Covid-19: Taxpayers are still liable for £2.7bn risk from government PPE contracts, say auditors
BMJ 2022; 376 doi: https://doi.org/10.1136/bmj.o837 (Published 30 March 2022) Cite this as: BMJ 2022;376:o837
Billions of pounds of taxpayers’ money are still at risk from contracts for personal protective equipment (PPE) that were hurriedly signed in 2020 to respond to the covid pandemic, the government’s public spending watchdog has concluded.
In a report published on 31 March,1 the National Audit Office (NAO) said that financial fallout was still being felt from the “extremely overheated” global market in 2020 that had pushed up PPE prices.
Gareth Davies, head of the NAO, said, “The Department of Health and Social Care is still dealing with the results of its emergency procurement decisions, some two years after it first needed to rapidly buy PPE in unprecedented circumstances. The department is continuing to manage 176 contracts where it believes it may not achieve full value for money, with an estimated £2.7bn [€3.2bn; $3.6bn] at risk.”
Most of these disputes were due to the quality of PPE delivered, the NAO said.
Excess stock
The report also found that over half (53%) of the 51 PPE suppliers selected from the “VIP” lane—which prioritised suppliers suggested by ministers, MPs, or other senior figures—had provided some PPE that was not currently suitable for frontline services.
Overall, the Department of Health and Social Care is storing 3.6 billion PPE items that it considers not currently suitable for frontline services, as well as 1.5 billion that are estimated to have passed their expiry date and are ineligible for distribution, the NAO said.
The department estimates that it now has 3.9 billion more PPE items than it needs—around 10% of the total PPE it purchased—and is spending an estimated £7m a month storing these items while it tries to reduce the excess stock by selling, repurposing, donating, or recycling it.
Since February 2020 the department and its NHS procurement partner have awarded almost 10 000 contracts for PPE, spending £12.6bn on almost 38 billion PPE items, the NAO found.
Some 394 contracts worth a total of £7.9bn were awarded through two new procurement routes set up to respond to the high demand, most of which went to new or unknown suppliers to the NHS. Of these 394 contracts, 115 were awarded to 51 “VIP lane” suppliers.
To date, the department has taken receipt of 31.5 billion PPE items, with a further 1.4 billion items stored in China and 5.0 billion items still to be received, the auditors found.
Of the 31.5 billion items received, 17.3 billion have been delivered to frontline services and 14.2 billion remain in UK storage. From March 2020 to October 2021 PPE storage had cost the department £737m, including penalty charges of £436m because it had had to store PPE in containers for longer than expected.
The NAO observed that the department had no “single end-to-end stock management system” and that the management data it held contained inconsistencies between the volume of PPE ordered and the quantities received.
In addition, the department estimates that potential fraud in the PPE procurement programmes will be 0.5-5.0% of expenditure.
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