Late NHS payments shut down staff agencies
Employment agencies that supply staff to the National Health Service are going bust because NHS trusts have put off paying them in their attempts to deal with big overspends in the health service. At the same time, suppliers of equipment and tests to the NHS say they are owed tens of millions of pounds- which is the result of hospitals putting off paying bills from the last financial year to this.
Williams Kennedy, the accountancy firm, said it had been appointed as administrators and liquidators to three recruitment groups in recent weeks, including one, Worldwide Recruitment Group, with a £20m turnover. Keith Stevens, a business recovery partner at the firm, said: "This is the first collateral damage from the NHS's funding crisis." The service in England was projecting a £790m overspend at the end of January, with Wales clocking up a similar pro-rata deficit.
Late payment left the companies unable to meet their tax and national insurance bills, with action by Revenue and Customs then triggering bankruptcy, Mr Stevens said.
Meanwhile, Doris-Ann Williams, director-general of the British In Vitro Diagnostics Association, said a survey of members who supply pathology equipment and agents showed they were now owed "in excess of £50m" over and above the normal trading terms of 30 days payment.
This compared with a turnover for the sector of about £315m a year, she said. "We haven't had any companies go under yet. But it is causing plenty of them problems with their cash flow."
Some NHS trusts were now asking for retrospective discounts on last year's prices or demanding price cuts for this year's supplies, Ms Williams added.
"They really are looking for pennies down the back of the sofa, but it all adds up for our members who are their suppliers," she said.
Trade bodies for companies who supply nurses, IT staff and others to the NHS said they were looking to tighten their credit control procedures with the health service to ensure they were paid more promptly.
Private sector staffing agencies have anyway been put under pressure by the service's development of NHS Professionals, its own in-house staffing agency.
The Recruitment and Employment Federation has complained to the European Commission that the activities of NHS Professionals have put it in breach of competition law.
A few hospitals and health authorities had to borrow tens of millions of pounds from other parts of the NHS at the end of the last financial year to pay staff and suppliers. Others are having to make significant cuts in staffing to cope with reduced payments for NHS procedures which were aimed at getting the service back on a sound financial footing.
http://news.ft.com/cms/s/a3082afc-e6d3-11da-a36e-0000779e2340.html
Williams Kennedy, the accountancy firm, said it had been appointed as administrators and liquidators to three recruitment groups in recent weeks, including one, Worldwide Recruitment Group, with a £20m turnover. Keith Stevens, a business recovery partner at the firm, said: "This is the first collateral damage from the NHS's funding crisis." The service in England was projecting a £790m overspend at the end of January, with Wales clocking up a similar pro-rata deficit.
Late payment left the companies unable to meet their tax and national insurance bills, with action by Revenue and Customs then triggering bankruptcy, Mr Stevens said.
Meanwhile, Doris-Ann Williams, director-general of the British In Vitro Diagnostics Association, said a survey of members who supply pathology equipment and agents showed they were now owed "in excess of £50m" over and above the normal trading terms of 30 days payment.
This compared with a turnover for the sector of about £315m a year, she said. "We haven't had any companies go under yet. But it is causing plenty of them problems with their cash flow."
Some NHS trusts were now asking for retrospective discounts on last year's prices or demanding price cuts for this year's supplies, Ms Williams added.
"They really are looking for pennies down the back of the sofa, but it all adds up for our members who are their suppliers," she said.
Trade bodies for companies who supply nurses, IT staff and others to the NHS said they were looking to tighten their credit control procedures with the health service to ensure they were paid more promptly.
Private sector staffing agencies have anyway been put under pressure by the service's development of NHS Professionals, its own in-house staffing agency.
The Recruitment and Employment Federation has complained to the European Commission that the activities of NHS Professionals have put it in breach of competition law.
A few hospitals and health authorities had to borrow tens of millions of pounds from other parts of the NHS at the end of the last financial year to pay staff and suppliers. Others are having to make significant cuts in staffing to cope with reduced payments for NHS procedures which were aimed at getting the service back on a sound financial footing.
http://news.ft.com/cms/s/a3082afc-e6d3-11da-a36e-0000779e2340.html
posted by Dr Search- Principal Consultant at the Search Clinic at
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