KPMG offices

Covering up Corruption?

Nick Kempe – 28th April 2022

Covering up corruption – the Scottish Government’s appointment of KPMG to design a National Care Service

On Friday I received the Scottish Government Procurement Division’s review of their decision to withhold information about when they knew about the UK Government’s concerns about KPMG.  The Scottish Government had awarded KPMG the £550k contract to design the National Care Service on 13th December, just a week before it was announced that KPMG were withdrawing from bidding for UK contracts because of concerns about corruption.  Common Weal’s Care Reform Group was interested in finding out if Scottish Government officials knew of those concerns before awarding the contract and, if so, why they pressed ahead with it.

The review request was submitted on 3rd March, the same day we learned from another information request to the UK Cabinet office that officials there had been at a meeting on 25th November where they informed the Scottish Procurement Directorate about their “engagement with KPMG”.  It says something about the state of open government in Scotland that the UK Cabinet Office was more prepared to release information than the Scottish Government. (The Cabinet Office response also admitted to not having notified other parts of government about their concerns with KPMG, an extraordinary omission, so in other respects they come out no better than the Scottish Government in this case.)  

Having confirmed in writing that the Review response was due by 31st March, Scottish Government officials responded on 22nd April three weeks after the legal deadline. 

In their review of their decision, the Scottish Government stated that they had met the UK Cabinet Office at the meeting on 25th November “at which KPMG was mentioned”.  Having admitted this, the obvious next question was to justify why they awarded the contract to KPMG two and a half weeks later. This  probably explains why they also chose to release what purports to be a short extract from a note of the meeting:

We don’t have to exclude them [KPMG] and every contracting authority can make their own decision. They [KPMG] need to provide us with evidence to show they are on path to recovery. They are cooperating with this.” 

If the Scottish Government were notified of the UK Government’s concerns about KPMG at this meeting, it would have been impossible for KPMG to have been already “co-operating with this”.  Perhaps the note records actions that were undertaken after the meeting? Or perhaps officials were informed of concerns about KPMG before the meeting and from another source?  Either way, the truth is not being revealed, a sad indictment of the way the Scottish civil service now operates.

The implication of the review response is that KPMG had provided officials with information – we have now asked for this under FOI – that showed they were “on the road to recovery” by the date the contract was awarded on 13thDecember.  If that was really the case, why then did KPMG withdraw from bidding for UK contracts just a week after that?  If things were so different in Scotland, why then was it announced at the end of January that KPMG was withdrawing from bidding from Scottish Government contracts after all?  Clearly whatever governance checks took place between 25th November and 13th December were deeply flawed.  Time for our national politicians to investigate and for Audit Scotland to investigate as they have recently done with the award of the ferry contracts.

All this secrecy lends more weight to the suspicion that ex-KPMG staff who are now working at the heart of the Scottish Government have somehow overridden normal governance processes to further the privatisation of care services.  That suspicion is re-inforced by our latest intelligence that civil servants have been meeting with KPMG to re-design the care system without the involvement of other stakeholders and based on a budget that fails to use all the extra monies that will come to the Scottish Government from the increase in National Insurance contributions which were intended to pay for care.  If this is allowed to continue, Scotland will end up with a bastardised version of a care service that will pump yet more profits into the private sector rather than providing people with the care services they need and the vision we set out in Caring for All.

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