Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Accepted
£14.9 billion of public money written off due to excess PPE and COVID-19 supplies.
Conclusion
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
Government Response Summary
The government agrees with the committee's findings, noting past reviews and a future PPE strategy, and commits to ceasing storage costs for excess PPE by January 2025, providing an update by the end of January 2025.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: January 2025 5.2 The 2021 Boardman Review of Government Procurement in the COVID-19 pandemic on lessons learned from the pandemic included 11 recommendations for the department. This resulted in a review of the future structure of procurement in the health sector, with Supply Chain Coordination Limited (SCCL) being transferred to NHS England and measures taken to improve SCCL’s resilience. The department wrote to the committee in March 2023 setting out its future strategy for Personal Protective Equipment (PPE), including lessons learned in relation to PPE procurement. 5.3 The department continues to examine the lessons learned from the pandemic, including being fully engaged with the procurement module of the Covid-19 inquiry and will update the new Committee by the end of January 2025. 5.4 The department spent £13.6 billion buying PPE from the start of the pandemic until the end of the financial year 2023. The costs of storing excess PPE are shown in the table below: C ost of Storage – by Financial Year in £ FY 2020-21 FY 2021-22 FY 2022-23 FY 2023-24 Total All Storage 481,448,973 410,583,857 256,829,048 123,699,709 5.5 Storage costs for excess PPE will cease by January 2025. Remaining storage costs will relate to the pandemic preparedness stock and sample PPE retained as part of dissolution activities. The cost of storing these products is not yet known.