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Rush to Procure VentilatorsCost Taxpayers£569 Million
Health officials didn’t know the total number of ventilators in national circulation at the start of the pandemic, a new report has revealed
The majority of the £569 million worth of ventilators procured by the Government in an emergency state during the early stages of the Coronavirus pandemic have not been required, a new report has revealed.
The National Audit Office (NAO) report reveals that concerns about the supply of ventilators set in at the end of February when the NHS discovered there was no national asset register – only discovering after an emergency audit that it possessed 7,400. This came when medical experts estimated that between 59,000 and 75,000 ventilators could be needed in the “worst possible scenario” if the pandemic took hold.
Subsequently, both Health and Social Care Secretary Matt Hancock and Cabinet Office Minister Michael Gove decided in March to launch separate initiatives to procure up to 30,000 new ventilators between them.
The NAO report reveals the Department for Health and Social Care (DHSC) went straight to China using the British embassy to obtain most of the new ventilators. It spent some £244 million on mechanical ventilators and the first order for 1,000 VG70 ventilators cost £9,000 each from the firm Aeonmed. However, after a worldwide procurement rush, the follow-up order for 2,700 VG70 ventilators from Excalibur Healthcare Services cost £50,000 each.
“Excalibur Healthcare Services told us that the prices it charged enabled it to fulfil all its orders at a time when many other suppliers were not able to,” the report states. “[It] reflected the price [Excalibur Healthcare Services] had to pay to secure stock from China against the threat of being gazumped by buyers from other countries and the difficulties it had to overcome in transporting ventilators from China at the height of global demand for ventilators.”
However, the procurement process didn’t always work out as hoped. One order worth £2.2 million for 750 transport ventilators from Aeonmed Shangrila was vetoed by doctors as unsafe.
“Although this device was designed to be used in ambulances, DHSC and NHSE&I judged that it could be useful in an intensive care environment,” the report states – countering that, “It withdrew the device, however, in response to concerns raised by some clinicians who, after testing the devices, did not consider them appropriate for use within an intensive care setting.”
The Need For Speed
The Cabinet Office launched the “Ventilator Challenge” to encourage British consortia to design a new generation of ventilators. In an incentive for firms to bid, Gove scrapped conventional competitive tendering, allowed a profit margin twice the normal rate and indemnified companies from inadvertently breaking intellectual property rights and from the ventilators not working properly.
He also put aside £113 million on design costs, components and factory capacity for ventilators it did not buy because the design was not viable, or not needed to meet the Government’s targets. This included around £11 million for an order of 15,000 additional devices that was later cancelled.
The Cabinet Office justified the indemnities and higher profit margins because it was asking companies to produce new designs in weeks rather than years, using components outside normal medical devices. The Cabinet Office also fast-tracked the medical and regulatory process so they could be used in NHS hospitals.
Indeed the NAO concluded that the Government generally “prioritised speed over cost” when procuring the ventilators, revealing that the Cabinet Office alone spent £277m on these new products.
By the time they were all delivered between June and August the demand for ventilators had dropped and most were put into storage. The DHSC and Cabinet Office cancelled any more orders. Gove’s department has also recovered £36 million from the sale of components it no longer needed.
Both the NAO and the chair of the Commons Public Accounts Committee, Meg Hillier, have not been critical of either the Department of Health or the Cabinet Office over the way they handled the orders.
“We were lucky the worst-case scenario didn’t come to pass before the extra ventilators had arrived,” Hillier said. “However the NHS is now much better prepared for whatever happens next.”