Meeting of the Parliament (Hybrid)

Meeting date: Wednesday, May 27, 2020

Official Report 972KB pdf

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Manufacturing (Support for NHS Scotland)

I remind members that social distancing measures are in place in the chamber and across the Scottish Parliament; members should observe those measures over the course of this afternoon’s business, including when they enter and leave the chamber.

The next item of business is a statement by Ivan McKee on the mobilisation of the Scottish manufacturing base and sourcing to support NHS Scotland. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.

The Covid-19 public health crisis has raised significant challenges in meeting the rapidly increasing needs of our health and social care services. The response of the Government, our agencies and partners, and the Scottish business community has been crucial in overcoming those challenges.

This afternoon, I will summarise the Government’s supply chain programme, the collaborative actions that we have taken to address potential shortages and the challenges and opportunities that remain. By quoting examples of Scottish businesses, I will illustrate the tremendous progress that has been made—in a matter of only weeks—in meeting demand, building resilience, reshoring activity and enhancing self-sufficiency.

Although we will continue to source from global supply chains, our dependence on them for key product lines—and, therefore, our exposure to global pressures and price volatility—has greatly decreased. I hope that that outcome commands the support of all parties.

Of course, we can go further. As innovation minister, my particular commitment is to support the national health service and Scottish businesses to harness the power of innovation to meet future health service needs and enhance economic recovery. I will say more about that theme towards the end of my statement.

The Covid-19 pandemic is one of the greatest public health challenges that our society has faced. The scale of it risked overwhelming NHS capacity and the ability of supply chains to respond. As the severity and spread of the pandemic became clear, three things were quickly apparent: global demand for equipment, including personal protective equipment, had risen exponentially; sources of supply had dried up; and trade barriers had increased.

As movement restrictions and lockdowns were imposed in China and other major centres of production, usual supply chains faltered. At the same time, as passenger flights were curtailed and planes grounded, the capacity to move international freight by air dwindled rapidly.

In Scotland, NHS forecasts indicated that we would need to source huge quantities of PPE and medical equipment such as ventilators, hand sanitiser and swab tests to keep pace with surging demand. Faced with that scenario, we chose a strategy that was designed to deliver results—a considered and selective approach. We have directed all our efforts and resources into finding new, dependable sources of supply, internationally and at home.

It is also useful to consider things that we chose not to do: when faced with warnings that supplies would soon be gone or prices hiked, we did not rush into accepting unverified offers; we have not dealt through layers of brokers or taken offers that yield small quantities; and, most important, we have not cut corners or let our quality standards slip. Instead, our choice was to assemble a multi-agency team to identify rapidly those offers of support that could supply us with high volumes of approved products in the fastest possible times and, in parallel, to work with businesses to grow Scottish capacity to produce key products and build resilience.

The procurement and technical expertise of the NHS, the Scottish Government, Scottish Enterprise, Scottish Development International and the National Manufacturing Institute Scotland have been harnessed to buy products of the right standards, in the right quantities and in the right timescales. That multi-agency team has worked tirelessly to support the NHS and I offer my thanks to them all. Their efforts are well reflected in the on-going achievements of the programme.

I will give some examples of where we have built resilience and are moving towards self-sufficiency, including several new domestic supply chains that have been established in record time. A supply chain for hand sanitiser has been created from scratch. Production at CalaChem in Grangemouth, using spirit from Scottish distillers and Scottish bottling capacity, can satisfy all current health and social care needs in Scotland.

A supply chain has been established to produce non-sterile gowns for the NHS. Don & Low of Forfar is producing enough base fabric to make 1 million non-sterile gowns for NHS Scotland. That will satisfy more than half of our NHS and social care requirements in Scotland. Keela in Glenrothes and Transcal and Endura of Livingston are among the firms converting that raw material into gowns and shipping them to our front-line services.

Across a range of other product lines, Scottish businesses are benefiting from a stream of NHS orders and improving our self-sufficiency. From the start of June, Berry BPI in Greenock and Dumfries will produce 2 million aprons per week as part of an order for more than 100 million aprons for NHS Scotland. That order alone meets around 40 per cent of our NHS and social care demand.

The picture for visors is even better. Alpha Solway of Annan—which I heard on “Good Morning Scotland” this morning—is producing 1.1 million visors for the NHS at a rate of 20,000 per day, which more than meets current Scottish demand. I can also announce that we have successfully created a manufacturing supply chain for masks using product from Don & Low and the manufacturing expertise of Alpha Solway. Backed by a significant NHS order and support from Scottish Enterprise, Alpha Solway is about to commence manufacturing FFP3 face masks, the type that is worn in intensive care, with newly installed machinery. The company has more machinery arriving next month to increase its production capacity still further. Once it is fully up and running, the new plant will be capable of producing 5 million masks per week, which is well above NHS Scotland’s demand, so it will create export potential. What is more, the company expects to create at least 50 more jobs in total in the coming months in Dumfries and Annan, with 30 of those already filled.

That adds to the recent announcement by Honeywell at Newhouse that it will manufacture 70 million masks for use across the United Kingdom. Scotland’s production of PPE is building self-sufficiency, creating jobs and opening export opportunities.

Beyond sanitiser and PPE, many businesses are repurposing their facilities to support the NHS and meet its needs. For example, Scottish Enterprise is supporting two manufacturers as part of work led by Babcock International to design and produce new ventilators under the UK ventilator challenge initiative. Plexus and Raytheon will support the production of ventilators from their Kelso, Livingston and Glenrothes manufacturing facilities.

Those many achievements are of course just a snapshot of the supply chain programme and the wider business response to Covid-19. All members of the Parliament will know of companies large and small in their areas that have put their shoulder to the wheel. We will continue to highlight more examples of that work as we grow our domestic capabilities.

Of course, while we were building up our domestic supply chains, there was an urgent need to secure huge volumes of PPE from international sources to meet the immediate demands of our front-line services. In recent weeks, and despite the international difficulties I mentioned, we have brought in seven charter flights, delivering more than 64 million face masks, 130,000 reusable gowns, 120,000 test kits and 1,300 infusion pumps, with more to follow. Much-needed ventilators and oxygen concentrators have arrived from the United States and China, and, in the spirit of mutual aid and assistance, our flights have carried cargoes for the NHS in Wales, plus donations free of charge for Scottish charities.

Our international sourcing has been assisted greatly by Scottish Government and Scottish Development International teams that are based in the overseas hubs. Their local knowledge, connections and expertise have been invaluable in qualifying international companies, checking certificates and export licences and making factory visits. I take this opportunity to thank them, on behalf of us all, for their work.

As the pandemic and our response to it evolve, other opportunities to build resilience present themselves. Through our test supply chain group, and engagement with the Life Sciences Scotland industry leadership group, work has started to examine the role that Scotland can play in the manufacture of vaccines when they become available.

We can also start to think about emerging themes and lessons. Our future systems must be more resilient, adaptable and sustainable. Covid-19 has exposed vulnerabilities and highlighted core strengths. One positive side-effect has been an upsurge in innovative thinking about new ways of remote working, distance monitoring devices, new technologies for decontamination, enhanced protection from airborne virus particles, automation, the circular economy and service redesign.

The National Manufacturing Institute Scotland has worked to respond to many hundreds of companies that offered to help with manufacturing for the NHS, speaking to more than 400 that offered support, and continuing to work with many of those, alongside its own research and engineering community, which has generated many additional proposals.

“I want Scotland to be the inventor and producer of the innovations that shape the future—not just a consumer of them.”

Those were the words of our First Minister in the era before Covid-19, but never have they been more relevant than they are now, as we work our way through the crisis.

Thankfully, as the peak of the pandemic subsides, we see that actions taken by this Government, the NHS and—very important—by the public and businesses have helped to curb the worst potential impacts and boosted our capacity to respond. A huge amount has been achieved at unprecedented speed to source critical medical supplies and equipment. I congratulate Scottish business and public services on their fantastic efforts, rising to the occasion and supporting the national effort.

I have painted a picture of the future: of how we are supporting innovation, building self-sufficiency and putting Scotland at the forefront of supply chain resilience, now and in the future.

The minister will now take questions on the issues that were raised in his statement. I intend to allow around 20 minutes for questions, after which we will move on to the next item of business. It would be helpful if members who wish to ask a question were to press their request-to-speak buttons now.

I thank the minister for early sight of his statement as well as for his mention of the circular economy in it.

It is absolutely right that our focus right now should be on supporting the NHS, which includes mobilising our manufacturing base to assist whenever possible. Indeed, that is already happening, with businesses across Scotland stepping up to help. For example, we recently saw the UK Government sign a mammoth contract with Honeywell, which is based in North Lanarkshire, to produce 70 million pieces of PPE, creating 450 local jobs.

Many firms have broken out of their existing sectors to begin manufacturing PPE equipment, such as Don & Low and Keela, which were mentioned by the minister. Each and every one of them deserves our thanks. For Scottish manufacturing to play its full role, employees must be given the support that they need to do their jobs. I am pleased to see that theme echoed in the manufacturing guidance and in the statement today.

McCallum Water Heating, which is based in East Renfrewshire is one such firm safely producing components for the NHS. Despite the firm proving that it can work safely, the Scottish National Party will not allow it to fully reopen. That puts it at risk, because the NHS contracts alone will not cover its outgoings and English firms that are reopening can bid for contracts without competition from Scottish manufacturers. Will the minister agree to address that unfairness?

Wow—okay. The member will be well aware that the issue has been well covered by my colleague the Cabinet Secretary for Economy, Fair Work and Culture, Fiona Hyslop, who spoke yesterday at length about the steps that we are taking to work with the manufacturing and other sectors as we return to work post-lockdown. He will also understand very well that the Scottish Government’s focus is to place the health of the population of Scotland at the fore, and to work with others to make sure that there is an evidence-based and science-led approach and that we manage the return from lockdown in the safest way possible that ensures that the people of Scotland stay safe through this situation. I can only point him to the to the work that we have done on that, to the statement that was made by my colleague and to our priority, which is making sure that the safety of the people of Scotland is paramount.

I, too, thank the minister for prior sight of the statement. He acknowledges in it that the Scottish Government was caught on the hop and had insufficient PPE to cover demand. I also remember, at the start of the pandemic, many companies offering to help but receiving no response to those offers, while people were making scrubs at their kitchen tables for front-line staff who could not get them.

Although lessons have to be learned and emergency planning put in place, does the minister believe that, if the Scottish Government had an industrial strategy, it would have been better able to respond? In addition to that, will he make sure that small and medium-sized enterprises are not shut out of this production?

There are several points there. First of all, it is absolutely not the case that there was at any point a risk to the supply of PPE to front-line services in Scotland. There was a stockpile of 45 million items of PPE at the start of the crisis, and we have supplied more than 200 million items of PPE to front-line services since 1 March. We currently have 118 million items of PPE in the central warehouse, in addition to stocks in hospitals, care homes and elsewhere, so, for the record, it is absolutely not the case that we risked running out of stock at any point.

I have read Labour’s so-called “industrial strategy document”, which is pretty thin and weak. The term is a slogan—a soundbite that does not deliver an industrial strategy where it matters, which is on the ground, working with businesses and others to make it happen in reality.

With regard to the response to businesses, I said in my statement that our focus was clear and blunt: to access the highest quality and volume of products to the right specifications and get them to the front line in the fastest possible time. I do not think that anybody in the front-line services, in Parliament or across Scotland would say that our priority should have been different. The consequence was that we focused on the businesses that could deliver the required volume of equipment that met the specifications. We have gone through every single offer of help—more than 2,000 businesses responded—but, as one would expect, our priority has been to identify the ones that could do the business and deliver for us.

The Cabinet Secretary for Health and Sport told the Health and Sport Committee that the UK Government had said that it would no longer support the Scottish Government’s efforts to procure PPE for Scotland. When was the Scottish Government informed of that decision by the UK Government and what was its response to it?

The permanent secretary at the Scottish Government got a letter from the UK Government on 16 April, which said that the joint action co-ordination team, JACT, which is a combination of the Department for International Trade and the Foreign and Commonwealth Office, had,

“on the advice of Ministers, advised the overseas network”

of the UK Government

“not to undertake additional work to support any new procurement ‘asks’”

on behalf of devolved Administrations.

The UK Government’s FCO has a responsibility to support devolved Administrations in the devolved areas of healthcare and healthcare procurement so, obviously, we found it unfortunate that the UK Government was taking that step not to support our efforts to internationally secure PPE for front-line services.

I referred in my statement to the fact that the Scottish Government has an office in Beijing and that Scottish Development International works in several locations in China and internationally, including the United States, so despite the FCO and the DIT taking that action, we were able to work directly with manufacturers in China in particular and in other places to ensure that the products were supplied to Scotland with the correct certifications.

Much of the PPE equipment is for single use, for obvious reasons. That point raises the question of disposal, which was not addressed in the minister’s statement. Given that the statement focused on innovation, what efforts have been made to ensure that those items do not end up in landfill or incinerated after use?

That is an excellent question from Andy Wightman. I should perhaps have mentioned in my statement that extensive work is being done on that. We recognised the need to look at reusable options early in the process because of the sheer volume of products—hundreds of millions—that were being disposed of.

Work has moved forward on the issue. Our first priority, as one would expect, is to ensure that we fully comply with all requirements, that any reusable pieces of PPE that are put into front-line services are fully tested and that adequate processes are in place to ensure their safe recycling.

We have already taken steps: Trade Right International in Greenock is working on a proposal for the recycling of hand sanitiser bottles, which is very welcome, because that process will significantly help with the supply chain as well.

At the moment, we are working on other supply chains, such as for gowns and goggles, in respect of which reusable items are coming to the fore. Such items have already been delivered, are going through approval processes and either are on the front line already or will be in the near future. It is an area that we are focusing on and one in which, as Andy Wightman rightly says, there is great potential for innovation. We continue to explore opportunities in those areas to further build resilience to support front-line services and our drive towards the circular economy.

This morning, it was announced that Pneumagen, which is based in St Andrews, has been awarded a £4 million investment to allow clinical development of Neumifil for prevention and treatment of Covid-19. That investment includes £1 million from the Scottish Investment Bank. The company eventually wants to manufacture in Scotland, but at present it need to do so through a company in the north of England, because Scotland does not have the capacity. Is that something with which the minister could help?

I thank Willie Rennie for his question. I would be delighted to help the business that he mentioned to support its efforts to manufacture the product in Scotland. Such products are much needed, as we move forward in the fight against Covid-19. It is great that the business has already accessed support from the Scottish Investment Bank, so I look forward to following up on that conversation.

As I mentioned in my statement, the NMIS has worked extensively with hundreds of businesses that have innovative solutions that we want to move forward. Through the life sciences Scotland industry leadership group and others, I have engaged with the life sciences sector in looking for opportunities to support Scottish businesses in the very important areas of testing, vaccine and cure.

The Chancellor of the Exchequer and the Prime Minister have repeatedly stated that they will spend billions on personal protective equipment. Will the minister confirm that the UK Government has guaranteed that Scotland will receive the hundreds of millions of pounds of consequentials that should flow from that additional UK spend in a devolved area?

Unfortunately, so far the UK Government has not agreed to provide any of the consequentials that are due to Scotland, Wales and Northern Ireland. It is essential that the Scottish Government receives an appropriate budget transfer from the UK Government for that spend. The Cabinet Secretary for Finance has written to the UK Government to underline that expectation, and the Scottish Government will keep Parliament informed of further developments.

The Cabinet Secretary for Health and Sport has stated that the national stockpile was not sufficient, in some respects. What investigations into that have taken place? From reading between the lines of his statement today, I ask whether the minister is saying that the Scottish Government wants to look for a permanent Scotland and UK protected supply chain for the NHS and care sector in the future.

I have already given the numbers in relation to the stockpile situation at the start of the epidemic and the amount of PPE that we have brought in over the past few weeks.

With regard to the supply chain, as I said in my statement, it is our desire that Scotland be the innovator and manufacturer both of existing technologies and of technologies of the future. We understand the importance of resilience and self-sufficiency in the PPE sector, so it is one of a number of sectors in Scotland for which we are working very hard to ensure a Scottish supply chain that is able to supply its needs.

I thank the minister for all the work that he has done in his field. He will be aware of the work of the Oil & Gas Technology Centre in Aberdeen, which has brought together manufacturers from across the industry to help in the fight to tackle the virus. One such manufacturer is Air Control Entech, which is producing 1,000 face shields per day for hospitals and care homes. A further 10 projects are about one month from deployment, including one to use the processing power of the National Decommissioning Centre’s supercomputer to help to arrest spread of the virus. What further engagement will the Government have with the OGTC on future initiatives?

Maureen Watt raises some very good points. I thank the business that she mentioned for its production of PPE. It is one of the many examples of businesses that are part of the now-extensive supply chain. There are far too many such businesses to mention now, although I hope that at some point in the future, we will be able to produce a more comprehensive list of them.

There is advanced technology in the oil and gas sector that can be adapted. For example, there are businesses in the sector that are turning their expertise in making breathing equipment to making equipment to support the fight against the virus in hospital settings. That is all to be welcomed. I am always delighted to engage with innovation in the sector to repurpose and adapt technology for the fight that we currently face.

Will the minister join me in congratulating Inverness-born design engineer Ross Hunter, who has reached the final in a global competition to invent a low-cost mechanical ventilator to help people who are afflicted by the coronavirus? Is not that an example of the initiative and innovation that the minister referred to in his statement?

I thank David Stewart for his question, and I take this opportunity to congratulate Ross Hunter. When it was brought to my attention that he had got through to the final in that international challenge, I thought that it was a testament to Scottish ingenuity and innovation, as David Stewart said. I wish Ross Hunter well in that endeavour, and in anything that he chooses to turn his hand to in the future.

I thank the minister for his encouraging statement. Does he agree that although Scotland’s efforts to procure PPE have produced excellent results in recent months, building resilience in domestic supplies, such as those that are produced by Alpha Solway Ltd in my region, is an absolute necessity in order to ensure that the safety of Scottish key workers is not dependent on a fluctuating global market?

I agree with Joan McAlpine. Alpha Solway is a prime example of the work that has been done by businesses in Scotland to step up and build resilience in order to protect us against the vagaries of international markets, which are difficult at this time. I congratulate and thank the companies that have engaged in that work, including Alpha Solway. We look forward to continuing to build in strength and resilience in Scottish supply chains.

I refer members to my entry in the register of members’ interests.

Many manufacturers are going above and beyond the call of duty to support the NHS through their manufacturing efforts. If the Government wishes to continue to rely on their good will, it will be important that manufacturers have trust in the Government and the NHS.

Earlier this month, that trust was undermined in the case of one company. Adam Short, who owns a laser cutting company in Ayrshire, was reportedly left £12,000 in debt after a deal with NHS Ayrshire and Arran to produce 16,000 visors was cancelled at short notice, which meant that Mr Short distributed the face masks for free to desperate nurses who, he says, went to him directly. Mr Short says that he spent £20,000 on adapting his factory so that it could produce PPE.

The minister has already referred to the fact that the production of PPE has increased significantly during the past month or two. Will he ensure that well-intentioned business owners are not left out on a limb by the very organisations that they are trying to help? As I understand it, there are now 400 firms that have offered to help. What safeguards are in place for such manufacturers? Will the minister assure me that businesses that have offered similar assistance are not being treated in a similar manner?

As far as I am aware, Michelle Ballantyne has not shared with me any details of the business that she mentioned, so I have not had an opportunity to look into that case. I undertake to look at the situation to see what the contractual arrangements were. If the business had a contract to supply and the contract was not fulfilled, we will address that. If it did not have a contract, the situation is different.

The process for businesses supplying the NHS and health boards is well defined, and it follows strict rules and procedures. As members would expect with regard to expenditure of public money, we ensure that that is done in a proper fashion. I expect businesses that have supply contracts with the NHS to have those contracts honoured. If that has not been the case, I undertake to have a look at the matter.

I thank the minister for all the hard work that he has done during the recent period. I am sure that many small companies will be delighted to hear about the opportunities that will arise from the upsurge in innovative thinking.

However, as we are all aware, this deadly virus does not recognise boundaries. Does the minister agree that, as exemplified by the Scottish Government’s recent lending of 1.1 million fluid-resistant masks to Wales, working between countries is vital during this crisis, and that the UK Government’s decision not to participate in the first round of PPE procurement displays exactly the wrong message on working together?

I think that the member might be referring to the European Union process for procurement exercises. We were on record at the time as saying that the UK Government should have participated in those programmes.

The Scottish Government co-operates with the other three nations, and more widely with other Governments when that makes sense, to make sure that we are all able to benefit from the supply of PPE. As Scotland moves to being an exporter of many of those commodities, we are keen to have conversations with international partners that want to avail themselves of Scotland’s innovative manufacturing capabilities for PPE.

I thank the minister for his statement. Will he provide an update on the Scottish Government’s talks with Midlothian-based firm Quotient on supplying to the NHS a coronavirus blood test that it has invented? With orders for the antibody test filling up from other countries, it is feared that Scotland could miss out. The local MP, Owen Thompson, has given the company his backing. When will a decision be reached, and when does the minister expect the NHS in Scotland to be able to offer antibody testing?

The area of antibody testing is developing as the technology and research develop. Several businesses can provide support in that area, through the provision of antibody tests, polymerase chain reaction tests, laboratory consumables, or equipment—as does Thermo Fisher in Scotland. Other businesses are looking at vaccines. We are engaged with a range of businesses in the life science sector. Quotient is one of them. We responded to Quotient recently. We are engaged with it and with a number of other businesses that have the potential to provide support in the area of antibody testing.

The group that I mentioned earlier, which I chair on a daily basis, is looking at test supply chain issues, and is looking at Quotient’s work and the work of other Scottish businesses in that area, as part of its antibody workstream.

Following on from some of the questions that have already been asked, will the minister confirm that consequentials are due only from new UK spend, and not from the use of existing budgets? His suggestion that the UK was not supplying the Scottish Government with extra PPE is at odds with the opinion of clinical director Jason Leitch, and of the Cabinet Secretary for Health and Sport and the First Minister. Blatant politicking is doing nothing to help us with the Covid challenge.

To be clear, the vast majority of PPE that we have used in Scotland has been brought in directly to Scotland by National Services Scotland, the purchasing arm of NHS Scotland.

New spend on PPE at a UK level—which is what we are talking about—would, as I understand it, incur consequentials, because it is additional to the spend that was identified previously. It is about making sure that people in front-line services in Scotland get the support that they need, whether that is through PPE or through funding from the UK Government, through that consequentials process, to be able to buy PPE.

Does the minister agree that the Covid crisis has shown that the market cannot provide the answers to the very serious questions that we have been asked during this period, and that, without major state intervention, we would have had an absolute disaster on our hands—even greater than we have at the moment? Does that not mean that there has to be a recalibration of economic policy, both in Scotland and across the UK, to ensure that we go forward as a planned economy, which is far more than just a market economy?

I agree that there is a role for Government in looking at the industrial landscape in the country and understanding where support is needed. That is what Scottish Enterprise and other agencies do daily; they consider where to support businesses that are required for the national effort, be that in the fight against Covid or elsewhere.

It is important to remember that the businesses that have stepped forward to offer support are private businesses in their own right. The Government has no intention of going into the PPE manufacturing business; there are Scottish businesses or businesses that are based in Scotland that are able to do that, and we will continue to support and work with them.

However, I absolutely agree that Government should have a role in understanding what the landscape looks like and offering support where that makes strategic sense.