Labour embroiled in new cronyism scandal after donors awarded millions in contracts

The company that had a senior member of staff working for the Technology Secretary while in opposition has seen a huge increase in the number of contracts it's being awarded by the new Labour government. Public Digital saw a member of staff seconded to Peter Kyle's office prior to the election, with the firm also donating the equivalent of around £100,000 to the Labour Party.

Since the election, and Mr Kyle's appointment as Secretary of State for Science, Innovation and Technology, Public Digital has won a number of contracts to reform major IT systems across Whitehall. These include a £5 million contract for reforming local services, as well as a £3 million contract to transform the Post Office's IT system. In total, Public Digital's awarded government contracts have quadrupled since Labour took power, from valuing around £2.5 million to a whopping £10 million.

While none of the contracts were awarded to Public Digital by Mr Kyle's department, the relationship is raising questions about public money and government cronyism.

The Tories are now calling for an independent investigation into the links between Public Digital and Labour, with the shadow Cabinet Office minister branding it "more sleaze and scandal from Starmer's government".

Former MP Duncan Hames, who is now the director of policy at a transparency campaign group, said: "This case raises serious questions about how public money is now spent under the new government.

"When a company gives senior staff to support a political party and then receives valuable government contracts after they take power, this raises concerns about potential conflicts of interest."

The relationship between Labour and Public Digital also hit headlines last year, when it emerged that Mr Kyle failed to disclose that a businesswoman he hired was from the firm that had donated to Labour.

Emily Middleton was appointed as director general of DSIT following the election on a six-figure salary.

Ms Middleton had also worked at Labour Together, the think tank with close ties to Keir Starmer's chief of staff Morgan McSweeney.

A government spokesman said: "All contracts are awarded in line with public procurement legislation.

"Public Digital is a leading digital consultancy and a long-running supplier for government and the wider public sector, holding a number of contracts awarded under previous administrations."

A Public Digital spokesman said they have "a proven track record of delivering exceptional digital transformation services".

"Our team's expertise, not political affiliations, has earned us the trust of government bodies."