as a volunteer in this process.

Lord Andrew Feldman: Yes.

Mr Weatherby KC: So you were influencing, you would say in a positive way, the process. So your role was to filter or to promote or to help prioritise offers in what was a Civil Service procurement process. Is that right? Is that a fair way of putting it?

Lord Andrew Feldman: Yeah, I mean, I certainly think to filter and to identify interesting opportunities.

Mr Weatherby KC: Okay. All right.

Was it appropriate for a Member of the House of Lords and a leading member of the governing party to be playing such a role in a procurement process by the Civil Service?

Lord Andrew Feldman: Well, look, the view I took was that, normally speaking, it would not be a role that I would take on.

Mr Weatherby KC: Yes.

Lord Andrew Feldman: But in a crisis –

Mr Weatherby KC: Okay.

Lord Andrew Feldman: Well, it’s worth just making this point. In the crisis you get a phone call from James Bethell and you have a choice. You either say, “You know what? I’m not going to help. There’s too much risk associated with it, you know, it’s complicated, it’s not a role that has historic precedent. I’ll just sit on my hands.”

Or at that moment you say, “Well, I understand there’s a risk. We’ll do what we can to mitigate the risk, by giving me civil servants and a DHSC laptop, and I will try to help in any way that I can.”

They’re the choices you’re faced with at that moment. So the question of appropriateness is a very valid one to ask –

Mr Weatherby KC: Thank you.

Lord Andrew Feldman: – but I’m just saying you have to contextualise it about the choices that you have to make at that moment.

Mr Weatherby KC: Yes. So you’re agreeing with me then that it muddies the waters, doesn’t it, between –

Lord Andrew Feldman: I don’t think so, no.

Mr Weatherby KC: – between the political and the Civil –

Lord Andrew Feldman: No, because I think the other thing to say, in my experience with the Civil Service, almost invariable experience with the Civil Service, is they’re perfectly capable, and every day they deal with the challenge of deciding – you know, being faced by a political pressure or a political judgement and then having to make a judgement in their role as civil servants about what they perceive to be is right for the country, what’s in the best interests of the country.

Mr Weatherby KC: Yes.

Lord Andrew Feldman: I think the civil servants in my experience that I dealt with were more than capable of doing that. And in fact their evidence consistently says that, which is that they made judgments – what they thought was in the best interests of the country, in the best interests of the procurement process. And yes, they may have found politicians irritating, but they firmly and trenchantly stuck to their guns in making decisions – (overspeaking) –

Mr Weatherby KC: Okay, but you at least concede that in normal times it wouldn’t be appropriate for you to do a role such as that, given your role in the –

Lord Andrew Feldman: I think in normal times I wouldn’t be asked.

Mr Weatherby KC: Yes. Okay, I’ll move on.

You’ve stated that, with your discussion with Lord Bethell, you completed a conflict of interest form –

Lord Andrew Feldman: Mm.

Mr Weatherby KC: – at the beginning of your placement. Did you ever give consideration to potential for conflicts of interest in relation to the suppliers you were triaging? Was that something that you paid attention to?

Lord Andrew Feldman: Yes, absolutely, yes.

Mr Weatherby KC: In particular because a lot of them were apparently people that you knew?

Lord Andrew Feldman: As I said, some of the people introducing suppliers I knew. The suppliers themselves, overwhelmingly, I didn’t know.

Mr Weatherby KC: And did you take account of whether individuals who were referring, referrers of the companies, had financial interests in the suppliers being promoted?

Lord Andrew Feldman: Largely –

Mr Weatherby KC: It’s an important question, isn’t it?

Lord Andrew Feldman: It is an important question. Largely, that wasn’t the case. We’ve just been discussing an instance where Lord Chadlington was a director of the company –

Mr Weatherby KC: Yes.

Lord Andrew Feldman: – (overspeaking) – disclosed that. I didn’t know whether he had a financial interest or not in the business at that time. At the moment I can’t think of any – I may be corrected but I can’t think of any others where the referrer had a financial interest in the company.

Mr Weatherby KC: Yes, but was it something you asked them?

Lord Andrew Feldman: Um –

Mr Weatherby KC: I mean, here you are, putting forward offers or promoting offers. Surely you would want to understand conflicts or potential conflicts, or financial interests of people who were promoting them to you to promote into the –

Lord Andrew Feldman: Generally speaking, the people referring the businesses pointed it out. So they made a point of saying if there was, like in the case of Peter Chadlington, that they were a director. In the other instances, I think I assumed not.

Mr Weatherby KC: Do you think on reflection you should in each case have made that clear with referrers –

Lord Andrew Feldman: Well, are there instances where that happened that you’re concerned about?

Mr Weatherby KC: Well, I’m asking –

Lord Andrew Feldman: No, no, what I am saying to you is that I’m not aware of any, I’m not aware of any instances where I referred people who had a financial interest. But I mean, I’m not saying it’s not possible –

Mr Weatherby KC: I’m looking at the process you engaged with. I’m simply asking you whether this is something that you took care to – (overspeaking) –

Lord Andrew Feldman: Look, I’m hesitating in saying that I did because whether I – in the heat of the moment, whether I did it invariably, I can’t say for certain. But I certainly think that would have been something in my mind, yes.

Mr Weatherby KC: And in terms of SG Recruitment finally, you’ve been asked questions so I’ll be brief about this, but did you specifically ask David Sumner or Lord Chadlington to declare conflicts of interest or, particularly with Lord Chadlington, the fact of his financial involvement with SG Recruitment?

Lord Andrew Feldman: I think, when he said that he was the director, I sort of assumed that that was sufficient.

Mr Weatherby KC: Yes.

Lord Andrew Feldman: And you have to remember, as I said before, I was at the tip of the spear. There was an enormous machine of hundreds of people sitting behind me who went through technical due diligence, financial due diligence.

Mr Weatherby KC: – (overspeaking) –

Lord Andrew Feldman: Logistics and delivery. So you’re putting a lot of weight on me, and actually, as one person, acting on my own, and perhaps I had more faith that the system that was sitting behind me, which as I now know, had 500 people in it, would sort of address those concerns that you’re now articulating.

Mr Weatherby KC: Okay. Finally, in terms of SG Recruitment, you’ve given your account of the fact that SG Recruitment had some contacts in the Far East and the army connection?

Lord Andrew Feldman: Mm.

Mr Weatherby KC: We know from disclosure that some of the products that were supplied by SG Recruitment were marked “Do not supply to the NHS” at the end because they weren’t fit for purpose. This supplier was a recruitment company. It had no relevant trading history of itself. It had very low turnover for contracts of this magnitude prior to the pandemic. Apart from what you said, was there any basis for promoting SG Recruitment in the way that you did?

Lord Andrew Feldman: Well, I think first of all, promoting – you can see the correspondence. If you view that as promoting, you know, that’s your word not mine. I think I passed them on because I spoke to Mr Sumner and he seemed like a credible, knowledgeable person who might be able to help. The question of what was bought, how much of it was bought, what was paid for it, where it came from, how it was technically checked, how it was delivered, these were matters which were not in my remit and which there were teams of hundreds of people to attend to and I believe all of them, in my experience, worked very hard to get us to the right conclusion.

It is of course the case in a wartime situation, which frankly is what this was, that mistakes will be made. I suspect if one analyses the recruitment practices of the British government at the commencement of the Second World War, you would see all sorts of things –

Mr Weatherby KC: I don’t think we’ll go to the Second World War –

Lord Andrew Feldman: No, but what I am saying to you is you’re placing a prism on this team, this hard working team of civil servants, which is I’m afraid, you know, inevitably we’re carrying the weight of hindsight, but it’s not being very forgiving, given the situation that they were facing.

Mr Weatherby KC: I’m just asking you questions, Lord Feldman. Thank you very much.

Lord Andrew Feldman: No, I understand.

Lady Hallett: Thank you very much. Have we agreed on the questions, Ms Mitchell, that I’ve allowed you to ask?

Questions From Dr Mitchell KC

Dr Mitchell: I think we have, I’m obliged to counsel to the Inquiry who asked many of my questions but I think we’ve now agreed on one.

It follows on from the questions you’ve just been answering in relation to Mr Sumner. You’ve explained that you are doing a triage system, that you were credentialising the offer, and you explained in relation to Mr Sumner that you had a certain fondness due to the fact of him having been in the military and an SAS man.

Lord Andrew Feldman: Mm.

Dr Mitchell KC: Can I ask you if you asked him certain questions? And I think I might already know the answer to this but if I can just ask you to clarify. Did you ask him, for example, how long his company had been trading?

Lord Andrew Feldman: Look, I don’t want to misspeak. If you imagine this is 5 years ago –

Dr Mitchell KC: Indeed.

Lord Andrew Feldman: I was having multiple conversations a day. I don’t – I can’t actually remember my conversation other than what’s set out in the correspondence, which is he seemed like an interesting, credible person.

I suspect that I didn’t ask him how long the company had been trading. It’s possible that I did but I can’t honestly recall.

Dr Mitchell KC: You see, it’s the – the Inquiry has heard that in order to triage offers, that questions were asked, for example, how long had a company been trading, whether or not it was trading at a profit or a loss, whether or not it had ever traded PPE, and I wonder if I can ask you to comment on this: it sounded like what you were triaging was people rather than offers?

Lord Andrew Feldman: I think that – well, I think certainly what I was – and it’s a very fair comment. What I was doing was I was trying to make a rapid assessment of whether an offer was credible enough to go to the next stage, and by which I mean whether the – from – what I said at the beginning was, was there a proximity to the Chinese market? Was it an offer which was of sufficient scale to move the dial in a situation where the volumes needed were enormous? And was the person knowledgeable about the product area in a way that made it interesting?

The questions of whether the company had been trading a long time, the creditworthiness of its balance sheet, all of those aspects, were definitely not for me. They were definitely handled by the specialist teams further down the line. And you can see that in the correspondence. If you look at what was done after I’d passed it on by the professional team, they looked at things like the balance sheet of the company and its trading history, and, you know –

Dr Mitchell KC: Indeed, I –

Lord Andrew Feldman: – and corporate structure. So my point is it was done, but that wasn’t by me.

Dr Mitchell: My Lady, no further questions. I think my point is made.

Lady Hallett: Thank you very much, Ms Mitchell.

Thank you very much, Lord Feldman. I may just forgive you for that dreadful word “credentialise”, I can’t even say it, but thank you very much for your

patience in waiting so long to come on, and thank you

for your help with the Inquiry. Thank you very much

indeed.

Very well, 10.00 tomorrow, please.

(4.31 pm)

(The hearing adjourned until 10.00 am the following day)