Management of PPE Contracts

Public Accounts Committee Closed Inquiry
Opened: 15 Mar 2022 Closed: 8 Nov 2022 Parliament page
The NAO and PAC have previously reported on the commercial deals struck by government as part of its emergency response to the COVID-19 pandemic, finding in some instances that these deals may have left government with some that failed to meet the required standards, including hundreds of millions of pounds-worth … Read more
15 Recommendations
6 Conclusions
1 Report
1 Oral session
3 Letters
1 Event
Activity timeline 7 events
12 Jan
2023
Correspondence
12 Jan
2023
Correspondence
8 Nov
2022
Report published
20 Jul
2022
Report published
24 May
2022
Correspondence
20 Apr
2022
Oral evidence
20 Apr
2022
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
Oral evidence sessions 1 session
20 Apr 2022
View on parliament.uk
Management of PPE Contracts
Jonathan Marron · Department for Health and Social Care Shona Dunn · Home Office Sir Chris Wormald · Department of Health and Social Care
Title HC No. Published Items Response
Twelfth Report - Management of PPE contracts HC 260 20 Jul 2022 21 Responded
Recommendations & Conclusions
21 results
2 Recommendation Acknowledged
Twelfth Report - Management of PPE…
The Department still lacks a stock management system that enables it to fully understand what...
The Department still lacks a stock management system that enables it to fully understand what PPE it has and where it is. The Department believes that it has now received nearly all of the 37.9 billion PPE items that it … Read more
Government Response
The government agrees with the Committee’s recommendation and the department has undertaken a review of historic ministerial diaries and has, where necessary, updated the register in line with Cabinet Office requirements; the department has strengthened both reporting and quality assurance processes.
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3 Recommendation Accepted in Part
Twelfth Report - Management of PPE…
The Department remains in dispute on 176 contracts for PPE with £2.7 billion of taxpayer...
The Department remains in dispute on 176 contracts for PPE with £2.7 billion of taxpayer money at risk and has made little progress in tackling potential fraudulent supplies of goods. The majority of these 176 disputes relate to the quality … Read more
Government Response
The government will provide a summary update on the progress of negotiations in confidence to the Committee, and has established a Dissolution Team until March 2023 with quarterly targets to resolve contractual matters, but much of the requested information is commercially sensitive.
HM Treasury
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4 Recommendation Accepted
Twelfth Report - Management of PPE…
The Department had insufficient due diligence checks at the outset of the pandemic to prevent...
The Department had insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest. We recognise that the Department had to act quickly at the start of the pandemic to secure … Read more
Government Response
The government states that the commercial reset will ensure sufficient processes are now in place to prevent issues such as insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest from recurring, and highlights existing policies and guidelines.
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5 Recommendation Accepted
Twelfth Report - Management of PPE…
The Department has handed back responsibility for the PPE programme to Supply Chain Coordination Limited...
The Department has handed back responsibility for the PPE programme to Supply Chain Coordination Limited (SCCL) with many issues still to be resolved. Since October 2021, oversight of SCCL transferred from the Department to NHS England and in April 2022 … Read more
Government Response
The government agreed to release its PPE strategy and update the Committee on plans for publication, aiming for Autumn 2022 implementation, while the NHS Supply Chain took over PPE supply and distribution in April 2022.
HM Treasury
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6 Recommendation Accepted
Twelfth Report - Management of PPE…
The future of the UK-based supply chain for PPE is unclear.
The future of the UK-based supply chain for PPE is unclear. The global demand for PPE at the start of the pandemic pushed up the prices from suppliers around the world. In an effort to create a more resilient UK-based … Read more
Government Response
The department has established a resilient UK-based supply chain and contracts have been signed with around 30 UK-based companies. The department is working with NHS Supply Chain to help offer UK manufactured products to the health and care sectors where possible.
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1 Conclusion Acknowledged
Twelfth Report - Management of PPE…
On the basis of a Report by the Comptroller and Auditor General, we took evidence...
On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department of Health & Social Care (the Department) about its management of Personal Protective Equipment (PPE) contracts let during the COVID-19 pandemic.1
Government Response
The government acknowledges the committee's report on the Department of Health & Social Care's management of PPE contracts.
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7 Conclusion Accepted
Twelfth Report - Management of PPE…
Alongside reducing excess stock, the Department is also having to consider what is an appropriate...
Alongside reducing excess stock, the Department is also having to consider what is an appropriate level of PPE to hold as a stockpile. We asked it whether it had created another strategic reserve of PPE in preparation for the possibility … Read more
Government Response
Operational responsibility will transfer to the NHS Supply Chain on 1 April 2023, with the department retaining ownership of this stock for accounting purposes. The department’s current working assumption is that, subject to suitability, products held in excess will be transferred to a future stockpile.
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8 Conclusion Not Addressed
Twelfth Report - Management of PPE…
The Department told us that it has now received nearly all of the 37.9 billion...
The Department told us that it has now received nearly all of the 37.9 billion items of PPE which it ordered, with only 300 million items outstanding. It told us that whilst it has now opened every container it has … Read more
Government Response
Acknowledges the conclusion about the lack of a stock management system.
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9 Conclusion Not Addressed
Twelfth Report - Management of PPE…
We asked what assurances the Department could give us about the accuracy of its stock...
We asked what assurances the Department could give us about the accuracy of its stock numbers. This was because the NAO reported that it could not fully reconcile the numbers from the stock model with individual contracts and said it … Read more
Government Response
Acknowledges the conclusion about the accuracy of stock numbers.
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10 Recommendation Rejected
Twelfth Report - Management of PPE…
We asked the Department, given this wide spread of PPE storage, what steps it is...
We asked the Department, given this wide spread of PPE storage, what steps it is taking to introduce a modern stock management system for the PPE programme.23 We noted the importance of having a system where it knows exactly how … Read more
Government Response
The government disagrees that a new stock management system is needed, arguing that existing data systems are sufficient and a new system would only duplicate existing data.
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11 Recommendation Accepted in Part
Twelfth Report - Management of PPE…
The Department acknowledges that it still has many PPE contracts that have ongoing contractual issues...
The Department acknowledges that it still has many PPE contracts that have ongoing contractual issues that need resolving. There are 176 contracts where there are concerns about either the quality or the performance of the contract and these are collectively … Read more
Government Response
The government will provide a summary update on the progress of negotiations as a whole in confidence to the Committee due to commercial sensitivity, with a Dissolution Team working to resolve contractual matters by March 2023.
HM Treasury
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12 Recommendation Accepted
Twelfth Report - Management of PPE…
The NAO reported that of the 176 contracts in dispute, most of these were still...
The NAO reported that of the 176 contracts in dispute, most of these were still in the early stages of being resolved. Eighty-three of the 176 contracts are still in the first stage of the commercial resolution process with a … Read more
Government Response
The government agreed to explain its progress in resolving the 176 disputed PPE contracts and will provide a summary update on the progress of negotiations as a whole in confidence to the Committee. A Dissolution Team has been commissioned until March 2023 with quarterly targets to achieve resolution of contractual matters.
HM Treasury
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13 Recommendation Accepted
Twelfth Report - Management of PPE…
We asked the Department what its assessment of fraud was amongst these contractual disputes.
We asked the Department what its assessment of fraud was amongst these contractual disputes. Although it conceded that some of the 176 contracts were of interest from a fraud perspective it was unwilling to give much information about any specific … Read more
Government Response
The government agreed to update the committee on how it is working with relevant authorities in assessing and acting on any fraudulent cases. The department takes all allegations of fraud extremely seriously and, where appropriate, allegations are thoroughly investigated and the strongest possible civil and criminal sanctions sought.
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14 Recommendation Accepted
Twelfth Report - Management of PPE…
We wanted to understand the Department’s view of profits made by PPE suppliers and intermediaries,...
We wanted to understand the Department’s view of profits made by PPE suppliers and intermediaries, particularly on contracts that have failed to deliver adequate PPE, many of which came through the VIP referral route. Reports continue to emerge of the … Read more
Government Response
The government states that the commercial reset will ensure sufficient processes are now in place to prevent issues such as insufficient due diligence checks at the outset of the pandemic to prevent potential profiteering and to identify conflicts of interest from recurring, and highlights existing policies and guidelines.
HM Treasury
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15 Conclusion Acknowledged
Twelfth Report - Management of PPE…
The Department told us that factoring in consideration of profit margins before these PPE contracts...
The Department told us that factoring in consideration of profit margins before these PPE contracts were awarded was not possible. While it agreed that the best way to mitigate against excessive profiteering was to build such contingencies into the contract … Read more
Government Response
The government agrees with the Committee’s recommendation and is implementing a commercial reset to prevent issues with due diligence and conflicts of interest from occurring again in the future.
HM Treasury
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16 Recommendation Accepted
Twelfth Report - Management of PPE…
One due diligence check that did not appear to be applied was a consideration of...
One due diligence check that did not appear to be applied was a consideration of potential conflicts of interest on PPE referrals. The Department confirmed that when signing off on these PPE contracts the accounting officer did not normally have … Read more
Government Response
The government agreed to set out how its commercial reset will ensure sufficient processes are now in place to prevent issues of profiteering and conflicts of interest from recurring. The department has well-established policies, processes and due diligence systems for use outside of emergencies. All tendering activities comply with the relevant standards, processes and criteria set out in the Public Contracts Regulations.
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17 Recommendation Accepted
Twelfth Report - Management of PPE…
Prior to the pandemic, the role of procuring and managing PPE was largely the responsibility...
Prior to the pandemic, the role of procuring and managing PPE was largely the responsibility of Supply Chain Co-ordination Limited.50 In March 2020, when the Department realised that SCCL alone would not be able to procure the volume of PPE … Read more
Government Response
The government agreed to release its PPE strategy, setting out the roles and responsibilities of the Department and SCCL in managing contracts and future procurement. Responsibility moved to NHS Supply Chain in April 2022. The department committed to publishing the strategy and will update the committee on plans for publication.
HM Treasury
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18 Recommendation Deferred
Twelfth Report - Management of PPE…
We asked the Department how the transfer back to SCCL had gone and it was...
We asked the Department how the transfer back to SCCL had gone and it was very positive about the process. It said that nothing had really been interrupted from a logistics perspective and that the reality is that the Department … Read more
Government Response
The Department will release its PPE strategy, setting out how it will work with SCCL and what the respective roles and responsibilities of each organisation will be in the ongoing management of contracts and future procurement activities, as soon as it is possible and will update the Committee on the plans for publication in due course.
HM Treasury
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19 Conclusion Acknowledged
Twelfth Report - Management of PPE…
The Department will still have a role to play in the PPE programme despite this...
The Department will still have a role to play in the PPE programme despite this transfer back of the logistics to SCCL. We sought to clarify where exactly accountability lies across the different aspects of the programme. For example, the … Read more
Government Response
The government will provide a summary update on the progress of negotiations as a whole in confidence to the Committee due to commercial sensitivity, with a Dissolution Team working to resolve contractual matters by March 2023.
HM Treasury
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20 Recommendation Accepted
Twelfth Report - Management of PPE…
Prior to the COVID-19 pandemic there were not many businesses in the UK that specialised...
Prior to the COVID-19 pandemic there were not many businesses in the UK that specialised in producing PPE with most of it coming from overseas. The pandemic saw steep rises in global prices for PPE as demand for it surged … Read more
Government Response
The government agreed to explain the role of UK-based PPE suppliers going forward, noting that they have established a resilient UK-based supply chain (excluding gloves). Future procurement will include a focus on social value and environmental considerations, with NHS Supply Chain offering UK-manufactured products where possible.
HM Treasury
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21 Recommendation Acknowledged
Twelfth Report - Management of PPE…
The Department set out in its initial PPE strategy its desire to build on this...
The Department set out in its initial PPE strategy its desire to build on this UK manufacturing base, reiterating the role it should play in building a more resilient supply chain and also the wider benefits including job creation and … Read more
Government Response
The government states that it has established a resilient UK-based supply chain, that future procurement will continue on the open market including a focus on social value, and that it is working with NHS Supply Chain to help offer UK manufactured products to the health and care sectors where possible.
HM Treasury
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Government Response AI assessment · 21 of 15 classified
Accepted 10
Accepted in Part 2
Acknowledged 5
Deferred 1
Not Addressed 2
Rejected 1
Total 15 recs + 6 conclusions
Correspondence 3 letters
12 Jan 2023 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health & Social Care, re 12 report of session 2022-23 management of PPE contracts, dated 21 December 2022
Parliament page
12 Jan 2023 Correspondence from Will Quince MP, Minister of State for Health and Secondary Care, Department for Health and Social Care, re update on Government Personal Protective Equipment (PPE) contracts, dated 19 December 2022
Parliament page
24 May 2022 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, dated 19 May 2022
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