The substantial losses incurred on personal protective equipment (PPE) procurement during the COVID-19 pandemic were primarily the result of government mismanagement rather than widespread fraud or cronyism, the government’s counter-fraud commissioner told MPs on Tuesday. Tom Hayhoe, appointed in December 2024 to oversee recovery efforts of pandemic-related losses across government departments, described the procurement process as “uncritical” and a “monumental failure of government.”

Hayhoe, who previously chaired the West Middlesex University Hospital and the West London NHS Trust, appeared before the Commons Public Accounts Committee to discuss his findings on pandemic-related fraud and financial mismanagement. He revealed that approximately £10.9 billion had been lost due to fraud and errors in administering pandemic support programmes, an amount nearly equivalent to the government’s annual justice system expenditure. However, only £1.8 billion had been successfully recovered.

The counter-fraud report highlighted weaknesses in accountability, poor-quality data, and critically flawed procurement procedures as key contributors to the losses. Hayhoe emphasized that the majority of the nearly £11 billion spent on PPE that ultimately proved unusable or overpriced was due to excessive purchasing motivated by a lack of recognition of demand uncertainty. He explained that decisions were taken to buy significantly more stock than necessary, a practice driven by fears of shortages.

“The fundamental problem behind PPE losses was the very lax, uncritical way procurement was taking place, driven by a belief we were going to need to buy twice the amount we ever would do,” Hayhoe said. Reflecting on his experience managing NHS resources where savings of just a few thousand pounds were closely monitored, he lamented the scale of waste, noting that “£10 billion was written off” during the pandemic.

When questioned about allegations related to profiteering and the use of a “VIP lane” that prioritized suppliers with political connections, Hayhoe shifted focus to government decision-making, describing it as a reactive “panic mode” that fostered disproportionate purchasing. The government’s initial strategy to procure 12 months’ supply of PPE at peak market prices before fully assessing demand, he stated, further inflated costs and exacerbated waste.

Hayhoe estimated that a “couple of billion” pounds lost due to excess stock might have been an acceptable risk under different circumstances, but the near £11 billion write-off on a £13.8 billion total procurement was disproportionate and inadvertently escalated global PPE prices. He concluded that the government should have acted as a “much smarter customer.”

Aligning with Public Accounts Committee chairman Sir Geoffrey Clifton-Brown, Hayhoe characterized the procurement failures as “monumental.” He also expressed disappointment over the government’s decision to scale back transparency reforms for small company financial reporting, which had faced backlash. The revised approach will allow many of Britain’s two million small businesses to file profit and loss details confidentially from 2028.