Nearly £15bn wasted on Covid PPE, says UK spending watchdog

The UK health department was forced to write down £14.9bn worth of personal protective equipment and other medical items, according to a report by the independent public spending watchdog, which also issued a scathing criticism of the UK Health Security Agency.

The National Audit Office on Thursday said the department for health and social care did not complete an “effective programme of year-end stock counts” to assess the quality and quantity of coronavirus-related items, such as lateral flow tests.

During the last two financial years, the DHSC reported nearly £15bn of write down costs associated with PPE and other health items. The department estimated that the continuing cost of storage and disposal of excess and unusable equipment stands at £319mn.

The watchdog found a “lack of adequate governance, oversight and control” at the UKHSA. It noted that because of a “lack of sufficient, appropriate audit evidence and significant shortcomings in financial control” the NAO was unable to provide an audit opinion on the 2021-22 accounts of the agency.

UKHSA was established in April 2021 and became operational in October that year, with the aim of building on the work of Public Health England and NHS Test and Trace.

The NAO noted the agency had faced a “challenging” environment, with high staff turnover and the pressures of responding to the pandemic. In addition, the health department failed to “sufficiently support or oversee” the UKHSA, the watchdog added.

The NAO has called on the DHSC and UKHSA to work alongside the Treasury to improve financial governance, adding that the health department should put in place “adequate controls” over remaining coronavirus inventory to assess the quality and condition of items.

“Even taking into account the challenging context, it is unacceptable that UKHSA has not been able to produce auditable accounts and provide the transparency and assurance that parliament needs,” Gareth Davies, head of the NAO said.

The opposition Labour party accused the government of financial “carelessness”, with shadow health secretary Wes Streeting arguing that the Conservatives can “never again claim to be the careful stewards of the public finances”.

“While Rishi Sunak had control of the purse strings, a staggering £15bn of public money was wasted on useless PPE,” he added.

Meanwhile, the chair of the parliamentary committee of public accounts Meg Hillier urged the department and UKHSA to “get a grip on fundamental failures in governance, oversight, and financial controls”.

“It is another reminder to Whitehall about the vital importance of proper controls in public procurement, including during a crisis.”

Jenny Harries, chief executive of the UKHSA, said her organisation took the decision by the NAO “seriously”, adding that the agency was created in “unprecedented circumstances”.

“We have already made good progress and are now substantially different in terms of stability, governance and financial controls,” she said. “We will be working closely with DHSC to ensure our future accounts are more robust.”

The government said: “It is misleading to say that £14.9bn of taxpayers’ money has been wasted,” adding that the approach taken by ministers resulted in the UK becoming the first country in the world to deploy an approved Covid-19 vaccine.

“In the face of an unprecedented pandemic, we had to compete in an overheated global market to procure items to protect the public, frontline health and care workers and our NHS.”