Today, I am publishing my fifth report, which examines how the UK responded to the Covid-19 pandemic in the procurement and distribution of PPE, ventilators and testing equipment. It marks a halfway point in the publication of the Inquiry’s reports – a process which I intend to complete by this time next year.
When the Covid-19 pandemic struck, the world entered a desperate race to secure vital healthcare equipment and supplies. If governments failed to procure the required equipment and supplies, key workers, including health and social care workers could not be properly protected; their lives and the lives of those for whom they cared were put at risk. Governments, including those of the United Kingdom, were engaged in a fierce competition during the crisis. International demand skyrocketed, prices rose uncontrollably and global supply chains buckled under enormous strain. At the same time, the emergency stockpile of PPE and other equipment available to the UK was inadequate to meet the huge surge in demand.
In the global battle to procure equipment and supplies, the UK was simply not ready to compete. The UK entered the pandemic with inadequate and untested plans to increase its emergency procurement and distribution operations rapidly and the bodies responsible were caught off-guard.
In the face of this fundamental lack of readiness, ministers and officials were forced to improvise. Untested emergency procurement and distribution systems had to be developed within days.
Against this backdrop, decision-makers were confronted with an unenviable choice: put large sums of public money at risk to buy equipment at the speed and scale the pandemic demanded, or slow the process down and potentially lose out to international competitors.
They decided to take the risk and buy. Given the scale of the emergency, this was the right choice. To have done otherwise would have placed those working on the frontline in the health and social care sectors, and the wider public, in unacceptable danger.
However, had there been better planning, the choice would not have been so stark and the decision to buy at-risk was not without considerable cost and widespread waste.
Under the pressure of responding to the emergency, mistakes were made – leading to the waste of public money as well as allegations of cronyism and corruption.
Furthermore, the structures established to respond to the Covid-19 pandemic did not sufficiently integrate procurement and distribution. It was difficult to work out what was needed, what was being supplied and what was being transported. The technology and data systems for emergency procurement and distribution were outdated. These were systemic failures, which could have been avoided.
The total expenditure by the UK government and devolved administrations on PPE, ventilators and testing equipment between January 2020 and June 2022 was over £42 billion. Governments across the UK did not have the systems and processes in place for emergency spending at this scale.
The waste of taxpayers’ money was vast. It is a stark fact that of the approximately £15 billion spent on PPE, nearly two thirds – almost £10 billion – was wasted, with tens of millions of pounds more spent by governments across the UK on equipment that simply could not be used.
These figures demand a fundamental change in how the UK prepares for emergency procurement. Had ministers and officials been better equipped with appropriate plans, information and systems, procurement decisions would have been easier, fairer and far less costly – and equipment would have reached those who needed it faster.
The public must be able to trust that their money is being spent by the government with propriety, fairness and transparency.
I have found that public confidence – so important in an emergency – was undermined by the failures in procurement.
There have been well-documented complaints about the quality of the PPE which was procured by the government and delivered to the frontline. I have already examined how this affected those working in the health sector in my Module 3 report, and I will examine its impact on the social care sector in my Module 6 report to be published this autumn.
One aspect of the response has understandably and, in my view rightly, been the subject of significant public concern: the ‘High Priority Lane’, also known as the ‘VIP Lane’.
Officials, under intense pressure from ministers to ensure that offers of help were being managed properly, established the High Priority Lane. However, it was a misguided attempt at prioritisation. In responding to the crisis, some suppliers were given favourable treatment simply on account of their connections with the government.
The High Priority Lane embedded unfairness in the UK government’s emergency procurement – where billions of pounds were at stake. It undermined the otherwise enormous and well-intentioned efforts made by procurement officials, and it undermined public trust in how the government chose to spend taxpayers’ money during the pandemic. It should not have been set up and it should not be repeated.
I have examined the award of contracts to particular suppliers. One of these is PPE Medpro Ltd – which is the subject of an ongoing criminal investigation. It is not this Inquiry’s role to determine criminal or civil liability. My findings about the process leading to contracts being awarded PPE Medro Ltd will be published in due course – but only once any legal proceedings have been concluded, to avoid any prejudice to the investigation.
There were, however, many positives in the response that we must not forget.
Businesses and the public rallied enthusiastically to help.
The UK had at its disposal the innovation, expertise and the willingness of domestic life sciences and advanced manufacturing sectors to step up. This was evident in the design and production of PPE, ventilators and testing equipment – all within the UK. Manufacturers retooled and businesses used their international connections to source supplies from around the world.
The Army stepped in to provide its crisis response expertise and lend its skills to organising an extraordinary logistical operation.
Although the lack of planning caused an unnecessary delay in procuring the PPE and other equipment that healthcare workers and others desperately needed, it was a positive feature of the subsequent procurement response that key healthcare equipment was obtained at the speed and scale the crisis demanded.
The effective collaboration of the public and private sectors serves as an example of how government should respond to future pandemics. The UK needs to build on these strengths. The country will not be able to respond effectively without engaging businesses and industry – and ensuring that there is a plan to do so in advance of the next pandemic.
The procurement and distribution workforce also needs to be more highly skilled and ready for deployment in an emergency – we cannot be reliant on improvisation or the Army alone.
The UK relies heavily on international supply chains. However, its supplier base was too concentrated in one country – China – and the capabilities of domestic manufacturers had not been considered adequately in planning. This left the UK vulnerable on both fronts.
The country cannot repeat the mistakes of the past. I am today making 11 recommendations which, when implemented, in full and in concert with my previous recommendations, will ensure that the UK government and devolved administrations are better prepared for the next pandemic.
The complete list of my recommendations can be found in the published report. At their heart is placing ministers and officials in the best possible position to make decisions on how to spend public resources in the pressure of an emergency and ensuring greater industrial self-sufficiency.
Data must drive our crisis response. I have set an ambitious target for the UK government and devolved administrations – within three years – to digitalise their systems for the procurement and distribution of healthcare equipment. The real-time collection, sharing and analysis of procurement and distribution data will fundamentally improve the quality and efficiency of decision-making.
Key healthcare equipment should be regarded as a strategic national asset. There should be a programme of strengthening domestic industrial resilience and ensuring that the UK’s international supply chains are robust. New trading alliances to diversify overseas sources of supply should be established.
The UK government and devolved administrations need to create an environment which encourages investment, research and development into the advanced manufacturing of healthcare equipment here – in the UK.
The changes I recommend are an investment in the resilience and preparedness of the UK. They are a small price to pay to ensure that, next time, the public can be confident in the crucial spending decisions that will have to be made and that key healthcare equipment gets to those who need it at the right time.
The effective procurement and distribution of healthcare equipment will be crucial in a future pandemic. A better prepared emergency procurement system will reduce the cost of obtaining essential supplies and save lives.