- Trusts told to pay suppliers within seven days, instead of usual 30
- Some suppliers could continue receiving payments during pandemic, even if their supplies have been paused
NHS organisations have been told to pay for goods and services within seven days of receiving them, as regulators attempt to reassure suppliers and bolster their cash flows.
NHS England and NHS Improvement have issued new procurement guidance asking trusts and commissioners to speed up payments by three weeks against the normal invoice target of 30 days.
The guidance, published 20 April, also suggests some suppliers could continue receiving payments during the pandemic, even if their supplies have been paused.
The guidance stated that with “immediate effect all NHS organisations must aim to implement… payment of all invoices within 7 days of receipt of goods and service”.
It said organisations should escalate to regional teams where they cannot improve payment times.
Many trusts have struggled to meet the 30-day target for several years, but significant sums of cash have been set aside for the NHS during the pandemic, with the chancellor promising “whatever it needs”.
NHS finance teams were given greater flexibility with block contracts and the suspension of several performance-related targets to focus on areas, including cash flow.
Meanwhile, many businesses are struggling with reduced cash flows due to the national lockdown and social distancing measures.
The new guidance also set out where payments can be made to suppliers of goods or services “where provision is reduced or paused temporarily” during the pandemic.
It said: “There is a requirement for national coordination regarding payment where goods and/or services will not be received in time, or in full, or provision thereof may be paused due to covid-19.”
It added local officials should contact the national finance team before making any agreement, stating: “NHS England and NHS Improvement will ensure that, where payments are agreed (on an emergency basis), it will be on an open book basis to ensure there is not profiteering or cross subsidisation and that the supplier has taken all appropriate mitigations.”