Covid-19: Government writes off £10bn on unusable, overpriced, or undelivered PPE

The government has written off almost £10bn of spending on personal protective equipment (PPE) that was either unusable, above market price, or was not delivered, official accounts show.

The Department of Health and Social Care’s annual report and accounts1 for 2020-21, show that £8.7bn worth of PPE purchased early in the pandemic was written off. This included £673m for defective PPE not suitable for any use, £2.6bn for items not suitable for NHS use that may be suitable for other uses, £4.7bn from paying inflated prices because of global demand, and £750m for “excess” inventory that passed its expiry date and is held for resale or donation.

The department also purchased an additional £1.2bn of PPE that had not been delivered as of 31 March 2021, but which it was committed to buying, the accounts show.

Gareth Davies, the head of the National Audit Office, described delivering the department’s accounts as “challenging” and gave them only qualified approval.

The government has faced much criticism for the way it has handled procurement during the pandemic, including its establishment of a high priority “VIP lane” through which potential PPE suppliers referred by MPs, ministers, or civil servants could gain quicker access to contracts, a process that was later ruled unlawful by a High Court judge.2

Davies said that the health department had “rapidly increased its risk appetite and adapted its normal processes” in response to covid-19 but was “not able adequately to manage some of the elevated risks, resulting in significant losses for the taxpayer and leaving the department open to the risk of fraud.”

He said the department had failed to maintain adequate records of the location or condition of £3.6bn worth of stock that was unaccounted for. While officials believe the department held 7.5 billion items in 16 000 containers at UK ports and a further 1.6 billion in storage in China, “it is unable to confirm this,” Davies said.

As a result of poor record keeping, Davies said he had not received “adequate assurance that the level of fraud losses are not material.” The department is currently spending around £500 000 a day on storage of PPE, accounts show.

Speaking on BBC Radio 4’s Today3 Meg Hillier, chair of the Commons Public Accounts Committee, which scrutinises government spending, said the money wasted on PPE was “a symptom of the panic buying and the sellers market that took place in that very early stage of the pandemic, which in itself is a symptom of the lack of preparedness for covid.”

She added, “Even in that situation the danger was that money was being spent far too easily. You can still have controls in place. A lot of those controls were ripped up, not just because it was an emergency but there was poor record keeping on procurement. Some people were getting contracts who had no track record while other companies weren’t getting a look in.”

A Department of Health and Social Care spokesperson said, “Our absolute priority throughout this unprecedented global pandemic has always been saving lives.

“In a highly competitive global market where many countries imposed export bans, we acted swiftly to obtain 30 000 ventilators by the end of June 2020 and we have delivered over 17.5 billion items of PPE, with 97% of PPE we ordered being suitable for use.

“The supply of these vital items helped keep our NHS open at a moment of national crisis to deliver a world class service to the public. We are seeking to recover costs from suppliers wherever possible.”

In response to an urgent question in the Lords on 2 February, health minister Syed Kamall defended the government’s actions as justified given the pressing need for PPE in the NHS at the time. “I can remember the leader of the BMA said this really is a matter of life and death,” he said. “You cannot put a price on that. We had to buy equipment from wherever we could to help make sure that we kept our staff safe.”