News / UKHSA ‘hamstrung’ by lack of governance

The agency was set up in April 2021, becoming fully operational in October the same year, and took over the health protection functions of the former Public Health England. It also assumed responsibility for NHS Test and Trace and the Joint Biosecurity Centre. In its report on the Department of Health and Social Care 2021/22 annual report and accounts, the Commons Public Accounts Committee (PAC) acknowledged that the body’s creation was complex, complicated by a changing remit and policy decisions.

However, there was an absence of governance arrangements, including a failure to appoint additional non-executives other than the chair until after the 2021/22 financial year.

The agency’s first set of accounts were disclaimed by the comptroller and auditor general, meaning he was unable to give an opinion on whether the accounts were ‘true and fair’ or on whether the transactions recorded in the accounts were applied to the intended purposes.

Issues included:

• The inventory transferred to UKHSA was not subject to stock counts
• £3.3bn of consumption of Test and Trace inventory was not supported by records
• UKHSA was unable to provide sufficient evidence to support the £1.9bn accruals balance as at 31 March 2022 and £3bn expenditure on goods and services
• UKHSA was unable to provide sufficient evidence to support journal adjustments made to the accounts

The committee called for the agency to ‘urgently ensure robust financial controls and processes are put in place’ and to have ‘a clear plan in place to deliver unqualified accounts’.

Committee chair Meg Hillier (pictured) said the agency had a significant role in leading protection against threats to the 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 and Trace inventory can no longer be properly accounted for.’

Dame Jenny Harries, UKHSA chief executive said the agency had always taken its 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,’ she said. ‘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.’

The report also highlighted ongoing inadequate controls at the Department of Health and Social Care over personal protective equipment, with ongoing storage and disposal costs for unusable items. It said the Department had written off £14.9bn pounds of inventory, including £9.9bn of PPE, £2.6bn of Covid medicines and £1.9bn of Covid vaccines. The write-off was 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’. The Department continues to incur ‘very high storage and disposal costs for PPE – costing an estimated £319m over the next few years.

The committee called for a cost-effective disposal plan to be put in place and for the maximum possible value to be recovered from suppliers that failed to deliver against contractual terms. The PAC also called on the Department to get its accounts delivery back on track. The 2021/22 accounts were laid in Parliament in January 22, just five days ahead of the statutory deadline.

There are plans to bring this forward to before the Christmas recess for the 2022/23 accounts. But the committee said the real target should be to submit the accounts before the summer recess, for which there was not yet a credible plan. It acknowledged challenges with gaps in the finance function and problems with the local audit market, but called for the Department to work with NHS England to ‘restore timely financial reporting and local audit across the NHS’.

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.’

They added that the government would ‘consider the committee’s recommendations and formally respond in due course’.