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Select committee: Public Accounts Committee

Sixty-Sixth Report - PPE Medpro: awarding of contracts during the pandemic

HC 1590 Published 18 July 2023

Public Accounts Committee Report on parliament.uk ↗

Recommendations and conclusions 15

  1. 10
    The papers concerning the contracts with PPE Medpro do provide further strong indications of what... Conclusion Conclusion (the committee's words)
    The papers concerning the contracts with PPE Medpro do provide further strong indications of what this Committee has repeatedly found in our work on procurement failings during the pandemic. The Committee has seen evidence of officials working at very fast pace in extraordinary circumstances to procure the PPE which was urgently needed by staff working on the front lines of the pandemic in the health and social care sectors. The overall picture is of civil servants trying to fulfil the normal requirements of good contracting but without the time or structures in place to allow them to do this.
  2. 11
    During the initial stages of the crisis, the Department solicited offers to provide PPE with... Conclusion Conclusion (the committee's words)
    During the initial stages of the crisis, the Department solicited offers to provide PPE with no tendering process and received multiple offers from companies without any track record of delivering PPE and/or with varying track records and longevity. The Department then had insufficient time and resources to reflect properly on each offer, and under pressure caused by the sudden need for PPE, chose to accept very high levels of risk, as we have reported previously in our reports.4
  3. 12
    On the basis of the material we have seen, the risk appetite appears to have... Conclusion Conclusion (the committee's words)
    On the basis of the material we have seen, the risk appetite appears to have been so high at the time that the Department does not seem to have responded to the information it was receiving as part of the contracting process in a way that would be appropriate in normal times. The Department had an overriding impetus to buy and though it conducted 4 Public Accounts Committee, COVID-19 Government procurement and supply of Personal Protective Equipment, February 2021, and Public Accounts Committee, Department of Health and Social Care 2020–21 Annual Report and Accounts, Paras 19–20 PPE Medpro: awarding of contracts during the pandemic 5 some checks, found aspects of bids or companies that were sub-optimal and put in place some limited safeguards (including assurances and payment on delivery), it then bought the products anyway. Colloquially, this might be called panic-buying.
  4. 13
    The risk of conflicts of interest from the High Priority Lane was also high by... Conclusion Conclusion (the committee's words)
    The risk of conflicts of interest from the High Priority Lane was also high by design and we have seen limited information on how conflicts of interest should be handled within the Department should they arise (although this was not a direct part of the documents requested for release in the humble Address). There seems to have been a lack of clarity about the purpose of officials checking whether conflicts of interest existed. These are serious defects in government’s stewardship of public money and the Committee has previously reported on this issue.5 However, from the evidence in the materials made available to us we cannot comprehensively conclude whether emails from Baroness Mone and the route through the High Priority Lane led to the PPE Medpro offer being treated differently by government than other offers made in the same way during those abnormal times. 5 Public Accounts Committee, Management of PPE contracts, July 2022, Para 16 and Public Accounts Committee, Department of Health and Social Care 2020–21 Annual Report and Accounts, Para 5 6 PPE Medpro: awarding of contracts during the pandemic 2 Related investigations and legal proceedings
  5. 14
    There are two ongoing investigations which significantly limit what we are able to comment on... Conclusion Conclusion (the committee's words)
    There are two ongoing investigations which significantly limit what we are able to comment on or publish at this stage. They are, as previously mentioned, a National Crime Agency investigation into PPE Medpro and the House of Lords Commissioners for Standards investigation into the conduct of Baroness Mone. There is also a civil case initiated by the Department against PPE Medpro seeking to recover taxpayer’s money in relation to the second contract. We are conscious of the need for scrutiny of these matters and of the Resolution of the House of 6 December that there should be “examination of the process by which contracts were awarded through the High Priority Lane”.6 However, as the Public Accounts Committee does not have access to all the relevant paperwork, other bodies are better equipped to investigate the specific circumstances of the awarding of contracts to PPE Medpro and whether any laws or rules were broken. We are mindful that the information we hold could impact on the outcomes of any of these serious investigations and this has informed our decision on publication.
  6. 15
    We note that this is not the first time a Parliamentary select committee has had... Conclusion Conclusion (the committee's words)
    We note that this is not the first time a Parliamentary select committee has had to manage scrutiny and been limited in its options on publication as a result of legal action. There is a wider challenge to day to day scrutiny and transparency because of this.
  7. 16
    At this time the Committee has chosen not to publish the materials provided as a... Conclusion Conclusion (the committee's words)
    At this time the Committee has chosen not to publish the materials provided as a result of the Order of the House of 6 December, but we have made clear to the Department of Health and Social Care and the Cabinet Office that we reserve the right to do so in future. 6 HC Deb, 6 December 2022, col 277 PPE Medpro: awarding of contracts during the pandemic 7 3 Wider issues for government procurement
  8. 17
    The Committee has raised problems with PPE procurement regularly since July 2020, problems which are... Conclusion Conclusion (the committee's words)
    The Committee has raised problems with PPE procurement regularly since July 2020, problems which are illustrated by the example of the PPE Medpro contracts. We reported early on in the pandemic that there were fundamental flaws in central procurement and local distribution of PPE.7 We highlighted that the need to operate at speed was not a justification for rushing into contracts without adequate due diligence or regard for public money8 and that the approach adopted had opened up significant procurement risks. We found that the Department had already wasted hundreds of millions of pounds on poor quality and unusable PPE by the time of our February 2021 report on PPE and that the High Priority Lane had not been effective in sorting good from bad offers or identifying credible leads.9
  9. 18
    In June 2022, over two years on from the start of the pandemic, we reported... Conclusion Conclusion (the committee's words)
    In June 2022, over two years on from the start of the pandemic, we reported the Department’s poor track record of failure to follow public spending rules – not just in relation to the pandemic. We were by then particularly critical of the lax handling of conflicts of interest. In relation to the Department’s Annual Report and Accounts for 2020–2021, the Comptroller and Auditor General (C&AG) qualified a regularity opinion due to insufficient evidence to show that the Department’s spending, particularly on COVID-19 procurement, was not subject to a material level of fraud.10
  10. 19
    When we looked at the management of PPE contracts in July 2022, we highlighted insufficient... Conclusion Conclusion (the committee's words)
    When we looked at the management of PPE contracts in July 2022, we highlighted insufficient due diligence checks to prevent potential profiteering and to identify conflicts of interest. We noted that the Department was in dispute over many PPE contracts and had made limited progress in tackling potentially fraudulent supplies.11
  11. 20
    Last year we looked at how the Department had procured COVID tests with an individual... Conclusion Conclusion (the committee's words)
    Last year we looked at how the Department had procured COVID tests with an individual company (Randox Laboratories Ltd) and raised concerns about inadequate records of how contracts were awarded and who had met with whom, failure to deal with conflicts of interest, a lack of scrutiny from senior officials or clarity on the role of ministers, and a lack of awareness of the scope for excess profits. There were also failures to hold the contractor to account for performance while entering into further contracts.12
  12. 21
    The two Boardman reviews conducted in 2020, of Cabinet Office COVID-19 Communications Procurement13 and government... Conclusion Conclusion (the committee's words)
    The two Boardman reviews conducted in 2020, of Cabinet Office COVID-19 Communications Procurement13 and government procurement in the pandemic14 also recommended improvements to due diligence procedures, including verifying that a suggested supplier is appropriate for the requirement, accurate and timely record keeping, and creating a clear process for managing risk regarding conflicts of interest (actual or perceived). The final report on procurement recommended improving information available to procurement teams on technical specifications. The Government has accepted 7 Public Accounts Committee, Whole of Government Response to COVID-19, July 2020 8 Public Accounts Committee, Covid-19: Supply of ventilators, Nov 2020 9 Public Accounts Committee, COVID-19: Government procurement and supply of Personal Protective Equipment, February 2021 10 Public Accounts Committee, Department of Health and Social Care 2020–21 Annual Report and Accounts, June 2022 11 Public Accounts Committee, Management of PPE contracts, July 2022 12 Public Accounts Committee, Government’s contracts with Randox Laboratories Ltd, July 2022 13 Boardman Review of Cabinet Office COVID-19 Communications Procurement 14 Boardman Review of Government procurement in the COVID-19 pandemic 8 PPE Medpro: awarding of contracts during the pandemic the Boardman recommendations and has said that it is in the process of implementing them.15 The Government has also accepted recommendations of the National Audit Office in relation to procurement practices and managing contract risks.16
  13. 22
    Now we have considered the Department’s 2021–22 Annual Report and Accounts, it is clear that... Conclusion Conclusion (the committee's words)
    Now we have considered the Department’s 2021–22 Annual Report and Accounts, it is clear that it has still not got adequate inventory controls, is running up large storage and disposal costs (for unused or unusable PPE) and needs to do more to maximise the amount it can recover from contracts and suppliers who had not delivered what was required.17
  14. 23
    When we reported on the Department’s 2020–21 Annual Report and Accounts, we noted that the... Conclusion Conclusion (the committee's words)
    When we reported on the Department’s 2020–21 Annual Report and Accounts, we noted that the Department was unable to verify its stock at year-end to check the quality and quantity of the inventory it owned.18 From October 2020 onwards the Department had a quality and technical function with a market surveillance authority to check the quality of PPE against essential technical specifications. However, by January 2022, it was yet to assess 1,000 of the 30,000 containers of PPE it had received.19
  15. 24
    The recurring themes from the Department’s approach to procurement over recent years have been inadequate... Conclusion Conclusion (the committee's words)
    The recurring themes from the Department’s approach to procurement over recent years have been inadequate financial controls, governance, documentation, and transparency, and poor management of due diligence and conflict of interests. We have already made many recommendations to government on how it can improve these areas as well as the detection and pursuit of fraud, technical expertise in procurement and the role of regulation. 15 Gov.uk, Findings of the Boardman review into pandemic procurement (at 16.06.2023) 16 National Audit Office, Investigation into the management of PPE contracts, March 2022 17 Public Accounts Committee, Department of Health and Social Care 2021–22 Annual Report and Accounts, July 2023 18 Public Accounts Committee, Department of Health and Social Care 2020–21 Annual Report and Accounts, June 2022 19 Public Accounts Committee, Department of Health and Social Care 2021–22 Annual Report and Accounts, June 2022, National Audit Office, investigation into the management of PPE contracts PPE Medpro: awarding of contracts during the pandemic 9