The UK Health Security Agency, which replaced Public Health England in 2021, has been rebuked by the Public Accounts Committee for "completely staggering" accounting failings.
Some £3.3bn of NHS Test and Trace stock transferred to UKHSA cannot be properly accounted for. In a report examining the Department of Health and Social Care's annual report and accounts for 2021-22, the PAC found the UKHSA’s “financial controls and processes were so poor that the organisation could not prepare auditable accounts for the 2021–22 financial year.”
This prompted National Audit Office head Gareth Davies to disclaim an opinion, something that is “very unusual” and last happened in 2006.
The PAC report highlighted a "fundamental absence of governance" and pointed out that Dame Jenny Harries, chief executive, UKHSA, did not have any “previous technical experience in elements of running a complex organisation.”
The problems were exacerbated by last year’s restructure of the UKHSA which saw its staff slashed from 18,000 to 6,700 full-time equivalents.
In addition,”two of the predecessor entities to UKHSA, NHS Test and Trace and the Joint Biosecurity Centre, did not have a history of budget and accounting discipline which further contributed to the difficulties in providing evidence and explanations.”
Commenting on the findings of the report, PAC chair Dame Meg Hillier said: "It is completely staggering…that an organisation envisaged as a foundation stone of our collective security was established with a leadership hamstrung by a lack of formal governance, and financial controls so poor that billions of pounds in NHS Test & Trace inventory can no longer be properly accounted for.”
The PAC report also criticised DHSC for wasting billions of taxpayers' money on unusable PPE and an “alarming" lack of a plan for an emergency stockpile for future pandemics.
It revealed that the DHSC has "written off" £14.9 billion of supplies in the past two years, including £9.9 billion of unusable or unneeded PPE, as well as Covid medicines and vaccines which are “unlikely to be used.”
The department is set to spend an estimated £319m in storing and disposing of the PPE. No proper stocktakes of existing PPE stock can be taken, as it would cost £70 million to move and open inaccessible storage containers, according to the PAC report.
The committee warned that governance and accounting problems are not confined to UKHSA.
“There have been repeated and unacceptable governance and accounting failures within the departmental group” and the DHSC needs to “strengthen its governance and financial controls.”
In addition, the department “does not yet have a clear plan in place for a national emergency stockpile for any future pandemic.”
Responding to the criticisms of the UKHSA, its chief exec Harries said: “We have always taken our accounts and financial controls very seriously. The UKHSA was created in unprecedented circumstances when tackling covid was our first priority, and we inherited significant pre-existing accounts challenges.”
She added: “We have already instituted strong governance arrangements in a hugely complex organisation at the earliest opportunity. This progress means our organisation is now substantially different in terms of stability, governance and financial controls. We are working with DHSC to ensure the robustness of our accounts is recognised both now and for the future.”
A government spokesperson added: “We were the first country in the world to deploy an approved Covid vaccine, with 144 million doses administered, and we have delivered over 25 billion items of PPE to the frontline. Buying vital Covid vaccines and medicines saved countless lives and kept NHS and care staff safe. We will consider the committee’s recommendations and formally respond in due course.”