Two schemes offered by Greensill Capital – an early payment scheme to community pharmacies and salary advances to employees of NHS Trusts – did not receive the expected uptake and offered no material benefits to the NHS, according to the National Audit Office (NAO).

Greensill Capital was involved in providing two schemes to the NHS before it entered administration in March 2021. The first scheme, known as the Pharmacy Earlier Payment Scheme (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.1 The second scheme, the Employer Salary Advance Scheme (or ESAS), allowed employees of participating NHS Trusts to receive a proportion of their earned salaries before payday without incurring charges.

Supply chain finance for community pharmacies

PEPS was introduced by the Department of Health and Social Care (the Department) in 2013. The Department estimated that PEPS could save the NHS £100 million per year in the cost of pharmaceutical supplies. This was based on advice provided by Lex Greensill, who was an adviser to government on supply chain finance between 2012 and 2015. The NAO has found no evidence that these predicted savings were realised.

Lex Greensill attended a key meeting in March 2017 about setting up a framework agreement for supply chain finance. The subsequent process led the Crown Commercial Service (CCS) to appoint Taulia Inc as the sole framework supplier in April 2018. Greensill Capital acted as financial guarantor for Taulia to allay concerns about Taulia’s financial standing. NHS Business Services Authority (NHSBSA) then contracted with Taulia for supply chain finance for PEPS, replacing Citibank who had held the contract since 2013.

Lex Greensill and Taulia threatened legal action when CCS assessors initially excluded Taulia from bidding for the framework because of concerns about Taulia’s ability to grow the number of businesses involved in the scheme. Following a review, a new assessment panel was appointed by CCS, who reinstated Taulia. The NAO has seen no evidence that there was any discussion of a potential conflict of interest in relation to Greensill Capital being appointed as a subcontractor for supply chain finance services, about which Lex Greensill had earlier provided advice.

Fewer community pharmacies in England participated in the scheme than anticipated. CCS and the Department estimated that 60-80% of pharmacies would enrol in PEPS by 2022-23. 14% (1,615) participated in the scheme when Taulia and Greensill Capital took over PEPS in 2018, and this remained broadly flat until June 2020. In July 2020, PEPS was amended to allow pharmacies to obtain funds at the beginning of the month, prior to dispensing prescriptions. Following this change, participation increased and by April 2021, 20% (2,170) of pharmacies were participants.

The collapse of Greensill in March 2021 triggered emergency action by the Department and HM Treasury to authorise NHSBSA to make direct payments to all pharmacies within the scheme, processing total monthly payments of £144 million. The Department told the NAO that if it had not intervened, a significant number of pharmacies could have faced financial difficulties.

Due to low participation in the scheme and low interest rates, the cost to the taxpayer of taking over the amended payment schedule was minimal.2 However, reimbursing participating pharmacies in advance of their dispensing activity created the risk of a pharmacy borrowing money but ceasing to trade before dispensing prescriptions in the month ahead. The combination of the collapse of Greensill Capital, and the need for government to step in to pay pharmacies, therefore resulted in the Department making payments in advance of need. This required special HM Treasury approval because such payments should be “exceptional and should only be considered if a good value for money case for the Exchequer can be made.”3

No other finance provider was willing to take on Greensill Capital’s role as subcontractor, and the contract with Taulia was terminated by NHSBSA in June 2021. Since March 2021, NHSBSA has continued to pre-fund pharmacies that were in PEPS. A new arrangement for paying community pharmacies will be in place from November 2021.4

Salary advance schemes for NHS employees

Between 2019 and 2021, Greensill Capital marketed a salary advance scheme called ‘Earnd’ to NHS Trust employers and other central government bodies. Greensill told employers that the service was free as part of its corporate social responsibility agenda. Greensill sought to secure the NHS as a customer before commercialising Earnd in the private sector.

NHS Trusts told the NAO that they implemented the scheme on the basis that it would improve financial wellbeing for employees. The NAO surveyed a sample of Trusts and found that between 1.3% and 10% of their staff have used salary advance schemes; active users typically drew down between £25 and £84 per transaction; and most active users made between 2 and 5 transactions per month. The NAO identified seven NHS Trusts that implemented Earnd.

Government advised all departments not to implement salary advance schemes. The Department of Health and Social Care told the NAO that owing to an oversight it cascaded this guidance to its arm’s-length bodies only recently, and has not disseminated it to NHS Trusts because they are legal entities in their own right.

The collapse of Greensill Capital resulted in some Trusts switching to a paid-for salary advance scheme. Wagestream, which charges for its services, acquired the right to approach Earnd’s customers in the UK. Some Trusts have switched to this provider, thereby incurring costs where previously they received the service for free.

Read the full report

Investigation into supply chain finance in the NHS

Notes for editors

  1. Supply chain finance is a financial transaction whereby a lender finances a supplier on behalf of the customer. In this case, it allows the pharmacy (supplier) to be paid for prescriptions dispensed earlier than the NHS (customer) timescales, in return for a fee or interest charge from the lender (Greensill Capital).
  2. The annual interest expense for government of this working capital requirement is around £144,000.
  3. Managing Public Money: Managing public money - GOV.UK (
  4. NHSBSA announcement: Pharmacy Earlier Payment Scheme (PEPS) announcement from DHSC (26 August 2021) | NHSBSA
  5. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
About the NAO 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. The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The NAO audits the financial accounts of departments and other public bodies. It also examines and reports on the value for money of how public money has been spent. In 2020, the NAO’s work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £926 million.

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