DHSC writes off £8.7bn of pandemic PPE

The losses included £2.5bn spent on PPE that was not suitable for the NHS or in care settings
NHS workers wearing PPE

By Tevye Markson

01 Feb 2022

The Department of Health and Social Care has written off £8.7bn spent on unsuitable or overpriced personal protective equipment during the first year of the pandemic, it has revealed.

DHSC spent £12.1bn on emergency PPE in 2020-21.

More than 70% of this spending went to waste, either due to a loss in market value, being unsuitable or passing its expiry date.

The huge losses are revealed in the department’s annual report and accounts, which was published yesterday.

Of the £8.7bn written off, £4.7bn is due to inflated PPE costs, with market prices going down after the equipment was purchased.

Another £2.5m was spent on PPE that is not suitable for use in the NHS or in care settings, while £673m was wasted on equipment which cannot be used because of defects or other issues.

The department also spent £750m on PPE that will pass its expiry date before it can be used.

As well as the £8.7bn in confirmed losses, the accounts reveal the department expected to lose a further £1.2bn in lost value of PPE due to be delivered after the 2020-21 financial year.

At the start of the pandemic, prices for protective equipment soared as governments rushed to get hold of items such as face masks.

Gareth Davies, head of the NAO, describes this as a seller’s market “with desperate customers competing against each other”.

The UK had failed to stockpile PPE in anticipation of a potential pandemic and, needing to get equipment to frontline workers, suspended normal procurement procedures.

Davies said the department’s PPE procurement was vulnerable to fraud due to large numbers of contracts being awarded to new suppliers – many of which came through the controversial VIP lane – as well as a lack of checks on the quality of goods received and poor inventory management.

The NAO chief has also not given the DHSC’s accounts a clean bill of health, qualifying his findings because £1.3bn of the department’s Covid-19 spending was spent either without necessary Treasury approvals or in breach of Treasury conditions, along with the potential fraud.

Departments are given a qualified opinion by the NAO, which audits the accounts, if the accounts are considered to be fairly presented, except for a specific issue.

The report also reveals that the department is spending £500,000 per day on storing PPE.

MP Pat McFadden slammed the PPE write-offs during a parliament debate on tackling fraud and preventing government waste.

“What could that have done in the NHS? It is twice the government’s entire hospital building programme,” he said.

The debate was held in light of reports that £4.3bn owed to HMRC in fraudulent Covid grants could be written off.

The £13bn total wastage from PPE procurement and Covid fraud has reignited criticism of the increase in National Insurance, set to come in this spring.

“If you add that £8.7bn to the £4.3bn [on Covid support loan scams] you’ve got a whole year’s worth of receipts from the National Insurance rise that is going to be imposed on families in April,” McFadden added.

“The chancellor says this is all about public services but it is impossible to escape the conclusion that these taxes are at least in part to fill the hole caused by this colossal mismanagement of public money.”

Responding to the criticism, paymaster general Michael Ellis said: "We acted swiftly to secure and deliver more than 17.5 billion pieces of PPE to the frontline. The vast majority of the PPE we ordered – in the region of 97% – was suitable for use, either in the NHS or other non-medical settings."

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