A National Audit Office report said the Government was still grappling with issues over contracts agreed during the coronavirus crisis.
29 March 2022
The Government has been told to “get a grip” of personal protective equipment (PPE) stocks and contracts, as it was disclosed more than half of suppliers who provided items through the VIP fast-track lane provided stock that was not suitable for use on the front line.
A report released on Wednesday by the National Audit Office (NAO) found that two years on from the start of the coronavirus pandemic, the Department of Health and Social Care (DHSC) was still dealing with issues over some of the nearly 10,000 contracts drawn up to purchase almost 38 billion items of PPE.
Officials rushed to buy the equipment at the start of the pandemic and the NAO watchdog recognised there was “an extremely over-heated global market, with desperate customers competing against each other, pushing up prices and buying huge volumes of PPE”.
But the report said the Government was now being charged millions of pounds to store this equipment for longer than expected, there were “inconsistencies” between the volume of PPE ordered and what was received, and that billions of items were not suitable for use on the front line.
The report found that more than half of suppliers given contracts via the fast-track stream, where firms could be recommended by government officials, ministers’ offices, members of Parliament, senior NHS staff and other health professionals, had provided unsuitable items.
Some of the reasons the PPE was unsuitable was because it would take too long to assemble, there were concerns about modern slavery, or paperwork was missing.
Some 1.5 billion items in storage have now passed their expiry date.
DHSC said that having more PPE than necessary was better than having not enough, and it is understood estimates for what would be needed were made on a worst-case scenario basis.
But Labour MP Dame Meg Hillier, chairman of the Commons Public Accounts Committee, said: “The numbers are staggering – over 30 billion items of PPE received so far with five billion more on the way and 3.6 billion items that can’t be used by frontline services.
“Storage alone has cost over £700 million, with DHSC continuing to spend £7 million a month storing PPE it doesn’t need.”
She added: “Whatever forbearance the taxpayer may have had at the start of the pandemic, this will quickly wear thin if DHSC can’t now manage the consequences.
“The department must urgently get a grip of its PPE stocks and focus on protecting value for taxpayers. It has to claw back contract costs where it can, get rid of unusable PPE, and cut down on expensive storage.”
The NAO report detailed how DHSC awarded 394 contracts worth £7.9 billion through two new supply chains.
Some 9,492 contracts worth £5.2 billion were agreed through the existing NHS supply chain.
Of the 394 contracts, 115 of those went to 51 VIP lane suppliers and 46 of these contracts did not go through full due diligence checks, which were only put in place from May 2020 onwards, but some measures were in place.
The report said DHSC paid out £2.5 billion to suppliers upfront – before PPE was received – to “prevent contracted PPE being gazumped while in transit”.
Five of those upfront payment contracts, worth £19 million, are at risk of not being delivered, the report said.
Of the PPE which has been received, 17.3 billion items (55%) have been sent to frontline staff, but 14.1 billion items – worth £8.5 billion – remain in storage, either in one of 50 warehouses, with suppliers, or in shipping containers.
By November 2021 it had cost the Government £737 million to store PPE. Some £436 million of that was penalty charges, because DHSC could not move the items out of shipping containers in time.
The report said DHSC estimated it had 3.9 billion items of PPE it did not need, with an extra five billion due to be delivered, while spending about £7 million a month to store the current stock.
Of the current unneeded stock, the Government is “trying to dispose of these items through sales (305 million items), donations to other parts of the public sector (253 million items) and recycling (232 million items).”
It is understood 207 million masks have already been donated to schools, with plans to give away equipment abroad.
The NAO said DHSC believed its model for measuring stock was accurate, but the report said: “When we attempted to reconcile stock numbers on individual contracts, however, we were unable to gain assurance over its accuracy.”
Some 3.6 billion items that had been received were judged not suitable to be used on the front line, with 53% of fast-track lane suppliers providing some unusable PPE.
In some 1.1 billion cases this was due to requiring assembly “which was considered too time-consuming”.
In 1.4 billion items there were concerns about modern slavery, or paperwork was incomplete.
A further one billion items – 99% of which came through the new supply chains – were deemed to be wastage and “cannot be used in any way”, with 25% of VIP lane suppliers providing PPE that ended up as wastage.
Some 57 of the 176 contracts where the Government believes “it may not achieve full value for money” were awarded through the VIP lane, the NAO report said.
In 117 of those 176 contracts the dispute was over the quality of the PPE received, and five related to deliveries not arriving.
Labour’s deputy leader Angela Rayner said: “Unusable masks, gowns, goggles and gloves that our frontline key workers desperately needed during the pandemic are now literally going up in flames, along with billions of taxpayers’ cash spent on it.
“Ministers have a duty to get value and results when spending the public’s money, but Boris Johnson has created a culture of cronyism and waste throughout his Government.”
A DHSC spokesman said: “Our priority throughout the pandemic has been saving lives, and we have delivered over 19.1 billion items of PPE to frontline staff to keep them safe.
“Having too much PPE was preferable to having too little in the face of an unpredictable and dangerous virus, given this was essential to keep our NHS open and protect as many people as possible.
“Where contracts are in dispute, we are seeking to recover costs from suppliers and we expect to recover significant amounts of taxpayers’ money.”
