DHSC Annual Report and Accounts 2023-24 – Committee of Public Accounts Report (HC 2025)

Committee of Public Accounts
DHSC Annual Report and
Accounts 2023-24
Twenty-Fifth Report of Session 2024–25 HC 639

Committee of Public Accounts
The Committee of Public Accounts is appointed by the House of Commons
to examine “the accounts showing the appropriation of the sums granted by
Parliament to meet the public expenditure, and of such other accounts laid
before Parliament as the committee may think fit” (Standing Order No.148)
Current membership
Sir Geoffrey Clifton-Brown (Conservative; North Cotswolds) (Chair)
Mr Clive Betts (Labour; Sheffield South East)
Nesil Caliskan (Labour; Barking)
Mr Luke Charters (Labour; York Outer)
Anna Dixon (Labour; Shipley)
Peter Fortune (Conservative; Bromley and Biggin Hill)
Rachel Gilmour (Liberal Democrat; Tiverton and Minehead)
Sarah Green (Liberal Democrat; Chesham and Amersham)
Sarah Hall (Labour; Warrington South)
Lloyd Hatton (Labour; South Dorset)
Chris Kane (Labour; Stirling and Strathallan)
James Murray (Labour; Ealing North)
Sarah Olney (Liberal Democrat; Richmond Park)
Rebecca Paul (Conservative; Reigate)
Michael Payne (Labour; Gedling)
Oliver Ryan (Independent; Burnley)

Powers
Powers of the Committee of Public Accounts are set out in House of
Commons Standing Orders, principally in SO No.148. These are available
on the Internet via www.parliament.uk.
Publication
This Report, together with formal minutes relating to the report, was
Ordered by the House of Commons, on 28 April 2025, to be printed. It was
published on 14 May 2025 by authority of the House of Commons.
© Parliamentary Copyright House of Commons 2025.
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Public Accounts, House of Commons, London SW1A 0AA. The telephone
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Contents
Summary 1
Introduction 3
Conclusions and recommendations 4
1 The operation of the Department and its reporting 9
Introduction 9
Qualification of the Department’s accounts 9
Reduction of administrative functions in the health system 11
The development of the Harlow Health Security Campus 13
2 Protecting taxpayers’ money 15
The continuing impact of clinical negligence 15
Unapproved special severance payments 17
3 Transparency and accountability for the
Department’s spending 19
Usability of the Department’s Annual Report and Accounts document 19
Lack of timeliness of reporting 21
Formal minutes 24
Witnesses 26
Published written evidence 26
List of Reports from the Committee during the
current Parliament 27

1
Summary
The work of the Department of Health and Social Care and its organisations
touches the lives of an average of 1.7 million patients per day and costs the
taxpayer around £187.3 billion per year. The health system faces significant
financial pressures on numerous fronts, which means that strong financial
management and decision–making, and efficiency improvements, are
essential for the NHS’s long–term sustainability.
While the Department has made progress, significant issues remain
with its financial management and oversight of its arms–length bodies.
We are concerned that it lacks a grip of the financial pressures it faces
and therefore lacks adequate plans for key areas of spend and activity.
The Department’s annual report is late again and contains too little
information on areas of interest to Parliament, including plans for social
care, plans to move to prevention of ill health, and on how to harness
technological advances to improve the NHS’s productivity.
The Department simply cannot afford poorly devised and poorly overseen
infrastructure programmes. One such programme is the modernisation
of high containment laboratories. These are critical to the UK’s public
health infrastructure and a key defence against a future pandemic. We are
deeply concerned that there is no long–term plan for ensuring that the
UK continues to have this capability since, despite the UK Health Security
Agency spending nearly £400 million developing a site at Harlow, this
project is now on hold due to expected costs spiralling from £530 million
to £3.2 billion. The UK Health Security Agency has little time left to decide
how it will continue to protect public health as existing facilities rapidly
approach the end of their operational lives.
Both patients and public money need to be better protected by
the Department. Far too many patients still suffer clinical negligence which
can cause devasting harm to those affected. It also results in large sums
of public money being spent on legal fees and compensation, drawing
resources from the wider health service. In 2023–24 the Department paid
out over £2.8 billion to claimants due to clinical negligence. In total it has
needed to set aside an astounding £58.2 billion to pay for the potential
estimated future cost of claims (or almost a third of health and social care
total annual spend). The Department must also act firmly to stop the flow
of unapproved exit packages going out the door, with five such payments by
NHS Trusts totalling £180,868 in 2023–24.

2
The scale of the challenges facing the Department arising both from
historic issues and upcoming structural changes is significant and should
not be underestimated. The Department is facing a period of upheaval
following the announcement of the abolition of NHS England. At the time
of our evidence session, during which this announcement was made, the
Department and NHS England did not yet have any firm plans about how
they would simultaneously abolish NHS England and reduce headcount by
50%, whilst maintaining and improving patient services. It will be essential
that they formulate these plans quickly to ensure a smooth transition and
provide certainty for patients and staff as soon as possible.

3
Introduction
The Department leads the health and social care system in England.
The Department and its group spent £187.3 billion in 2023–24. The C&AG has
qualified 1 his opinions on the Department’s accounts for the last five years
due to a number of different issues within both the Department itself and
its wider group of organisations that form part of its accounts. Whilst some
of these issues were due to the COVID–19 pandemic, the range and scale
of them has highlighted issues with oversight across the group, including
financial and compliance issues.
NHS England leads the NHS in England and sets the national direction
for the NHS. It commissions services from NHS Trusts and Foundation
Trusts, and from other healthcare providers, runs national NHS IT systems,
and is responsible for the education and training of the NHS workforce.
NHS England spent £180.0 billion in 2023–24, of which £153.6 billion was
on the commissioning of health and social care services for patients.
The government announced on 13 March 2025 that NHS England will be
abolished and its functions merged into the Department.
Parliament expects Departments’ accounts to be published before the
summer recess each year, which the Department has not met since 2019.
The Department published its accounts covering 2019–20 to 2022–23 in
January each year, six months after this deadline. It published its 2023–24
accounts in December 2024, marking an improvement on the previous
four years, but still five months after the pre–summer recess deadline.
The 2023–24 accounts were delayed as a result of ongoing issues at UKHSA
following the C&AG’s disclaimed opinions on its 2021–22 and 2022–23
accounts and because of delays to local NHS audits. The Department’s
Annual Report and Accounts needs assurance from NHS England’s accounts
and the Consolidated NHS Provider Accounts because they account for over
£100 billion of expenditure. Those accounts in turn rely on assurance from
the audits of NHS commissioners and NHS providers.
1 Qualified accounts are accounts which are considered by the auditor to be in some way
deficient, incomplete or unsupported fully by evidence, and which the auditor has been
unable fully to consider as presenting a true and fair view of the organisation’s affairs.

4
Conclusions and
recommendations
1. The announcement of the abolition of NHS England, and staff cuts across
the Department, NHS England, and Integrated Care Boards, has created
high levels of uncertainty for patients and for staff. During our evidence
session the government announced that it would abolish NHS England and
centralise its functions into the Department. This is a major structural and
operational change for the Department and its organisations, but it has not
yet set out how this will impact key services and targets to improve patient
care. With over 1.7 million patient interactions per day and 1.5 million staff
in the NHS, we are concerned about the impact that this uncertainty may
have on both patients and staff. It is disappointing that the Department
and NHS England do not have a clear plan for how they will achieve the
required reductions in headcount, and are unable to articulate the costs
involved. The reductions have been announced prior to the finalisation of
the NHS’ 10–Year Health Plan, and therefore we do not yet know how these
fit with the wider plans for the NHS. This includes not knowing how the
savings made from NHS England’s reduced staffing costs will translate into
a stable financial footing for frontline NHS services. During the restructure,
it will be essential to maintain and protect the effective local delivery
relationships that are so critical to delivering good quality patient care.
The changes should also preserve the place–based approach to retain
close and effective working relations with local councils, directors of public
health and local GPs.
recommendation
a. Within the next 3 months, the Department must reflect on the
lessons learnt from previous structural changes and share with
us its plan and timetable for the structured transfer of NHS
England’s functions to the Department, including the resources
it will now have for each of its key responsibilities, and any
activity it will cease.
b. The changes should preserve the place–based approach to retain
close and effective working relations with local councils, directors
of public health and local GPs.

5
2. The Department’s accounts do not provide sufficient information on key
long–term financial pressures facing the health and social care system.
Despite it being jointly responsible for health and social care in England,
the Department’s accounts overwhelmingly focus on health services and
do not give a clear overarching narrative on social care. The Department’s
accounts contain very little information in key areas of interest to us, and
to Parliament. This includes a lack of financial data on the prevention of ill
health in the first place, which has the biggest long–term impact on health
outcomes, and on technological advances, which are needed to improve
future productivity for the NHS. While the Performance Report section of
the Department’s Annual Report and Accounts contains some high level
information on these areas, there is a lack of detailed financial data to set
out how money has been spent in these areas. The Department’s accounts
also do not provide information in enough detail to allow Parliament or
the public to establish whether legal costs relating to exit packages and
employment tribunals represent a good use of public funds, or provide the
best outcomes. The Department is unable to tell us how much is spent on
palliative and end–of–life care, nor what outcomes were delivered through
this spending.
recommendation
a. In line with its Treasury Minute response, the Department should
write to the Committee to set out its plans to improve the
transparency and usability of its Annual Report and Accounts in the
following areas: social care; productivity; prevention; digital and
artificial intelligence; palliative and end–of–life care; severance
and clinical negligence payments; and any new and emerging
areas of Parliamentary and public interest.
b. All future annual reports and accounts should be very clear about
what productivity and efficiency gains have been made during
the year and how. Also, a prediction for future years should be
included.
3. There is little to show for the £400 million spent so far on the
development of Harlow Health Security Campus, with no decision yet
on the future of the site. This is an example of a poorly overseen project
to replace the UK’s critical public health infrastructure. UKHSA’s high
containment laboratories are central to protecting the population against
potentially highly infectious diseases. The current facilities at Porton
Down and Colindale are nearing the end of their life. The programme to
build new facilities at Harlow has been underway for over a decade, and
the cost of the current plan has risen from the initial estimate of £530
million to an eye–watering projected £3.2 billion. UKHSA has developed an

6
alternative proposal involving modernising the existing facilities at Porton
Down and Colindale. The decision between these two options is complex.
The final decision is currently being made by Ministers and is expected
in the second part of the spending review. But this is still some 3 years
after the programme was suspended. As well as having cost implications,
these delays could risk leaving the nation without adequate protection
against emerging new diseases. UKHSA estimates its current facilities
could continue to operate for 15 years, and in 2024 the NAO reported
that the earliest date for having a fully operational new or upgraded
site is 2036, 11 years from now. Time is running out for UKHSA to decide
on the best course of action in order to avoid exposing the public to
any unnecessary risk.
recommendation
a. In line with the recommendations this Committee made in May
2024, UKHSA should urgently outline how it will ensure that the
UK continues to have the infrastructure it needs to protect public
health, and confirm its plans for its high containment laboratories,
including setting out full costs and timeline for completion. In light
of spending review, and given UKHSA’s poor record of delivering
new facilities, it should set out as soon as possible, exactly what
the arrangements are in respect of accountability, oversight, and
the involvement and status of delivery partners.
b. The Department should ensure it establishes effective oversight of
funding for all major health infrastructure projects, starting with
ensuring these are based on a realistic assessment of the costs.
4. It is unacceptable that the Department is yet to develop a plan to deal
with the cost of clinical negligence claims, and so much taxpayers’
money is being spent on legal fees. The Department has set aside an
astounding £58.2 billion to cover the potential costs of clinical negligence
events occurring prior to 1 April 2024, the second largest liability across
government. Some £9.3 billion of that £58.2 billion relates to events
occurring in 2023–24, when it also paid out £2.8 billion on clinical negligence
claims. Behind these jaw–dropping amounts lie many tragic incidents of
patient harm. The Department has only recently written to us in response
to the previous Committee’s recommendation which was to set out, by
summer 2024, the key reasons for patient harm and the actions it will take
to address these. In addition, the Department says that an astronomical
19% of the money awarded to claimants goes to their lawyers, on top of the
fees payable for the Department’s defence team. We are disappointed that
huge improvements still need to be made to better protect both patients
and public money.

7
recommendation
Within the next 6 months, the Department should set out a plan with
clear actions to:
• Reduce tragic incidences of patient harm to as low a level as
possible; and
• Manage the costs of clinical negligence more effectively, including
introducing a mechanism to reduce legal fees.
• Improve patient safety across the NHS and in particular in
maternity services.
5. We are disappointed by the Department’s continued failure to return
to publishing its accounts before the summer Parliamentary recess.
Timely production of accounts is essential to understanding public finances
and supporting accountability and Parliament expects Departments’
accounts to be published before the summer recess each year. Yet the
Department has failed to deliver its accounts on time for each of the last
five years, which hampers effective and timely accountability of taxpayers’
money. The Department is making some progress and published its
2023–24 accounts on 17 December 2024, nearly six weeks earlier than its
2022–23 accounts. But this is still five months later than the timescale
needed to meet the expected pre–summer recess delivery. Weaknesses in
basic financial accounting at UKHSA, together with delays in the completion
of local NHS audits have continued to cause the accounts to be late.
The absorption of NHS England into the department will need to be carefully
planned in the accounts production and auditing process, otherwise
timelines could slip backwards.
recommendation
By the start of September 2025, the Department must write to us with
a realistic and credible plan to produce audited accounts before the
summer Parliamentary recess. This must include how it will:
• Effectively support and hold group bodies to account to ensure they
produce accounts of appropriate quality on a timely basis; and
• Work with stakeholders across the local audit system to build
capacity, resilience and ensure deadlines are met in particular
given organisational changes.
6. NHS England does not have a coherent plan to better protect taxpayers’
money and prevent future unapproved exit packages. There remain
far too many special severance payments where approval has only been
sought after the payment has been made. Five such unapproved payments

8
totalling £180,868 were made by NHS trusts in 2023–24. Without approval,
this expenditure has not been spent in line with Parliament’s expectations.
NHS England’s plan to stop such payments occurring in future has been to
remind providers of the rules in place. However, it has acknowledged that
solely reminding providers is not enough to guarantee future unapproved
payments will not happen. NHS England is also unable to identify any
meaningful consequences for trusts that would act as a deterrent.
recommendation
As part of its Treasury Minute response, NHS England should set out how
it will ensure that all exit packages receive the appropriate approvals
in advance of payment being made, including details of consequences
for non–compliance with the rules. Given the proposed scale of
redundancies it should set out how its new approvals mechanism can be
enforced to prevent even more unauthorised severance payments.
This should include how it will ensure that this corporate knowledge and
any lessons learned are not lost when it is abolished and its functions are
taken on by the Department.

9
1 The operation of the
Department and its reporting
Introduction
1. On the basis of a report by the Comptroller and Auditor General (C&AG),
we took evidence from the Department of Health and Social
Care (the Department), the UK Health Security Agency (UKHSA)
and NHS England on the Department’s Annual Report and Accounts
for 2023–24.2
2. The Department leads the health and social care system in England.
In 2023–24, the Department, its agencies, and its wider Group—which
includes NHS England, NHS commissioners and providers, and other
arm’s length bodies—spent £187.3 billion. NHS England leads the NHS
in England and sets the national direction for the NHS. It commissions
services (via Integrated Care Boards) from healthcare providers, runs
national NHS IT systems, and is responsible for the education and training
of the NHS workforce. NHS England spent £153.6 billion of its total spend
of £180.0 billion in 2023–24 on the commissioning of health and social care
services for patients. The NHS had 1.7 million interactions with patients
every day, and employs some 1.5 million full–time equivalent staff. UKHSA is
an executive agency of the Department and began its operations on
1 October 2021.3
Qualification of the Department’s accounts
3. The C&AG qualified his audit opinion on the Department’s Annual Report
and Accounts for each of the four years prior to 2023–24. The previous Public
Accounts Committee reported on the Department’s 2022–23 Annual Reports
2 Report by the Comptroller and Auditor General, Department of Health and Social Care
Annual Report and Accounts 2023–24, HC 476, 17 December 2024, pages 237–242
3 Department of Health and Social Care Annual Report and Accounts 2023–24, HC 476, 17
December 2024, pages 1, 186, 243; NHS England Annual Report and Accounts 2023–24,
HC 251, 10 October 2024, pages 13–14, 128, 152; Healthcare Financial Management
Association, News alert / NHS had 1.7 million interactions every day in 2023/24, 12 June
2024; Report by the Comptroller and Auditor General, UKHSA Annual Report and
Accounts 2023–24, HC 427, 16 December 2024, page 153

10
and Accounts in April 2024. It highlighted significant weaknesses in the
Department’s controls and oversight. The Committee found that there had
been repeated failings of oversight both within and across the Departmental
Group which led to a number of qualified accounts. Some of these issues
related to the Department’s response to the COVID–19 pandemic, which
represented an unprecedented challenge to the healthcare system in areas
such as the procurement of vaccines and personal protective equipment,
but others were due to other underlying matters.4
4. The C&AG disclaimed his audit opinion on the 2021–22 and 2022–23
UKHSA Annual Report and Accounts, but noted a significant improvement
in UKHSA’s 2023–24 Annual Report and Accounts, on which he only
qualified, rather than disclaimed, his audit opinion. The C&AG reported to
Parliamentarians that there were still significant weaknesses in UKHSA’s
control environment in 2023–24, and that it had to rely upon substantial
corrective action to produce its 2023–24 financial statements, including
through engaging an external professional services firm. UKHSA spent
£1.04 million on external support in 2023–24.5
5. In 2023–24, the Department made progress and, for the first time since
2019–20, the C&AG did not qualify his opinion on the Department’s
figures for its spending during the year being reported on. However, the
Department’s accounts are required to include the previous year’s
figures for the purpose of comparison with the current year. In 2022–23,
the C&AG qualified: His ‘true and fair’ opinion on UKHSA’s income and
expenditure figures for 2022–23, and UKHSA’s balances as at 1 April 2022;
and His ‘true and fair’ opinion on the Department’s spend on personal
protective equipment for 2022–23, and the opening balance of personal
protective equipment stock as at 1 April 2022. A net £19 million of personal
protective equipment was written off in 2023–24.6 Most of the write offs
were recognised in prior years and total £9.9 billion.7 Since the C&AG
qualified his opinion on these figures in the 2022–23 accounts, he also
qualified his opinion on the 2023–24 accounts because they contained
4 Committee of Public Accounts, Thirty–First Report of Session 2023–24, Department of
Health and Social Care 2022–23 Annual Report and Accounts, HC 459, 29 April 2024,
page 8
5 Q 34; Report by the Comptroller and Auditor General, UKHSA Annual Report and Accounts
2023–24, HC 427, 16 December 2024, pages 153 and 155
6 Department of Health and Social Care: Annual Report and Accounts 2023–24, HC 476,
17 December 2024, page 281
7 Department of Health and Social Care 2022–23 Annual Report and Accounts , HC 459,
29 April 2024, page 281

11
the 2022–23 figures. This meant that he qualified his opinion on the
Department’s Annual Report and Accounts for 2023–24 overall, but did not
qualify his opinion on the figures relating to 2023–24.8
Reduction of administrative functions in
the health system
6. NHS England announced on 10 March 2025 that its size was to be ‘radically
reduced’, in a move that could see its workforce halve. We therefore asked
what this would mean in practice and what were the estimated long–term
savings that could be secured as a result. NHS England told us that it had
set a budget for around 15,000 staff, and that Integrated Care Boards
(ICBs) employed approximately 25,000 further staff. NHS England confirmed
that both NHS England and NHS commissioners in ICBs were expected to
reduce their headcount by 50%. NHS England estimated that the headcount
reduction in NHS England, when completely delivered, would save around
£400 million per year. It also estimated that the headcount reduction in ICBs
would achieve savings of roughly between £700 million and £750 million on
an annualised basis once delivered.9
7. We asked the Department about reports that its headcount would also be
cut by 50%. The Department told us that it aimed to become “smaller and
leaner”. It said that it was not in a position to put a number on the reduction
in size of its headcount, confirming only that there would be a reduction.
The Department told us that it had announced a voluntary exit scheme
in early March 2025 and that it was also operating a cap on new external
appointments. It anticipated that these actions would equate to savings
worth £15 million per year which could then be used for frontline services.10
8. We observed that the scale of change was bigger in NHS England than
the Department, and so asked NHS England about its plans to reduce its
workforce. It confirmed that it did not currently have a detailed plan to
achieve that reduction. It told us it that it had implemented a recruitment
freeze, which it expected to reduce headcount by 10% as staff left and
were not replaced, but acknowledged that a redundancy scheme might
be required to achieve the remaining 40% reduction. We noted that
redundancy and reorganisation would cost money, and asked if NHS
England had estimated how much money it might need to spend on any
redundancy programmes to deliver the required headcount reduction.
NHS England told us that it did not have a firm estimate of this, but noted
8 Department of Health and Social Care 2022–23 Annual Report and Accounts , HC 459,
29 April 2024, pages 214–242
9 Qq 9, 13; NHS England, NHS England board members stepping down, 10 March 2025
10 Qq 2–4, 8 27

12
that “at best” it would assume that it would need to “pay on average
the annual salary if a redundancy package is required”, although its
turnover rate would mean that not everyone would be required to be
made redundant.11
9. We asked how the 50% headcount reduction will be applied to ICBs, noting
that some were already working efficiently and the importance of the
place–based approach in ensuring effective working between local councils,
directors of public health and local GPs. The Department expected that
the changes to ICBs would not lead to more centralisation. However, NHS
England was unable to clarify whether the 50% reduction in ICBs
represented a 50% reduction for each ICB individually or across system as
a whole. NHS England explained that the detail of the expectations on ICBs
would become clear as the 10–year plan for the NHS was finalised.12
10. It had previously been announced that NHS England’s Chief Executive,
Chief Financial Officer, Chief Operating Officer, National Medical Director
and Chief Delivery Officer and National Director for Vaccination and
Screening would step down from their roles.13 During our evidence session,
the Prime Minister announced that the Department and NHS England would
merge. In the context of these changes, we asked how the institutional
memory of NHS England would be preserved. NHS England could not explain
specifically how this would be retained. It stated that those remaining at
NHS England had a significant amount of experience, and that these people
would give continuity of knowledge.14
11. We asked the Department whether the current locally–led approaches
would be retained as part of the new structure to allow better local
accountability, and whether previous commitments about public health
and prevention would also be retained. The Department said that the
ideal set–up for an ICB to meet its commitments and be held to account
was through a good balance of stakeholders, including local authorities,
primary, secondary, community, and other care providers, to maintain local,
but joined up, accountability.15
11 Qq 9–10, 14
12 Q 17
13 NHS England, NHS Chief to stand down at end of March, 25 February 2025; NHS England,
England’s top doctor to stand down after over seven years, 6 March 2025; NHS England,
NHS England board members stepping down, 10 March 2025
14 Qq 20, 27
15 Q 26

13
The development of the Harlow Health
Security Campus
12. UKHSA’s purpose is to prevent, prepare for and respond to infectious
diseases and environmental hazards, and to provide scientific and
operational leadership to protect the public’s health and to build the
nation’s health security capability. UKHSA owns high containment science
laboratories at Porton Down and Colindale, which are nearing the end of
their operational life.16 These laboratories are a critical part of UKHSA’s
health protection mission and are required for protecting the nation against
highly infectious diseases. In 2024, UKHSA assured the previous Committee
that, with ongoing maintenance, its laboratories should be able to continue
operating for another fifteen years.17 However, the laboratories are currently
dependent upon remedial investment to keep them in operation, resulting in
periods of time where facilities are unavailable as they are being updated.
In 2024, UKHSA acknowledged that reliance on these ageing facilities
presents a significant but managed risk to public health.18
13. The need for a planned replacement to these facilities was initially identified
in 2006 and Public Health England (UKHSA’s predecessor public body)
was given approval to purchase the land in 2017. However, in February 2024
the NAO found that work on a replacement laboratory at Harlow had been
intermittent since the land was purchased, with the programme suspended
from 2022 after the Department reallocated funding to other departmental
priorities amid uncertainty about the programme. The earliest date at which
the Harlow campus could be ready was estimated at 2036. The NAO found
that estimates of the projected cost of building the facility had spiralled
upward, from an initial estimate of £530 million in 2015 to £3.2 billion
in 2023. This increase was partly due to factors such as rising inflation
but also due to the numerous delays encountered by the programme.19
UKHSA’s 2023–24 Annual Report and Accounts show that it has so far spent
some £400 million on work at Harlow, but has written off £297 million of
this spend to date, reflecting the costs of building work already done that it
cannot be certain will be completed.20
16 UKHSA Annual Report and Accounts 2023–24, HC 427, 16 December 2024, pages 4 and 35
17 Letter from Dame Meg Hillier to Shona Dunn and Professor Dame Jenny Harries,
24 May 2024
18 Report by the Comptroller and Auditor General, Investigation into the UK Health Security
Agency’s health security campus programme, HC 553, 20 February 2024, page 14
19 C&AG’s Report, Investigation into the UK Health Security Agency’s health security campus
programme, pages 8–11, 27
20 UKHSA Annual Report and Accounts 2023–24, page 141

14
14. We asked UKHSA what progress it had made in deciding what it would
do with the site. UKHSA told us that it was waiting for Ministers to decide
whether to continue development at Harlow or to change course to a
phased delivery option providing high containment facilities at Porton Down
with later refurbishment of supporting infrastructure at Porton Down
and Colindale. UKHSA told us that this decision was under “active review”
by Ministers and that it expected a decision to be made in the second part
of the spending review. It recognised that this was “now quite a critical
decision in terms of timeframe, because it takes a long time to build …
[and] commission them into service.” UKHSA informed us that that the
decision–making process was difficult and prolonged because the relative
costs and benefits of each option are finely balanced and difficult to
compare. To ensure that it was ready for a decision either way, UKHSA
said that it was working with the Infrastructure and Projects Authority
to ensure its model for overseeing the programme included sufficient
technical expertise.21 The Department should clarify the arrangements
for accountability, oversight, and the involvement and status of delivery
partners as soon as possible.
21 Qq 47–50

15
2 Protecting taxpayers’
money
The continuing impact of
clinical negligence
15. The Department recognised that each incidence of clinical negligence has
a tragedy behind it involving a patient. It told us that while the optimal
number of clinical negligence cases would be zero, this will never be a
practical target. Clinical negligence also comes with a monetary cost to
the taxpayer. The Department is required to make compensation payments
for pain suffered and the impact on the everyday lives of those who have
suffered negligence. In 2023–24, NHS Resolution, which administers
claims of clinical negligence for the Department, paid £2.8 billion in
cash to claimants.22
16. The Department recognises an amount for potential future compensation
payments for incidents of clinical negligence in its financial statements
as a liability. This is reported in the accounts of NHS Resolution and is
consolidated into the Departmental Group accounts. The Department
recognised a liability of £58.2 billion in its 2023–24 accounts to cover the
expected potential future costs of compensation for clinical negligence,
which included £9.3 billion set aside to cover incidents that occurred in
2023–24. The Department has identified a further £24.6 billion of clinical
negligence claims which it does not recognise as a liability but may need
to pay in the future.23 The Department’s clinical negligence liability is the
second largest liability across government.24
22 Q 59; Department of Health and Social Care Annual Report and Accounts 2023–24,
pages 262, 308; NHS Resolution, Annual Report and Accounts 2023/24, HC 73,
23 July 2024, pages 29, 166–167
23 Department of Health and Social Care Annual Report and Accounts 2023–24, pages 262,
306; NHS Resolution, Annual Report and Accounts 2023/24, HC 73, 23 July 2024,
pages 166–167, 188–189
24 Whole of Government Accounts, year ended 31 March 2023, HC 289, 26 November 2024,
page 67

16
17. The previous Committee were concerned that the Department was spending
billions of pounds of taxpayers’ money without an effective plan to minimise
future costs of the clinical negligence scheme.25 In April 2024, the Committee
recommended that, by summer 2024, “the Department should set out the
key reasons for patient harm and the actions it will take to address these,
ensuring that its plans will reduce health disparities, ensure better patient
outcomes, and reduce the costs for taxpayers”. In September 2024, in its
response to the Committee’s report, the Department committed to writing
to us by the end of 2024 to “set out the actions it is taking with NHS England
and other system partners to reduce patient harm and advance patient
safety in the NHS and improve outcomes for patients and the taxpayer”.26
It sent us a letter outlining its plans in February 2025.27 We therefore asked
the Department what it was doing to reduce patient harm and advance
patient safety. In response, the Department, whilst acknowledging that it
should get safety as close to perfect as possible, did not set out specific
actions that it was taking to progress in this area. The Department
told us that the number of claims of clinical negligence remains static
year on–year.28
18. The Department told us that around 19% of the total compensation
payments made in 2023–24 by NHS Resolution go to the claimants’ lawyers.
This equates to £536 million of the total £2.8 billion paid to claimants in
2023–24 , which is over one–and–a–half times the amount spent by the
Government Legal Department (the government’s principal legal advisers)
in totality across all of its legal activities in the same period.29 The previous
government announced plans to place limits on how much lawyers receive
from lower damages clinical negligence claims from April 2024, but the
required legislation was not introduced. The Department told us that to
reduce legal costs by moving to a no–fault compensation model would
likely be more expensive overall, whilst potentially not distinguishing
between those suffering as a result of negligence and those as a
result of an accident.30
25 Committee of Public Accounts, Thirty–First Report of Session 2023–24, Department of
Health and Social Care 2022–23 Annual Report and Accounts, HC 459, 29 April 2024,
page 6
26 Treasury Minutes, Government Response to the Committee of Public Accounts on the
Twenty-sixth to the Twenty-ninth, the Thirty-first, and the Thirty-third to the Thirty-eighth
reports from Session 2023–24 , CP 1151, September 2024, page 18, paragraph 4.4
27 Letter from the Interim Permanent Secretary of the Department for Health and Social
Care relating to the 31st Report of Session 2023–24, DHSC 2022–23 Annual Report and
Accounts, Recommendation 4, 25 February 2025
28 Qq 58–59
29 Qq 58–59; NHS Resolution, Annual Report and Accounts 2023/24, HC 73, 23 July 2024,
pages 166–167; Government Legal Department Account Report and Accounts 2023–24,
HC 74, 18 July 2024, page 64
30 Q 61; Department of Health and Social Care, Government to introduce legal costs cap to
support victims, 16 September 2023

17
Unapproved special severance payments
19. Exit packages are payments made in relation to redundancy and other
departure costs for employees. Special severance payments are a subset
of exit packages, relating to any non–contractual payments to employees.31
We have repeatedly raised issues with the Department or its organisations
making inappropriate or unapproved payments. In June 2022, the previous
Committee found that three Clinical Commissioning Groups (CCGs)
had approved and paid special severance payments without following
the required authorisation process. One of these payments resulted in the
C&AG qualifying his regularity audit opinion on the NHS England 2020–21
Annual Report and Accounts. The previous Committee warned in 2022 that
planned large–scale NHS restructuring increased the risk of future payoffs
and further non–compliance with the rules. It recommended that the
Department should set out how it would monitor and control the approval of
all redundancy payments made by entities within the Departmental Group.32
The Department agreed with our recommendation, and told us in its
response to our report that detailed written guidance relating to exit
payment processes and approvals had been circulated to CCGs and the
(then) proposed ICBs, and that separate arrangements were in place for
NHS Trusts and Foundation Trusts.33
20. Special severance payments always require prior HM Treasury approval,
as they are usually novel or contentious.34 In 2023–24, two NHS Trusts and
two NHS Foundation Trusts between them made five special severance
payments totalling £180,868 without the required approval. In his report on
the 2023–24 Consolidated Provider Account, the C&AG reported that, while
most NHS providers were following the correct procedures when proposing
to enter a special severance payment arrangement, some NHS providers
were still not following the requirements set by HM Treasury.35
21. We asked NHS England what progress it had made in addressing the
approvals and ensuring that payments being made without being approved
did not happen again. NHS England recognised that “every case that is
31 Report by the Comptroller and Auditor General, Consolidated NHS Provider Accounts
2023–24, HC 399, 26 November 2024, page 47; Department of Health and Social Care
Annual Report and Accounts 2023–24, pages 164, 189
32 Committee of Public Accounts, Sixth Report of Session 2022–23, Department of Health
and Social Care 2020–21 Annual Report and Accounts, HC 253, 10 June 2022
33 HM Treasury, Treasury Minutes: Government Response to the Committee of Public
Accounts on the Second, and the Fourth to the Eighth reports from Session 2022–23 ,
CP 708, August 2022
34 HM Treasury, Managing Public Money, May 2023, page 142
35 Report by the Comptroller and Auditor General, Consolidated NHS Provider Accounts
2023–24, HC 399, 26 November 2024, page 47; Department of Health and Social Care
Annual Report and Accounts 2023–24, HC 476, 17 December 2024, page 164

18
not properly approved is wrong”. It told us that it continued to work with
providers and ICBs to “remind them of their duties” including through
regular training sessions. NHS England told us that it considered its
current approach of reminding NHS providers of the requirements to be
proportionate, but was unable to guarantee that there will not be future
examples where NHS bodies fail to follow the process and obtain the
required approvals.36
22. We noted that the accounts showed there had been 240 cases where
retrospective approval had been sought for special severance payments,
and asked NHS England whether there were any consequences for making
these payments without the necessary approvals. NHS England said that
this was down to “a judgement about how proportionate the response is
in each case”. It said that, depending on the sum involved and what had
happened, it would “talk to the organisation and make sure that people are
spoken to”. We therefore asked whether any action had been taken against
anyone for making payments without the proper approval. NHS England
did not identify any specific actions beyond reminding individuals of the
authorisations required, and that it could not guarantee that this would not
happen in future given the size of the NHS.37
23. When the previous Committee reported on this in June 2022, it warned
that that the (then planned) large–scale restructuring of commissioning
within the NHS could increase the risk of further unapproved payments
being made.38 Given the announcements about the restructuring of NHS
England and the potential for large numbers of redundancies, we asked
the Department whether it planned to introduce a new mechanism to
approve these. Given the potential for many more unapproved payments
being made due to the scale of the redundancies the enforcement of this
mechanism needs to be carefully considered. The Department told us
that this had yet to be decided, but that when it had run similar schemes,
HM Treasury had approved the overarching business case for the overall
numbers, cost and time of the people due to leave the organisation, and
then processes had been set up inside the Department and NHS England to
manage it and ensure that appropriate governance was in place. It told us
that it “imagine[d] that … will happen again”.39
36 Qq 52–3, 55
37 Q 55
38 Committee of Public Accounts, Sixth Report of Session 2022–23, Department of Health
and Social Care 2020–21 Annual Report and Accounts, HC 253, 18 May 2022
39 Qq 53–55

19
3 Transparency and
accountability for the
Department’s spending
Usability of the Department’s Annual
Report and Accounts document
24. The Department was renamed the Department of Health and Social Care
(from the Department of Health) in January 2018, with the intention of
delivering a greater focus on adult social care. We observed that social
care is only reflected in “a lot of little bits” in the Department’s Annual
Reports and Accounts. We therefore asked how social care delivery for
users was being improved. NHS England told us that “a lot of work is
already going on” including moving towards having joint social care and
NHS assessment teams. It explained that this created a single process for
assessing the care package needed for each patient and how it should be
delivered, which should also result in earlier discharge from hospital. It also
told us that it had undertaken work over the last 18 months to consider how
it could improve intermediate care, focusing on physical rehabilitation when
patients were leaving hospital, which it planned to roll out in 2026.40
25. The Department’s Annual Report and Accounts also does not contain
analysis of the Department’s progress in improving productivity
and efficiency. We asked, given the importance of productivity to ensuring
that NHS expenditure was sustainable, if it would pay more attention to this
in future. The Department told us that productivity was “absolutely one of
the top priorities” as part of the 10–year plan and the spending review, and
committed to addressing this issue.41
26. We similarly asked about the Department’s progress on technological and
digital developments and the use of artificial intelligence (AI), as key areas
which could improve productivity. We were surprised that the Department’s
Annual Report and Accounts contains such little information on those
40 Q 71; National Audit Office, Departmental Overview: Department of Health & Social Care,
October 2018, page 3
41 Q 68

20
areas and asked for fuller details to be provided in future. The Department
explained that it was “absolutely developing a refreshed tech plan as part of
the productivity plan” and committed to place more focus on these areas in
its next Annual Report and Accounts.42
27. The NHS Long Term Plan states that ill health prevention helps the public to
stay healthy, as well as moderating demands on the NHS. The Department
recognised in its 2023–24 Annual Report that there “is still much work to do
to make a shift towards prevention in the NHS”.43 We observed that, with
the exception of a very short paragraph, the Department’s 2023–24 Annual
Report does not include a section on preventative work, or information on
outcomes arising from this spend. We asked the Department to ensure that
next year’s accounts had more importance paid to prevention, which it
agreed to.44 We also commented that it was difficult to find information in its
Annual Report and Accounts on how much the Department was spending on
palliative and end–of–life care, or what outcomes this spend was delivering,
which felt like a “huge omission”. The Department was unable to provide a
figure for this spending on our session, but told us that it would “definitely
change that for next year … [and] add more prominence to it”.45
28. NHS England’s Annual Report and Accounts and the Consolidated NHS
Provider Accounts show that there were 3,877 exit packages in the NHS in
2023–24, costing a total of £98 million. We asked NHS England whether
the use of exit packages had been increasing or decreasing. NHS England
was unable to provide this information in our session but told us that it
would confirm the precise number separately. Some 96 exit packages arose
following employment tribunals or court orders against NHS England, NHS
Trusts or NHS Foundation Trusts, at a cost of £1.3 million. We observed that
there was no breakdown of the legal costs relating to employment tribunals
and exit packages at NHS bodies within the Department’s or NHS England’s
Annual Reports and Accounts. We requested that the Department provide
this information to enable us to determine whether these were a good use of
public funds.46
42 Q 69; Department of Health and Social Care Annual Report and Accounts 2023–24,
HC 476, 17 December 2024, pages 38–39
43 Department of Health and Social Care Annual Report and Accounts 2023–24, HC 476,
17 December 2024, page 78; The NHS Long Term Plan, January 2019, page 7
44 Qq 28, 72
45 Qq 28, 72
46 Q 53; NHS England Annual Report and Accounts 2023–24, HC 251, 10 October 2024,
pages 96–97; Consolidated NHS Provider Accounts 2023/24, HC 399, 26 November 2024,
pages 82–83

21
Lack of timeliness of reporting
29. Timely production of accounts is essential to understanding public
finances and supporting accountability.47 All Departments should aim
to lay their accounts and those of their agencies no later than prior
to the Parliamentary summer recess. Departments have a statutory
deadline of 30 November to provide their accounts to the C&AG, and of
31 January to publish their annual report and accounts.48 The Department
published its accounts covering 2019–20 to 2022–23 in January each year,
six months after this deadline. When the previous Committee examined
the Department’s 2022–23 Annual Report and Accounts, it found that the
Department had not published its Group Accounts until 25 January 2024,
10 months after the financial year end. It concluded that its continued failure
to deliver its accounts to an earlier timetable hampered effectively and
timely accountability of taxpayers’ money. It warned that the Department’s
plans to return to a pre–summer recess timetable were becoming less
and less ambitious and would result in it taking until 2029 to achieve a
pre–summer recess publication rather than the 2025–26 financial year it
previously committed to.49 Given the scale of work that will be required
to integrate NHS England into the departmental accounts following NHS
England’s abolition, the accounts production and audit process will need to
be carefully planned otherwise timelines could slip further back.
30. The Department published its 2023–24 accounts on 17 December 2024, five
months after the summer Parliamentary recess deadline. The Department
has reported that there continues to be significant challenges in bringing
the laying of its accounts back to a pre–summer recess timetable.50
31. The delays to the accounts were the result of challenges in preparing
the accounts of UKHSA and delays in completion of local NHS audits.51
UKHSA was subject to a disclaimed audit opinion in 2021–22 and 2022–23,
with significant remedial work being required to complete the 2023–24
accounts, causing delays. NHS England and the Consolidated NHS
47 Committee of Public Accounts, Thirty–First Report of Session 2023–24, Department of
Health and Social Care 2022–23 Annual Report and Accounts, HC 459, 10 May 2024
48 HM Treasury, Dear Accounting Officer letter, Accounts Directions 2023–24,
14 December 2023
49 Committee of Public Accounts, Thirty–First Report of Session 2023–24, Department of
Health and Social Care 2022–23 Annual Report and Accounts, HC 459, 10 May 2024
50 Report by the Comptroller and Auditor General, Department of Health and Social Care
Annual Report and Accounts 2023–24, page 3; Department of Health and Social Care
Annual Report and Accounts 2023–24, page 138
51 Department of Health and Social Care Annual Report and Accounts 2023–24, HC 476,
17 December 2024, page 138

22
Provider Accounts rely on the individual audits of 42 NHS Commissioners
and 211 NHS providers respectively, which are incorporated into their own
group accounts.52
32. NHS England set a deadline of 28 June 2024 for the completion of the
financial audits of NHS Commissioners and NHS Providers. Almost a
fifth (18.0%) of NHS Providers and a tenth (9.5%) of NHS Commissioners
missed the 28 June 2024 deadline.53 The previous Committee called on
the Department to strengthen its governance and financial controls and
set out a clear plan to restore timely accountability across its group and
improve its financial reporting.54 The C&AG reported that the Department’s
timetable for completion of the NHS provider and ICB audits will need to be
significantly advanced, and the remaining weaknesses in the UKHSA control
environment will need to be addressed, to meet its target of a pre–summer
recess sign–off by 2026–27.55
33. We asked the Department and NHS England why so many NHS
commissioners and NHS providers missed the deadline for completing
their financial audits, and what it was doing to ensure that this improved.
NHS England recognised that the number of organisations who were
meeting the June deadline was lower than before the COVID–19 pandemic,
but told us that this was improving. It told us that one of the reasons for
the delays was “definitely the overall pressure on the local audit market”
and the trade–off audit firms were making between undertaking local
authority accounts and NHS accounts. It told us that “there are no systemic
problems” with NHS bodies that were contributing to delays, and that it
expected to see continual improvement.56
34. In September 2024, the Department told us that its aim was to lay its
accounts in Parliament at least a month earlier each year and that
its target was to reach a pre–summer recess laying for the 2026–27
financial year.57 Given the issues within local authority audit, we asked NHS
England whether it was working with the Ministry of Housing, Communities
52 UKHSA Annual Report and Accounts 2023–24, HC 427, 16 December 2024, page 154–155;
NHS England Annual Report and Accounts 2023–24, page 178; Consolidated NHS Provider
Accounts 2023/24, page 48
53 NHS England Annual Report and Accounts 2023–24, HC 251, 10 October 2024, page 124;
Consolidated NHS Provider Accounts 2023/24, HC 399, 26 November 2024, page 45
54 Committee of Public Accounts, Thirty–First Report of Session 2023–24, Department of
Health and Social Care 2022–23 Annual Report and Accounts, HC 459, 29 April 2024,
paragraph 3
55 Department of Health and Social Care 2022–23 Annual Report and Accounts , HC 459, 29
April 2024, page 239
56 Qq 64–65
57 Treasury Minutes, Government Response to the Committee of Public Accounts on the
Twenty-sixth to the Twenty-ninth, the Thirty-first, and the Thirty-third to the Thirty-eighth
reports from Session 2023–24 , CP 1151, September 2024, page 16, paragraph 2.2.

23
and Local Government (MHCLG) to improve the position of local audit in
future and help prevent delays. NHS England told us that it was working
with MHCLG, the Department, and the NAO to make sure that future audit
arrangements were sustainable for both the NHS and local authorities.
The Department and NHS England told us they were closely linked to the
MHCLG consultation process on reforms to the local audit market and that
their views, concerns, and requirements had been taken into account.
The Department emphasised, though, that moving towards pre–summer
recess certification would require a sizable change in the capacity of the
local audit market. NHS England told us, however, that there was no firm
timeframe of when it expected that local auditors would be able to increase
their capacity.58
58 Q 67

24
Formal minutes
Monday 28 April 2025
Members present
Sir Geoffrey Clifton-Brown, in the Chair
Mr Clive Betts
Nesil Caliskan
Luke Charters
Peter Fortune
Rachel Gilmour
Sarah Green
Sarah Hall
Lloyd Hatton
Sarah Olney
Rebecca Paul
Oliver Ryan
Declaration of interests
The following declarations of interest relating to the inquiry were made:
13 March 2025
Nesil Caliskan declared the following interest: former employee
NHS England.
Anna Dixon declared the following interest: member of the All-Party
Parliamentary Group on Patient Safety.

25
DHSC Annual Report and Accounts
2023-24
Draft Report (DHSC Annual Report and Accounts 2023-24), proposed by
the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph
by paragraph.
Paragraphs 1 to 34 read and agreed to.
Summary agreed to.
Introduction agreed to.
Conclusions and recommendations agreed to.
Resolved, That the Report be the Twenty-Fifth Report of the Committee
to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available
(Standing Order No. 134).
Adjournment
Adjourned till Thursday 8 May at 9.30 a.m.

26
Witnesses
The following witnesses gave evidence. Transcripts can be viewed on the
inquiry publications page of the Committee’s website.
Thursday 13 March 2025
Professor Sir Chris Whitty, Acting Permanent Secretary and Chief Medical
Officer, Department of Health and Social Care (DHSC); Andy Brittain, DHSC
Director General, Finance, Department of Health and Social Care (DHSC);
Professor Dame Jenny Harries, Chief Executive, UK Health Security Agency
(UKHSA); Julian Kelly, Chief Financial Officer and Deputy Chief Executive,
NHS England Q1-74
Published written evidence
The following written evidence was received and can be viewed on the
inquiry publications page of the Committee’s website.
DAR numbers are generated by the evidence processing system and so may
not be complete.
1 Cook, Mr Nigel D DAR0002

27
List of Reports from the
Committee during the
current Parliament
All publications from the Committee are available on the publications page
of the Committee’s website.
Session 2024–25
Number Title Reference
24th Government cyber resilience HC 643
23rd The cost of the tax system HC 645
22nd Government’s support for biomass HC 715
21st Fixing NHS Dentistry HC 648
20th DCMS management of COVID-19 loans HC 364
19th Energy Bills Support HC 511
18th Use of AI in Government HC 356
17th The Remediation of Dangerous Cladding HC 362
16th Whole of Government Accounts 2022-23 HC 367
15th Prison estate capacity HC 366
14th Public charge points for electric vehicles HC 512
13th Improving educational outcomes for
disadvantaged children
HC 365
12th Crown Court backlogs HC 348
11th Excess votes 2023-24 HC 719
10th HS2: Update following the Northern leg
cancellation
HC 357
9th Tax evasion in the retail sector HC 355
8th Carbon Capture, Usage and Storage HC 351
7th Asylum accommodation: Home Office acquisition
of former HMP Northeye
HC 361
6th DWP Customer Service and Accounts 2023-24 HC 354
5th NHS financial sustainability HC 350
4th Tackling homelessness HC 352

28
Number Title Reference
3rd HMRC Customer Service and Accounts HC 347
2nd Condition and maintenance of Local Roads in
England
HC 349
1st Support for children and young people with
special educational needs
HC 353