The National Audit Office has published its report into supply chain finance in the NHS, following the failure of Greenshill Capital in March 2021. The National Audit Office (NAO) scrutinises public spending for Parliament and is independent of government and the civil service. It helps Parliament hold government to account and it uses its insights to help people who manage and govern public bodies improve public services.
Greenshill Capital is an early payment scheme to community pharmacies and salary advances to employees of NHS Trusts, it was found not to provide any material benefits to the NHS, nor did it receive the expected uptake. Greenshill Capital entered administration in March and was providing two sub-schemes, the Pharmacy Earlier Payment Scheme (PEPS) and the Employer Salary Advance Scheme (or ESAS). PEPS “provided supply chain finance to community pharmacies in England to allow them to be reimbursed for dispensing prescriptions earlier than the normal payment timetable”. ESAS “allowed employees of participating NHS Trusts to receive a proportion of their earned salaries before payday without incurring charges”.
The NAO was told by NHS Trusts that scheme was implemented on the basis that it would improve financial wellbeing for employees. Following the hearings by the select committees, the Comptroller and Auditor General decided to examine Greensill Capital’s involvement in supply chain finance for community pharmacies and NHS employees – given recent events and the Committee of Public Accounts’ interest in this area.
The report states that no evidence that the predicted benefits and savings from introducing supply chain finance into pharmacy reimbursement processes in 2013 were realised. Investigations also found the Government did not undertake a separate procurement exercise for the original PEPS, which ran for five years, as the operation of the scheme was awarded to Citibank under a pre-existing contract with the Government Banking Service. The Department for Health now intends to introduce a revised payment timetable for all pharmacies in November 2021, which will reduce the normal payment timetable by 20 days.