• 44 out of 135 acute trusts paid less than half their invoices on time in 2017-18
  • Deterioration comes as the Department of Health and Social Care introduces tougher restrictions on short term cash support
  • Full list of the worst payers

A third of acute trusts routinely break the law by paying their suppliers late, HSJ can reveal.

Contract regulations mean public bodies are required to pay invoices to non-NHS suppliers within 30 days, but dozens of hospital providers have resorted to delaying payments to manage their cash flows.

According to data obtained from regulators, 44 out of 135 acute trusts (33 per cent) paid less than half their invoices within 30 days in 2017-18. Research by HSJ suggests this figure has gradually increased from around 27 per cent in 2016-17, 19 per cent in 2015-16, and 10 per cent in 2014-15.

The regulations were introduced after concerns that late payments were often a major cause of insolvency for small and medium sized companies.

The DHSC has publicly stated it “does not endorse” late payments, and yet the deterioration has come as it has introduced tougher restrictions on short term cash support. Many hospitals with budget deficits rely on these funds to maintain their supplier payments.

Tracking invoice payments to non-NHS suppliers

When asked why they did not draw down sufficient cash support to pay suppliers on time, four of the slowest payers, East Kent Hospitals University Foundation Trust, The Queen Elizabeth Hospital King’s Lynn FT, Croydon Health Services Trust, and South Tees Hospitals FT all cited restrictions on the support available.

The DHSC was contacted for comment but did not respond.

Trusts also have a financial incentive to slow down invoice payments, as their capital charges are reduced if they hold higher cash balances.

In December last year, Jim Mackey, the former chief executive of NHS Improvement, said it was “outrageous” that so many trusts were paying their invoices late, and suggested the restrictions on cash support were misjudged.

Several trusts have confirmed that some suppliers have put their accounts “on stop” and refused to deliver further supplies because of late payments.

In one of the more extreme examples, an external investigation found that patient safety had been put at risk at Barking, Havering and Redbridge University Hospitals Trust after it routinely delayed its payments and some key suppliers ceased making deliveries.

Nationally, trusts’ performance is measured under an indicator called the Better Payment Practice Code, which says they should pay at least 95 per cent of invoices within this timeframe. Average performance against this threshold has also declined, while just 10 trusts met the standard last year.

The deterioration also reflects an increasing number of trusts struggling to maintain adequate cash levels due to their recurring income and expenditure deficits.

Medway FT, the worst performer against the BPPC standard last year, said it has introduced a new payment process, and it is now paying around 44 per cent of non-NHS invoices on time.

The trust added: “We appreciate that we still have some way to go in ensuring our creditors are paid quickly and aren’t inconvenienced by late payments. The senior members of the finance team speak directly to suppliers to address any specific delays on their accounts that require intervention.”

The Rotherham FT, South Tees Hospitals FT, and University Hospitals of Leicester Trust said their performance had significantly improved in 2018-19, while Airedale FT, said issues were caused by new payment ledger.

Under the Late Payment of Commercial Debts (Interest) Act 1998, suppliers can claim statutory interest of 8 per cent on valid and undisputed invoices not paid within 30 days. But suppliers have told HSJ they are often reluctant to take this approach, because of the NHS’s buying power.

HSJ obtained the 2017-18 data from NHSI via a freedom of information request. Data from previous years was collated from trusts’ annual reports, and typically did not include data from around 10 to 15 providers. 

You can see the data for every acute trust here.

Worst payers in 2017-18

ProviderNon-NHS invoices paid on time (by number)Non-NHS invoices paid on time (by value)Value of late payments (£m)
Medway NHS Foundation Trust 5% 10% £93.7
Queen Elizabeth Hospital King’s Lynn NHS Foundation Trust 11% 15% £56.2
East Kent Hospitals University NHS Foundation Trust 12% 45% £192.1
York Teaching Hospital NHS Foundation Trust 12% 41% £144.3
Western Sussex Hospitals NHS Foundation Trust 13% 46% £104.5
The Rotherham NHS Foundation Trust 14% 20% £70.0
Barnsley Hospital NHS Foundation Trust 15% 36% £45.2
Derby Teaching Hospitals NHS Foundation Trust 14% 40% £148.4
Barking, Havering and Redbridge University Hospitals NHS Trust 16% 55% £114.2
Harrogate and District NHS Foundation Trust 16% 56% £42.1
The Hillingdon Hospitals NHS Foundation Trust 18% 51% £70.3
East Sussex Healthcare NHS Trust 19% 28% £114.9
Walsall Healthcare NHS Trust 19% 44% £52.6
West Hertfordshire Hospitals NHS Trust 21% 19% £120.0
Cambridge University Hospitals NHS Foundation Trust 21% 23% £311.7
Airedale NHS Foundation Trust 23% 65% £35.9
Heart of England NHS Foundation Trust 26% 31% £170.9
South Tees Hospitals NHS Foundation Trust 27% 50% £138.3
University Hospitals of Leicester NHS Trust 29% 63% £209.7
Croydon Health Services NHS Trust 29% 54% £76.1
Warrington and Halton Hospitals NHS Foundation Trust 30% 45% £40.5
Maidstone And Tunbridge Wells NHS Trust 30% 44% £111.1
Northern Lincolnshire and Goole NHS Foundation Trust 31% 21% £144.2
North Cumbria University Hospitals NHS Trust 32% 56% £55.0
Great Western Hospitals NHS Foundation Trust 32% 62% £92.6
Royal Free London NHS Foundation Trust 35% 49% £404.6
The Shrewsbury And Telford Hospital NHS Trust 33% 38% £82.7
North Tees and Hartlepool NHS Foundation Trust 35% 45% £48.5
West Suffolk NHS Foundation Trust 37% 54% £58.6
The Royal Liverpool and Broadgreen University Hospitals NHS Trust 38% 51% £137.2
The Princess Alexandra Hospital NHS Trust 40% 49% £43.0
Hampshire Hospitals NHS Foundation Trust 40% 74% £8.0
Tameside and Glossop Integrated Care NHS Foundation Trust 42% 69% £39.5
Lancashire Teaching Hospitals NHS Foundation Trust 42% 65% £86.2
St George’s University Hospitals NHS Foundation Trust 43% 48% £187.5
The Ipswich Hospital NHS Trust 44% 56% £84.3
Wye Valley NHS Trust 45% 60% £40.0
Hull And East Yorkshire Hospitals NHS Trust 46% 48% £124.9
Blackpool Teaching Hospitals NHS Foundation Trust 46% 70% £57.8
Calderdale and Huddersfield NHS Foundation Trust 46% 63% £63.9
Colchester Hospital University NHS Foundation Trust 47% 65% £67.1
Taunton and Somerset NHS Foundation Trust 47% 67% £55.2
Mid Essex Hospital Services NHS Trust 49% 66% £67.4
Gateshead Health NHS Foundation Trust 48% 77% £18.6

 

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