The UK Health Security Agency (UKHSA) said it was working to address a range of financial and management issues after a Commons watchdog accused the organisation of a "completely staggering" lack of formal governance and poor controls over its finances.
A report by the Public Accounts Committee (PAC) found financial controls at the UKHSA were so weak that £3.3 billion in the NHS Test and Trace inventory transferred to the Agency could not be properly accounted for.
The cross-party committee also warned that there was no clear plan in place for a national emergency stockpile of personal protective equipment (PPE), vaccines, and medicines for any future pandemic. It accused the Department of Health and Social Care (DHSC) of having no proper control over the PPE stocks it already had, potentially leaving frontline workers exposed to similar shortages seen at the start of the COVID-19 pandemic in 2020.
The UKHSA was set up in 2021 as a successor to Public Health England and with responsibilities for protecting public health and planning against infectious diseases. The PAC inquiry found there were "significant issues" in setting up the new organisation, compounded by a lack of support from the DHSC. That led to "a fundamental absence of governance arrangements and controls", according to MPs.
The report said that the UKHSA "did not have effective control over its cash management process and did not even perform bank reconciliations, one of the most basic financial controls for an organisation".
Chief Executive 'Lacked Managerial Experience'
The committee also criticised the appointment in 2021 of Dame Jenny Harries as UKHSA chief executive, who "despite her expertise in the science of public health, did not have experience in the other elements of running a complex organisation".
The report found that 3 years after the start of the pandemic, the DHSC "still does not have adequate controls over its PPE and there continue to be high ongoing storage and disposal costs for unusable items", the report found. It said the DHSC had written off £14.9 billion worth of PPE and COVID medicines and vaccines it had accumulated, "due to the Department overpaying for items at the height of the pandemic and over ordering of significant quantities of PPE that cannot or will not be used".
Since then, the DHSC had vast quantities of unusable and unneeded PPE in storage waiting for disposal by recycling or burning. As of March this year, the Department was unable to perform proper stocktakes of its PPE, estimating to the committee that doing so would involve moving and opening inaccessible piles of storage containers at a cost of £70 million.
The report called on health ministers to develop a clear and cost-effective plan to deal with its stockpile to prepare for any future pandemic emergency.
'Alarming' State of Pandemic Preparedness
Dame Meg Hillier MP, chair of the PAC, said: "The UK Health Security Agency was set up with great fanfare in 2021, and rightly so given the significance of its role in leading protection against threats to our nation’s health. It is completely staggering, then, that an organisation envisaged as a foundation stone of our collective security was established with a leadership hamstrung by a lack of formal governance, and financial controls so poor that billions of pounds in NHS Test & Trace inventory can no longer be properly accounted for.
"It is greatly alarming that there is no clear plan from the Government for an emergency stockpile of vaccines, medicines, and PPE. Three years after the start of the pandemic, the Government still has no proper controls over the PPE stocks it already has. This could leave front-line workers exposed in the future to shortages similar to those faced in 2020. For the Government not to make serious preparations for any future pandemic would be utterly inexcusable."
Dame Jenny Harries said: "We have always taken our accounts and financial controls very seriously. The UKHSA was created in unprecedented circumstances when tackling COVID was our first priority, and we inherited significant pre-existing accounts challenges.
"We have already instituted strong governance arrangements in a hugely complex organisation at the earliest opportunity. This progress means our organisation is now substantially different in terms of stability, governance, and financial controls.
"We are working with DHSC to ensure the robustness of our accounts is recognised both now and for the future."
The DHSC said it would be considering the committee's findings and recommendations. A Government spokesperson said: "In the face of an unprecedented pandemic, we had to compete in an overheated global market to procure items to protect the public, frontline health and care workers and our NHS.
"We were the first country in the world to deploy an approved COVID vaccine, with 144 million doses administered, and we have delivered over 25 billion items of PPE to the frontline. Buying vital COVID vaccines and medicines saved countless lives and kept NHS and care staff safe."