PPE procurement decisions were ‘rational and defensible’, DHSC perm sec says

Sir Chris Wormald says pandemic procurement processes were correct based on the evidence at the time
Photo: PA Images/Alamy Stock Photo

By Tevye Markson

21 Apr 2022

The decisions taken on procuring PPE during the Covid pandemic were rational given the evidence at the time, Department of Health and Social Care permanent secretary Sir Chris Wormald has said.

The permanent secretary and other senior DHSC officials were questioned yesterday by the Public Accounts committee on the speed of personal protective equipment procurement and the processes for choosing suppliers, including the use of the controversial VIP lane.

DHSC has been criticised for the lack of stockpiling of PPE prior to the pandemic, the pace at which equipment was procured at the beginning of the pandemic and the fairness and robustness of its procurement processes.

‘The evidence matched the decisions we took’

The department’s pre-pandemic PPE stockpile was inadequate to deal with the Covid-19 crisis, and prices soared as governments around the world rushed to get hold of items such as face masks, gowns and gloves.

Questioned on DHSC added to its protective equipment reserves swiftly enough when Covid struck, Wormald said the department “went into the market very quickly” in February 2020 to buy extra stock but “not at the scale that we eventually did”.

Wormald said the initial stockpile contained suitable items but there was not enough of it for this “type of pandemic”, pointing out that the Covid-19 virus was spread much more through asymptomatic cases than flu or other coronaviruses such as SARS.

The government and health services have previously been criticised for failing to prepare for a coronavirus pandemic, which meant they were heavily reliant on planning that had been done for a flu pandemic in the early days of the Covid outbreak.

He said the understanding of the disease changed in early April 2020, when it became clear that the disease spread asymptomatically. The department then amped up its procurement in response as it realised PPE was needed not just in hospitals but in many other settings.

“With the benefit of hindsight we would do lots of different things,” Wormald said.

“Could we have looked at the evidence and made a decision slightly earlier? Possibly. I don’t think so. I think the course of events I have set out was a rational set of decisions. The evidence matched with the decisions we took.”

Wormald said a decision has not been taken yet on how much of a reserve the department would keep for future health crises.

“We will probably want something that is bigger than what we had last time…and smaller than [an amount] big enough to deal with a pandemic of this scale simply by reserve.”

Procurement processes ‘rational and defensible’

Needing to quickly get equipment to frontline workers, the government suspended normal procurement procedures, leaving the process more vulnerable to fraud.

The department is currently in dispute with suppliers over 176 contracts, with £2.7bn at risk.

Liberal Democrat MP Sarah Olney asked how senior officials can be confident that sufficient due diligence was done, given the large sums that are at risk.

Wormald said the processes were “rational and defensible” but admitted “there are things we wouldn’t do again”.

“We think the due diligence checks we did were appropriate in the circumstances,” he said.

“We raised our risk threshold but we retained our key checks. The basic processes of what we did... we would keep the same broad framework.”

Olney also raised concern that some suppliers who have not delivered on their contracts may not be able to pay back what they owe the government due to a lack of checks that the firms were financially sound.

But Jonathan Marron, director general of the Office for Health Improvement & Disparities, told the committee he is “confident” the department took sufficient steps to ensure that suppliers were credible.

Explaining how the department had responded to concerns about fraud during the PPE procurement process, DHSC second perm sec Shona Dunn said the department had “learnt an enormous number of lessons” in the last few years and developed a counter fraud strategy to “design fraud out” of procurement “as far as possible”.

But Wormald said the level of fraud during the pandemic PPE procurement process was not higher than in previous sets of contracts.

DHSC ‘would not use’ VIP lane again

The officials were also questioned on the government’s use of a PPE ‘high priority lane’ during the pandemic, which gave preference to suppliers recommended by MPs and ministers.

The VIP lane was ruled unlawful by the High Court in January, which said it "was in breach of the obligation of equal treatment".

Wormald said, in a similar future pandemic scenario, the department would keep some of the same procurement strategy but would not use the high priority lane again “given that we lost in court on one part of it”.

“Would we have a triage system where out of a large number of offers we attempt to identify the most promising and do them first? Yes we would,” he said.

“Would we do it in the same way that we did it with the high priority lane? No we would not.”

Wormald also said DHSC would handle PPE procurement in a future pandemic with “considerably more transparency”.

Companies referred to the VIP lane were 14 times more likely to win contracts than other suppliers, the National Audit Office revealed last year.

But Marron said the criteria for awarding contracts were the same whether bidders applied through the high priority lane or not, with a focus on getting the equipment which meets the technical requirements, ensuring companies can supply high volumes and value-for-money.

“The checks that were done were identical,” Wormald added.

“The high priority was how quickly the thing was looked at. There was no difference in criteria.”

However, the NAO found that 40% of contracts which came via the VIP lane did not go through full due diligence checks, as only limited measures were in place until May 2020.

The officials were also questioned on why PPE Medpro, a company referred by a Tory peer with links to the firm, was handed contracts worth £122m just weeks after being set up.

The department later deemed the gowns supplied by the company unfit for use, whilst the PPE was bought from a Chinese manufacturer for just £46m, according to the Guardian.

The DHSC chiefs said they could not give information on individual cases but all went through the same due diligence process. “Our [due diligence] procedures have been tested several times in court and were given a clean bill of health,” Wormald added.

Whilst the department’s use of the VIP lane to prioritise certain companies was ruled as unlawful by the High Court, the court said PPE contracts did go through sufficient due diligence.

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