Disputes between the government and suppliers of personal protective equipment during the pandemic that didn’t make the grade could cost the taxpayer £2.7bn, MPs have said.
The Public Accounts Committee accused the Department of Health and Social Care of “significant failings” in its handling of the contracts during the COVID pandemic, leaving the government with four billion unused items – many of which will be burnt.
The report also said the department took little action against potentially fraudulent suppliers – believed to account for 5% of PPE spend – and that it did not carry out due diligence over some contracts, allowing firms providing substandard equipment to get away with it.
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The committee said there are 176 contracts in dispute, worth a total of £2.7bn, and progress was slow.
Other criticisms in the report included the DHSC not considering the profit margins providers were taking home and potential conflicts of interests if they were awarded contracts after coming through so-called “VIP lanes” for companies with political connections.
The chair of the committee, Labour’s Dame Meg Hillier, said: “The departure from normal approaches to due diligence, record keeping, decision making and accountability in relation to PPE contracts puts a stain on the UK’s response to the pandemic.
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“Even if you accept that some proper procedure will have to slip in times of crisis, the complete collapse of some of the most well-established civil service practices beggars belief.
“The taxpayer will be paying for these decisions for years to come.”
Of 37.9 billion items of PPE the department bought during the pandemic, costing £13bn, it still has 3.9 billion items in stock that it doesn’t need, and it is spending £7m every month to store the equipment – with most of it out of date or faulty.
The committee said the items were being stored in 70 places in the UK and China, but accused the government of not having systems in place to track what items are where.
But the department denied the claim, saying: “It is simply wrong to suggest that the department does not know how much PPE it has, or where it is located.
“We have a comprehensive data system in place to allow us to oversee the storage network and dispose of any excess stock.”
Labour’s deputy leader, Angela Rayner, said the report “exposes the Conservatives’ catalogue of scandalous waste, with ministers opening the door for VIP fraudsters to rip off the British public”.
She added: “Billions of pounds of taxpayers’ money is now literally going up in smoke as the government’s bonfire of useless PPE grows.
“The taxpayer will be paying for the Conservatives’ incompetence for years to come. They have weakened standards and left Britain’s finances exposed.”
Unions, including Unite and the GMB, also called for an investigation into the government’s handling of procurement and for those PPE suppliers to be held to account.
But a spokesperson from the department said: “Despite massive inflation in prices and unprecedented global demand, we delivered over 21.4 billion items of PPE to frontline staff to keep them safe, with only 3% of the PPE we procured unusable in any context.
“The department also takes fraud extremely seriously and is exploring every available option – including working with law enforcement partners – to bring those who commit fraud to account and seek to recover losses.”
The committee urged the government to put more robust and transparent practices in place as they may be in the position again in the future where they have to ramp up procurement.
