Management of PPE contracts – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Committee of Public Accounts

Related inquiry: Management of PPE Contracts

Date Published: 20 July 2022

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Two years after purchasing just over £13 billion’s worth of PPE the Department of Health & Social Care (the Department) remains in dispute with many suppliers over the quality of the PPE they provided. It faces a huge challenge to manage a stockpile of PPE, including billions of items that are unusable or not needed. Of the 37.9 billion items of PPE purchased, the Department has estimated that it holds 3.9 billion items that it does not need. It is exploring options for selling, donating and recycling this PPE but it accepts that some will end up being incinerated. The Department is hampered in its overall management of its PPE stock as is does not have a fully integrated stock management system and because it still holds PPE in over 70 locations across the UK as well as in China and at various supplier storage locations.

The Department is in dispute with PPE suppliers on 176 contracts with up to £2.7 billion of taxpayers’ money at risk. The majority of these disputes relate to the quality of the PPE provided. Progress in resolving these disputes has been slow with 86 of the 176 still at the very first stage of the commercial resolution process with an estimated 35% that will not be resolved by 2023. There is also little sign of action against potentially fraudulent suppliers despite the Department’s estimate that as much as 5% of PPE expenditure may have involved fraud. Insufficient due diligence checks prior to letting some contracts has left the Department unable to prevent or take action where suppliers and intermediaries may have made excessive profits whilst providing substandard PPE.

The future of the PPE programme remains uncertain. In April 2022 Supply Chain Coordination Limited (SCCL) took over responsibility for the programme, however it is unclear how exactly responsibilities and roles are split between itself and the Department, and the already delayed PPE strategy paper is still to emerge. That strategy will, amongst other things, need to set out how the Department expects to maintain resilience in the UK supply chain by working with the UK suppliers who helped meet demand during the pandemic as well as where responsibility lies for getting best value for taxpayers from the contracts it is still disputing.