Department of Health wasted £15bn on unused Covid supplies, watchdog finds

The Department of Health has wasted a total of £15bn on unused personal protective equipment, Covid tests and vaccines, prompting heavy criticism from the Whitehall spending watchdog.

The department spent £8.9bn during 2020/21 and another £6bn last year on such supplies, including masks and gowns for NHS staff that have proved unuseable and are now being burned.

The sums were revealed in the Department for Health and Social Care’s (DHSC) annual accounts and report for 2021/22, published on Thursday, and highlighted in a highly critical assessment issued by the National Audit Office (NAO).

Meg Hillier MP, the chair of the Commons’ public accounts committee, which oversees the NAO, said the accounts showed “extraordinary waste” by the DHSC. The money wasted was “another reminder to Whitehall about the vital importance of proper controls in public procurement, including during a crisis”.

The NAO said that the £6bn wasted in 2021/22 included a £3.5bn writedown on PPE, vaccines and medication to treat Covid which the DHSC had committed to buy but no longer plans to use.

The other £2.5bn was a writedown in the value of goods on which the DHSC originally spent £11.2bn.

Those supplies included £1.5bn of PPE, £5.8bn of Covid-detecting lateral flow tests and PCR tests procured by the test-and-trace programme, £2.7bn worth of vaccines to fight the virus and £1.2bn of various drugs that hospitals used to treat patients.

The DHSC’s report also disclosed that it expects to spend £319m storing and disposing of PPE which is no longer needed and is of such poor quality that it is no use to frontline staff anyway.

In March last year it was still spending £24m a month storing the infection-preventing equipment, the NAO said.

Labour seized on the DHSC’s admissions and highlighted that Rishi Sunak was the chancellor of the exchequer during the two years that have caused such concern to the NAO.

Wes Streeting, the shadow health secretary, said the accounts showed that “the Conservatives can never again claim to be the careful stewards of the public finances”.

He added: “While Rishi Sunak had control of the purse strings, a staggering £15bn of public money was wasted on useless PPE – enough to fund the police force for an entire year. Instead, that money is now literally going up in smoke. Taxpayers will rightly judge the carelessness with which the Conservatives treat their money to be an absolute scandal.”

DHSC estimates that the value of PPE and other items bought in response to the pandemic has fallen by £6bn, and that it has spent £319m on storage and disposal.

The accounts were complicated by the department’s failure to count stock at the end of the year to verify the quantity and quality of items including PPE and lateral flow tests, as it was unable to access items stored in containers, and did not have processes in place for accessible stock held in warehouses.

A DHSC spokesperson said the department had to “compete in an overheated global market to procure items to protect the public, frontline health and care workers and our NHS” in an “unprecedented pandemic”. She defended the approach as enabling the UK to become the first country to deploy an approved Covid vaccine.

The accounts also revealed serious problems with the accounting processes and leadership of the UK Health and Security Agency, which led most test-and-trace work.

Hiller said it was “astonishing and unacceptable” that the agency was unable to provide Whitehall’s spending watchdog, the National Audit Office, with enough information to properly analyse its accounts.

She said: “The department and UKHSA must get a grip on fundamental failures in governance, oversight and financial controls so UKHSA’s accounts can be audited. Taxpayers have a right to know how their money is being spent, including on test and trace.”

In a damning report, the National Audit Office warned that there was a lack of transparency as well as “inadequate” governance in the first set of accounts published by UKHSA since it replaced Public Health England in 2021, meaning the auditor general was unable to sign off on them.

UKHSA could not provide sufficient evidence for where £794m of stock payments had gone, as well as £1.5bn of payments relating to NHS test and trace, which were transferred from the Department of Health and Social Care, and £254m of stockpiled goods transferred from its predecessor organisation, Public Health England (PHE).

The NAO added that the “lack of formal governance arrangements exposed UKHSA to a high level of risk, with no clear oversight structure in place for its first six months of operation”, and said there had been a lack of support and oversight from DHSC in setting the agency up.

It noted that UKHSA had faced difficult operating conditions due to the pandemic, and that it was “heavily reliant” on temporary staff, including in key senior roles, and had experienced high levels of staff turnover.

Gareth Davies, the head of the NAO, said: “Even taking into account the challenging context, it is unacceptable that UKHSA has not been able to produce auditable accounts and provide the transparency and assurance that parliament needs.

“When setting up new bodies, it is essential that basic governance arrangements are put in place. DHSC and UKHSA must work with HM Treasury to get on track to produce auditable accounts.”