Government had to change rules and establish ministerial panel to approve large sums, report finds
The UK government has spent nearly £12 billion on Covid-19 vaccines so far, but expects costs to mount up over the coming years, according to the National Audit Office.
NAO says the government believes the total cost of its plans to secure, manufacture and deploy vaccines—as well as its contribution to global vaccine efforts—has been up to £11.7bn so far.
These costs include £6.2bn to support the Department for Business, Energy and Industrial Strategy’s procurement and manufacturing activities, £4.9bn for the Department of Health and Social Care’s (DHSC) deployment activities in England, and up to £600 million for global efforts to find a vaccine.
BEIS calculated it needed £519 million to provide manufacturing capacity for vaccines in the UK, with £302m committed by 8 December including:
- £127m to buy, convert and run a Cell and Gene Therapy Catapult Manufacturing Innovation Centre (VMIC) to start vaccine production in June 2021.
- £93m to accelerate the completion and expand the role of the Vaccine Manufacturing Innovation Centre where two vaccines against Covid-19 could be mass produced.
- £42m for ‘fill and finish’ process to put up to two different vaccines into vials so they can be delivered to vaccination sites from August 2020 for 18 months.
- £31m to support skills development and early manufacturing of the vaccines developed by the University of Oxford and Imperial College London.
- £9m to train staff from VMIC and to purchase manufacturing equipment.
However, the report said these costs are “likely to change” as BEIS and DHSC “obtain a clearer understanding through clinical trials as to how the vaccines are developing, what is required to manufacture them and how the vaccines need to be administered”.
The figure also does not cover the costs of any future potential multi-year vaccination programmes, it noted.
It added that BEIS had to invest some money that may have to be written off if some of the vaccines purchased are not approved by the regulator, and that the taxpayer may incur additional costs in future because the contracts “each contain some form of indemnity protection for the pharmaceutical companies in the event of liabilities or legal action arising from any adverse effects that might result from the vaccines”.
The report also reveals that “new structures” were created to bring together ministers to approve expenditure to speed up the approval of investments.
Investments valued at more than £150m, including the vaccine contracts, are now reviewed by a new ministerial panel consisting of secretaries of state for BEIS and DHSC, the chief secretary to the Treasury and the minister of state for efficiency and transformation, it confirmed.
This panel had met six times by 8 December and approved all contracts for potential vaccines, the report said.
Meanwhile, all investment decisions valued at less than £150m are now considered by a new investment panel made up of senior officials from across the centre of government, instead of by BEIS’s projects and investments committee.
Laying out the challenges the government needs to manage in the deployment of vaccines, the report said DHSC was continuing its work on the public perception of Covid-19 vaccines including understanding changes in people’s intentions to receive the vaccine.
But it noted that “it is not clear how this is being used to inform its communications strategy and assumptions on take-up rates among all parts of society”.