Public Audit Committee

Meeting date: Thursday, November 4, 2021

Official Report 631KB pdf

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Section 22 Report: “The 2020/21 audit of NHS National Services Scotland”; and “Personal protective equipment”

For the next item, I welcome two new witnesses from Audit Scotland, who join the Auditor General. Joining us remotely is Ashleigh Madjitey. If you want to come in at any point you can put an R in the chat function. That would be helpful. My apologies—Carole Grant joins us remotely. She is an audit director in audit services at Audit Scotland. I welcome Carole, and I welcome Ashleigh, who is here with us in the room, to talk about the fuller 2020-21 audit and the subsequent, more recent, briefing on personal protective equipment. We have a series of questions to ask our witnesses. Auditor General, do you want to begin with an opening statement to get us under way?

Convener, I bring you two reports on another key area of the Covid-19 response—personal protective equipment. The first, as you said, is a briefing paper on PPE that we published in June and the second is the report on the 2020-21 audit of NHS National Services Scotland prepared under section 22 of the Public Finance and Accountability (Scotland) Act 2000.

I took the decision to prepare a section 22 report to capture the key role that NSS played in response to the pandemic, with a focus on how it procured PPE for Scotland’s health and social care workers. Our briefing paper on PPE considers how the Scottish Government and NSS put in place arrangements to procure, store and distribute PPE to health and social care settings before and during the pandemic, and how they are planning for the longer term. The section 22 report examines the procurement of PPE in more detail and notes a number of other areas in which NSS had a key role in the pandemic response.

NSS worked with its partners to procure PPE, construct the NHS Louisa Jordan hospital, set up and operate the contact tracing system and support the vaccination programme. It expanded its PPE distribution early in the pandemic to meet PPE demand in the national health service and primary and social care settings across Scotland.

We found that centrally held stocks of PPE were very low in the early days of the pandemic, with less than a day’s supply of some items held in April 2020. As global demand increased and supply chains collapsed, prices increased. NSS had to make decisions quickly as countries across the world competed for PPE. It used emergency procurement regulations to award contracts without competition, and it reduced its usual governance arrangements. Between March 2020 and June 2021, NSS awarded 78 contracts, worth £340 million, to companies that provided PPE. Twenty-nine of those contracts went to new suppliers without competition.

Auditors then considered those contracts through the annual audit work on NSS. Although they were satisfied that reasonable arrangements were in place, they noted some variations in application and recording. Their work did not uncover any evidence of preferential treatment or bias in the awarding of contracts.

The Scottish Government and NSS worked well with their partners to set up new supply chains, thereby making PPE supply more resilient, creating jobs and benefiting local economies. By April 2021, the majority of PPE that was distributed by NSS was made in Scotland, whereas none of it had been made in Scotland at the start of the pandemic.

As we emerge from the pandemic, the Scottish Government and NSS will have to continue working with their partners to develop a longer-term approach to PPE supply and distribution, including provision to meet business-as-usual PPE needs and to prepare for future pandemics.

As you said, convener, I am joined by Carole Grant, who is the appointed external auditor of NSS, and Ashleigh Madjitey. Between the three of us, we will do our best to answer the committee’s questions.

Thank you very much, Auditor General. I want to press ahead straight away with questions. I turn to my right, to Sharon Dowey.

Hello again, Mr Boyle.

In my short time on the committee, lots of reports have come in, and a common theme has been the fact that many of the recommendations have not been actioned. We note that the Scottish Government did not fully implement the recommendations from previous pandemic preparedness exercises. Although nobody could have predicted the arrival of the pandemic, if we had actioned the points that emerged from those preparedness exercises, we might have been better prepared. Will you outline what the recommendations were and why you believe they were not implemented?

I am happy to do so, and I am sure that Ashleigh Madjitey will want to say a word or two more about the opportunities for preparedness.

We touch on the issue in the PPE briefing paper and in the overview of the NHS in Scotland that we prepared in February this year. We refer to three pandemic preparedness exercises that were undertaken in the years leading up to the 2020 Covid-19 pandemic.

There are a couple of important distinctions to make. Pandemic preparedness planning and thinking has centred around flu pandemics, as opposed to the Covid pandemic. A number of areas were identified that subsequently emerged as themes from the Covid-19 pandemic, including that of the supply and use of PPE. Another issue that emerged that is probably relevant to the discussion that we are having is the extent to which social care settings would be able to cope in pandemic circumstances. The conclusion that we arrived at is that there were opportunities to be better prepared that could have been explored.

Despite that finding, we reached the judgment that, as the pandemic unfolded, NHS NSS responded well in incredibly difficult circumstances to secure the supply and distribution of PPE across Scotland. NSS also took on additional responsibility for social care settings and moved quickly to set up hubs, secure new contracts and so forth. That said, there were opportunities for it to be better prepared.

In your briefing, you reported that there were low levels of PPE stocks in April 2020. How confident are you that NHS NSS has done enough work to ensure that we never return to such a precarious situation?

I just want to say something about NSS’s forward thinking and the steps that it is now taking. Exhibit 4 in the PPE briefing will, I hope, be of most help in illustrating the frenetic nature of this activity—“frenetic” is probably the best description—and the great pace at which PPE was being sourced. In my introductory remarks, I mentioned the global competition for PPE stocks, which, as we touch on in the briefing paper, changed the price of PPE items. As supply was coming in, it was being passed out to hospitals and social care settings with great urgency. That allowed us to reach the overall conclusion that Scotland did not actually run out of PPE, although it came close to doing so with certain items. People worked at real pace to source PPE as quickly as possible and then to pass that supply on.

It is clear that what matters is what happens next. We need to learn lessons from the pandemic and take this opportunity to think about what it means for a business-as-usual context as well as for future pandemics to ensure that Scotland is not left in a precarious position. Ashleigh Madjitey will say a bit more about how NSS is taking that sort of thing forward.

A large part of the problem was that deliveries were coming from overseas, and it took time to put them into the shipping containers and so on. Now that 88 per cent of PPE is made in Scotland, the situation should be much more stable, and if we find ourselves in a similar situation, we should be able to get the equipment much quicker.

As the Auditor General has said, as it considers how it moves forward with stockpiling, NSS will need to balance having enough PPE in the stockpile with the costs involved in keeping that stockpile and keeping large amounts of PPE in warehouses. However, as you will see from exhibit 4, it now has three to four months’ supply of PPE, so it is in a good position.

That is fine. I also noted that we are now making PPE in Scotland, which is excellent. However, the demand for PPE remains high, because it is needed in social care settings as well as hospitals. The second wave in winter 2020 led to more people in hospital and intensive care units. Now that winter 2021 is fast approaching, do you expect demand for PPE to continue or to grow even further? Are you happy with the stocks that you have?

It is hard to be definitive and offer the committee assurance on that. Because of the factors that Ashleigh Madjitey mentioned, Scotland now has a larger stockpile and its supply chains are almost exclusively domestic. Moreover, because it has already been through a winter pandemic, it will have a better idea of the extent of the demand that it will face. All those factors place it in a far stronger position than it was in 12 months ago, but, given everything that we have seen in the past 18 months, I am unable to offer a definitive assurance. In any case, it is probably better to put the question of what the future might bring to NSS itself.

Carole Grant has indicated that she wishes to respond, and I am happy to let her do so.

At the end of the first wave of the pandemic, NSS carried out a lessons learned exercise. As it moved through the next waves of the pandemic, that put NSS in a better place to understand some of the challenges. I just wanted to offer that thought to the committee.

Craig Hoy has some questions about the PPE contracts and how they were experienced, particularly by people on the front line.

The Royal College of Nursing, the British Medical Association and care professionals raised widely reported concerns about access to, use of and shortage of PPE very early on in the pandemic. Are you aware of any on-going concerns from healthcare, social care or other professionals about access to, use of or quality of PPE today?

Again, I will ask Ashleigh Madjitey and Carole Grant to supplement my comments.

As well as its availability, one of the issues that arose from the pandemic was training in the use of PPE, and preparedness exercises highlighted the need for that to be considered.

As you mention, in the overview report and the PPE briefing, we touch on the concerns that were expressed by the Royal College of Nursing and the British Medical Association about how their members were experiencing the use of PPE in the early stages of the pandemic. I think that we are hearing fewer of those concerns now. That probably speaks to the far greater security of supply that we now have, the more rigorous arrangements around quality and the confidence that people have gained in the use of the PPE through familiarity with its use since April 2020.

My colleagues might want to add something to that.

We are not aware of any later surveys from the BMA or the RCN that point out similar findings, and the Scottish Government told us, as part of its briefing, that it is not getting the same level of concerns raised with it.

Between March and June 2020, the modelling to assess the required supplies was based on Covid numbers. After that, it was based on staff numbers. Would you say that that is the most appropriate and optimal way of doing it?

Yes.

Ultimately, NSS will be the experts with regard to how much PPE Scotland’s health and social care settings require.

As well as staff numbers and Covid cases, we also have the statistics for how much PPE was used in the 20 months since the start of the pandemic, which includes a winter period. That gives us an even better representation of future PPE demand in Scotland. As Carole Grant said earlier, NSS has gone through some of that learning and is beginning to think about its plans and stock management arrangements for a future pandemic context and a business-as-usual context. All of that suggests that that learning is being incorporated into the demand modelling.

Might the fact that, between March and June 2020, the modelling was based on Covid numbers have contributed in part to the shortfall, and did the reconfiguration to base the modelling on staff numbers increase the supply to better match demand?

I am not able to give a definitive answer on that point. Although I recognise that that might have been a factor, the steps that NSS and Scotland’s economic development agencies took to secure supplies in a globally competitive market were an equally valid way of securing supplies across the health and social care setting. I think that the answer is a combination of factors.

At the height of the pandemic, the NHS and NSS were providing daily PPE stock bulletins. Is that still happening?

I am not sighted on that, but my team might be able to answer you.

NSS has a dashboard that is updated daily with certain information, but I am not aware of how widely that is shared.

We cannot give you an answer today, but we can come back to the committee on that point.

That would be helpful.

During the height of the pandemic, some of the private supply chains that were supplying primary care providers and social care providers fell apart, and the Scottish Government stepped in to provide the necessary PPE to care homes and so on. Has the Scottish Government ever been reimbursed for any of the PPE that was supplied to those private businesses?

That is not our understanding of how the arrangement operated. Carole Grant can say more about the transactions that were involved and the duration of the arrangement, but our understanding is that the Scottish Government gave a commitment to fund the supply of PPE to private social care settings across Scotland.

Do we have a cost for that?

I invite Carol Grant to say a word about that.

You will have seen from the report that there were significant changes and audit adjustments to the financial statements. Part of that was to do with the accounting for the PPE and how it flowed through. That captured the cost for public sector bodies. I do not have the figure to hand for those bodies, but I know that NSS has that figure, so we can definitely come back to the committee with it.

It would be good to see the figure. I realise that the period was one of extreme urgency and that the PPE had to be acquired to protect lives.

Your briefing also says that the 48 PPE hubs were to be in place

“until the end of June 2021”,

and that the Scottish Government and NHS NSS were “considering future arrangements”. Do you have any idea what those future arrangements might be?

Ashleigh Madjitey will be able to say where that is now headed.

We identify the hubs as one of the successes of the PPE programme. Given the dispersal of primary care settings and, in particular, social care settings across Scotland, an effective mechanism had to be in place to supply PPE as quickly as possible. As you mentioned, the Government took on responsibility for providing PPE to settings for which that had not previously been part of its remit. The role of the hubs was therefore particularly important. They secured the supply, and that lasted until the end of June this year. What comes next matters. It needs to be factored into the long-term thinking so that the arrangements can be enacted quickly in the event of a further surge or subsequent pandemics.

Ashleigh can say where we are now with the hubs.

In paragraph 50 of the briefing, we say that the measures were to be in place until the end of June 2021 but, since that was published, the Scottish Government has extended the date to March 2022. The PPE strategy and governance board is currently considering the longer-term plans for PPE, part of which is about social care and what role NSS will play within that.

Other than the fact that the Government is still evaluating its forward plans, was there a specific reason why it decided to continue to support private providers?

No, not that I am aware of, but I can find out.

If there is any information on that, I would be interested in it, because obviously there is a cost to the public purse. Although PPE is essential and the Government is doing everything that it can to ensure that it is available, there is nevertheless a cost, and we should monitor that.

I should clarify that the hubs are a provider of last resort. If social care providers are unable to access PPE through the usual routes, they can go to the hubs to access it. Providers should be going through their usual private suppliers. If they are unable to access PPE through those suppliers, the hubs can provide them with a week’s worth of supplies.

So it is actually a back-up, rather than primary provision.

Yes.

Do we know whether the providers are using their private supply chains these days, or are they still accessing PPE from the hubs?

I do not know the current figures. Paragraph 31 of the briefing gives a breakdown of what was being used up until August 2020, but I do not have more up-to-date figures.

It would be interesting to know the extent to which the private sector is still reliant on the public sector to provide PPE.

Your briefing also states that, in the first five months of the pandemic,

“had NHS NSS been able to buy PPE at the same prices as 2019, it would have spent £37.4 million less on PPE”.

This might be a daft question, but I suppose that it has to be asked. In your opinion, could anything have been done to avoid that additional spend?

It is probably fair to say that that is something of a theoretical number. If the NHS in Scotland had had the arrangements that it subsequently brought in over the course of the pandemic, it would have saved that money. However, in the wider context of global competition and supply chains collapsing, it would not have been reasonable for us as auditors to arrive at a judgment that the money was spent unnecessarily. The spend reflected the circumstances in which the NHS in Scotland found itself.

I do not know whether the figure would have been as high as £37 million if all the pandemic preparation exercises had been acted on, or if they had been based on a Covid pandemic as opposed to a flu pandemic. There might have been opportunities to reduce the figure, but it is hard to pin down where it would have landed. In the wider context of a frenetic pandemic, that there was a scramble for PPE supplies is a more realistic description of why the money needed to be spent.

Again, and as we say in the report, what matters is what comes next. There is a business and stock management system in place that can adjust quickly. Building on the big success of Scotland now having a domestic PPE supply chain, Scotland and its NHS will not, when securing contracts overseas at pace, find themselves in the vulnerable position that we describe in the section 22 report.

Paragraph 87 of the section 22 report says:

“NHS NSS has committed to ensuring retrospective contract approval and monitoring this through its established governance group.”

How is that progressing, particularly in respect of the contracts that are described and the issues raised about them?

Carole Grant will be able to say a bit more about how the contract arrangements operated. Retrospective approval was given for all the contracts that were awarded that took advantage of emergency procurement regulations. We make the point in the report, however, that even when contracts are awarded at pace and emergency procurement regulations are used, there is still a need for appropriate governance and transparency around how those contracts were awarded. Contract awards still need to be published so that users of public services and public money have clarity around what is being spent, with which suppliers, and how much. That has now happened. We are now clear that such an important step must be followed in future, and we now have the transparency on those contracts that we would expect.

I invite Carole Grant to say a bit more about the arrangements that NSS will use to make sure that that is embedded in its processes.

In the annual audit report, we made a recommendation about the consistency of documentation. During the collation of our audit work, we saw evidence to support the assessment of the quality of the documentation, that it was approved and that governance arrangements were being followed. However, there was a lack of consistency in capturing and documenting that. Sometimes that made our work more challenging.

As the Auditor General said, we recognise the situation and the pace at which NSS was operating. To confirm, retrospective approval for the two contracts for which the spend was higher than the approved contract value has now been processed. We had to look at the arrangements. Sometimes the problem was because of the value and sometimes products were being ordered outwith the timeframe, but retrospective approval is now in place.

So everything is now regularised.

My next question is slightly different. The report outlines that NHS NSS took a range of measures to support contact tracing. However, the report does not outline the impact of those measures on the programme overall. To what extent has the success or otherwise of those measures been evaluated?

It is probably too early for us to be definitive on that. To answer your question properly, I should say that we have not audited the contact tracing system in Scotland. Our references in the report therefore talk more generally about the digital innovation that took place to put one of the tools at Scotland’s disposal so that we could stabilise the pandemic. Through our work, there is an option for us to look at the spending on and the effectiveness of the contact tracing programme, and that will be part of our thinking as we continue the iteration of our work programme. Carole Grant will continue to track, monitor and report on spending, through her annual audit activity.

10:45  

I want to go back to part of the discussion that you have just had with Colin Beattie. These are my calculations, so they may not be entirely reliable, but, broadly speaking, and based on the figures that are in the report, the increase in the volume of PPE from 2019-20 to 2020-21 was of the order of 212 per cent, but the cost of shipments increased by 2,100 per cent—by a factor of 10. The price inflation was exorbitant, was it not? Do you have any reflections on that?

We recognise the difference in the scale of change. In all the factors that we have talked about, we have seen that market forces came into play during the pandemic, and that supply and demand—if that is a reasonable analysis—kicked in. Global competition allowed suppliers from all over the world to increase prices at the height of the pandemic. An exhibit in the report shows that that tailed off, and that we are now in a more stable environment.

We have already talked about Scotland now being better placed to be insulated from some of those price shocks in future—it now has a reliable domestic supply of PPE that gives it a better chance of avoiding some of the price increases that we have reported.

Thank you. Some of us might describe it as excess profiteering from a global pandemic.

My next question is not designed to catch you out. My eye was drawn to a line that says that the auditor reported that the audit work did not find

“any issues with the quality of goods procured or the companies contracted.”

The report goes on to talk about cost overruns.

I will not always rely on the media for my sources, but I was struck by a story that the Sunday Mail ran—the weekend after the report came out, I think—which included the following figures:

“We can reveal that millions of masks and goggles were binned after a rush to secure vital PPE as Covid struck”,

including

“90,000 respirator valve masks made by US firm Medline ... Three million pairs of goggles lenses and frames from US company Tiger Medical Products ... 66,000 face masks from Dumfries-based Alpha Solway—some of which were poorly made”,

and

“700 charity donated masks it was feared were made at forced-labour camps in China.”

What was your methodology, and how did you arrive at a point where you could make the categorical statement that you make in the report?

Carole Grant looks as though she wants to come in on some of this, and I will pass to her in a moment.

The judgment that we make in the report—particularly bearing in mind the volume of the PPE that was procured and used, not to mention the environmental impact of some of that, which may be of interest to the committee—relates to the fact that some of the items that were procured were returned. Under contractual arrangements, they were received by NSS or the health boards, assessed, deemed not to be of sufficient quality and then returned to the supplier. Refunds and credit arrangements are part of the normal process of supply and demand.

Looking at our own consideration of the issue, we have seen some of the examples that you referred to and which were reflected in the media, but those do not reflect the overall arrangements in the round. There are sufficient safeguards when it comes to quality checks, and the review of the PPE itself and the review of the documentation allowed us to reach the conclusion that sufficient contractual arrangements were in place between NSS and its suppliers and that public spending was not left to pick up the cost of poor-quality PPE.

Carole can say more about the specifics of what we looked at and what we saw on those examples and more.

Clearly, the audit team are not experts in assessing the quality of PPE, so we relied on the arrangements that NSS had in place, and we could see evidence of that review and check being done.

On the amounts that were quoted, it is helpful to bear in mind, as the Auditor General said, the overall volume and the likelihood of there being the odd occasion when PPE was not at the right standard. However, it was always assessed by an expert as part of the procurement process. That is what we based our judgment on.

Thank you for that clarification. The question was not designed to catch you out. It is just that we want to understand better how you arrived at your conclusions.

One of the other issues that features in the report is that costings were done at pace, especially in the early days. Contract approval documents were not completed to a consistent level of detail, as you already mentioned, and concerns are raised in the report about the scrutiny of contracts before their conclusion. Will you give us a picture of the extent to which that was prevalent at the beginning of the pandemic, when there was urgency, and the extent to which it continued as a practice over the months after the initial spike in demand for PPE?

I am delighted to do so, and I am sure that Carole will come in to add more to my comments.

The fundamental point is that the provision existed for emergency circumstances. In the normal procurement arrangements that exist in public bodies, there are framework contracts that are set out well in advance and suppliers are identified. If there is a new contract, it is placed as a tender notification, contractors submit their suitability and there is a bidding process.

However, we were not in that environment at the height of the pandemic, when supply chains collapsed and there was global competition. With the support of Scotland’s development agencies, we had to go out and source new PPE suppliers across the world. You have mentioned already what that meant for the prices of some items that were purchased. How that related back to NSS was that some of its procurement and associated governance arrangements had to be flexed, so that the pace at which PPE was used was matched by its sourcing and supply.

The point that we make in the report is that, in such an environment, transparency matters. It must be possible to see what is being spent and who contracts are being awarded to, and, where necessary, there must be retrospective approval arrangements. We must not sacrifice all the governance and transparency that goes alongside that. That is why we arrive at the finding in our report that there must be rigour around publishing contract awards and approval arrangements when we are in such an environment. We are not still in the heat of it—there is more stability now, as we have touched on.

On NSS governance arrangements, Carole can speak to the various steps that NSS went through and how it is now responding to the publication of award notices.

It is safe to say that inconsistent documentation was a feature with the contracts that we looked at, but I agree that that was at the start of the pandemic. As things settled down, there was more of a business-as-usual approach with contracts and the processes that were in place.

In the annual audit report, as the Auditor General mentioned, we point to the arrangements that NSS put in place with Scottish Enterprise as an example of good practice, because that relationship enabled NSS to have access to and do due diligence in markets where that potentially would not otherwise have been possible.

Overall, there is a need for documentation to be standardised across a few areas. We are seeing that as part of the business-as-usual arrangements that are now in force.

I also note that the report mentions Scottish Enterprise visiting overseas factories, which I presume was part of some kind of due diligence process. Will you expand on that to give us a bit more sense of what is contained in the due diligence guidance that is being pursued? For example, does it include matters such as labour standards and whether forced or exploitative labour is involved or what conditions are like in the factories that it visits at home as well as abroad? Will you elaborate on that part of the report?

We will do our best to describe what we saw from the consideration that NSS undertook on the due diligence in relation to the contract awards. There is probably a limit to what I can say on that, but Scottish Enterprise and NSS will be able to describe the steps that they took and what they saw when they undertook factory visits and so forth.

It is about weighing up the balance between securing supply and probing deeply into the arrangements in individual factories. As I think that you are suggesting, convener, we have all seen media reports of the conditions around the world in factories that produce PPE. At the risk of repeating myself, the fact that Scotland now has domestic supply arrangements for PPE means that we are better placed to have the respect for working conditions that we expect.

Carole Grant might be able to say a bit more about the specifics of what we saw in our work in relation to the due diligence work that Scottish Enterprise and NSS undertook.

I do not have the details with me on the specific due diligence checks that were done. We saw evidence of sign-off—for want of a better word—that a visit had taken place and that the bodies were content with the arrangements. We saw limited guidance specifying what had to be considered, and I think that there was an element of trust in experience, given the situation that the bodies were in. That is another element where there was inconsistency on occasion with regard to the approach to documentation, but we saw clear evidence that that had taken place and that the assessment had been done prior to the awarding of the contract.

Who would normally issue that guidance? Would it be the Scottish Government or NSS?

The pace that was required was part of the situation. I suggest that, potentially, they would determine the need together. NSS would set out its expectations and I imagine that Scottish Enterprise would offer insight on the basis of its experience of working in the area and doing site visits in the past. Therefore, I think that they would have developed the guidance together, and NSS would have defined what it was looking for.

Thank you. I will bring in Willie Coffey.

When I think back to the start of the pandemic and the real struggle that we had to source PPE, I remember well a flight coming in to Prestwick loaded with PPE to help. NHS NSS and others moved heaven and earth to help supply our hospitals and care homes. Thank goodness and thank God that they did that by whatever means possible to protect the public. I want to put that on the record.

Auditor General, you said that our ability to produce PPE in Scotland went from zero to 88 per cent. How soon did we get to the point where we were sourcing and supplying PPE material from within Scotland? Was it weeks or months?

Ashleigh Madjitey can talk about the timeline, but I can say that you are right that Scotland did not have a domestic PPE supply chain before the pandemic. The fact that it now has one not only brings economic benefits through the supply of new jobs but ensures that there is a security of supply for future pandemics and that we are better placed as a country to absorb their impact. The pace with which that happened was a remarkable achievement.

11:00  

The supply is not universally perfect: gloves are often mentioned as an item with which there are issues, but that is not unique to Scotland. However, the way in which the country moved to invest in that supply chain, through the work of NSS and regional development agencies, has got us to a place in which we will be better able to respond to future pandemics.

The figure of 88 per cent was for April 2021. Our briefing also includes a case study about Alpha Solway—one of the major UK PPE producers—that sets out that, in March 2020, as Alpha Solway was struggling to get its Taiwan-made masks into the country, it started working with the Scottish Government to re-shore production in Dumfries and Galloway. As early as April 2020, NSS had committed to an order of 2 million masks from Alpha Solway and had made an advance payment that enabled the company to buy the necessary machinery to produce the masks in Scotland. By June, Alpha Solway was making 1 million masks a week in Dumfries and Galloway. By August, NSS placed another big order through a framework supplier that then subcontracted Alpha Solway for £53 million-worth of masks and visors. You can see that that all happened quite quickly over those first few months.

That is an incredible achievement, and it is worth putting it on the record so that the public can be aware of the pace with which Government officials, the NHS and the companies moved to produce the material. I recall that the skies were empty at the beginning of the pandemic—few planes were flying, so, when you saw something coming in, you knew that it was that material.

Auditor General, you mentioned that 470 jobs have been created in relation to the production of PPE in Scotland. Is that likely to be sustainable? Will that become an established production industry for Scotland? Looking ahead, are we now able to contribute to the international healthcare supply chain and help the world to access those products?

I am cautious about making predictions on whether this is a new model of supply and whether the jobs are sustainable. As we mention in the briefing, some of the environmental implications of the significant use of single-use PPE, which, for clinical reasons, ends up in landfill, have not yet been addressed. There are issues that are still to be tackled. Experts in those companies and beyond will address those sustainability issues. NSS and social care providers will be able to describe what that means for future demand and supply. However, as I have said, the provision of a domestic supply means that Scotland will be able to cope far better with the PPE needs that arise from future pandemics than it was previously.

Is the issue of establishing such a local supply chain likely to be a Government-level decision?

It is fair to say that there will be discussions between the Government, the NHS and enterprise agencies about how best to meet those needs. As Ashleigh Madjitey said, NSS is thinking about future demand in a business-as-usual context and in the context of future pandemics.

Do you know whether we are supplying PPE to the international healthcare market as a result of that development in Scotland, or do other countries have sufficient supplies locally?

That came up as an ambition when we were speaking to the Scottish Government and NSS, but they would be better placed to tell you whether that is happening.

I have a question about the online portal that the Auditor General mentioned earlier. In the Public Audit Committee, we usually receive the opposite type of reports about information and communication technology initiatives, but the online portal for PPE ordering seems to have been a success. Do you have any information on who developed it? Is it still in place and working well?

Carole Grant or Ashleigh Madjitey might know who was involved, but I would say that you are right, Mr Coffey. Our briefing on the Covid-19 vaccination programme, which we discussed last week, also mentions successful information technology contracts in NSS and the NHS. That is really welcome. It changes the narrative about Scotland’s public services and their ability to deliver complex IT projects at pace. We are seeing and reporting that, and we are pleased about it.

As ever, one thing to take away is the importance of applying that learning, not just in the context of the NHS, but across public services in Scotland. We are keen for that to happen, and we will track the situation and report back to the committee.

I ask the team whether we can say any more about who was involved.

Carole Grant might be able to comment.

NSS developed the portal as a way for it to assess the volume of inquiries and emails that it was receiving, and the expressions of interest. It is telling that, although not many contracts flowed from that, it provided an efficient way to respond to people as they expressed interest in getting involved, and it saved time for the staff, who were under significant pressure. We note that it was an efficient way to manage the level of interest and ensure that the use of staff time was proportionate.

That is great. Thank you.

On page 13 of the report, you note that

“NHS NSS built, stocked and decommissioned the NHS Louisa Jordan field hospital”,

and that it is

“responsible for the ... redistribution of equipment to NHS boards across Scotland.”

How quickly is that taking place, given the pressure that many hospitals are under?

We report that the Scottish Government spent £51.2 million to build and stock the NHS Louisa Jordan hospital and have it available to treat Covid patients. As we have all seen, that was not what it ended up being used for, and instead it was used to provide vaccinations, out-patient appointments and so forth. It was used, but not as intended.

That ended in June 2021 and the equipment, rather than being wasted or returned, was instead provided to NHS boards—to healthcare settings—across Scotland in the months that followed. We understand that that is now complete, but again I will check with the team whether there is more detail about how that operation unfolded. Perhaps Carole Grant is best placed to respond.

It is substantively complete. I do not immediately have the up-to-date position, but I know that NSS was working through it and absolutely looking to redistribute the equipment to health boards as and when the need arose.

We are coming towards the end of the evidence session. I know that Craig Hoy has a couple of questions, and I want to touch on the long-term planning of NSS and future funding, which is a subject in which we have taken an especial interest. We have looked in our rear-view mirror at how things have gone over almost the past two years, but we also want to look at some of the consequences for the future.

We note from the report that there still appears to be financial uncertainty for NSS—I do not know whether that has changed since the report was published—and that there is consideration of the pausing of some areas of development work by NSS. Will you outline which areas of its work are being paused, or will potentially be paused? What is your assessment of the risks of not progressing that work?

There are a couple of things to say about that. In terms of the financial position, further funding allocations have been made since our report was published. I think that we discussed some of that at last week’s meeting. NSS was a significant recipient, although I do not have the precise allocation to hand at the moment. However, it will go some way towards alleviating some of the financial pressures that the body is facing during this financial year.

What comes next will come through the Scottish budget and its consideration of the review of the recovery plans that all NHS boards—NSS is a national health board in Scotland—have submitted to the Scottish Government. We will see what that means for NSS’s financial position. The audit team will look at its financial sustainability and report during this year’s audit.

Critical services being paused was a feature of the pandemic. We absolutely acknowledge that difficult decisions were taken during the pandemic to do that. Some of those services were related to screening programmes that NSS would have run. Those have now been restarted but their being paused will have had a very serious impact on individuals.

Unlike many health boards, as a national board, much of the activity that NSS undertook at the time, albeit that it grew at scale, could reasonably be categorised as business as usual. The supply of PPE and stock management on behalf of the NHS in Scotland are activities that NSS would have carried out. NSS grew in prominence and scale as opposed to taking on brand-new activities.

Having said that, it paused some activity in IT development and roll-out of other services that it is now picking up—I am sure that Carole Grant can talk about those. However, in the round, the change in working practices was not quite as dramatic as those that took place in other NHS settings, when the NHS took a much more Covid-related focus as opposed to being a universal service. The context for NSS was quite different.

Carole Grant can say something about the restarting of IT development and some of those other services.

NSS assessed all its services and categorised them into essential, paused and stopped. The internal work that was stopped was largely a planned IT transformation, although we saw real innovation being made in IT tools as part of the pandemic response. There was a real shift of focus in the digital team, which ensured that it was providing the digital tools to support the pandemic response. It is now moving back to working on restarting and recreating its planned internal IT transformation. The remobilisation plan sets out how NSS continues to support the pandemic response as well as continuing with its plans for delivering for the future and how it is working towards that.

I end the session by inviting Craig Hoy to be very topical.

I have just been to the 26th United Nations climate change conference of the parties—COP26—so I am perhaps running the risk of being accused of greenwashing by bringing up this subject at the end of the meeting.

I would like to get your impression of how the NHS NSS procurement process took into account environmental considerations at the height of the pandemic. Now that things have calmed down, are you sighted on its activities so that you can try to make sure that it acquires a more environmentally sustainable stream of materials?

I will do my best to answer that, although I suspect that Ashleigh Madjitey or Carole Grant will be better placed to give you the details of NSS’s activity. As we have mentioned, the environmental sustainability of PPE supply was probably not at the forefront of people’s minds, especially at the height of the pandemic when we saw exponential growth in usage and the scramble for supplies was the bigger priority. Now that we are in business as usual, the sustainability of single-use material and the extent to which much of it will be either incinerated or landfilled has to be considered. Given that its use has grown so much since before the pandemic, and that it is likely to remain higher, all those factors have to come back into the obligations not just of NSS but all public bodies.

11:15  

Many public bodies have made a commitment to sustainability and to achieving 75 per cent net zero in 2030 and 100 per cent beyond that, so there is a real onus on public bodies to capture environmental sustainability considerations in their thinking. As Mr Hoy rightly said, that is not greenwashing. It is supported by evidence and subject to scrutiny.

As the subject relates to NSS, Ashleigh or Carole will be able to give more detail.

In our discussions with the Scottish Government and NSS, we asked about environmental issues. I am aware that discussions were being had with the industry and the National Manufacturing Institute Scotland, but I am unclear about how far those discussions got. It came down to the health implications of reusability and how that would work. We definitely highlighted in the briefing that, as NSS makes plans for the future, it should be considering those issues.

Carole Grant, do you want to come in with a final word?

I do not have much to add. The issue features in NSS’s remobilisation plan, and the body is working with partners to achieve the best balance and take everything into account.

With that, I thank the Auditor General, Ashleigh Madjitey, who is with us in the committee room, and Carole Grant, who joined us remotely, for some robust and illuminating evidence. It is greatly appreciated.

11:16 Meeting continued in private until 11:37.