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Despite previous experience of contractor failures, CCS and the Department did not act on lessons...
Recommendation
Despite previous experience of contractor failures, CCS and the Department did not act on lessons from previous cases. The Department, CCS and NHS Business Services Authority (NHSBSA) assessments of risks did not flag issues with having a single supplier on the Supplier Early Payment Solution framework or that taxpayers’ The pharmacy early payment and salary advance schemes in the NHS 7 funds may be required in the event of supplier failure. We do now know that this risk crystallised, as Greensill Capital eventually failed. Although CCS considered the risk of Taulia failing, and requested a financial guarantor, it did not consider the risk of Greensill Capital failing, and Greensill was the key sub-contractor. This Committee has reported before that understanding what capability government still lacked in letting and managing contracts was an important strategic issue and identifying and plugging these gaps may have helped to avoid the lack of a proper risk assessment on supplier resilience and the consequences of Greensill Capital’s failure for government Issues around the continued challenges in quality, accessibility and integrity of data raised by the inquiry into the collapse of Carillion reverberate here, as we now know that the predicted savings for the NHS cannot be reliably measured. The lack of a business case to support the decision made in July 2020 to reimburse pharmacies even earlier than previous arrangements also points to a continuing challenge in the quality, accessibility and integrity of data. Recommendation: The Department and CCS should establish a cohesive and robust methodology for assessing suppliers’ risk profiles and resilience and develop steps to improve information sharing between the two organisations and across government. Procedures should include processes for assessing contractors’ financial viability; potential to deliver the required goods and services; and that assessments are reviewed at appropriate intervals, such as when cont
Government Response
A response document is linked to this report, dated 28 April 2022. Response attribution to this recommendation has not been verified. Read the response document.
Source
Committee
Public Accounts Committee
Inquiry
NHS supply chain finance
Report
Thirty-Fifth Report - The pharmacy early payment and salary advance schemes in the NHS
04 Feb 2022
HC 745
Addressee Bodies
HM Treasury
Timeline
Recommendation age
4.6 yrs
Report published
04 Feb 2022