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UK Health Security Agency set up with no formal governance and weak financial controls

• £3.3bn NHS Test and Trace inventory transferred to UKHSA cannot be properly accounted for
• No clear plan exists for a national emergency stockpile for any future pandemic, while DHSC has inadequate controls over existing PPE stock

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The UK Health Security Agency (UKHSA) was set up with financial controls so poor that it cannot be established whether its transactions were applied to the purposes laid out for it by Parliament.

In a report published today on the Department of Health and Social Care’s 2021-22 Annual Report and Accounts, the Public Accounts Committee notes that the UKHSA’s weak financial controls meant that, highly unusually, it could not be established whether its accounts were true and fair. For example, UKHSA’s consumption of £3.3 billion worth of inventory transferred from NHS Test and Trace could not be verified by proper financial records. The UKHSA did not even perform bank reconciliations, one of the most basic financial controls for an organisation.

In light of this, UKHSA should urgently put in place robust financial controls and processes, and a clear plan to deliver unqualified accounts. A lack of governance arrangements, including a Chief Executive appointed with no previous technical experience in elements of running a complex organisation and UKHSA operating without a budget from DHSC, resulted in inadequate scrutiny and assurance of UKHSA’s operations. These arrangements should also be assessed and rectified as a matter of urgency.

The report also warns there is no clear plan in place for a national emergency stockpile of PPE, vaccines and medicines for any future pandemic. DHSC should implement a clear, cost-effective plan for the level and composition of such a stockpile.

DHSC still does not have adequate controls over its PPE, with vast quantities of unusable and unneeded PPE in storage waiting for disposal by recycling or burning. At March 2023, DHSC was unable to perform proper stocktakes of its PPE, estimating that doing so would involve moving and opening inaccessible piles of storage containers and cost £70 million.  Ongoing storage and disposal costs for unusable items continue to be high. In the past two years, the Department has written off £14.9 billion of inventory, which included PPE (£9.9 billion), COVID-19 medicines (£2.6 billion) and COVID-19 vaccines (£1.9 billion).

Chair's comment

Public Accounts Committee chair, Dame Meg Hillier MP, 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.”

Further information

• Inquiry: DHSC Annual Report and Accounts 2021-22
• Public Accounts Committee
• About Parliament: Select committees