Department of Health writes off £9bn spent in England’s Covid PPE drive

Billions were spent on unusable or overpriced protective equipment, annual accounts show

Ministers spent almost £9bn on personal protective equipment that was either substandard, defective, past its use-by date or dramatically overpriced, according to figures released on Monday.

The Department of Health and Social Care paid £12bn while emergency-buying PPE for England in the year to 31 March 2021, its annual accounts show. Tonnes of items bought for £2.6bn were never usable by the NHS – this figure is now £2.7bn – and a further £670m worth of PPE was not usable at all in any healthcare setting.

This was mostly because it was defective, the annual report stated, and items costing £750m passed their safe date before they could be used.

By far the biggest figure , however, is the £4.7bn amounting to the difference between the dramatically inflated prices the DHSC paid for PPE to fill England’s tiny stockpile, and the value of that equipment now.

The accounts, audited by the National Audit Office, do not identify to where that extra £4.7bn was paid, whether in increased prices charged by PPE factories, mainly in China, or in significant profits made by UK companies and their intermediaries.

Gareth Davies, the NAO’s comptroller and auditor general, also noted that PPE procurement had been vulnerable to fraud, as normal competitive tender processes were suspended and multimillion-pound contracts awarded to many companies with no previous experience. As much of the equipment supplied remains in sealed containers, Davies said he had been unable to carry out sufficient checks to be satisfied that substantial fraud had not taken place.

“The level of fraud risk has increased as a result of Covid-19-related procurement,” he stated. “A significant increase in new suppliers, a lack of timely checks on the quality of goods received and poor inventory management all contributed to this heightened risk. In these circumstances … I have not been able to obtain assurance that there has not been a material level of losses due to fraud.”

Davies’s cautionary note on possible PPE fraud follows the resignation last week of the former Cabinet Office minister Theodore Agnew, who complained of “arrogance, indolence and ignorance” in the government’s attitude to tackling fraud, after £4.3bn fraudulently claimed in Covid loans was written off.

The DHSC accepted in the annual report that its PPE procurement was susceptible to “heightened risk” of fraud, as “goods subject to detailed technical requirements were purchased from new suppliers … some of whom did not have experience in supplying these types of product”.

The department justified its processes, however, saying it had to act quickly to buy “scarce resource amidst a global pandemic”, and was confident in its anti-fraud precautions including financial checks on suppliers and payment on delivery.

“In the department’s view, these factors give assurance that the possibility of significant levels of fraud existing in respect of PPE inventory purchasing is remote,” the DHSC said.

The government’s frantic process to replenish an empty stockpile of PPE has since become one of the most severely criticised elements of its pandemic response. Last month the high court ruled in favour of a legal challenge by the Good Law Project that the “VIP lane”, which gave high priority to companies with political connections, was unlawful.

Companies with many years’ experience supplying the NHS complained they were ignored by the procurement process, while some people with no previous PPE experience but with Conservative party connections were awarded multimillion-pound contracts.

The NAO has previously reported that companies referred to the VIP lane by Conservative ministers, MPs and peers or government officials had a success rate for contracts 10 times greater than companies dealt with in the other procurement route.

Pat McFadden, the shadow chief secretary to the Treasury, said of the DHSC accounts: “These levels of waste destroy any claim the Conservatives have to be careful stewards of the public finances.

“Along with the government’s laissez-faire attitude to fraud, this will be particularly galling to hard-working households wondering how they will pay the higher taxes the chancellor is imposing this April.”

A DHSC spokesperson said: “Our absolute priority throughout this unprecedented global pandemic has always been saving lives.

“In a highly competitive global market where many countries imposed export bans, we acted swiftly to obtain 30,000 ventilators by the end of June 2020 and we have delivered over 17.5bn items of PPE to the frontline, with 97% of PPE we ordered being suitable for use.

“The supply of these vital items helped keep our NHS open at a moment of national crisis to deliver a world-class service to the public. We are seeking to recover costs from suppliers wherever possible.”

• This article was amended on 1 February 2022. The original referred to the UK’s PPE drive. The DHSC figures are actually for England only.


David Conn

The GuardianTramp

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