Twenty-seventh Report - Covid-19: Supply of ventilators

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 … Read more 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 Show less

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Both programmes succeeded in part due to cross-government working and the expertise of key individuals involved. It is clear that both programmes were successful in part due to the involvement of different government departments that were best placed to carry … Read more Both programmes succeeded in part due to cross-government working and the expertise of key individuals involved. It is clear that both programmes were successful in part due to the involvement of different government departments that were best placed to carry out specific functions, and the involvement of people with the right skills—something that is not always the case with the programmes we report on. For example, the Department for Health & Social Care was able to secure orders relatively quickly at a reasonable cost due to a significant effort from the Foreign & Commonwealth Office and the Department for International Trade in China, which had a better knowledge of the local market. Similarly, Cabinet Office used the Ministry of Defence’s Cost and Assurance Analysis Service to ensure that suppliers’ costs were reasonable. Cabinet Office also drew on external expertise where required. The government was fortunate that its Chief Commercial Officer, who led the ventilator challenge, had a background in running engineering and product development companies and was therefore well placed to develop and initiate the programme. The ‘technical design authority’, put in place to support decision making as part of the ventilator challenge, drew on the expertise of NHS clinicians, the Medical and Healthcare products Regulatory Agency and PA consulting (acting as a programme manager) in addition to other government departments including the Department for Business Energy & Industrial Strategy and the Ministry of Defence. Recommendation: The Cabinet Office should set out, as part of its Treasury Minute response, what lessons it has learnt from these programmes for how government will, in future, ensure that it identifies the skills it needs, where these skills are, and how it will get them in place quickly when a rapid response is required. Show less

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The ventilator challenge produced intellectual property that should be exploited to maximise value for the taxpayer. The ventilator challenge produced a number of designs in a very short space of time, even though many did not go on to be … Read more The ventilator challenge produced intellectual property that should be exploited to maximise value for the taxpayer. The ventilator challenge produced a number of designs in a very short space of time, even though many did not go on to be manufactured. This was in part due to the Cabinet Office’s approach of fostering collaboration between small product designers and large manufacturers. There will be potential value in the intellectual property associated with these designs. Where it paid for a manufacturer’s design work as part of the challenge, the Cabinet Office tells us that it will get a royalty if in future a manufacturer uses the design to take 8 Covid-19: Supply of ventilators a unit to market. However, this currently relies on the goodwill of manufacturers to inform the Cabinet Office that they have used the design, as there is no plan or mechanism in place for it to monitor whether this occurs. Recommendation: The Cabinet Office should set out, as part of its Treasury Minute response, how it plans to maximise the value to the taxpayer from the intellectual property created through the ventilator challenge. This should include how it plans to: • use its learning from the ventilator challenge to set out how it could bring together small and large companies to develop workable and scalable products that the government needs in future; and • monitor whether intellectual property it owns is used so that it can achieve value for money for the taxpayer. Covid-19: Supply of ventilators 9 1 Preparedness for the pandemic Show less

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It is not clear how the Department of Health and Social Care is assessing whether the NHS has enough critical care equipment for future demand. NHSE&I’s estimate of how many mechanical ventilators the NHS would need in a worst-case scenario has changed repeatedly: on 12 February initial estimates indicated a …

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The ventilator challenge was an exceptional and far from traditional approach that offers some lessons for future programmes although they could not be applied wholesale under normal circumstances. The ventilator challenge was undoubtedly a significant achievement, involving a huge effort from industry across the UK. In total it produced around …

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On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Health and Social Care (the Department), the Cabinet Office and NHS England and NHS Improvement (NHSE&I) on the government’s efforts to increase the number of ventilators in response to COVID-19.1

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When we challenged the Department on why it did not begin its initial efforts to buy more ventilators until the 3 March, it explained that there was a “huge amount” of work done in February to understand the disease and to look at the capacity across the NHS in multiple …

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From February to April, NHSE&I’s estimate of how many mechanical ventilators the NHS would need in a worst-case scenario changed repeatedly. Its estimates were based on reasonable worst-case planning assumptions assured by the Scientific Advisory Group for Emergencies (SAGE), which provides scientific and technical advice to support government decision-makers during …

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However, when the programmes began in early-March, departments were looking at a potential need of up to 90,000 mechanical ventilators, far more than the 7,400 thought to be available. The Department acknowledged that it was never going to be able to increase capacity to this level, but aimed to raise …

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It is fortunate that the majority of the ventilators were not needed and that there is now additional capacity if they should be required in the future. Nevertheless, we are concerned that the Department was not able to give a clear explanation of how it now assesses whether the NHS …

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From 3 March, in response to the anticipated shortage of ventilators, the Department began to purchase as many ventilators as it could using existing NHS supply chain framework agreements, which are designed to ensure competitive pricing. It explained that as part of these initial efforts, it discussed the possibility of …

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From 13 March the Department, therefore, stepped up its efforts to purchase ventilators directly from overseas with significant help from the Foreign and Commonwealth Office and the Department of International Trade in China.18 The Department told us that while it was somewhat ahead of other countries in moving to international …

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We recognise that given the circumstances the Department had to move quickly. However, regardless of the circumstances, government regulations require departments to carry out due diligence on the organisations that they buy from and exclude organisations that do not comply with various environmental, social and labour laws”.20 The Department told …

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The Cabinet Office’s ventilator challenge, which encouraged UK businesses to develop new ventilators from scratch and increase the production of existing products or modified designs, was undoubtedly a significant achievement. In total, it produced around 15,000 mechanical ventilators in the space of just four months, over 1.5 times the number …

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However, it is important to remember that the challenge did not take place under normal circumstances. Ventilator Challenge UK, the consortium of businesses that worked together to produce the Penlon ES02 ventilators, described the process as “working against a backdrop of life or death urgency”.24 The Cabinet Office acknowledged that …

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Nevertheless, there are clearly elements of the challenge which could be applied to future programmes. For example, the Cabinet Office told us that it took a number of steps to ensure that suppliers costs were reasonable, such as working on an open-book basis using the Ministry of Defence’s Cost Assurance …

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In any government programme, departments should aim to work collaboratively across government and to involve people with the right skills from the outset. Yet this is not something we always see in the programmes we report on.28 In this case, we heard how the departments’ efforts to involve government departments …

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For example, the Department explained that both the Department for International Trade and the Foreign and Commonwealth Office helped it to purchase ventilators directly from China, which it viewed as the largest untapped market for ventilators. Both departments played a substantial role in assessing offers, which meant that the Department …

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The Cabinet Office also drew on external expertise where required. We heard that the Chief Commercial Officer happened to have a background in running engineering and product development companies that meant he was well placed to develop and initiate the programme. Additionally the Cabinet Office’s ‘technical design authority’, put in …

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From the outset, Cabinet Office’s strategy was to support a number of both new and existing designs. This was to provide it with insurance against new designs not meeting the regulatory standards on time and the likelihood of it facing global competition for parts and components used in existing designs. …

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In total the Cabinet financed 18 devices from 17 challenge participants over the course of the challenge; the majority of which were either completely new designs or modifications of existing designs. Through its technical design process, which eliminated devices based on whether they met regulatory requirements or were needed to …

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Designs are a type of intellectual property (IP), which if protected, can provide value for the owner.36 The Cabinet Office told us that it owns the IP for the designs it paid for and that it either owns all or a “substantial chunk” of the IP for the majority of …

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