Government’s Covid protection procurement failures cost £10bn

Failure to maintain adequate stockpiles of personal protective equipment (PPE) cost the government £10bn as prices soared during the pandemic, while moves to boost supply failed to get equipment to frontline workers quickly enough, the National Audit Office (NAO) has found

Its report into the government’s actions during the Covid-19 crisis found that in a rapidly deteriorating situation, there were huge efforts made to obtain PPE, but it paid very high prices due to unusual market conditions and many front-line workers reported shortages, while some contracts delivered equipment which was not appropriate for their needs.

Between February and July, the Department for Health and Social Care (DHSC) spent £12.5bn on 32bn items of PPE, but only 2.6bn items were delivered to front-line organisations in that period because of the time lag between placing an order and receiving supplies.

During the early stages of the pandemic, the government experienced difficulties distributing PPE and there was a lack of information on how much stock each NHS trust needed.

To manage the rapidly deteriorating situation and urgently source PPE, DHSC created a ‘parallel supply chain’. This made orders worth £7bn for 14.6bn items of PPE by the end of May.

There were huge increases in the price paid for PPE compared with 2019 due to the global surge in demand and restrictions on exports in some countries. This ranged from a 166% increase for respirator masks to a 1310% increase for body bags.

The NAO calculated that had government been able to buy PPE at 2019 prices, expenditure on PPE to July 2020 would have been £2.5bn, some £10bn less than it actually paid.

The audit watchdog’s inquiry found some PPE failed to meet required standards.

Across two contracts, orders totalling £214mn were made for 75m respirator face masks which the NHS will not use for the original purpose (one of the suppliers has since agreed to vary the contract and replace most of the order with a different type of face mask).

Tens of millions of respirator masks ordered from other suppliers and some other types of PPE are also likely to be unusable for the original purpose.

Adult social care providers told the NAO that they were not adequately supported by government in obtaining PPE and were very close to running out.

The sector received approximately 331m items of PPE from government between March and July (14% of the total PPE distributed and 10% of their estimated need).

This compared with 1.9bn items sent to NHS trusts in that period (81% of PPE distributed and 80% of estimated need).

In September, DHSC published a PPE strategy which aims to increase resilience by means of a bigger stockpile, a much larger UK manufacturing base, a better distribution network, and an improved understanding of the needs of health and care organisations.

Gareth Davies, NAO head, said: ‘As PPE stockpiles were inadequate for the pandemic, government needed to take urgent action to boost supplies

‘Once it recognised the gravity of the situation it worked hard to source PPE, but most of these orders were not received in time for the first wave of the pandemic and many front-line workers reported shortages of PPE during that time.

‘The price of PPE increased dramatically, and that alone has cost the taxpayer around £10bn.

‘There are important lessons for government to learn as it continues to tackle the pandemic. This includes fully understanding not just the requirements of the NHS, but also social care providers so that they can be better supported in future.’

Further reading:

NAO report on the supply of personal protective equipment (PPE) during the Covid-19 pandemic

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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