Recommendations & Conclusions
5 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. …
Read more
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.
Show less
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.
Read full response →
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.
Read full response →
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 …
Read more
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
Show less
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.
Read full response →
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 …
Read more
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
Show less
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.
Read full response →
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 …
Read more
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
Show less
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 …
Read full response →
HM Treasury