DHSC Annual Report and Accounts 2021-22

Public Accounts Committee Closed Inquiry
Opened: 18 Jan 2023 Closed: 24 Sep 2023 Parliament page
The Committee will question senior officials at the Department for Health and Social Care about its overall spending and priorities in 2021 to 2022, the second year of the pandemic in the UK. The Committee has previously looked at issues including: - the Government response to the pandemic, particularly the … Read more
3 Recommendations
30 Conclusions
1 Report
1 Oral session
2 Letters
1 Event
Activity timeline 6 events
24 Sep
2023
Report published
5 Jul
2023
Report published
28 Mar
2023
Correspondence
20 Mar
2023
Oral evidence
20 Mar
2023
Formal meeting (oral evidence session) · The Grimond Room, Portcullis House
7 Feb
2023
Correspondence
Oral evidence sessions 1 session
20 Mar 2023
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DHSC Annual Report and Accounts 2021-22
Andy Brittain · Department of Health and Social Care (DHSC) Ian Peters · UK Health Security Agency Professor Dame Jenny Harries · UK Health Security Agency Shona Dunn · Home Office Sir Chris Wormald · Department of Health and Social Care
Title HC No. Published Items Response
Sixty-Second Report - Department of Health and Social Care 2021–… HC 997 5 Jul 2023 33 Responded
Recommendations & Conclusions
33 results
2 Conclusion Accepted
Sixty-Second Report - Department o…
Develop and implement a clear, cost-effective plan for national emergency pandemic stockpile
The Department does not yet have a clear plan in place for a national emergency stockpile for any future pandemic. The stockpile held by the Department was invaluable for the first few months of the COVID-19 pandemic but it does … Read more
Government Response
The government states it has a clinical countermeasure program, is setting up a UK-Moderna partnership for vaccine manufacturing, and has signed a service level agreement with SCCL for stock rotation. It is also working with SCCL on PPE volumes and preparing advice.
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3 Conclusion Accepted
Sixty-Second Report - Department o…
Assess, rectify, and urgently resolve governance arrangement vacancies within UK Health Security Agency
There was a fundamental absence of formal governance arrangements at UKHSA and the Department failed to respond to the heightened risks of setting up a new and complex organisation at pace. UKHSA was created on 1 April 2021 with unsatisfactory … Read more
Government Response
The government states UKHSA completed non-executive recruitment by April 2022, established corporate governance and committees by September 2022, and appointed an Audit and Risk Committee Chair in April 2023. A GIAA review was completed, and identified actions to improve governance were completed by March 2023 and confirmed by a follow-up audit.
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4 Conclusion Accepted
Sixty-Second Report - Department o…
Urgently implement robust financial controls and processes to deliver unqualified accounts for UKHSA
UKHSA had a fundamental weakness in financial controls and processes which resulted in it being unable to prepare auditable accounts. On 1 October 2021, the day that it became operational, UKHSA implemented a new IT accounting system and transferred the … Read more
Government Response
The government states UKHSA immediately established a Finance and Control Improvement Programme aimed at achieving unqualified accounts by 2024-25, acknowledging 2022-23 is not possible. A multi-year project plan for this programme will be in place by Autumn 2023, overseen by a dedicated board and Audit and Risk Committee.
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5 Conclusion Accepted
Sixty-Second Report - Department o…
Develop and implement plan to remove qualifications from Departmental Group accounts and restore timely NHS reporting
The Department has not yet developed a clear plan to remove the audit qualifications and deliver its accounts to a pre-summer recess timetable. The Department has prepared its accounts in exceptional circumstances for the past two years. It laid its … Read more
Government Response
The government has a multi-year plan to bring forward the accounts timetable by two months annually, aiming to lay 2022-23 accounts in November 2023 and achieve a pre-summer recess timetable for 2025-26. It acknowledges challenges with local audit capacity, which are being addressed.
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6 Conclusion Accepted
Sixty-Second Report - Department o…
Establish capability for effective oversight across Departmental Group to avoid future financial and governance failings
There have been repeated and unacceptable governance and accounting failures within the Departmental Group which has led to poor financial control, undermined Parliamentary accountability, and money being spent without Parliamentary approval. The Department has failed to implement adequate financial control … Read more
Government Response
The government states it has already established a 'financial reset programme' which implemented robust financial controls and governance across its group. While acknowledging challenges in ensuring full compliance, it maintains that these processes and controls are proportionate risk mitigation and are kept under continual review.
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1 Conclusion Accepted
Sixty-Second Report - Department o…
Committee takes evidence on Department of Health's 2021-22 Annual Report and Accounts
On the basis of a report by the Comptroller and Auditor General (C&AG), we took evidence from the Department of Health and Social Care (the Department) and the UK Health Security Agency (UKHSA) on the Department’s Annual Report and Accounts … Read more
Government Response
The government states it regularly updates the Committee on PPE inventory controls, disposal, and commercial resolution through quarterly updates and a March 2023 strategy document. It details how SCCL manages the PPE supply chain, inventory controls, and disposal, and how the Contract Dissolution Team works to recover value from suppliers.
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7 Conclusion Accepted
Sixty-Second Report - Department o…
Numerous PPE contracts faced dissatisfaction and breaches, leading to substantial cancellations and variations.
The Department continues to review the PPE contracts it entered into to identify suppliers that did not deliver against their contractual terms. By February 2022, the Department had negotiated the cancellation or variation of contracts to reduce the original supply … Read more
Government Response
The government states it is already providing regular quarterly updates on PPE inventory, disposals, and contract resolution activities, with SCCL managing the PPE supply chain and excess stock disposal, and the Contract Dissolution Team continuing to recover value from defaulting suppliers.
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8 Recommendation Accepted
Sixty-Second Report - Department o…
Department incurred £3.5 billion in impairments for unused COVID-19 vaccines and medicines.
As well as the significant volumes of PPE it purchased, and is now disposing of, the Department entered into contracts for both COVID-19 vaccines and COVID-19 medicines which commit it to procure future stock. It recognised impairments on these contracts … Read more
Government Response
The department recognizes the need to manage future procurement commitments to ensure value for money and minimize potential losses, and is working to improve forecasting and demand planning, and to manage contract flexibilities to reduce future stock commitments where possible.
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9 Recommendation Accepted
Sixty-Second Report - Department o…
Future pandemic stockpiling plans remain undecided despite past domestic PPE supply chain limitations.
In our June 2022 report on the Department’s 2020–21 Annual Report and Accounts we noted the lack of planning for how big a PPE stockpile needed to be, and also the need to build greater resilience into the supply chain.20 … Read more
Government Response
The government agrees and details a range of specific actions for building resilience, including a clinical countermeasure programme, a UK-Moderna partnership for vaccine manufacturing, and ongoing work with SCCL on PPE volumes, long-term resilience, and stock rotation.
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10 Conclusion Not Addressed
Sixty-Second Report - Department o…
UK Health Security Agency established in 2021, consolidating key public health protection functions.
On 18 August 2020, the Department announced a reorganisation of public health in England. The UK Health Security Agency (UKHSA) was subsequently established as an Executive Agency of the Department on 1 April 2021 with its Chair and Chief Executive … Read more
Government Response
The government's response outlines UKHSA's governance improvements, but this conclusion was a factual observation about the agency's establishment, not a recommendation requiring action.
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11 Conclusion Not Addressed
Sixty-Second Report - Department o…
Establishment of UKHSA was a complex and urgent task driven by pandemic imperatives.
The Department told us that there was an operational imperative to establish UKHSA before the winter of 2021–22, which was driven by the state of the pandemic and the need to create a single source of advice for Ministers and … Read more
Government Response
The government's response details governance improvements at UKHSA but does not directly engage with the conclusion's observations regarding the operational imperative for its rapid establishment or the inherent complexity of the task.
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12 Conclusion Not Addressed
Sixty-Second Report - Department o…
UKHSA's complexity compounded by changing remit and significant workforce reduction post-pandemic strategy.
The complexity was compounded by the changing remit for UKHSA and by policy decisions which had significant implications for UKHSA’s size and structure. For example, in March 2022 with the implementation of the ‘living with covid’ strategy, UKHSA began a … Read more
Government Response
The government's response focuses on UKHSA's corporate governance and oversight, rather than directly addressing the observed complexities stemming from its changing remit and restructuring outlined in this conclusion.
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13 Conclusion Accepted
Sixty-Second Report - Department o…
UKHSA Chair adopted an executive role due to CEO's limited experience in key functions.
On 1 October 2021, UKHSA had a Chief Executive and a non-executive Chair, both of whom had been appointed on 1 April 2021. UKHSA told us that the Chief Executive, despite her expertise in the science of public health, did … Read more
Government Response
The government states the implicit recommendation is implemented, detailing how UKHSA established full corporate governance by September 2022, completed non-executive recruitment, and engaged GIAA for a governance review, with identified actions completed by March 2023 to ensure traditional roles and strong oversight.
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14 Conclusion Accepted
Sixty-Second Report - Department o…
UKHSA's corporate governance arrangements deemed unsatisfactory due to absence of non-executive directors.
No additional non-executive directors were appointed until after the 2021–22 financial year. As a result, UKHSA did not comply with the principles of HM Treasury and the Cabinet Office’s Corporate governance in central government departments: code of good practice and … Read more
Government Response
The government agrees and states UKHSA has established a full suite of corporate governance arrangements, including completing non-executive recruitment by April 2022 and establishing committees by September 2022, with a GIAA review identifying improvements completed by March 2023.
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15 Conclusion Accepted
Sixty-Second Report - Department o…
Department prioritised rapid UKHSA establishment over implementing a robust, appropriate governance framework.
We asked the Department whether, given the risks associated with the establishment of UKHSA, it had considered an alternative timing for establishing the new organisation to ensure that an appropriate governance framework could have been put in place. The Department … Read more
Government Response
The government agrees and states UKHSA has established a full suite of corporate governance arrangements, including completing non-executive recruitment and establishing committees by September 2022, with a GIAA review identifying improvements completed by March 2023.
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16 Conclusion Accepted
Sixty-Second Report - Department o…
Absence of UKHSA governance led to inadequate scrutiny and minimal departmental support and oversight.
The absence of governance arrangements at UKHSA, during a time of significant change and operational challenge, meant that there was inadequate scrutiny and oversight over UKHSA. We asked the Department what it had done to support UKHSA to help mitigate … Read more
Government Response
The government agrees and states that UKHSA has already implemented a full suite of corporate governance arrangements, including completing non-executive recruitment, establishing committees by September 2022, and completing a GIAA review with actions by March 2023.
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17 Conclusion Accepted
Sixty-Second Report - Department o…
C&AG disclaimed opinion on UKHSA's inaugural accounts, unable to confirm 'true and fair' status.
The C&AG’s audit of UKHSA’s first set of accounts resulted in him disclaiming his opinions.34 This means that he was unable to give an opinion on whether the accounts were ‘true and fair’ or on whether the transactions recorded in … Read more
Government Response
The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
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18 Conclusion Accepted
Sixty-Second Report - Department o…
UKHSA accounts disclaimed due to uncounted inventory, unsupported expenditure, and insufficient evidence for accruals.
The UKHSA accounts were ‘disclaimed’ as: the inventory transferred from Public Health England (£254 million) and the Department (£794 million) to UKHSA on 1 October 2021 was not subject to stock counts, £3.3 billion of consumption of Test and Trace … Read more
Government Response
The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
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19 Conclusion Accepted
Sixty-Second Report - Department o…
C&AG disclaiming an opinion is rare; UKHSA expects unqualified accounts by 2023–24.
It is very unusual for an auditor to disclaim their opinion. No C&AG has disclaimed an audit opinion since January 2006, concerning the Home Office resource accounts 2004–05.36 UKHSA confirmed that they do not anticipate being able to produce accounts … Read more
Government Response
The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
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20 Conclusion Accepted
Sixty-Second Report - Department o…
Multiple root causes, including the new accounting system, led to UKHSA's unauditable accounts.
There were multiple root causes of UKHSA’s inability to produce auditable accounts. One of the key causes was the accounting system that UKHSA implemented on 1 October
Government Response
The government agrees with the observation and states that UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, with the aim of achieving a clean audit opinion for the 2024-25 accounts and a multi-year project plan in place by Autumn 2023.
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21 Conclusion Accepted
Sixty-Second Report - Department o…
UKHSA inherited new accounting system decision, regretting not running existing systems simultaneously.
We asked UKHSA whether it would have been better to use one of the systems used by its predecessor entities rather than implementing the new system on the day it became operational. UKHSA said that it had inherited the decision … Read more
Government Response
The government agrees and UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a clean audit opinion by 2024-25, with a multi-year project plan in place by Autumn 2023.
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22 Conclusion Accepted
Sixty-Second Report - Department o…
Staffing difficulties and transitory workforce compromised UKHSA's ability to provide audit evidence and explanations.
UKHSA also experienced significant difficulties with staffing which compromised its ability to provide evidence and explanations to support the figures reflected in the accounts. The C&AG reported that one barrier to his ability to obtain evidence to allow him to … Read more
Government Response
The government agrees and UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a clean audit opinion by 2024-25, with a multi-year project plan in place by Autumn 2023.
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23 Conclusion Accepted
Sixty-Second Report - Department o…
Operational decisions, like uncounted transferred inventory, made accounts qualification inevitable for UKHSA.
There were also operational decisions which UKHSA and the Department took which meant that some form of accounts qualification was always likely. The Department decided not to count the stockpile of emergency goods transferred from Public Health England to the … Read more
Government Response
The government agrees and UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a clean audit opinion by 2024-25, with a multi-year project plan in place by Autumn 2023.
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24 Conclusion Accepted
Sixty-Second Report - Department o…
Department consistently missed Treasury's administrative deadline for publishing annual reports and accounts.
To ensure timely accountability for the spending of public funds, Treasury set an administrative deadline of 30 June after the end of the financial year for Departments to publish their Annual Report and Accounts, and no later than parliamentary summer … Read more
Government Response
The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023.
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25 Conclusion Accepted
Sixty-Second Report - Department o…
Department aims to gradually improve annual accounts timeliness, targeting pre-Christmas 2023 and future pre-recess dates.
We asked the Department about the timing of the 2022–23 annual report and accounts, the Department confirmed that it was aiming to lay its Accounts before the 2023 Christmas recess and then to gradually improve the timeliness in future years.49 … Read more
Government Response
The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023.
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26 Conclusion Accepted
Sixty-Second Report - Department o…
Department faces significant challenges in finance capability and audit timetable delivery.
The Department faces two main challenges to bring the audit timetable forward, issues within the Department’s control and issues within the local audit market. The Department acknowledges that it is always looking to build its finance capability and identified three … Read more
Government Response
The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023, while acknowledging external factors like local audit capacity.
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27 Conclusion Accepted
Sixty-Second Report - Department o…
Group bodies face significant accounts preparation and audit issues for 2022-23.
We questioned the Department on the capacity of other bodies in its Group to prepare their Accounts to the required timescales, as we were aware that a number of bodies did not yet have auditors appointed for 2022–23, and this … Read more
Government Response
The government agrees and commits to a multi-year plan to return to a pre-summer recess timetable for laying accounts by the 2025-26 financial year, aiming to publish the 2022-23 accounts in November 2023, and states it is working to address external factors like local audit capacity.
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28 Conclusion Accepted
Sixty-Second Report - Department o…
Departmental and Group accounts repeatedly qualified due to inventory valuation failures.
The Department and bodies within its Group have had a number of financial governance and accounting failures in recent years. The Department Core and Group accounts have been qualified by the C&AG for the past two years. In both 2020–21 … Read more
Government Response
The government states it has already undertaken a financial reset programme to establish robust financial controls and governance, putting in place proportionate controls to reduce future financial and governance failings, with a target implementation date of December 2023 for the programme.
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29 Conclusion Accepted
Sixty-Second Report - Department o…
C&AG qualified Group accruals and Core Department financial assets due to valuation issues.
The C&AG also qualified the Groups ‘other accruals’ in 2020–21 as there was insufficient assurance in respect of existence and valuation of £17.3 billion, the Department accrues expenditure it has incurred but has not yet been invoiced for and therefore … Read more
Government Response
The government states it has already undertaken a financial reset programme to establish robust financial controls and governance across the department and its arm’s length bodies, which has put in place proportionate controls to reduce future financial and governance failings.
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30 Conclusion Accepted
Sixty-Second Report - Department o…
DHSC Group accounts received regularity qualification for exceeding budget and unapproved expenditure.
Furthermore, the C&AG has qualified his ‘regularity’ opinion on the DHSC Group accounts for the past two years: the Department exceeded its budgetary limit for Resource Non-Budget Expenditure as authorised by Parliament in 2021–22 as a budget of £nil was … Read more
Government Response
The government agrees with the implied concern, stating it has already implemented a financial reset programme with robust controls to reduce future financial and governance failings, which are kept under continual review.
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31 Conclusion Accepted
Sixty-Second Report - Department o…
UKHSA audit failures led to further qualifications on Departmental Group accounts.
The C&AG being unable to provide an opinion on the UKHSA 2021–22 Annual Report and Accounts59 (see above) resulted in further ‘true and fair’ and ‘regularity’ qualifications on the Departmental Group accounts.60 . We questioned the Department on when it … Read more
Government Response
The government agrees and states UKHSA has established a Finance and Control Improvement Programme to strengthen financial controls and processes, aiming for a fully clean audit opinion by 2024-25, with a multi-year project plan due by Autumn 2023.
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32 Conclusion Accepted
Sixty-Second Report - Department o…
Multiple Departmental Group entities received additional audit qualifications for various failures.
There have been other qualifications across the Departmental Group. The NHS Property Services (NHSPS) accounts were qualified in 2021–22 as NHSPS were unable to demonstrate compliance with the Financial Reporting Framework and account for the expenditure, assets and liabilities arising … Read more
Government Response
The government agrees with the implied concern, stating it has already implemented a financial reset programme with robust controls to reduce future failings, which are kept under continual review.
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33 Recommendation Accepted
Sixty-Second Report - Department o…
University Hospitals of Leicester NHS Trust faces significant audit and control weaknesses.
At the time of our evidence session, University Hospitals of Leicester NHS Trust (UHL) had yet to publish its 2021–22 Annual Report and Accounts. UHL’s auditor was not able to obtain sufficient, appropriate evidence upon which to form an opinion … Read more
Government Response
The government agrees and details its financial reset programme, which has established robust financial controls and a risk-based framework across its bodies to reduce future financial and governance failings, with a target implementation date of December 2023.
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Government Response AI assessment · 33 of 3 classified
Accepted 30
Not Addressed 3
Total 3 recs + 30 conclusions
Correspondence 2 letters
28 Mar 2023 Correspondence from Sir Chris Wormald, Permanent Secretary of the Department of Health and Social Care, re 6th report - DHSC Annual Reports and Accounts 20-21, dated 16 March 2023
Parliament page
7 Feb 2023 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health & Social Care, re Health England Annual Report and Accounts 2021-22, dated 30 January 2023
Parliament page