PPE Expenditure

Question

Asked by

To ask His Majesty’s Government what is their latest estimate of expenditure incurred in purchasing faulty personal protective equipment (PPE) during the COVID-19 pandemic; how much had been recovered by 31 December 2022; and how much they forecast to recover by 31 December 2023.

The department’s Annual Report and Accounts 2020-21 confirm that 817 million items of PPE worth £673 million were not fit for any use. By December 2022, the department had reduced the number of contested PPE contracts from 176 to 60, with an associated recovery of value for the taxpayer of around £1 billion. Given commercial sensitivities, we cannot comment on our forecast for further recovery.

My Lords, I am grateful to the Minister for that reply, but when I look at the National Audit Office report it produces some slightly different figures from those that he has given. It says that his department had identified 3.6 billion PPE items that were not suitable for use, at a cost of £2.9 billion. The point I want the Minister to comment on is that 53% of those suppliers who came through the VIP route provided materials which were not fit for use. Does that raise any questions about the procurement processes operated during the pandemic?

I thank the noble Lord. Given the recent press, I want to start by setting out the position of Cignpost, the private sector Covid testing company in which, as many noble Lords will be aware, I own a stake. To be clear, Cignpost did not bid for any government PPE contracts and has only private sector clients. None the less, upon taking up the role as an unpaid Minister of Health, I resigned my directorships, made an undertaking to sell my stake, and in conjunction with the Permanent Secretary, ensured that I was not engaged in any areas where there could be perceived to be a conflict—I just wanted to make that clear.

Turning to the question, I was giving the most up-to-date figures. The £1 billion reflects the money that we have continued to recover. Right now, the only amount that has been written off is the £600-odd million that I have mentioned, and we are continuing to pursue the other amounts. When we close the accounts, we will have an update on where that will go. On the VIP lane, I think we accept that, given our time again, we would conduct that in a different way. I will check but I do not recognise those figures as to the level of faults.

My Lords, as well as the financial cost of failures in the PPE procurement process, does the Minister agree that it is important to remember the human cost paid by care workers who became ill when looking after vulnerable and elderly people without adequate PPE? Does he understand how frustrated care workers must now feel to see this level of wastage when their services are crying out for more investment? We could buy a lot of care packages for “£600-odd million”.

In the circumstances at the time, I think we were all worried that we were going to run out of PPE. If the noble Lord remembers, it was the Wild West out there in terms of trying to purchase it, with planes gazumped literally on the runway and flying to other countries. That is why we stepped in. We bought to a worst-case projection, because we knew we could not afford for PPE to run out in our social care homes or our hospitals. We ended up buying 20% too much as a result, and that is what we are dealing with now. However, only 3% of everything that we bought ended up being faulty, which I think people will agree was a pretty good result.

My Lords, will the Minister indicate how much we are paying for storage of PPE? Are the press reports that we paying for the storage of PPE on a substantial scale in China correct?

Right now, less than 1% of stock is held in China—to answer that question directly. In terms of cost, we are currently paying about £700,000 per day, which is why we are writing off the stock and effectively disposing of it. We have tried to donate as much of it as possible to people who want it, but we have to bite the bullet on the rest and say, “You know what? It’s no longer required so we are disposing of it as rapidly as possible.” We are bringing down those costs; we will be saving £200 million a year through that rapid disposal.

How many health and social care staff are now off long-term sick with long Covid? What correlation has there been between long Covid and their perception that they did not have adequate PPE for the job to be done?

I will write to the noble Baroness with the statistics. I can be clear that the endeavours undertaken to buy the PPE were to make sure that we did not run out. Again, there is quite a bit of hindsight going on in saying, “Ah, we bought too much of it”, when at the time everyone was scrambling to say, “You need to buy more.” That was the result of the situation, and to try to apply hindsight now is quite wrong. They did a pretty good job regarding the amount that they bought; they got 97% of it right, which I think we would agree is a pretty good result.

My Lords, the reference to hindsight is misplaced. The Minister accurately described the shambles and panic that happened at the beginning of the pandemic, but there had been several reports in the 10 years before it that indicated that one measure the Government could take for any pandemic was to have standby contracts whereby there were arrangements with companies to provide PPE and laboratory facilities. That was recommended by, among others, your Lordships’ own Science and Technology Committee. Do such contracts now exist so that, were another virus to hit us, we should not go through the same shambles and corruption that we did on that occasion?

Absolutely. As ever, we want to learn the lessons. That is why we have set up the Covid inquiry. Yes, supply arrangements are in place. At the same time, as per the answer to the previous question, holding high levels of stock does not make sense. It is cheaper in this case to dispose of it while making sure that the supply lines are in place so that we can rapidly respond to any future event.

My Lords, I understand from the Minister that it is the department that paid the cost of this useless material, and for its storage. How many doctors, nurses and ambulance staff could be given a decent pay rise if that money had been given to the NHS?

Again, I would take issue with the words “useless material”. It was bought based on a projection of how the pandemic could progress and what would be required. The fact that it did not progress that far was thanks a lot to the work we did in being the quickest country to vaccinate in the world. So, we did not need that level of PPE; that was a good thing. We bought for a worst-case scenario and, thank goodness, we did not require it because of the action we took to get on top of it all. Now, we are dealing with the surpluses bought for that worst-case scenario and quickly disposing of them.

My Lords, can my noble friend tell us the amount of this stuff in UK warehouses, and how much that costs daily?

As I mentioned before, the daily cost is roughly £700,000.