Recommendations & Conclusions
21 items
2
Recommendation
Twelfth Report - Management of PPE cont…
Acknowledged
The Department still lacks a stock management system that enables it to fully understand what PPE it has and where it is. The Department believes that it has now received nearly all of the 37.9 billion PPE items that it has ordered, with 300 million items yet to be received. …
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The Department still lacks a stock management system that enables it to fully understand what PPE it has and where it is. The Department believes that it has now received nearly all of the 37.9 billion PPE items that it has ordered, with 300 million items yet to be received. The management data on total stock numbers, however, has rarely been accurate. The Department blames inconsistencies between the volumes of PPE ordered and quantities shown in stock counts on the lack of a single end-to-end stock management system that captures all the stock it holds. This is exacerbated by the fact that the Department is still storing PPE in 70 locations across the UK, with items also held in China and also by suppliers. In order to make informed decisions about the appropriate amount of PPE to stockpile in future, the Department will need accurate and complete data on the stock it currently holds. Recommendation: The Department should set out in its Treasury Minute response to the Committee how it intends to work with SCCL to build and maintain an effective stock management system that is complete and accurate in its data collection.
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Government response AI summary
The government agrees with the Committee’s recommendation and the department has undertaken a review of historic ministerial diaries and has, where necessary, updated the register in line with Cabinet Office requirements; the department has strengthened both reporting and quality assurance processes.
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HM Treasury
3
Recommendation
Twelfth Report - Management of PPE cont…
Accepted in Part
The Department remains in dispute on 176 contracts for PPE with £2.7 billion of taxpayer money at risk and has made little progress in tackling potential fraudulent supplies of goods. The majority of these 176 disputes relate to the quality of the PPE provided by the supplier. Eighty-three of the …
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The Department remains in dispute on 176 contracts for PPE with £2.7 billion of taxpayer money at risk and has made little progress in tackling potential fraudulent supplies of goods. The majority of these 176 disputes relate to the quality of the PPE provided by the supplier. Eighty-three of the 176 contracts are still in the first stage of the commercial resolution process with a further 59 having entered formal commercial discussions. At present, no cases have moved into the litigation stage of the commercial dispute process. The Department estimates that of the 176 contracts in dispute, 35% will not be resolved until 2023. Although the 6 Management of PPE contracts Department estimates that total fraud from PPE contracts could be between 0.5%- 5.0% of expenditure it was unable to give us any details on how it is progressing any fraud inquiries for these contracts under dispute. Recommendation: The Department should explain in its Treasury Minute response to the Committee its progress in resolving these cases and provide as full an update as is possible on the status of those negotiations. The Department should also update us on how it is working with relevant authorities in assessing and acting on any fraudulent cases.
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Government response AI summary
The government will provide a summary update on the progress of negotiations in confidence to the Committee, and has established a Dissolution Team until March 2023 with quarterly targets to resolve contractual matters, but much of the requested information is commercially sensitive.
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HM Treasury
4
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
The Department had insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest. We recognise that the Department had to act quickly at the start of the pandemic to secure vital supplies of PPE but believe that there was still …
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The Department had insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest. We recognise that the Department had to act quickly at the start of the pandemic to secure vital supplies of PPE but believe that there was still scope to perform appropriate due diligence, particularly on potential new suppliers. The Department acknowledges that before May 2020 not all due diligence checks on areas such as financial, commercial and legal issues were completed before awarding contracts. A formalised eight-stage due diligence process was established in May 2020 but 46 out of 115 contracts awarded through the VIP lane pre-dated this. The Department believes that it had the necessary due diligence checks considering the circumstances and environment of the COVID-19 pandemic in which it was purchasing PPE. At no point was consideration given to the extent of the profit margin that potential suppliers would be taking on payments for PPE. Neither was consideration of any potential conflicts between individuals making referrals through the VIP lane and the companies they were referring. We are therefore unsurprised to see the reports of excessive profits and conflicts of interest on PPE contracts. Recommendation: The Department should set out in its Treasury Minute response how its commercial reset will ensure that sufficient processes are now in place to prevent such issues occurring again.
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Government response AI summary
The government states that the commercial reset will ensure sufficient processes are now in place to prevent issues such as insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest from recurring, and highlights existing …
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HM Treasury
5
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
The Department has handed back responsibility for the PPE programme to Supply Chain Coordination Limited (SCCL) with many issues still to be resolved. Since October 2021, oversight of SCCL transferred from the Department to NHS England and in April 2022 the Department transferred the responsibility for managing the supply of …
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The Department has handed back responsibility for the PPE programme to Supply Chain Coordination Limited (SCCL) with many issues still to be resolved. Since October 2021, oversight of SCCL transferred from the Department to NHS England and in April 2022 the Department transferred the responsibility for managing the supply of PPE to SCCL. This means that responsibility for the logistical management and distribution of PPE across the 70 sites that the Department built up now resides with SCCL. In other areas, however, such as the resolution of the 176 contracts in commercial dispute, responsibility is to remain within the Department. The Department was due to produce a PPE strategy where we expect roles and responsibilities to be clearly set out, but this has been delayed and is now not expected to be completed until summer 2022. Recommendation: The Department should release its PPE strategy in full as soon as possible, setting out how it will work with SCCL and what the respective roles and responsibilities of each organisation will be in the ongoing management of contracts and future procurement activities. If the strategy is not available by the end of September, the Department should write to the Committee to explain the reason for the delay. Management of PPE contracts 7
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Government response AI summary
The government agreed to release its PPE strategy and update the Committee on plans for publication, aiming for Autumn 2022 implementation, while the NHS Supply Chain took over PPE supply and distribution in April 2022.
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HM Treasury
6
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
The future of the UK-based supply chain for PPE is unclear. The global demand for PPE at the start of the pandemic pushed up the prices from suppliers around the world. In an effort to create a more resilient UK-based supply chain, the Department encouraged some UK manufacturers to repurpose …
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The future of the UK-based supply chain for PPE is unclear. The global demand for PPE at the start of the pandemic pushed up the prices from suppliers around the world. In an effort to create a more resilient UK-based supply chain, the Department encouraged some UK manufacturers to repurpose their businesses to supply PPE. It signed 37 contracts under its “UK Make” programme and collectively, these contracts helped deliver 3.9 billion items of PPE. However, now that demand for PPE has reduced and with the Department holding a large amount of excess stock, it is unclear what role these suppliers might play going forward. Only seven of them have been moved onto SCCL’s procurement frameworks enabling them to bid for future PPE contracts. In the event of a future pandemic, it is unclear what role these suppliers might be expected to play to meet the renewed demand. Recommendation: The Department should explain in its Treasury Minute response what the role of UK based suppliers of PPE is expected to be going forward. This should include what role UK-based suppliers can expect to play in ongoing procurement activity and what the expectation is for capacity to be increased in the event of future pandemics. 8 Management of PPE contracts 1 The management of PPE stock
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Government response AI summary
The department has established a resilient UK-based supply chain and contracts have been signed with around 30 UK-based companies. The department is working with NHS Supply Chain to help offer UK manufactured products to the health and care sectors where possible.
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HM Treasury
1
Conclusion
Twelfth Report - Management of PPE cont…
Acknowledged
On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department of Health & Social Care (the Department) about its management of Personal Protective Equipment (PPE) contracts let during the COVID-19 pandemic.1
Government response AI summary
The government acknowledges the committee's report on the Department of Health & Social Care's management of PPE contracts.
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HM Treasury
7
Conclusion
Twelfth Report - Management of PPE cont…
Accepted
Alongside reducing excess stock, the Department is also having to consider what is an appropriate level of PPE to hold as a stockpile. We asked it whether it had created another strategic reserve of PPE in preparation for the possibility of a future pandemic.11 The Department noted that it had …
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Alongside reducing excess stock, the Department is also having to consider what is an appropriate level of PPE to hold as a stockpile. We asked it whether it had created another strategic reserve of PPE in preparation for the possibility of a future pandemic.11 The Department noted that it had a large “surplus”, but the size of the future stockpile it might hold had yet to be determined. Two factors were noted as having a large effect on this decision; the cost of storage and the potential for items in the stockpile to go out of date.12 The Department has seen how expensive storage costs can be over the last two years, spending £737 million on storage by the end of November 2021.13 It told us, however that it is now confident that it has reduced the monthly storage costs it is paying for PPE.14 However, it is still paying around £7 million a month in storage costs just on items it currently deems to be excess.15 The absence of a full integrated stock management system
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Government response AI summary
Operational responsibility will transfer to the NHS Supply Chain on 1 April 2023, with the department retaining ownership of this stock for accounting purposes. The department’s current working assumption is that, subject to suitability, products held in excess will be transferred to a future stockpile.
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HM Treasury
8
Conclusion
Twelfth Report - Management of PPE cont…
Not Addressed
The Department told us that it has now received nearly all of the 37.9 billion items of PPE which it ordered, with only 300 million items outstanding. It told us that whilst it has now opened every container it has received there are still 1.39 billion PPE items that have …
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The Department told us that it has now received nearly all of the 37.9 billion items of PPE which it ordered, with only 300 million items outstanding. It told us that whilst it has now opened every container it has received there are still 1.39 billion PPE items that have not been fully quality assured.16 The NAO reported that quality assurance checks have resulted in 11% of PPE items being deemed not suitable for front-line services, equivalent to 3.6 billion items at the time of reporting.17 The Department was unable to offer any definitive timescales on when it would complete its quality checks.18
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Government response AI summary
Acknowledges the conclusion about the lack of a stock management system.
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HM Treasury
9
Conclusion
Twelfth Report - Management of PPE cont…
Not Addressed
We asked what assurances the Department could give us about the accuracy of its stock numbers. This was because the NAO reported that it could not fully reconcile the numbers from the stock model with individual contracts and said it was therefore unable to gain assurance over the accuracy of …
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We asked what assurances the Department could give us about the accuracy of its stock numbers. This was because the NAO reported that it could not fully reconcile the numbers from the stock model with individual contracts and said it was therefore unable to gain assurance over the accuracy of the numbers.19 The Department told us that these differences should be attributed to the fact that the stock model was not intended to be a 8 Q35 9 C&AG’s Report, para 13 10 C&AG’s Report, para 2.9 11 Q53 12 Q54 13 C&AG’s Report, para 2.5 14 Q41 15 C&AG’s Report, para 2.7 16 Q3 17 C&AG’s Report, para 2.11 18 Qq6–8 19 C&AG’s Report, Investigation into the management of PPE contracts, session 2021–22, HC 1144, 30 March 2022, para 2.2 10 Management of PPE contracts completely accurate account of all PPE stock. It said that the stock model existed to ensure that PPE could be moved around effectively.20 The Department was adamant that it knows exactly where all its stock is currently located.21 PPE stock is, however, scattered around the country; the Department listed 70 locations where it is stored, saying that it owns 50 warehouses itself and around 11,500 containers are still in use by the Department, with some PPE also still stored in China.22
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Government response AI summary
Acknowledges the conclusion about the accuracy of stock numbers.
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HM Treasury
10
Recommendation
Twelfth Report - Management of PPE cont…
Rejected
We asked the Department, given this wide spread of PPE storage, what steps it is taking to introduce a modern stock management system for the PPE programme.23 We noted the importance of having a system where it knows exactly how much PPE it holds, where it is and what the …
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We asked the Department, given this wide spread of PPE storage, what steps it is taking to introduce a modern stock management system for the PPE programme.23 We noted the importance of having a system where it knows exactly how much PPE it holds, where it is and what the expiry dates are, and is able to easily access it all.24 The NAO reported one example of a contract where the Department seemingly did not know how much PPE it had received and amended the contract to 53.7 million items despite the fact that it had already received 54.3 million items.25 Despite this, the Department told us that it was already able to say what stock it holds and the expiry dates of items. It also said that given that it is still distributing nearly 700 million items a month this is freeing up more space to then access the remaining PPE in storage. It did concede, however, that getting to a position where it has reduced down its stock to a level where it can reduce the number of storage locations would take some time.26 20 Q5 21 Q1 22 Q3 23 Q97 24 Qq102–103 25 C&AG’s Report, para 2.4 26 Qq103–104 Management of PPE contracts 11 2 Managing issues with contracts Ongoing contractual disputes
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Government response AI summary
The government disagrees that a new stock management system is needed, arguing that existing data systems are sufficient and a new system would only duplicate existing data.
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HM Treasury
11
Recommendation
Twelfth Report - Management of PPE cont…
Accepted in Part
The Department acknowledges that it still has many PPE contracts that have ongoing contractual issues that need resolving. There are 176 contracts where there are concerns about either the quality or the performance of the contract and these are collectively worth £3.9 billion.27 The Department has assessed that of that …
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The Department acknowledges that it still has many PPE contracts that have ongoing contractual issues that need resolving. There are 176 contracts where there are concerns about either the quality or the performance of the contract and these are collectively worth £3.9 billion.27 The Department has assessed that of that £3.9 billion, contractual issues mean that £2.7 billion of taxpayer money is still at risk of not achieving value for money.28 However, it told us that it is not unusual for disputes to arise on contracts like these and that looking across the wider health service and the NHS many contractual disputes are “resolved entirely amicably” whilst at the other end of the spectrum some will have involved an element of wrongdoing.29
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Government response AI summary
The government will provide a summary update on the progress of negotiations as a whole in confidence to the Committee due to commercial sensitivity, with a Dissolution Team working to resolve contractual matters by March 2023.
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HM Treasury
12
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
The NAO reported that of the 176 contracts in dispute, most of these were still in the early stages of being resolved. Eighty-three of the 176 contracts are still in the first stage of the commercial resolution process with a further 59 having entered formal commercial discussions. At present, no …
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The NAO reported that of the 176 contracts in dispute, most of these were still in the early stages of being resolved. Eighty-three of the 176 contracts are still in the first stage of the commercial resolution process with a further 59 having entered formal commercial discussions. At present, no cases have moved into the litigation stage of the commercial dispute process.30 Despite this, the Department denied that there is a logjam in resolving these cases and said that there was a team dedicated to resolving these disputes within the Department. Much of the work of that team revolves around checking that the PPE provided meets the technical specifications to then be released into the health and social care sectors.31 That team is also expected to draw on the experience within the Department’s commercial function, as well as government’s wider commercial expertise, where relevant.32 Although it was reluctant to go into specifics on commercial negotiations the Department said it was confident that it was making good progress against its quarterly targets for resolving these cases.33 The NAO, however, has reported that the Department is forecasting that 35% of these cases will not be resolved until 2023.34
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Government response AI summary
The government agreed to explain its progress in resolving the 176 disputed PPE contracts and will provide a summary update on the progress of negotiations as a whole in confidence to the Committee. A Dissolution Team has been commissioned until March 2023 with quarterly targets …
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HM Treasury
13
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
We asked the Department what its assessment of fraud was amongst these contractual disputes. Although it conceded that some of the 176 contracts were of interest from a fraud perspective it was unwilling to give much information about any specific work it was undertaking beyond stating that it was working …
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We asked the Department what its assessment of fraud was amongst these contractual disputes. Although it conceded that some of the 176 contracts were of interest from a fraud perspective it was unwilling to give much information about any specific work it was undertaking beyond stating that it was working closely with internal fraud teams and the broader fraud authorities.35 As with the notion of contractual disputes being commonplace, it also argued that “fraud in contracting is a fact of life” and that the best it could do was to aim to minimise it and recover amounts when fraud is detected.36 When pushed on the timescales for any action that it might eventually take against fraudulent suppliers the Department simply said if that involves going to court then that “takes as long as it takes”.37 It told us that its current assessment is that these PPE contracts have 27 Q13–14 28 Q15 29 Q16 30 C&AG’s Report, Figure 14 31 Q58 32 Q61 33 Q60 34 C&AG’s Report, para 3.8 35 Qq19, 22 36 Q21 37 Q25 12 Management of PPE contracts been no more susceptible to fraud than the average across public sector procurement.38 The NAO reported that this assessment means that PPE fraud could be anywhere within a range of 0.5% to 5.0% of PPE expenditure. On contracts signed by the Department this could mean fraud worth as much as £400 million.39 PPE profits and conflicts of interest
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Government response AI summary
The government agreed to update the committee on how it is working with relevant authorities in assessing and acting on any fraudulent cases. The department takes all allegations of fraud extremely seriously and, where appropriate, allegations are thoroughly investigated and the strongest possible civil and …
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HM Treasury
14
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
We wanted to understand the Department’s view of profits made by PPE suppliers and intermediaries, particularly on contracts that have failed to deliver adequate PPE, many of which came through the VIP referral route. Reports continue to emerge of the vast profits that some individuals and companies made through supplying …
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We wanted to understand the Department’s view of profits made by PPE suppliers and intermediaries, particularly on contracts that have failed to deliver adequate PPE, many of which came through the VIP referral route. Reports continue to emerge of the vast profits that some individuals and companies made through supplying PPE despite much of it being not fit for purpose. One example that we asked about was PPE Medpro, a company that did not exist until May 2020, yet was reportedly able to secure a £76 million profit supplying PPE to the Department.40 The Department was reluctant to give any specifics on this case but said that all of the PPE contracts signed “went through exactly the same due diligence process” and that the decision to award a contract to PPE Medpro would have been made on the basis of the price it was offering compared to other market prices.41 We note that since giving evidence to us, further reports suggest that the National Crime Agency has launched an investigation into this contract with several properties related to the company searched and documents seized.42
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Government response AI summary
The government states that the commercial reset will ensure sufficient processes are now in place to prevent issues such as insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest from recurring, and highlights existing …
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HM Treasury
15
Conclusion
Twelfth Report - Management of PPE cont…
Acknowledged
The Department told us that factoring in consideration of profit margins before these PPE contracts were awarded was not possible. While it agreed that the best way to mitigate against excessive profiteering was to build such contingencies into the contract it argued that the reality of the global market at …
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The Department told us that factoring in consideration of profit margins before these PPE contracts were awarded was not possible. While it agreed that the best way to mitigate against excessive profiteering was to build such contingencies into the contract it argued that the reality of the global market at the start of the pandemic meant that was simply not feasible.43 It also conceded that this meant that taking action retrospectively against suppliers profits was unlikely to be possible. The Department clearly still believes that it had an appropriate balance in place at the start of the pandemic that ensured some due diligence checks were performed but still enabled it to secure deals for PPE quickly.44 It said that while it is possible to look back in retrospect and reach different conclusions on decisions made, it felt it had the broad framework and risk appetite correct for the circumstances it faced.45 A more formalised due diligence process wasn’t established until May 2020 but as the NAO reported 46 out of 115 contracts awarded through the VIP lane pre-dated this.46
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Government response AI summary
The government agrees with the Committee’s recommendation and is implementing a commercial reset to prevent issues with due diligence and conflicts of interest from occurring again in the future.
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HM Treasury
16
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
One due diligence check that did not appear to be applied was a consideration of potential conflicts of interest on PPE referrals. The Department confirmed that when signing off on these PPE contracts the accounting officer did not normally have any information about the source of the referral.47 It also …
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One due diligence check that did not appear to be applied was a consideration of potential conflicts of interest on PPE referrals. The Department confirmed that when signing off on these PPE contracts the accounting officer did not normally have any information about the source of the referral.47 It also said that this process was the same regardless of whether the referrals came through the VIP lane or not.48 The very nature 38 Q22 39 C&AG’s report, para 3.12 40 Q84 41 Qq84, 87 42 For example, The Guardian, 29 April 2022 43 Q29 44 Q28 45 Q73 46 C&AG’s Report, para 1.6 47 Q84 48 Q85 Management of PPE contracts 13 of the VIP lane, however, meant that potential conflicts of interest were inherently more likely for VIP lane referrals. Turning again to the example of PPE Medpro, we asked the Department what additional checks were conducted on this company given that the health minister had previously said that the Department was aware of a link between the initial referrer, Baroness Mone, and PPE Medpro. The Department refused to be drawn on the specifics of this case but again reiterated the argument that there would have been no difference in the level of checks conducted between any of the contracts awarded.49 49 Qq84–86 14 Management of PPE contracts 3 The future of the PPE programme SCCL’s role going forward
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Government response AI summary
The government agreed to set out how its commercial reset will ensure sufficient processes are now in place to prevent issues of profiteering and conflicts of interest from recurring. The department has well-established policies, processes and due diligence systems for use outside of emergencies. All …
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HM Treasury
17
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
Prior to the pandemic, the role of procuring and managing PPE was largely the responsibility of Supply Chain Co-ordination Limited.50 In March 2020, when the Department realised that SCCL alone would not be able to procure the volume of PPE required, the Department took a more central role in PPE …
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Prior to the pandemic, the role of procuring and managing PPE was largely the responsibility of Supply Chain Co-ordination Limited.50 In March 2020, when the Department realised that SCCL alone would not be able to procure the volume of PPE required, the Department took a more central role in PPE procurement.51 SCCL continued play an active role though, procuring a total of 17.4 billion PPE items through contracts worth £5.2 billion. With the need for further procurement now seen as unlikely, the Department passed responsibility for managing the supply of PPE back over to SCCL from April 2022.52 Oversight of SCCL was transferred from the Department to NHS England and NHS Improvement in October 2021.53 NHS England’s Chief Commercial Officer is now the Senior Responsible Officer for SCCL and meets quarterly with the SCCL executive team to discuss performance.54
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Government response AI summary
The government agreed to release its PPE strategy, setting out the roles and responsibilities of the Department and SCCL in managing contracts and future procurement. Responsibility moved to NHS Supply Chain in April 2022. The department committed to publishing the strategy and will update the …
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HM Treasury
18
Recommendation
Twelfth Report - Management of PPE cont…
Deferred
We asked the Department how the transfer back to SCCL had gone and it was very positive about the process. It said that nothing had really been interrupted from a logistics perspective and that the reality is that the Department and SCCL had been working “hand in glove before the …
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We asked the Department how the transfer back to SCCL had gone and it was very positive about the process. It said that nothing had really been interrupted from a logistics perspective and that the reality is that the Department and SCCL had been working “hand in glove before the transition”.55 It told us that the two had undergone six months of “intensive planning” to prepare for SCCL taking back operational responsibilities. Forty-four departmental staff members that worked on the PPE programme have been transferred over to SCCL to help try and ensure a smooth transition.56 All of the 70 sites that the Department has established over the last couple of years to store PPE are now the responsibility of SCCL to manage.57
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Government response AI summary
The Department will release its PPE strategy, setting out how it will work with SCCL and what the respective roles and responsibilities of each organisation will be in the ongoing management of contracts and future procurement activities, as soon as it is possible and will …
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HM Treasury
19
Conclusion
Twelfth Report - Management of PPE cont…
Acknowledged
The Department will still have a role to play in the PPE programme despite this transfer back of the logistics to SCCL. We sought to clarify where exactly accountability lies across the different aspects of the programme. For example, the Department confirmed that resolving the 176 contracts in dispute will …
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The Department will still have a role to play in the PPE programme despite this transfer back of the logistics to SCCL. We sought to clarify where exactly accountability lies across the different aspects of the programme. For example, the Department confirmed that resolving the 176 contracts in dispute will remain its responsibility.58 It told us that its aim here is no longer to swap unusable PPE items for more appropriate items, but to concentrate on obtaining refunds wherever possible.59 Likewise, responsibility for decisions on how to dispose of excess stock will remain with the Department, though with the intention of handing that over to SCCL at a later date.60 We would expect further clarity on these 50 C&AG’s Report, The supply of personal protective equipment (PPE) during the COVID-19 pandemic, session 2019–2021, HC 961, 25 November 2020, para 1.4 51 C&AG’s Report, Investigation into the management of PPE contracts, session 2021–22, HC 1144, 30 March 2022, para 1.3 52 C&AG’s Report, Figure 4, para 2.18 53 Q94 54 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 1, dated 19 May 2022 55 Q92 56 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 1, dated 19 May 2022 57 Q92 58 Q92 59 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 4, dated 19 May 2022 60 Q92 Management of PPE contracts 15 roles and responsibilities to be set out in the PPE strategy that we are now expecting this summer.61 The Department said that this is being worked on “in collaboration with SCCL and NHS Supply Chain”.62 Future of UK PPE manufacturing
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Government response AI summary
The government will provide a summary update on the progress of negotiations as a whole in confidence to the Committee due to commercial sensitivity, with a Dissolution Team working to resolve contractual matters by March 2023.
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HM Treasury
20
Recommendation
Twelfth Report - Management of PPE cont…
Accepted
Prior to the COVID-19 pandemic there were not many businesses in the UK that specialised in producing PPE with most of it coming from overseas. The pandemic saw steep rises in global prices for PPE as demand for it surged throughout the world. As part of its initial pandemic response, …
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Prior to the COVID-19 pandemic there were not many businesses in the UK that specialised in producing PPE with most of it coming from overseas. The pandemic saw steep rises in global prices for PPE as demand for it surged throughout the world. As part of its initial pandemic response, the Department decided to try and encourage UK manufacturers to start producing PPE in order to increase the short-term supply and to help improve the UK’s long term resilience and ability to respond in the event of future pandemics.63 This “UK Make” strategy resulted in the Department signing 37 contracts with UK manufacturers worth £1.1 billion for 3.9 billion PPE items.64 The Department was complementary about the role of these UK suppliers saying that those 37 contracts were very successful and that some of these suppliers were “really creative at an early stage”.65
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Government response AI summary
The government agreed to explain the role of UK-based PPE suppliers going forward, noting that they have established a resilient UK-based supply chain (excluding gloves). Future procurement will include a focus on social value and environmental considerations, with NHS Supply Chain offering UK-manufactured products where …
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HM Treasury
21
Recommendation
Twelfth Report - Management of PPE cont…
Acknowledged
The Department set out in its initial PPE strategy its desire to build on this UK manufacturing base, reiterating the role it should play in building a more resilient supply chain and also the wider benefits including job creation and making the UK a centre for innovative products.66 It is …
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The Department set out in its initial PPE strategy its desire to build on this UK manufacturing base, reiterating the role it should play in building a more resilient supply chain and also the wider benefits including job creation and making the UK a centre for innovative products.66 It is now apparent, however, that the Department holds a large excess of stock which it is concentrating on reducing down.67 In that context, the role of the UK suppliers forward seems uncertain as they are unlikely to receive orders for many years. The Department told us that those suppliers “have other products to make” and that the Department are “not in the market to buy at the moment”. Only seven UK suppliers are on SCCL’s future frameworks enabling them to bid for future PPE contracts.68 The Department said that it is worth with NHS Supply Chain to try and ensure that UK manufactured products are marketable to the health and social care sectors. Whilst it recognised that procurement rules will require it to still operate in the international market place it said that its plans to emphasis social value and environmental considerations going forward should place UK manufacturers in a good position to compete with international suppliers.69 61 Q106 62 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 2, dated 19 May 2022 63 C&AG’s Report, The supply of personal protective equipment (PPE) during the COVID-19 pandemic, session 2019–2021, HC 961, 25 November 2020, para 2.14 64 C&AG’s Report, Investigation into the management of PPE contracts, session 2021–22, HC 1144, 30 March 2022, para 1.3 and Figure 4 65 Q56 66 Department of Health & Social Care, Personal Protective Equipment (PPE) Strategy, 28 September 2020, para 1.4 67 Q33 68 Q56 69 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 4, dated 19 May 2022 16 Manageme
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Government response AI summary
The government states that it has established a resilient UK-based supply chain, that future procurement will continue on the open market including a focus on social value, and that it is working with NHS Supply Chain to help offer UK manufactured products to the health …
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HM Treasury