Taxpayers could lose £2.7bn in rows with faulty PPE firms

UNRESOLVED disputes between the Government and suppliers of poor quality personal protective equipment (PPE) could cost the taxpayer £2.7billion, MPS have said.

“Significant failings” by the Department of Health and Social Care (DHSC) in handling PPE contracts in the pandemic have also led to a surplus of four billion unneeded items, some of which will be burnt, according to a report by the public accounts committee.

The committee, which scrutinises government spending, criticised the DHSC for taking little action against potentially fraudulent suppliers, despite an estimated 5 per cent of PPE expenditure involving fraud.

As the DHSC failed to carry out sufficient due diligence before agreeing some contracts, it was paralysed from acting against suppliers who “may have made excessive profits whilst providing substandard PPE”, the committee said.

The extent of suppliers’ profit margins was never considered, nor were potential conflicts between companies and the people referring them through the VIP lane, according to the report.

Progress on resolving disputes on 176 contracts worth £2.7billion is slow, with no cases being moved into the litigation stage of the commercial dispute process. Dame Meg Hillier, chairman of the committee, said: “The departure from normal approaches to due diligence, record keeping, decision making and accountability in relation to PPE contracts puts a stain on the UK’S response to the pandemic... The taxpayer will be paying for these decisions for years to come.”

Of the 37.9 billion items of PPE purchased for more than £13billion, the DHSC still holds more than 10 per cent, 3.9 billion items, that it does not need, according to the report.

The department is spending £7million each month storing the equipment, much of which is faulty or past its useby date. The items are spread over 70 locations across the UK and China.