NAO highlights major flaws in the PPE supply chain
2 December 2020: The National Audit Office has published an in-depth report on the shortages of personal protective equipment at the height of the COVID-19 pandemic and how very high prices were paid to secure supplies.
The National Audit Office (NAO) has issued a report on how the Department of Health & Social Care (DHSC) obtained personal protective equipment (PPE) in response to COVID-19. This follows last week’s wider report by the NAO on the disarray in government procurement during the pandemic.
The NHS is now expected to spend in the region of £15bn on PPE in 2020-21. This compares with the £146m worth of PPE ordered by the NHS in 2019-20, an increase of over 10,000%. The pandemic has resulted in a very different set of circumstances with 32 billion items procured between February and July 2020 for the NHS and care homes, many times greater than the 400 million items of emergency PPE in stock in January 2020.
Global demand for the same PPE made it a sellers’ market, with competing customers across the world driving up prices significantly. This was combined with changing specifications for the type of PPE that was required as more understanding was gained about the virus.
Before the pandemic, managing the day-to-day supply of PPE was the responsibility of several different public bodies and private sector contractors, with social care providers purchasing their PPE directly from suppliers. The emergency pandemic stockpiles were contracted out from Supply Chain Co-ordination Limited, a company owned by the NHS, to a private contractor Movianto.
The stockpiles intended for use in a pandemic proved to be inadequate, with insufficient amounts of PPE to meet the demands of this pandemic and omissions of key items such as gowns. In addition, there were difficulties getting access to the stock and no clarity about how much PPE each trust needed. The Ministry of Defence was brought in to assess the situation, leading to a conclusion that the existing infrastructure could not cope with the demand of the pandemic. As a result, a parallel supply chain was set up with 450 staff to find and buy PPE for both the NHS and care homes.
By mid-April, it was realised that previous estimates of what was required were far below actual needs. By the end of May 1.6 billion items of PPE had been ordered in contracts worth £7bn. Ordering was just the beginning, as items had to be made, transported to the UK and on receipt checked before being distributed. This delay between ordering and distribution meant that local organisations could not get what they needed. Initially, no national organisation held information on how much PPE local bodies had in stock, although this was remedied in early May so that daily data collected could better inform distribution decisions.
The NAO reports that because of the speed with which procurement took place, equipment was purchased that did not always meet requirements, wasting hundreds of millions of pounds. For example, two contracts with a value of £214m for respirator masks that were not fit for purpose, although one of the suppliers did agree to vary the contract.
The sheer volume of items purchased, together with much higher prices than in normal circumstances has meant the government has spent £12.5bn on PPE so far. These price rises range from a 166% increase for respirator masks to a 1,310% increase for body bags. It is estimated that if the government had been able to pay ‘normal’ prices it would have spent ‘just’ £2.5bn.
NHS and social care staff rely on government guidance on what to wear to protect themselves from infection. As the understanding of the virus, and the PPE requirements, changed over time that guidance had to change, but the number of changes in the guidance – 30 times between that first issued to care representatives on 10 January and 31 July led to lack of clarity and a feeling that the social care settings in which the PPE was to be worn were not fully understood by those issuing the guidance.
Many front-line workers experienced insufficient access to PPE at the height of the first wave of the pandemic, leading to a significant proportion feeling unprotected in high-risk settings. In the adult social care environment, representative bodies have said that they felt the PPE support they received was inadequate, although the government has now committed to provide free PPE to care homes over winter.
The NAO was unable to verify any connection between the lack of PPE and resulting infection or death but notes that employers have reported 126 deaths and 8,152 cases of COVID-19 among health and care workers linked to occupational exposure. It is not possible to determine whether a lack of adequate PPE was a factor in any of these cases.
The government is in a much better position ahead of winter, with a stockpile of four months’ supply of PPE in place by November 2020.
The NAO also looks at the new strategy devised by the DHSC for building up a resilient supply chain of PPE that was published in September 2020. This is still likely to encounter many challenges, especially in its desire to sustain a larger UK manufacturing base for PPE intended to improve security of supply, but that might not be competitive in cost terms.
The report acknowledges that a new international supply chain and distribution network was built at pace in the midst of a crisis. However, it is clear that the government was not ready for a pandemic of this nature and was vastly overwhelmed at the start. In particular, the DHSC did not support the adult social care workers as well as it should have done and it has spent vast amounts of money on equipment which won’t be used for its original purpose, if at all.
The NAO recommends a thorough review of lessons learned to inform planning for future emergencies. Consideration needs to be given to operational and financial efficiency against the longer-term need for resilience and capability for dealing with shocks. Part of the emergency planning should include a regular review of the governance requirements, lines of accountability and resourcing responsibilities.
Clear communication and the opportunity for constructive feedback will mean that the response can be managed at a national level and that front-line services can be delivered locally and represent better value for money. In particular, the government needs to get a good understanding of why the social care sector was so badly served compared to the resources provided to hospitals.
Alison Ring, director for public sector at ICAEW, commented: “This report echoes previous findings on how unprepared the government was for the coronavirus pandemic and the speed at which it had to react to the situation it found itself in. The sheer volume of PPE procured from scratch has been astonishing, but it is clear that the starting place was not as good as it should have been – not only from the inadequate emergency stockpile, but more importantly from the contingency planning that was not in place beforehand that made responding quickly that much more difficult.
“The NAO report does not directly comment on the value for money of the PPE obtained given the extreme circumstances that the DHSC found itself in, although it is evident that contracts for hundreds of millions of pounds did not deliver value for the taxpayer. A huge amount of money that could have been saved or spent on PPE fit for purpose for the next wave has been wasted, and it is really important that lessons are learned to ensure this doesn’t happen again.
“The government must urgently look at the challenges facing adult social care and provide a coherent response to the ever-rising demands put on care workers. Unfortunately, the years of prevarication and delay in deciding on how to fund social care in old age has come home to roost.”