Twelfth Report - Management of PPE contracts

Select Committee

Public Accounts Committee HC 260 20 July 2022

Report Status Government responded

Conclusions & Recommendations 21 items (15 recs)

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Government Response (AI assessment · 21 of 21 classified)

Accepted 10

Accepted in Part 2

Acknowledged 5

Deferred 1

Not Addressed 2

Rejected 1

Recommendations

2 results

2 Acknowledged

The Department still lacks a stock management system that enables it to fully understand what...

Recommendation

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 Summary

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.

HM Treasury

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21 Acknowledged

The Department set out in its initial PPE strategy its desire to build on this...

Recommendation

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 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 making the UK a centre for innovative products.66 It is now apparent, however, that the Department holds a large excess of stock which it is concentrating on reducing down.67 In that context, the role of the UK suppliers forward seems uncertain as they are unlikely to receive orders for many years. The Department told us that those suppliers “have other products to make” and that the Department are “not in the market to buy at the moment”. Only seven UK suppliers are on SCCL’s future frameworks enabling them to bid for future PPE contracts.68 The Department said that it is worth with NHS Supply Chain to try and ensure that UK manufactured products are marketable to the health and social care sectors. Whilst it recognised that procurement rules will require it to still operate in the international market place it said that its plans to emphasis social value and environmental considerations going forward should place UK manufacturers in a good position to compete with international suppliers.69 61 Q106 62 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 2, dated 19 May 2022 63 C&AG’s Report, The supply of personal protective equipment (PPE) during the COVID-19 pandemic, session 2019–2021, HC 961, 25 November 2020, para 2.14 64 C&AG’s Report, Investigation into the management of PPE contracts, session 2021–22, HC 1144, 30 March 2022, para 1.3 and Figure 4 65 Q56 66 Department of Health & Social Care, Personal Protective Equipment (PPE) Strategy, 28 September 2020, para 1.4 67 Q33 68 Q56 69 Correspondence from Sir Chris Wormald, Permanent Secretary, Department of Health and Social Care, re Management of PPE Contracts, page 4, dated 19 May 2022 16 Manageme Show less

Government Response Summary

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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Conclusions (3) Observations and findings — click to expand

1 Conclusion Acknowledged

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 Summary

The government acknowledges the committee's report on the Department of Health & Social Care's management of PPE contracts.

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15 Conclusion Acknowledged

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 it argued that the reality of the global market at …

Government Response Summary

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.

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19 Conclusion Acknowledged

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 Department confirmed that resolving the 176 contracts in dispute will …

Government Response Summary

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.

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