PPE waste costs taxpayer £8.6bn – here’s a breakdown
Ministers are being accused of burning a hole in the pocket of the taxpayer after the government revealed that it has written off £8.7bn which was spent on personal protective equipment procured during the pandemic.
Waste on this scale “destroys any claim the Conservatives have to being careful stewards of public finances,” said Labour’s shadow chief secretary to the Treasury, Pat McFadden.
The revelation appeared in an annual report from the Department of Health and Social Care, detailing losses accrued by the pandemic during 2020-21.
We have picked apart these figures to understand the exact nature of what is meant by “waste.”
How was PPE “wasted”?
The £8.7bn figure is the “estimated loss in value” of PPE purchased in 2020-21. Some £12.1bn of PPE was purchased in total over this period – meaning the loss accounts for over 70 per cent of the total spend.
But the waste can be broken down into different categories.
According to the report, around £2.6bn was spent on equipment that was later judged to be unsuitable for use in the NHS. Other PPE waste was down to faulty products, with another £673m spent on kit deemed unsuitable for use by anyone.
Another £750m was spent on “excess items”; equipment which wasn’t faulty but was not used before its expiry date. Around £111.5m was paid in fines because of a failure to move containers full of PPE from a port to the storage facility on time.
Yet the biggest losses of all aren’t attributable to faulty or expired items but, rather, to a fall in prices. In other words, the government paid more for kit than it is currently worth.
When the pandemic first struck, the price of PPE soared as countries across the globe scrambled to secure extra equipment. Now that global supplies have recovered, the DHSC estimates that the value of its remaining stock has been slashed by £4.7bn. Protective aprons, for instance, are currently worth about a third of the price they were selling for during the earlier stages of the pandemic.
This latter aspect of “waste” is one that the government has refused to apologise for. “We stand by the decision to purchase the items that we did”, a No 10 spokesperson has said. “We were acting in a highly competitive global market with many countries imposing export bans and obviously we were seeking to secure PPE for frontline clinicians.”
Can any of this money be salvaged?
Unlike the £673m worth of kit deemed unsuitable for use by anyone, the £2.6bn of equipment considered unsuitable for use in the NHS could still be sold or given to charities, the DHSC has suggested.
A DHSC spokesperson added: “Where we have surplus stock of PPE, we have a range of measures we can take, including sales, donations, reuse and recycling.”
The department also says it is seeking to recover costs from suppliers and “working on plans to extend shelf life where appropriate.”
In the future, Number 10 has insisted it will be able to “mitigate” similar problems by “massively increasing our onshore-based PPE production”. This in itself would save on costs. For example, the government had to pay £649,000 for two flights from China that were cancelled because the PPE they were meant to be bringing to the UK was not available.
PPE waste in a wider context
So far over 17.5 billion items of PPE have been delivered to the frontline, says the DHSC, with 97 per cent of the equipment purchased being deemed suitable for use.
However, Wes Streeting, the shadow health secretary, has expressed frustration that “taxpayers’ money has been poured down the drain at a time when a record six million people are on NHS waiting lists.”
A scour through the government’s Autumn 2021 spending review – which covers departmental budgets and spending plans for the next three years – puts this figure of “£8.7bn wasted on PPE” into context.
In the review, the government states that from the start of the pandemic up until September 2021, £97 billion has been allocated for the Covid response in total.
But £8.7bn is no small sum when the government has allocated £9.6bn of Covid funding over the next three years to equip the health service for its continued response to the pandemic, and this includes the continuation of the vaccine programme.
The so-called £8.7bn wasted on PPE is also over a third of the £22bn spent in total on Test and Trace during 2020-21, and it is considerably more than the £2.7bn, estimated by the Institute of Government, to have been spent on vaccine procurement over this same period.