Today’s report by the National Audit Office finds that the government acted with urgency to increase the number of ventilators available to the NHS.1 It prioritised speed over cost and spent a total of £569 million.2 So far, most of these ventilators have not been needed.
In the early stages of the pandemic, based on information available at the time, the NHS believed it could need far more mechanical ventilators than were available. From 13 March, the government decided to pursue all available options to acquire as many ventilators as possible, as quickly as possible. Its two-pronged strategy was firstly to buy ventilators from existing UK and global suppliers – led by the Department of Health & Social Care (DHSC) – and secondly to encourage UK manufacturers to design and scale-up production of ventilators (the ‘Ventilator Challenge’, led by the Cabinet Office).
The government acquired an extra 1,800 ventilators by the mid-April peak of COVID-19 hospital admissions, so that around 10,900 were available to the NHS across the whole of the UK. However, demand was not as high as worst-case scenarios had indicated and NHS England and NHS Improvement (NHSE&I) is not aware of any point when a patient who needed a ventilator was unable to get one. On 15 April, the government formally adopted targets on the number of ventilators to provide additional resilience and prepare for a potential second wave. It missed its 18,000 target for the end of April3 but had made substantial progress toward its 30,000 target by the end of June, acquiring around 24,000 ventilators. The 30,000 target was met in early August.
Both DHSC’s and Cabinet Office’s approach maximised their chances of acquiring ventilators for the NHS and prioritised speed over cost.
DHSC had purchased all the ventilators available from established NHS suppliers by 13 March. They received many offers from intermediary bodies who said they had access to ventilators built overseas. However, they found that few of these resulted in credible offers and decided to deal directly with overseas manufacturers, mainly purchasing ventilators from China.
DHSC experienced growing competition when buying ventilators on the world market and usually had to pay up-front, accepting the risk that products may not be suitable. It is only aware of one case where this risk materialised, with 750 ventilators purchased at a cost of around £2.2 million withdrawn from use following feedback from clinicians. The increased competition meant that in some cases they had to pay more than typical market rates. The 2,200 new intensive care unit mechanical ventilators they purchased from established NHS suppliers cost an average of £20,000. The average cost of the 5,900 intensive care unit mechanical ventilators purchased from new suppliers was around £30,100.
The Cabinet Office’s priority for the Ventilator Challenge was to find designs that both worked and could be produced at scale. Following the Prime Minister’s ‘call to arms’ to UK manufacturers and a sift of over 5,000 initial responses, the Cabinet Office convened a ‘technical design authority’ (TDA) to assess ventilators and inform decisions on which to support. The Cabinet Office assessed a range of different designs and supported 18 devices from 17 participants, gradually reducing this number as devices proceeded through the regulatory testing process and as the demand for ventilators became clearer.
The Ventilator Challenge was not a traditional procurement competition on ‘most economically advantageous tender’ grounds. It was a way of continuously assessing multiple options and eliminating devices only after the Cabinet Office decided they were not likely to meet the regulatory standard in time or would not be needed. As such, the Cabinet Office accepted higher levels of risk than normal. It estimates it will spend £113 million excluding VAT on design costs, components and factory capacity for ventilators it did not buy because they were not viable, or not needed.
Given its overall approach, the Cabinet Office took reasonable steps to control the programme’s costs where it could. It sought assurance over suppliers’ costs, cancelled unnecessary orders early and, where possible, is recovering costs of components by selling them back into the wider supply chain.4 The final cost of the programme may be lower if it is able to recover further costs but could also be higher as the Cabinet Office committed to cover participants against the risk of product failure and infringement of intellectual property rights.
In total, DHSC spent around £292 million excluding VAT on their ventilator programme, including on buying ventilators and other oxygen therapy devices and on programme administration, storage and logistics costs. This included £244 million for around 11,100 mechanical ventilators of all types at an average cost of around £22,300 per ventilator.5 The Cabinet Office has spent around £277 million excluding VAT on around 15,200 ventilators acquired through the Ventilator Challenge at an average cost of around £18,300 per ventilator. This includes programme administration costs and the cost of designs that did not proceed to manufacture.6 All the designs were certified as meeting standards for use in the COVID-19 emergency, but they vary widely in their type, functionality and clinical utility with some being more basic models than others.
“The government acted quickly to secure the thousands of ventilators it thought it may need to safeguard public health. In the event far fewer ventilators were required than was anticipated during the first phase of the pandemic, resulting in a stockpile that may be needed for future peaks in clinical need.
“As with all aspects of its pandemic response, the government should ensure that the learning from this experience is used to enhance its contingency planning for future public health emergencies.”Gareth Davies, head of the NAO
Read the full report
Notes for editors
- This is the NAO’s third report on COVID-19 and the first of a series of detailed reports on specific elements of government’s response, which will also cover Personal Protective Equipment (PPE) and other government procurement.
- At the time of writing, the Cabinet Office and DHSC programmes are still in the process of financial close. The final numbers may vary slightly from those presented here.
- By the end of April, the government had increased the total number of mechanical ventilators to 11,500 meaning it missed its target by 6,500.
- Cabinet Office estimates it has recovered around £36.3 million to date in this way.
- The 11,100 mechanical ventilators include around 2,200 intensive care units bought from established NHS providers and around 5,900 from new suppliers, and around 3,000 transport ventilators purchased from both type of suppliers. In some cases the final numbers delivered may vary slightly, depending on revisions to the numbers acquired though the various contracts.
- This comprised £116 million for the Penlon ESO2 ventilators; £26 million for around 1,500 Smiths Parapac ventilators; £8 million for the Breas Nippy 4 and Vivo 65 ventilators; £113 million on design costs, components and factory capacity for ventilators it did not buy; and, £14 million on programme costs, which includes around £12 million earmarked for PA Consulting who acted as programme manager provided specialist knowledge on manufacturing and supply-chain management. Costs are excluding VAT.
- Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
About the NAO
The National Audit Office (NAO) scrutinises public spending for Parliament and is independent of government and the civil service. It helps Parliament hold government to account and it use its insights to help people who manage and govern public bodies improve public services.
The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO.
The NAO audits the financial accounts of departments and other public bodies. It also examines and report on the value for money of how public money has been spent. In 2019, the NAO’s work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £1.1 billion.