NAO report Test and Trace agency unable to provide enough accounting evidence for public audit

A senior MP said it was “astonishing” that the body responsible for carrying out the NHS Test and Trace programme during the pandemic was unable to provide enough evidence for a public audit.

The National Audit Office (NAO) found “significant shortcomings in financial control and governance” at the UK Health Security Agency (UKHSA) when conducting a review of its 2021-22 finances.

As a result, officials said comptroller and auditor general Gareth Davies (pictured) was unable to provide an audit opinion on the body’s accounts for the financial year, instead issuing what is known as a “disclaimer of opinion”.

The UKHSA, a government agency, was set up to replace Public Health England (PHE) in 2021, playing a vital role in testing the population and tracing potential variants of concern during the Covid pandemic.

The NAO report, which included a review of the Department of Health and Social Care’s (DHSC) 2021-22 accounts, also found that the UK Government’s losses on personal protection equipment (PPE) and other items procured during Covid were higher than previously announced.

The NAO said the DHSC estimates that there had been a £6 billion reduction in the value of items procured in response to the pandemic, taking the total of write-down costs to almost £15 billion over two years.

But it was failures related to UKHSA accounting and transparency that gave senior public and parliamentary officials most cause for concern.

Dame Meg Hillier, chair of the Commons Public Accounts Committee, said: “It is astonishing and unacceptable that the UK Health Security Agency – an agency within DHSC that absorbed the work of Test and Trace – could not provide the National Audit Office with enough information to carry out its 2021-22 audit.

“Taxpayers have a right to know how their money is being spent, including on Test and Trace.”

The auditor general’s report found the UKHSA was unable to provide “sufficient evidence” to support balances relating to £794 million of stock, £1.5 billion of “accruals” from NHS Test and Trace — which were transferred from DHSC — or £254 million related to stockpiled goods transferred from its predecessor organisation, PHE.

The NAO said “critical elements of internal control were not in place during UKHSA’s first six months”, with the lack of formal governance arrangements exposing it to a “high level of risk”.

Mr Davies, head of the NAO, said: “Even taking into account the challenging context, it is unacceptable that UKHSA has not been able to produce auditable accounts and provide the transparency and assurance that Parliament needs.

“When setting up new bodies, it is essential that basic governance arrangements are put in place.

“DHSC and UKHSA must work with HM Treasury to get on track to produce auditable accounts.”

UKHSA chief executive Dame Jenny Harries said they accepted the NAO’s findings and were treating them “very seriously”.

“The UKHSA was created in unprecedented circumstances and tackling Covid-19 was our first priority,” she said.

“We have already made good progress and are now substantially different in terms of stability, governance and financial controls. We will be working closely with DHSC to ensure our future accounts are more robust.”

On PPE, Labour looked to bring the Prime Minister in for criticism, pointing out that he was chancellor while the expenditure on medical garments, face coverings and other items took place.

Wes Streeting, the shadow health secretary, said it was “staggering” that £14.9 billion had been “wasted on useless” PPE.

“The Conservatives can never again claim to be the careful stewards of the public finances,” he said.

“While Rishi Sunak had control of the purse strings, a staggering £15 billion of public money was wasted on useless PPE — enough to fund the police force for an entire year.

“Instead, that money is now literally going up in smoke.

“Taxpayers will rightly judge the carelessness with which the Conservatives treat their money to be an absolute scandal.”

According to the NAO, the DHSC said the financial reduction in pandemic-procured goods included a £2.5 billion write-down on items originally costing £11.2 billion.

The department had already purchased the goods — including PPE, lateral flow and PCR testing kits, along with Covid vaccines and medicines — but no longer expects to use them, or the market price is now lower than that paid.

A further £3.5 billion was a write-down on PPE, vaccines and medication which the DHSC has “committed to purchase, but no longer expects to use”, the NAO said.

A Government spokeswoman said: “It is misleading to say that £14.9bn of taxpayers’ money has been wasted.

“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.

“Buying vital Covid vaccines and medicines also helped save countless lives and keep NHS and care staff safe.

“Our approach meant that 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 front line.”

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