Ministers have faced accusations of cronyism after it emerged that some firms were given access to a high priority lane for lucrative personal protective equipment (PPE) deals during the pandemic.
The government is now planning to tighten the rules so emergency public contracts can no longer be given without competition.
Suppliers will be blocked from winning government contracts if they have a record of poor delivery, fraud or corruption, according to a Cabinet Office document published on Monday.
It would also be possible to ban suppliers which have undertaken unethical practices – such as a lax approach to safety, or where there are national security or environmental concerns.
Procurement data will be published in a “standard, open format”, the government claimed, as Cabinet Office minister Steve Barclay promised that the changes were aimed at “increasing transparency”.
The government also pledged to introduce some form of competition into emergency buying procedures so it “doesn’t need to wholly rely on direct awards” in times of crisis.
The government has come under intense pressure over Conservative politicians’ links to firms which won PPE deals. Last month it emerged that at least seven Tory MPs and peers referred companies through the so-called VIP lane.
Communities secretary Michael Gove was named as the source of referral for Meller Designs – the firm co-owned by Conservative donor David Meller – to the VIP lane. The company went on to land more than £160m in PPE deals.
The government has argued that a VIP lane was a “perfectly reasonable and rational” solution to the large number of offers to supply equipment at the beginning of the pandemic.
And on Monday former health secretary Matt Hancock again denied any wrongdoing after a firm run by the ex-manager of a pub in the MP’s constituency was subcontracted to provide tubes for the NHS Test and Trace programme.
Mr Hancock told the BBC that “everything has been above board” over deals for PPE and other services, and said he was “absolutely certain” that the Covid inquiry would find government were “working incredibly hard in unprecedented circumstances”.
The proposed rule changes – outlined in a green paper public procurement reform on Monday – would give more weight to bids with “social value” and help level up the country.
“Under new rules, procurers will be able to give more weight to bids that create jobs for communities, build back better from the Covid-19 pandemic and support the transition to net zero carbon emissions,” the document said.
The Cabinet Office claimed the proposed crackdown on rogue firms were part of wide-ranging changes taking advantage of “new powers” after Brexit.
The department argued that a set of “simpler, clearer and more flexible” rules could now be introduced. Brexit minister Lord David Frost said the planned reforms “are just one of the many areas where we are taking advantage of our exit from the EU’s rules”.
Jolyon Maugham, director of the Good Law Project, responded: “You gotta love David Frost’s attempts to blame the EU for things his government did after leaving the EU and that EU law forbids.”
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