UK Health Security Agency established with weak financial controls, report shows

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, an influential committee of MPs has said.

The parliamentary Public Accounts Committee warned 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 £3.3bn 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, the committee said.

In light of this, the MPs said the 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 the Department for Health and Social Care (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 said.

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

The 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, the committee said. As of March 2023, the 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 £70m.

Ongoing storage and disposal costs for unusable items continue to be high. In the past two years, the Department has written off £14.9bn of inventory, which included PPE (£9.9bn), Covid-19 medicines (£2.6bn) and Covid-19 vaccines (£1.9bn).

Dame Meg Hillier, chair of the Public Accounts Committee, 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 frontline 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.’

Image: micheile henderson