An official Procurement Policy Note has been sent out by the government to the public sector on continuing to pay suppliers for goods and services. This is to try to ensure that goods and services will continue during and after the Covid-19 lockdown and to avoid companies struggling or closing altogether resulting in the loss of these services.
The linked government briefing outlines all the actions, but this article will outline the salient points.
Even if services are disrupted or temporarily suspended payment should continue as normal. Approaches like forward ordering and payment in advance of receipt of goods and services at the order stage are being proposed. This also includes the payment of invoices issued by suppliers straight away to maintain cash flow and retain jobs.
Who Does the Government Procurement Policy Note Apply to?
This notice is applicable to executive agencies, local authorities, the NHS, the wider public sector as well as government departments.
Why is the Government Taking These Steps?
There are two main reasons the government are asking the public sector to maintain payments to suppliers, they are:
- To ensure the survival of the supplier through maintained cash flow so that the service can be maintained throughout the crisis and afterwards.
- To ensure suppliers are able to continue to pay their employees as well as maintain their jobs.
The Procurement Policy Note also asks people to spread the note so that as many people in your organisation and beyond are aware.