Supplier relief and care market

Supplier relief and care market

24 April 2020 By Andy Perrins - Category Manager of Social Care at YPO

calendar and pot of money

All providers/suppliers are under pressure to maintain services during the COVID-19 crisis and this is especially impacting the care sector, which is facing unprecedented demand and operational challenges.

As an already fragile sector, it needs as much assistance as possible from contracting authorities who purchase large amounts of essential care and support from care homes, home care providers and transport providers.

The Supplier Relief PPN has directed contracting authorities to act and ensure cash flow and business continuity is maintained. This can be a challenge from a managing provider payments perspective, especially in a fast moving and changing purchasing environment, such as home care, where care packages can often vary on a daily basis, based on the needs of individuals. Contracting authorities may find it difficult to make adjustments to their invoicing and payment systems to take into account revised arrangements as a result of the PPN.  Managing this effectively is likely to take a significant amount of staff time and increase risk of invoice and payment errors.   

Due to the lockdown most home-to-school transport has ceased, but not all.  Local authority teams have been under pressure to react quickly to change and amend routes, to help ensure children of key workers and SEND children can get to school. This has meant that they have had to communicate with the entire supply chain and has left many suppliers without work. They also need to figure out what to do in terms of payments, as cutting funding completely could be terminal for many small businesses.

The government has provided some guidance to local authorities and has suggested that financial support for businesses is appropriate. However, the guidance is ambiguous, as the level paid out is down to each local authority to determine. In fact, some may choose not to pay anything.

At YPO we believe strongly in adding value to how you work with the wider care and support sector and have some examples of how one provider is doing this with a number of customers. 

 To facilitate provider cashflow they have taken the following actions:

  • For certain customers they are paying based on planned hours. They are generating a weekly invoice to the council for the committed (planned) amount. The customer pays and they handle the payment out to providers. This takes the time of service receipting or invoicing away from provider and guarantees cashflow.
  • Over the longer term they are then asking providers to tell them the care they actually delivered in the normal way through raising service receipts. They are then reconciling the two figures so they can tell customers, contracting authorities, the difference between the amount paid on planned and the amount delivered. This is all handled with no disruption or change to process for customer or provider. If necessary, at the end of this process the difference in value can be claimed back as necessary from central gov/provider or written off depending on policy.
  • They have also facilitated uplifts for all providers on behalf of two customers – this way they have added a percentage on top of their normal rate amount. This is again handled with no disruption the provider or customer by a simple rate load. The service receipts and invoices are then processed in the normal way for a greater amount. Again, reporting allows this value to be visible so the customer can see the amount raised for COVID-19 specific payments
  • For another customer they have processed a float payment to each provider. This has given them an advance of eight weeks funds to maintain cashflow. They will then help the customer recoup this later when things return to normal.
  • Outside of this they are handling all supplier communications, surveys, capacity trackers etc for several customers. 
  • Facilitate communication with the entire supply chain quickly and efficiently
  • Added additional cost codes to track financial support due to COVID-19
  • Quickly implement new payment process to speed up payments to suppliers

 

To find out more around actions local authorities are or can take in relation to supplier relief, get in touch with our Category Manager of Social Care, Andy.

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