A Russian-owned company played a key role in the £2.6m renovation of No.9 Downing Street in an undisclosed contract to get it ready for White House-style televised media briefings, a source has told HuffPost UK.
According to the source, Megahertz carried out crucial work, including installing computers, cameras, microphones and a control desk, to get the building ready for briefings from Boris Johnson’s press secretary Allegra Stratton.
In 2013, Megahertz was bought by the UK arm of Okno-TV – a Moscow-based firm that has carried out technical work for state-controlled broadcasters Russia Today, Channel One, and Public Television of Russia.
Most of Megahertz’s current shareholders are either current or former workers at the Russian firm, according to Companies House.
It has not been suggested that either Megahertz or Okno-TV is under the influence of the government of Russia, which will reportedly be described as a “hostile state” and the UK’s “biggest state-based threat” in a landmark review of foreign policy this week. It comes after parliament’s intelligence and security committee last year declared Russian influence in the UK as “the new normal”.
But Labour said there were “serious questions” to answer about the No.9 refurb, while the chair of parliament’s cross-party group on Russia said it sounded “dodgy”.
An industry source added: “They are Russian-owned and the owners supply the Russian state broadcaster, and they have just put all the technology into Downing Street.”
The televised briefings are believed to have been the brainchild of the prime minister’s former director of communications Lee Cain, who left No.10 in December alongside his Vote Leave ally Dominic Cummings.
“The Johnson government seems to have learnt nothing about the involvement in sensitive UK projects of companies with ties to autocratic regimes”
Downing Street said that it “takes all necessary measures” to ensure “very high standards of security are always met”.
But it could not say whether the work was put out to competitive tender, and did not publish the contract.
Chris Bryant MP, who chairs the all-party parliamentary group on Russia, said: “This new vanity project sounds dodgy.
“All the details should be published immediately but what shocks me most is that the Johnson government seems to have learnt nothing about the involvement in sensitive UK projects of companies with [links] to autocratic regimes, whether in Russia or in China.”
Shadow Cabinet Office minister Fleur Anderson said: “This raises serious questions on who is getting rushed-through government contracts.
“And that’s before we even get to why they’re spending millions on a media briefing room while our nurses face a [real-terms] pay cut.
“This gets to the heart of this government’s deeply flawed obsessions with layer upon layer of wasteful outsourcing – pretty soon, they don’t appear to know or care about where British taxpayer money is going or who it is funding.
“The fact the government seems to have simply brushed this off with no further transparency or assurances on due diligence is deeply concerning.”
The industry source told HuffPost UK that the firm had carried out systems integration work to make the No.9 studio function to Downing Street specifications.
HuffPost UK understands the work has taken around four months and that Megahertz was subcontracted to do it by Interserve, which partially merged with Mitie last year and holds the Cabinet Office’s facilities management contract.
The source said the government could have used a British firm for the job, and that it could have been done for hundreds of thousands, rather than millions, of pounds.
“It could have been a couple of hundred grand,” they said.
“As far as I can see there has been no competition.”
They went on: “Doing this kind of work is a skillset that exists in the UK. It is something that we are good at doing.
“There are technical experts in building broadcast systems all over this country and none of us were involved.
“Megahertz have been in the UK market for years but they got bought out by the Russians.
“They have been involved in UK television for years. They are a perfectly good and respectable systems integration company – they know what they are doing.
“But they are Russian-owned and the owners supply the Russian state broadcaster, and they have just put all the technology into Downing Street.”
A government spokesperson said: “We take all necessary measures to ensure the very high standards of security that we have in place across the government estate are always met.
“All procurement decisions and contractual awards are made in line with strict government guidelines to ensure value for money for the taxpayer.”
HuffPost UK asked Megahertz whether there was a competitive process for the contract, how much the firm was paid for the work, and whether it could respond to concerns about security.
The company declined to comment.
Update: Allegra Stratton, the prime minister’s press secretary, said Downing Street took “all necessary measures” to ensure high standards on security.
Asked if there were any security concerns about the work, she told reporters on Monday: “Absolutely not – we are sitting in No.9 right now and all of the correct processes have been followed.
“There are no concerns from our team.”
She went on: “Clearly in a contract like that we take all the necessary measures to ensure the highest standards of security.
“It’s absolutely not something we would ever cut corners on, and every refurbishment across the government estate is to the highest standard and those standards are always met.”
Editor’s note: This story has been amended after an earlier version incorrectly attributed Fleur Anderson’s quote to Rachel Reeves.