Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Despite having to operate at speed, the Department of Health and Social Care still had...
Recommendation
Despite having to operate at speed, the Department of Health and Social Care still had a duty to carry out full due diligence for all parts of the supply chain. In early March, initial attempts by the Department to secure additional mechanical ventilators through its normal NHS supply chain routes did not produce sufficient devices to bridge the gap between the available stock and what was needed. From 13 March, alongside the ventilator challenge, the Department concentrated its efforts on purchasing ventilators directly from overseas manufacturers and distributors with the help of the Foreign & Commonwealth Office and the Department for International Trade. The Department says it did its best to confirm that sellers had CE marked ventilators available for sale and were credible organisations, but that it had not fully looked into the organisations supplying parts for the ventilators that it bought. We recognise that the Department had to operate at pace in the face of increasing global competition and the anticipated imminent spike in cases. But Departments are required by the procurement regulations to carry out due diligence on the organisations they buy from and if this is not done thoroughly, the Department puts itself at risk of funding organisations which may be involved in, for example, bribery and corruption or modern slavery. The Department did write to us one month after our evidence session to say that it had carried out ‘open source checks’ on Chinese suppliers and that it had complied with UK procurement regulations. However, it is not clear to what extent open source checks are sufficient to provide assurance over the full supply chain. Recommendations: The Department of Health & Social Care should set out in its Treasury Minute response its view of the risk resulting from the speed of its due diligence on its purchase of ventilators and how it is ensuring that its due diligence procedures for future procurements cover the full supply chain during eme
Government Response
Not Addressed
HM Government
Not Addressed
3.1 The government agrees with this recommendation. Recommendation implemented 3.2 The majority of devices purchased during this period were through framework agreements where NHS standard procurement processes had been followed. These include usual full due diligence checks. 3.3 Where devices were purchased outside these normal framework agreements, due diligence on suppliers was undertaken along with colleagues from FCO (now FCDO). This included commissioning rapid risk reports on potential new suppliers through specialist third party organisations. However, given the extreme urgency and exceptional circumstances, it is inevitable that the ability to conduct thorough due diligence checks were more limited during March and April 2020 than normal. 3.4 The checks that we undertook were appropriate to the circumstances faced and uncovered no material concerns relating to organisations that the department contracted with. 3.5 The government is confident that the increased capacity purchased already, and improved horizon scanning arrangements that we have now put in place (as set out in the answers to 1 and 2 above) will significantly reduce the need to rely on rapidly purchasing equipment outside of normal procurement processes in future. The department takes all allegations of modern slavery very seriously and is committed to ensuring all suppliers follow the highest legal and ethical standards, fully understand their supply chains and operate responsibly.