Government spend on PPE tops £1.1bn

Details of 38 PPE deals worth more than £710m were published on Wednesday and Thursday, adding to the £488.8m of spend revealed previously. It is likely the total figure will grow as more contract award notices are published.

Officials awarded the deals, which range in value from £280,000 to £116m, to firms directly under emergency procurement rules. HSJ has asked the DHSC how many items were supplied under each contract.

Five suppliers — Uniserve, P14 Medical, PestFix, Clandeboye Agencies and Purple Surgical — have won more than half the total PPE spend revealed so far, with 46 making up the rest. The DHSC says it is working with more than 175 new suppliers on PPE.

PestFix, which won a £108m PPE deal, made headlines in May when it was revealed to be a small family firm with net assets of just £18,000.

P14 Medical, which has won the biggest deal so far at £116m for face shields, listed net assets of -£486,000 on its latest accounts.

PPE has traditionally been imported from countries such as China, but soaring demand and severe disruption to supply chains has pushed prices up during the covid-19 pandemic.

A number of firms supplied PPE as part of the government’s “make” domestic manufacturing push, including The Royal Mint, Honeywell and Polystar. But a spokesman from the DHSC said this latest batch of contracts, published on Tenders Electronic Daily, did not include UK-manufactured goods.

The department expects roughly 20 per cent of PPE to be made in the UK by the end of the year. 

The spokesman said: “Coronavirus has placed unprecedented global demands on PPE supply chains.

 “Almost 28 billion items of PPE have been ordered overall from UK-based manufacturers and international partners to provide a continuous supply in the coming months.

 “We have a robust process which ensures that orders are of high quality standard, meet commercial due diligence and checked for risk and fraud.”

Other notable PPE deals include a £40m coverall order with a Nottinghamshire pharmacy business. Medicine Box Ltd, which operates two local pharmacies and an online wholesale operation, told HSJ it supplied the DHSC with four million coveralls.

The firm, which had net assets of just £6,141 last year, said it was paid half the contracted price in advance and half on delivery.

Director Peter Zhang told HSJ his firm was “fast-growing” and was able to fulfil the large order because it has “very strong partners and networks in China.”

Commenting on the raft of newly published deals, one senior NHS procurement specialist told HSJ it was easy to see why the government had partnered with some suppliers as PPE was “clearly their core business.”

However, he added: “There must be a sound, comprehensible rationale as to why the decision was taken to source hundreds of millions of pounds worth of mission-critical PPE commodities manufactured in known factories in China through a number of relatively unknown, seemingly small, entrepreneurial UK companies with no previous, significant experience or track record. But at this point in time, without any transparency, it’s hard to imagine what this could possibly be.”

After months of high demand, infection control is now the sub-sector of the health and social care industry most positively affected by covid-19, investment expert Sam Gray told a webinar Thursday.

The government has blamed an intense global PPE market on shortages in the UK reported throughout the pandemic. It has faced intense criticism over the supply of protective kit, with NHS procurement leads detailing inadequate and unpredictable deliveries to HSJ on multiple occasions.

NHS trusts and larger procurement groups ordered large volumes of PPE themselves to supplement central supplies, with trusts such as Guy’s and St Thomas’s spending nearly £10m on the equipment.

Local authorities have also made large PPE deals to supply community workers and assist with mutual aid.

Trusts were later ordered to stop bulk buying their own PPE to reduce competition and prevent local hoarding.