Select committee inquiry
DHSC Annual Report & Accounts 2022-23
Closed
What the inquiry looked at
“In 2023, the Committee reported that the Department for Health & Social Care (DHSC) had overpaid and overordered £14.9 billion of inventory, which included PPE (£9.9 billion), COVID-19 medicines (£2.6 billion) and COVID-19 vaccines (£1.9 billion). Vast quantities of unusable and unneeded PPE were in storage awaiting disposal by recycling or burning, at significant cost to the taxpayer. The Committee also found that the UK Health Security Agency (UKHSA) was set up with financial controls so poor that it could not be established whether its transactions were applied to the purposes laid out for it by Parliament. UKHSA’s consumption of £3.3 billion worth of inventory transferred from NHS Test and Trace could not be verified by proper financial records. Based on the National Audit Office’s (NAO) report into the DHSC’s Annual Report & Accounts 2022-23, the Committee will take evidence from senior DHSC officials on subjects including: Progress in recovering financial control following the COVID-19 pandemic; Progress at UKHSA; Continuing issues with timeliness of local NHS audits. If you have evidence on these issues, please submit it here by 23:59 on Wednesday 28 February 2024. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. This inquiry was closed due to the 2024 General Election.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
In the committee's words, from the summary of Thirty-First Report - Department of Health and Social Care 2022–23 Annual Report and Accounts ↗
Fundamental failings in the financial controls of the UK Health Security Agency (UKHSA), combined with backlogs in local NHS audits, are continuing to lead to unacceptable delays in producing the Department of Health and Social Care’s (the Department) financial accounts, which is undermining Parliamentary accountability for taxpayers’ money. The Comptroller and Auditor General (C&AG) has disclaimed his audit opinion on UKHSA for the second consecutive year as a result of a lack of appropriate audit evidence. The production of unqualified accounts and strong financial controls are fundamental requirements of all public sector entities and must not be secondary to operational priorities.
For the last four years, the Department has not published its accounts until January, ten months after the end of the financial year. The Department has committed to advancing its timetable by one month each year. However, this unambitious plan would mean it would take a decade to return to timely accountability for one of the largest areas of public spending. The Department is still not working effectively with the organisations within its group to enable earlier publication and needs to work with other stakeholders to ensure the audit market for NHS providers and commissioners is more resilient.
Incidences of clinical negligence are causing harm to patients and are a burden to the public purse. In 2022–23, the Department set aside over £21 billion to cover known clinical negligence events and paid over £2.6 billion to claimants. The Department needs to urgently reduce clinical harm to ensure better patient outcomes and free up taxpayer money. The C&AG also qualified his opinion on NHS England’s accounts for the second time, as a result of it making £1.3 million of ineligible payments to suspended medical practitioners. It is essential that NHS England puts in place effective controls to prevent further such payments, and that it recovers the money paid in error.
The Department is disposing of excess COVID-19 inventories including nearly all of the stock acquired during the pandemic. The Department still does not have adequate controls over this inventory, nor a clear plan for stockpiling for future pandemics. This is despite our Committee recommending it should do both of these things in our reports following the evidence sessions on the Department’s 2020–21 and 2021–22 Annual Report and Accounts. Disposing of this inventory before establishing a clear stockpiling strategy creates the risk that the Department disposes of items which it may need later.
What the government said
The government responded on 11 July 2025. The deadline was 10 July 2024.
Summary written by Accountability Index from the government's response.
The government states that it agrees with each of the Committee's recommendations covered in the response, with target implementation dates ranging from September 2024 to Summer 2027.
- On timely accounts, the government agrees and is implementing a multi-year plan targeting a return to pre-summer recess laying "for the 2026-27 financial year", but says this "will be challenging" and depends on factors outside the department's direct control.
- On UKHSA, the government agrees and says there is "greater confidence" of an improved audit opinion for 2023-24, while stating that an unqualified opinion "is not possible this year due to the prior year disclaimer".
- On clinical negligence, the government agrees and commits to write to the new Committee "later in 2024" on actions with NHS England and system partners to reduce patient harm.
- On suspended GP overpayments, the government agrees, but says its acceptance "relates to cases for which there is a legal basis to recover the amounts overpaid where work is already underway".
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 10 January 2024 to 11 July 2025. The dashed mark is the deadline Parliament records for the government's response.
- Oral evidence 13 Mar 2024
- Report 10 May 2024
- Government response 11 Jul 2025
- Correspondence 2 letters
What it recommended 4 recommendations · 27 conclusions
2Return to publishing departmental group accounts by a pre-summer recess deadline with a clear timetable.
Concluded (the committee's words)
The Department’s continued failure to deliver its accounts to an earlier timetable hampers effective and timely accountability of taxpayers’ money. Weaknesses in basic financial accounting at UKHSA, together with delays in the completion of local NHS audits, and a lack of resilience in the local audit market, meant the Department could not publish its 2022–23 group accounts until 25 January 2024, 10 months after the financial year-end. The Department set a deadline of 30 June 2023 for the completion of the financial audits of 212 NHS providers and 148 NHS commissioners. Almost a quarter (23%) of NHS providers and more than a fifth (21%) of NHS commissioners missed the 30 June 2023 deadline. By the end of October 2023, 4.2% of NHS provider and 9.5% of NHS commissioner audits were still ongoing. Timely production of accounts is essential to understanding public finances and supporting accountability. The Department’s plans to return to a pre- summer recess timetable are becoming less and less ambitious. It has committed to advancing its timetable by one month each year, one month per year slower than when we examined its 2021–22 accounts. This would mean it would take until 2029 to achieve a pre-summer recess publication of its accounts, compared to the 2025– 26 financial year it previously committed to. Recommendation 2: The Department must return to publishing its accounts to a pre-summer recess deadline and set out a timetable to achieve this. To do this, the Department must: • support and hold to account group bodies to ensure timely accounts production; • work effectively with the auditors of local NHS bodies to ensure audit deadlines are met; and 6 Department of Health and Social Care2022–23 Annual Report and Accounts • work across government, to build resilience in the local audit system.
3Urgently grip and address financial management problems across the Departmental Group with a clear improvement plan.
Concluded (the committee's words)
We are concerned that the Department has still not put in place adequate oversight to ensure strong financial management and reporting across its group which are fundamental to the effective delivery of its policy and operational work. The Department is responsible for ensuring there is an adequate and robust system of financial control across its group and the organisations that form part of this. Yet its accounts have been qualified for the last four years owing to a variety of reasons relating to basic financial controls, the accuracy of financial statements and whether money has been spent in the way that Parliament intended. As an executive agency UKHSA is formally part of the Department, and the Department says that it has provided it with additional support and oversight, but UKHSA’s accounts have nonetheless been disclaimed for a second consecutive year. The Department also pushed additional responsibility on to this new and struggling organisation when it transferred responsibility for the Covid Vaccine Unit to UKHSA in October 2022. We are not convinced by the Department’s assertion that it has little control over the issues relating to the audit of local NHS bodies that have repeatedly resulted in its accounts being delayed, nor that it does not have the levers needed to address them. We have previously recognised that over the last few years the Department has had to produce its accounts in exceptional circumstances, but these issues cannot be allowed to continue post-pandemic. Recommendation 3: The Department urgently needs to grip and address the problems with financial management across its Departmental Group and set out a clear plan to improve financial management and oversight of its group bodies.
4Set out by summer 2024, key reasons and actions to reduce clinical patient harm.
Recommended (the committee's words)
We are concerned that the Department is spending £2.6 billion on clinical negligence payments without an effective plan to minimise future costs of the scheme. Incidences of clinical negligence continue to result in significant cost to the taxpayer, particularly in maternity settings. The Department has made provisions in its accounts worth over £21 billion to cover the potential costs of known clinical negligence events, one of the largest financial liabilities across government. The Department made cash payments relating to clinical negligence arising from maternity and neonatal services worth £1.1 billion in 2022–23, equivalent to an eye-watering one third of the NHS’ total maternity and neonatal services budget. Each claim is a tragedy for the people involved. Yet the Department does not know whether the number of clinical negligence claims across the NHS as a whole are increasing or decreasing. The NHS does not benchmark well on clinical negligence compared to many similar health systems, and the Department and the NHS recognise that huge improvements need to be made. Recommendation 4: The Department must reduce clinical harm. By summer 2024, the Department should set out the key reasons for patient harm and the actions it will take to address these, ensuring that its plans will reduce health disparities, ensure better patient outcomes, and reduce the costs for taxpayers.
5Develop and implement a clear plan for future pandemic stockpiling within six months.
Concluded (the committee's words)
We are disappointed that the Department lacks adequate controls over its inventory and, four years after the COVID-19 pandemic began, still does not have a plan for stockpiling for future pandemics. The Department does not know how much inventory it currently holds as it did not undertake inventory counting Department of Health and Social Care2022–23 Annual Report and Accounts 7 procedures for its 2022–23 accounts. The Department plans to dispose of COVID-19 inventory that it considers unusable or excess to requirements, including nearly all of its Personal Protective Equipment (PPE) stock. The Department procured £13.6 billion of PPE to respond to the COVID-19 pandemic. Since 2020, the Department has reduced the value of this (‘written off’) by £9.9 billion, which is over 70% of the price it paid. By accelerating its disposal programme, the Department has saved £130 million in storage costs. However, the absence of stocktakes means it has not verified the volume and condition of stock that it is disposing of. Additionally, the Department has not actioned our previous recommendations – that it should work out what items and quantity of PPE it needs to hold as a stockpile, and to develop and implement a clear, cost-effective plan for such a stockpile – to prepare for future pandemics. This means it risks disposing of items that could form part of the nation’s strategic stockpile for future pandemics. Recommendation 5a): The Department must, within six months, set out the lessons learnt from its COVID-19 procurement processes, including reporting: • the overall losses arising from procuring, storing, and disposing of over- priced, unusable, and excess inventories; and • the outcome of its work on procurement fraud and associated recoveries. b): The Department must, within the next six months, develop, and implement, a clear and cost-effective plan, including adequate controls, for stockpiling items required to plan for a future pandemic. This should not be delayed unt
6Implement planned changes to control framework to prevent further ineligible payments by summer 2024.
Concluded (the committee's words)
NHS England again made payments to suspended GPs who were not eligible to receive them and has failed to adequately recover these overpayments. NHS England has made overpayments worth £1.3 million to suspended medical practitioners since 2017–18, just £33,000 of which it has recovered. For the second consecutive year the C&AG qualified his regularity opinion on NHS England’s accounts as a result of NHS England making these ineligible payments, which are contrary to statutory regulations. NHS England has failed to establish a system of control to ensure suspension payments were only paid to medical practitioners who met the qualifying criteria, and that these payments were stopped as soon as people were no longer eligible for them. Given the control failings that led to these overpayments were initially identified during the 2021–22 audit, this continued lack of appropriate safeguards over taxpayers’ money is unacceptable. NHS England has committed to reviewing all suspension payments and will be implementing a new national system to review and process suspension payments, replacing the existing regional system. Recommendation 6a): NHS England must ensure the planned changes to its control framework are implemented by summer 2024 to avoid further loss of money that should be used for patient care. b): NHS England must ensure that amounts that have been overpaid are in recovery by the summer of 2024. 8 Department of Health and Social Care2022–23 Annual Report and Accounts 1 Internal control failings and timely financial reporting
1Examination of Department of Health and Social Care 2022-23 Annual Report and Accounts.
Concluded (the committee's words)
On the basis of a report by the Comptroller and Auditor General (C&AG)2, we took evidence from the Department of Health and Social Care (the Department), the UK Health Security Agency (UKHSA) and NHS England on the Department’s Annual Report and Accounts for 2022–23.
22UKHSA committed to improving financial controls and achieving unqualified accounts for 2022-23.
Recommended (the committee's words)
As part of our examination of the Department’s 2021–22 accounts, we recommended that UKHSA should urgently ensure that it had in place robust financial controls and processes and there was a clear plan to deliver unqualified accounts. Government agreed with our recommendation, and in its response told us the UKHSA was working to urgently improve and strengthen its existing financial control, to evidence compliance with government functional standards and best practice. It explained that UKHSA had established a Finance and Control Improvement Programme to inform the production of auditable accounts of 2022–23, with the aim of achieving a fully clean, unqualified audit opinion at the “earliest feasible opportunity”.7
7UKHSA claims understanding of financial control issues and progress on 2021-22 audit problems.
Concluded (the committee's words)
We asked UKHSA whether it had sufficient organisational understanding and acceptance of the level of cultural change and process improvement required to fix these issues with its accounts. UKHSA responded that it understood and accepted this. It drew a distinction between the issues which had resulted in its 2022–23 accounts being disclaimed, and those which had resulted in its 2021–22 accounts being disclaimed, which it asserted were “quite different”. It stressed that, in 2021–22, it was a new organisation and had “inherited a number of issues on coming into being” and that it had made “very good progress” in trying to address the issues that had led to its 2021–22 accounts being disclaimed. It also told us that one of the issues it had encountered in its 2022–23 accounts was that it had “very little headroom because of the disclaimed accounts last year”, as well as a separate issue with its covid vaccine model. It explained that it had set up a Finance Control and Improvement Board, chaired by the Accounting Officer, and set up required governance arrangements that were not in place in the prior year.9
8C&AG notes UKHSA progress but significant work remains; 2023-24 accounts will be qualified.
Concluded (the committee's words)
The C&AG confirmed that UKHSA had introduced “quite a lot of important governance arrangements” following its 2021–22 accounts, and that it had made progress on being able to present a more manageable set of financial data for the NAO to audit. But he stressed that there was still a long way to go. The C&AG told us that UKHSA remained in a challenging position, and that it was vital that UKHSA did not underestimate the scale of what remained to be done to implement normal accounting processes.10 We asked UKHSA whether it was confident that it could produce accounts for 2023–24 that would not receive another disclaimer. UKHSA told us that it expected that its 2023–24 accounts “absolutely will be qualified” but that it was working hard to avoid the accounts being disclaimed for a third year. The Department and UKHSA noted that the decision was for the C&AG, but UKHSA reiterated that it had plans in place to ensure that it could produce auditable accounts and “hope and anticipate that we will be able to avoid another disclaimer”.11
9UKHSA attributes financial control lapses to pandemic, prioritising health protection over standard processes.
Concluded (the committee's words)
We asked UKHSA what lessons could be learned from the setup of a complex new government body and the issues reported by the C&AG in 2021–22 and 2022–23.12 UKHSA responded that if setting up a similar new body it would go about it ”in exactly the same way” and that the control issues that led to two consecutive disclaimers were a consequence of the operational challenges arising from the pandemic.13 The Department’s view, shared by UKHSA, was that it would take decisions on health protection issues first and then “do our best about the rest”. UKSHA stated that, if another significant health protection issue were to arise, it might expect to see further lapses in financial management and accountability. UKHSA told us that there was a balance point about recognising “exactly what we must do in terms of financial governance and control” and dealing with large health protection issues.14 The Department told us that it defended the decisions it had taken about the organisation based on health protection but recognised that it had made mistakes in some areas. We noted that UKHSA had encountered challenges in setting up a new organisation and responding to the pandemic, but that this was not an excuse 9 Q 47 10 Q 49 11 Qq 59–60 12 Q 61; C&AG’s Report, UKHSA 2022–23, pages 133–140; Report by the Comptroller & Auditor General, UKHSA Annual Report and Accounts 2021–22, HC 1086, 26 January 2023, pages 91–96 13 Q 61 14 Q 62 Department of Health and Social Care2022–23 Annual Report and Accounts 11 not to have proper financial controls. We observed that these were the “bread and butter” of what government departments should be doing, including when making sure that organisations are set up with the proper arrangements.15
10UKHSA prioritised vaccine delivery over financial reporting, leading to significant audit challenges.
Concluded (the committee's words)
We asked UKHSA how it was going to fix the issue with the covid vaccine demand model that was one of the causes of the C&AG disclaiming his opinions on its 2022–23 accounts. The Department confirmed it had made a mistake in failing to communicate the detail of the model it was using to the NAO on a timely basis, and that this resulted in the NAO being unable to audit significant amounts in UKHSA’s accounts. UKHSA described the steps it had taken to produce auditable figures in 2023–24. It explained that it had identified the vaccine demand model as business critical and resourced the quality assurance framework for the model. However, UKHSA told us that its priority was delivering vaccines in the immediate term, with the impact on financial reporting and accountability coming second.16
11Department transferred CVU to UKHSA, prioritising public health despite known control issues.
Concluded (the committee's words)
We questioned the Department on why it decided to transfer the CVU to UKHSA in October 2022, pushing additional responsibility on to a new and struggling organisation. The Department stated that, as an organisation of health protection experts who hold responsibility for established vaccination programmes, UKHSA was best placed to host the CVU. The Department told us that it thought that financial and accounting officer responsibilities had to be transferred alongside the operational responsibilities. It explained that it was aware of the systems and control issues at UKHSA that led to the disclaimer but considered that transferring the CVU would prioritise public health protection, leaving UKHSA time to “deal with the other issues” at a later date.17 The timeliness of the Department’s accounts
12Department committed to restoring timely financial reporting, targeting pre-summer recess by 2025-26.
Recommended (the committee's words)
As part of our inquiry in the Department’s 2021–22 Annual Report and Accounts, we found that the Department had prepared its accounts in exceptional circumstances for the previous two years but noted that it was imperative that it got back on track with the delivery of its accounts ahead of the Parliamentary summer recess. The Department laid its 2021–22 accounts on 26 January 2023, five days ahead of the statutory deadline, but planned to bring forward laying of its 2022–23 accounts to before the 2023 Christmas recess. We recommended that the Department must develop and implement a plan to restore timely financial reporting and support laying of the Department’s accounts to a pre-summer recess timetable. In its response to our report, the Department confirmed that it was committed to returning to a pre-summer recess timetable and told us that it was working to a multi-year plan which aimed to bring the timetable forward by approximately two months every year. At the time of its response in September 2023, it explained that it aimed to lay its 2022–23 accounts in November 2023 and to return to a pre-summer recess timetable for the 2025–26 financial year.18
13DHSC published 2022-23 accounts six months after deadline, missing pre-summer recess target.
Recommended (the committee's words)
All Departments should aim to lay their accounts and those of their agencies by an administrative deadline of 30 June after the end of the financial year, and no later than the 15 Q 72 16 Qq 50–51 17 Q 49 18 Committee of Public Accounts, Sixty-Second Report of Session 2022–23, Department of Health and Social Care 2021–22 Annual Report and Accounts, HC 997, 5 July 2023, para 5; HM Treasury, Treasury Minutes – Government Response to the Committee of Public Accounts on the Sixty-first to the Sixty-seventh reports from Session 2022–23, CP 941, September 2023, para 5.3 12 Department of Health and Social Care2022–23 Annual Report and Accounts Parliamentary summer recess. Departments have a statutory deadline of 30 November to provide their accounts to the C&AG, and of 31 January to publish their annual report and accounts.19 The Department published its 2022–23 accounts on 25 January 2024, one day earlier than the previous year and six months after the parliamentary recess deadline. The Department has reported that there continues to be significant challenges in bringing the laying of its accounts back to a pre-summer recess timetable.20
14Department's accounts delayed by UKHSA issues and widespread missed local NHS audit deadlines.
Concluded (the committee's words)
The delays to the accounts were the combined result of issues with the accounts of a key arm’s-length body (UKHSA) and delays in completion of local NHS audits. The accounts for UKHSA, NHS England and the Consolidated NHS Provider Accounts all need to be complete before the Department’s group accounts can be finalised. NHS England and the Consolidated NHS Provider Accounts in turn rely on the individual audits of 148 NHS commissioners and 212 NHS providers, which are incorporated into their own group accounts. The Department set a deadline of 30 June 2023 for the completion of the financial audits of NHS providers and NHS commissioners. Almost a quarter (23%) of NHS providers and more than a fifth (21%) of NHS commissioners missed the 30 June 2023 deadline. A significant number of NHS provider (4.2%) and NHS commissioner (9.5%) audits were not complete at 31 October 2023.21 This was the latest practical date that NHS commissioners’ and NHS providers’ audits had to be completed to enable the Department to publish its accounts by 30 November 2023; the date the Department originally committed to Parliament that its 2022–23 accounts would be published. This prevented the certification of the Consolidated NHS Provider Accounts, the NHS England group accounts, and delayed the finalisation of the Department’s accounts.22
15Department plans to accelerate account certification, but timely delivery needs increased local audit capacity.
Concluded (the committee's words)
We asked the Department about its plans to certify its accounts earlier in future. The Department advised us that producing its accounts is a difficult task and the expenditure included represents approximately 8% of the UK economy. It told us that every year it faced a new challenge that was not predicted. The Department told us that it was “confident that we are doing the right things” and that it expected to be able to produce its 2023–24 accounts more quickly. It confirmed that it was working to a November 2024 deadline for the laying UKHSA’s accounts, and it would then lay its own accounts. The Department’s aim is to lay its accounts in Parliament at least a month earlier each year. It emphasised, however, that moving towards pre-summer recess certification would require a sizable change in the capacity of the local audit market.23 Lack of departmental grip over its group bodies
16C&AG disclaimed UKHSA's audit opinion two years running, causing serious concern and departmental intervention.
Concluded (the committee's words)
The C&AG disclaiming his audit opinion is very rare. The fact that this has happened two years in a row for UKHSA gives us great cause for concern. While UKHSA has its own Chief Finance Officer, the Department has taken steps for its Director General Finance to undertake a formal role within the UKHSA finance function. No other organisations within the Department have this degree of involvement in their day to day running. We questioned how long this arrangement would be in place. The Department did not consider 19 HM Treasury, Dear Accounting Officer letter – Accounts Directions 2022–23, 15 December 2022 20 Department of Health and Social Care, Annual Report and Accounts 2022–23, HC 33, 25 January 2024, pages 128–131 21 NHS England, Consolidated NHS Provider Accounts 2022–23, HC 469, 25 January 2024; NHS England, Annual Report and Accounts 2022–23, HC 468, 25 January 2024 22 C&AG’s Report, DHSC Annual Report and Accounts 2022–23, pages 224–225 23 Qq 79–81, 104 Department of Health and Social Care2022–23 Annual Report and Accounts 13 the arrangement as unusual for a complex organisation in its set-up phase. Whilst no specific timeframe was provided, it conceded that if this arrangement was still in place in two to three years’ time then this would indicate “something will have gone badly wrong”.24
17Department acknowledges limited control over local NHS audit issues, relying on NHS England for frontline work.
Concluded (the committee's words)
A large proportion of the Departmental Group expenditure flows through from NHS commissioning bodies into NHS England and NHS providers into the Consolidated Provider Accounts, both of which are prepared by NHS England. Given their impact on the timeliness of the Department’s accounts, we asked the Department and NHS England what they were doing to ensure a more timely audit of NHS commissioners and NHS providers. The Department explained that the issues faced last year were in part because more audits needed to be completed owing to the in-year establishment of Integrated Care Boards (ICBs), combined with particular issues with a small number of firms within the local audit market. It explained that it was working with NHS England to address these issues, including engaging the market to try to build capacity within local audit.25 We therefore asked what steps the Department was taking to ensure that there were sufficient numbers of local auditors and sufficient people in the firms to be able to undertake local audits. The Department told us that it “does not have all the levers under its control on the local audit” but that it was working to ensure that local audit issues “as they refer to the Department and the NHS” were managed and mitigated.26 The Department recognised that the audit of local NHS bodies was a serious issue, but explained that most of the frontline work would be done by NHS England. It told us that this would require “considerable effort” by NHS England and that the Department’s role would be to “do the supporting, national stuff we can do over the top of this”.27
18Department struggles to ensure sufficient local NHS auditors, despite some improvements for 2023-24.
Concluded (the committee's words)
We observed that the Department appeared to be “slightly skating over the problem” in saying that it did not have the levers needed to address the local audit issues affecting its accounts. Whilst we accepted that the Department did not have responsibility for issues with the audit of local government, we note that it is responsible for the audits of a significant number of local bodies across NHS providers and ICBs.28 We therefore asked what it was doing to ensure that there were sufficient auditors to undertake the work needed. The Department explained that although it could incentivise firms to enter the market, it could not make them, and that the barriers to entry included audit complexity and regulatory risk. NHS England confirmed that going into the 2023–24 year end, every NHS provider and NHS commissioner had an auditor appointed. NHS England advised that this put it in a better position than in 2022–23. In addition, it explained that fewer audits were being undertaken by one particular audit firm which had significant difficulties in delivering timely audits in 2022–23. For 2023–24 there are only 42 NHS commissioners to audit, given Clinical Commissioning Groups were all closed down during 2022–23.29
19NHS England and Department are addressing audit timeliness, but external factors still impact progress.
Concluded (the committee's words)
We challenged NHS England and the Department on the extent they were acting on the proposals to improve audit timeliness set out in their 2022–23 governance statements. NHS England stated that it had regular update meetings with all audit firms, as well as working with the Department and cross-government groups looking at local audit delivery. 24 Q 58 25 Qq 79, 84 26 Q 81 27 Q 94 28 Qq 83–84 29 Q 84; Report by the Comptroller and Auditor General, NHS England Annual Report and Accounts 2022–23, HC 468, 25 January 2024, page 135 14 Department of Health and Social Care2022–23 Annual Report and Accounts NHS England advised it worked closely with bodies where major financial reporting issues arise, citing University Hospitals Leicester as an example. NHS England also stated that some factors were outside of its control, such as Local Government Pension Scheme (LGPS) audits, the late delivery of which continues to impact some NHS provider audits. A small number of NHS providers have staff who are members of the LGPS, and their share of pension scheme assets and liabilities must be accounted for in the NHS provider account.30 30 Qq 79–82, 94, 96–102; Department of Health and Social Care, Annual Report and Accounts 2022–23, HC 33, 25 January 2024, pages 130–131; and NHS England, Annual Report and Accounts 2022–23, HC 468, 25 January 2024, pages 76–77 Department of Health and Social Care2022–23 Annual Report and Accounts 15 2 Departmental expenditure and planning for a future pandemic Clinical negligence
20NHS clinical negligence costs significantly exceed international comparators, lacking litigation trend data.
Concluded (the committee's words)
The Department recognised that each incidence of clinical negligence is a tragedy for an individual and their families.31 They also come with a monetary cost to the taxpayer, in compensation payments for pain suffered and the impact on people’s everyday lives. The Department sets money aside in its accounts which it can use to fund compensation payments in the event of clinical negligence. The Department recognises a financial liability for potential future payments of compensation. These are reported in the accounts of NHS Resolution and consolidated into the Departmental Group accounts.32 In 2022– 23, NHS Resolution paid £2.6 billion in cash to claimants.33 The cost of clinical negligence to the NHS in England relative to the population served is significantly higher than those of similar health and social care systems. The cost of clinical negligence in 2018–19 was higher than the combined cost of clinical negligence in the health and social care systems of Australia, Canada, New Zealand, and Sweden.34 The Department, alongside NHS England, recognised that getting patient safety right and reducing the number of incidents leading to clinical negligence claims, is a big objective. We asked the Department whether, in terms of the NHS as a whole, the number of litigation claims was going up or down. It did not know the answer to this question and committed to providing a response after the session.35
21Maternity and neonatal cases account for 65% of £69.3 billion clinical negligence liability.
Concluded (the committee's words)
NHS Resolution’s 2022–23 accounts include a liability of £69.3 billion to cover the potential costs of clinical negligence. Of this, £45 billion, some 65% of the £69.3 billion total, related to maternity and neonatal liabilities. The Department told us that this was not unusual across international comparators and reflected the severe and lifelong impact of such events on those affected.36 The cash payments made annually in relation to obstetric negligence cases by NHS Resolution are nonetheless equivalent to roughly a third of the total NHS spend on maternity services, which was £3 billion in 2021–22. In March 2023, NHS England published its three-year delivery plan for maternity and neonatal services.37 As part of this plan, NHS England told us that it had invested £180 million in 2023–24 supporting NHS providers to put additional staff in place, which it said had enabled 1,000 additional midwives and more than 100 additional obstetricians to be employed.38
23£14.9 billion of public money written off due to excess PPE and COVID-19 supplies.
Concluded (the committee's words)
When we examined the Department’s 2021–22 Annual Report and Accounts, we found that it had written off £14.9 billion of public money as a result of overpaying and over ordering significant volumes of Personal Protective Equipment (PPE), COVID-19 medicines and vaccines. We noted that the Department was paying large amounts of money to store the equipment, but would never use a significant proportion of the PPE it had purchased.42 The Department is undergoing a programme to dispose of, primarily by incineration, nearly all of its remaining PPE stock as it will not be used by the NHS. The Department procured £13.6 billion of PPE as part of its response to the COVID-19 pandemic, but has reduced its value by £9.9 billion since 2020–21 in its accounts. This write off of over 70% of the value followed the Department’s assessments of market price changes (when prices returned to normal levels following the surge in prices during the pandemic) and whether the stock was unusable or held in excess amounts that could never be used.43
24Department lacks adequate controls over PPE inventory, unable to perform comprehensive stocktakes.
Concluded (the committee's words)
In 2023, we found that the Department did not have adequate controls over its PPE inventory and was unable to perform proper stocktakes to confirm what it held and the condition of these items. The Department did not perform full and complete stock counts on the PPE inventory it held at 31 March 2023, stating that a full stock-count would cost £70 million. We questioned the Department on how it could know which equipment was usable, what could be given away, and what could be sold, if a stock take has not been undertaken. The Department asserted that it knew what PPE inventory it had and where it is, although it admitted that it did not have access to some items held in warehouses and stacked in containers. In our report on the Department’s 2021–22 Annual Report and Accounts, we recommended that the Department should set out how it would ensure that adequate inventory controls were put in place over its PPE and report to us on its progress, which the Department has failed to implement. The Department accepted our recommendation and in its response to our report, it told us that as part of its strategy 39 The Royal College of Midwives, The contribution of continuity of midwifery care to high quality maternity care, Professor Jane Sandall CBE, RCM09150, October 2017, page 6; National Maternity Review, Better Births: Improving outcomes of maternity services in England, A Five Year Forward View for maternity care, 22 February 2016, page 9. 40 Qq 112, 114 41 Letter from Julian Kelly, Chief Finance Officer, NHS England, to Dame Meg Hillier, Chair, Committee of Public Accounts, Re: Public Accounts Committee: DHSC Annual Report and Accounts 2022–23, 26 March 2024 42 Committee of Public Accounts, Sixty-Second Report of Session 2022–23, Department of Health and Social Care 2021–22 Annual Report and Accounts, HC 997, 5 July 2023, para 1 43 C&AG’s Report, Department of Health and Social Care Annual Report and Accounts 2022–23, HC 33, 25 January 2024, pages 223–224 Department of
25Estimated £319 million cost for PPE storage and disposal, donation efforts explored.
Concluded (the committee's words)
In 2023, the Department estimated that it would cost £319 million to store and dispose of unusable or unneeded PPE. The Department told us that it had accelerated its disposal programme, to save £130 million in storage costs that it would otherwise incur. We asked the Department what consideration had been given to giving equipment away to others rather than disposing of it. The Department stated that it had undertaken an extensive international engagement programme to determine whether PPE could be reused within the NHS and in health and social care settings, or could be donated, including to other countries. It explained that it explored both of these options before seeking to incinerate waste for energy, and that its final option, which it sought to avoid, was landfill.45
26£569 million ventilator stockpile to be disposed of, with no NHS purchasing restrictions.
Concluded (the committee's words)
The Department also procured 20,900 individual ventilators at a cost of £569 million, held in stock as “an ICU reserve”. In February 2024 the Department decided to close the reserve and dispose of these ventilators. We asked the Department why these ventilators were being scrapped rather than being donated or sold. The Department set out that it had not yet determined how it will dispose of the stockpile, but a hierarchy will be used to ensure sale or donation before disassembly for recycling. The Department told us that it did not yet know how much of the £569 million spent it will recover. We asked the Department whether there was a pause on the NHS purchasing ventilators given the 20,000 currently held in warehouses and available for use by NHS. The Department and NHS England told us they were “not sighted on the specifics”, although they agreed it would be surprising if new ventilators were being purchased whilst this stockpile was available.46 The Department has since confirmed that no restrictions were placed on NHS organisations regarding the purchase of medical equipment, including ventilators similar to those held by the Department.47
27Department still lacks a clear plan for future pandemic stockpile requirements.
Concluded (the committee's words)
We recommended in our reports on the Department’s 2020–21 and 2021–22 Annual Reports and Accounts that the Department should develop a clear plan for a stockpile for a future pandemic. In response to our report on the 2021–22 Annual Report and Accounts, in September 2023 the Department told us that it was working closely with SCCL on the necessary volumes of PPE that were needed to provide resilience to future pandemics and was preparing advice on both short-term procurements and longer-term resilience. It committed to continuing to refine its approach over time based on the latest information available.48 When we asked for an update the Department reported that it was still deciding what stockpiles it needs for a future pandemic, and will also update 44 Qq 18–19; C&AG’s Report, Department of Health and Social Care Annual Report and Accounts 2022–23, HC 33, 25 January 2024, page 224; Committee of Public Accounts, Sixty-Second Report of Session 2022–23, Department of Health and Social Care 2021–22 Annual Report and Accounts, HC 997, 5 July 2023, para 1; HM Treasury, Treasury Minutes – Government Response to the Committee of Public Accounts on the Sixty-first to the Sixty- seventh reports from Session 2022–23, CP 941, September 2023, para 1.3 45 Qq 16–18; Committee of Public Accounts, Sixty-Second Report of Session 2022–23, Department of Health and Social Care 2021–22 Annual Report and Accounts, HC 997, 5 July 2023 46 Qq 24–25, 27, 32 47 Letter from Andy Brittain, Director General Finance, DHSC, to Dame Meg Hillier, Chair, Committee of Public Accounts, Re: Public Accounts Committee: DHSC Annual Report and Accounts 2022–23, dated 27 March 2024 48 Committee of Public Accounts, Sixty-Second Report of Session 2022–23, Department of Health and Social Care 2021–22 Annual Report and Accounts, HC 997, 5 July 2023, para 2; HM Treasury, Treasury Minutes – Government Response to the Committee of Public Accounts on the Sixty-first to the Sixty-seventh reports from Session 2022–23
28Fewer than twenty COVID-19 procurement contracts remain in dispute, with £202 million fraud identified.
Concluded (the committee's words)
We asked the Department how many contracts relating to COVID-19 procurement were still in dispute. The Department stated that 45 contracts were in dispute at 31 March 2023, and that the number at the time of the evidence session was below 20. Most of the contracts under review are not under review due to fraud. Due to the sensitive nature of the issue, the Department said that it was not able to comment on the number of contracts pursued due to fraud, but it committed to hold a private session with the Committee to discuss the matter further.50 Overall level of fraud in PPE purchases was 1.5% of the £13.6 billion, which equated to £202 million.51 The Department considered that there were no new lessons arising from its work on disputed contracts to apply to procurement for future pandemics. The Department committed to reporting to Parliament on the total level of fraud in COVID-19 procurement, which it expected to do in the coming months.52 Overpayments to suspended medical practitioners
29NHS England made £1.3 million ineligible payments to suspended practitioners, with minimal recovery.
Concluded (the committee's words)
NHS England can make payments to medical practitioners who have been suspended, in accordance with the relevant statutory regulations and conditions. The C&AG qualified his opinion on NHS England’s accounts for the second time, as a result of it making ineligible suspension payments to medical practitioners. NHS England made payments to 12 medical practitioners who did not meet the eligibility conditions, worth £1.3 million between 2017–18 and 2022–23. NHS England has not recovered most of the payments it made. Only two of the 12 overpayments had been recovered in full by NHS England by the time the 2022–23 audit was finalised, amounting to £32,747, meaning the remaining £1,302,879 had not been recovered. The C&AG reported that NHS England had failed to establish a system of controls to ensure suspension payments were only made to medical practitioners who met the qualifying criteria and to ensure that these suspension payments were stopped promptly once the qualifying period ended.53
30NHS England establishing a national team to enhance controls over suspension payments.
Concluded (the committee's words)
We asked NHS England why it did not have adequate controls in place to prevent ineligible payments of this nature and what controls it was putting in place to ensure that this does not happen again. NHS England confirmed that following two cases that were identified in late 2022 as part of the audit of its 2021–22 accounts, it commissioned internal audit to review the cases of all those who were on the suspension list. NHS England explained that this review had identified the 12 cases referred to above, but that it had not found any others. NHS England told us that given the complexity of some of the caselaw involved, it was going back through the list again and had created a single national team to administer the payments, as opposed to control being dispersed through seven regional teams. By having one team processing the system, NHS England felt it had 49 Qq 19, 23 50 Qq 36–39 51 Qq 36, 38–42; Department of Health and Social Care, Department of Health and Social Care Annual Report and Accounts 2022–23, HC 33, 25 January 202, pages 138 52 Qq 40–42 53 Q 73; NHS England, Annual Report and Accounts 2022–23, HC 468, 25 January 2024, pages 83; C&AG’s Report, NHS England Annual Report and Accounts 2022–23, pages 131–133 Department of Health and Social Care2022–23 Annual Report and Accounts 19 better oversight and could ensure better controls so it did not find itself in this position in future. It told us that the new approach meant that it could do checks every month and streamline the process.54
31NHS England faces challenges in fully recovering identified overpayments from 2022-23.
Concluded (the committee's words)
We asked NHS England whether it was pursuing recovery of the overpaid amounts identified in 2022–23. NHS England told us that it was still seeking to recover more of the overpayments, but that it did not think that it would recover all the money paid. It reported that it needed to ensure it has sound legal grounds to pursue recovery. It explained that there were one or two cases where recovery might not be possible, due to “things said and done in the past”.55 54 Qq 73, 76–78 55 Qq 73–75 20 Department of Health and Social Care2022–23 Annual Report and Accounts
Evidence
Oral evidence sessions 1
- 13 Mar 2024DHSC Annual Report and Accounts 2022-235 witnesses, listed belowparliament.uk ↗
Who gave evidence 5 witnesses
- Andy BrittainDHSC Director General, Finance, Department of Health and Social Care (DHSC)
- Julian KellyDeputy Chief Executive Officer & Chief Financial Officer, NHS England
- Professor Dame Jenny HarriesChief Executive, UK Health Security Agency
- Shona DunnSecond Permanent Secretary, Home Office
- Sir Chris Wormald KCBPermanent Secretary, Department for Health and Social Care
Correspondence 2 letters
- 15 Apr 2024Correspondence from Andy Brittain, Director General Finance, Department of Health and Social Care, re Public Accounts Committee hearing: Department for Health and Social Care’s Annual Report and Accounts 2022-23, dated 27 March 2024
- 15 Apr 2024Correspondence from Julian Kelly, Chief Financial Officer, NHS England, re DHSC Annual Report and Accounts 2022-23, dated 26 March 2024