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Latest 23 April 2024

Health department direct spend on storing PPE hits £990m

The surge in spending on storage as the government panic-bought PPE is coming to an end, but the health department is still shelling out £890,000 a week.

The Department of Health and Social Care has handed nearly a billion pounds directly to storage suppliers since the start of the pandemic, with one of the biggest suppliers of PPE apparently being paid vast sums of public money to store it.

The bulk of the money is likely to have gone on storing and transporting PPE. After allowing Britain’s stockpiles to run dangerously low in the years running up to the pandemic, the government panic-bought huge quantities of PPE, much of which was never used.

Government data shows the health department spent £990m directly on storage costs between the start of April 2020 and the end of 2023 – a huge rise on pre-pandemic spending. This is on top of storage costs amounting to £571m since 2020 through the NHS’s dedicated procurement channel, which has taken over the responsibility to manage PPE.

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In 2019, before Covid struck, the department spent £17.5m on storage costs, but this rose to £75m in 2020, of which £71m was incurred from April onwards. While spending peaked at an enormous £710m in 2021, it remained well above pre-Covid levels last year – the health department’s £47m of storage spending in 2023 was more than two and a half times its 2019 total, and amounted to nearly £890,000 a week.

Some of the money has been paid to public sector bodies such as councils, but the vast majority – around £966m – was paid to private firms, of which £868m has been paid to companies marked “large” in departmental spending records.

More than half of the department’s spend on storage was handed to Uniserve, a PPE supplier founded and run by Iain Liddell, which was referred on to the unlawful VIP lane by the Tory peer Lord Agnew. Uniserve has been paid £572m for storage costs since the start of April 2020, including £3.2m paid in February last year for “Stock Destruction” – apt perhaps, since in 2021 nearly £180m of the £304m worth of PPE it supplied was deemed unusable in the NHS.

Other firms that have landed large contracts include the transport and logistics firm Kuehne and Nagel, which bagged £132m and the supply chain firm Ligentia, which grabbed £59m. Around £23m has been spent since April 2020 on warehousing costs in China.

As well as payments from the health department directly to suppliers, the department has also spent £571m for storage costs via Supply Chain Coordination Ltd, a company which the NHS uses to manage procurement.

This spending started with £2m in 2020, but then ballooned to £151m the following year. Since then, however, it has followed a more consistent pattern than the department’s direct spending on storage costs, rising to £219m in 2022 before tailing off slightly to £199m in 2023.

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