Legal fees for PPE overspending clawback reach £1m

Cargo nets cover boxes of PPE disposable gloves stored on passenger seats inside the cabin of an aircraft, after it landed in southern England in 2020 - AFP
Cargo nets cover boxes of PPE disposable gloves stored on passenger seats inside the cabin of an aircraft, after it landed in southern England in 2020 - AFP

Health officials have spent more than £1m on legal fees in a bid to recover funds wasted on unsuitable personal protective equipment (PPE).

Around one quarter of contracts awarded during the pandemic are now in dispute, with almost £15 billion written off because products were overpriced, unusable or out of date.

It comes after Department for Health and Social Care accounts showed £14.9 billion was spent on unusable or overvalued PPE and medical equipment over two years.

The Labour opposition said such spending could have funded the police force for a year, warning that the cash was “going up in smoke” with unused PPE now being burned and disposed.

Last year the Public Accounts Committee (PAC) warned that £4bn of PPE is set to be destroyed - some of it burned to generate power - because so much useless kit had been bought.

It followed accusations of cronyism, with Conservative peers among those linked to companies which won contracts, and the existence of a “high-priority lane” for businesses backed by MPs or officials.

In a report published in June the PAC said that as a result of DHSC’s “haphazard purchasing strategy” 24 per cent of the PPE contracts awarded are now in dispute.

One contract for 3.5 billion gloves saw allegations of modern slavery against the manufacturer.

During select committee hearings, civil servants revealed that leftover PPE was being burned at a rate of 580 lorry loads per month.

Details of Government contracts reveal that last year the Department of Health and Social Care spent £1.03 million on legal fees for litigation relating to PPE.

The majority went to Burges Salmon LLP, a firm whose lawyers previously advised the government during the pandemic on testing and vaccines.

The company’s website states that one of its lawyers “advised the Cabinet Office and the Department for Health and Social Care during the height of the COVID-19 pandemic”, noting that it “provided procurement and contractual advice to both Government departments in relation to the procurement of PPE”.

Burges Salmon said that the work was undertaken by the individual while they were working at the Government Legal Department, not while working at Burges Salmon, and said they had not advised on any COVID-related contracts since joining Burges Salmon.

Civil servants have previously admitted that the government “were not looking at” whether some firms selling PPE were profiteering when the contracts were negotiated, and so would not be able to dispute any contracts on those grounds.

Last April, Sir Chris Wormald, Permanent Secretary for the Department of Health and Social Care, said that taking action retrospectively was now “not doable” as the department had failed to write the relevant clauses into the PPE contracts.

Labour's Wes Streeting - Jeff Gilbert
Labour's Wes Streeting - Jeff Gilbert

On Saturday shadow health secretary Wes Streeting accused the Prime Minister of “unbelievable negligence” in his oversight of such spending.

He said: “When Rishi Sunak was in the Treasury, he was handing out billions of pounds of taxpayers’ money, blissfully unaware he was being taken for a ride.

“Now he’s dipping back into the public funds in an attempt to claw back a fraction of what he lost.

“Labour will set up an Office of Value for Money so taxpayers’ money is treated with care and spent wisely,” said Mr Streeting.

This comes after the the head of the National Audit Office (NAO) has issued a damning appraisal of Department of Health spending, with billions of taxpayers' cash written off.

The accounts for the department and its agencies show £6bn wasted in 2021-22 on PPE, vaccines and medication which will not be used, or was overpriced.

Combined with almost £9bn written off the previous year, it amounts to £14.9bn of waste in two years.

The NAO warned of such poor financial control that auditors were unable to even sign off the accounts for the UK Health Security Agency, part of the Department of Health.

On Thursday Meg Hillier, the chairman of the Public Accounts Committee, which scrutinises public spending, said the scale of waste was “extraordinary”.

“It is another reminder to Whitehall about the vital importance of proper controls in public procurement, including during a crisis,” she said.

A Department of Health and Social Care spokesman said: “We are working to recover value for the taxpayer from contracts that have not been fulfilled. So far, we have recovered almost £1 billion of value for the taxpayer from unfulfilled PPE contracts.

“Some of these cases are complex and so legal support is needed. However, we only pursue cases where this represents value for money to the taxpayer.”