NHS crisis starting to hit healthcare agencies_2
17 September 2012
NHS financial crisis is hitting recruiters
Hospitals paying agencies late because of the financial crisis in the NHS have contributing to forcing several recruiters into administration, an accountancy firm has claimed.
Wilkins Kennedy has been appointed administrator and liquidator of three recruitment groups that specialise in healthcare cover in the past few weeks. One is Worldwide Recruitment Group, which went into administration in January (Recruiter, 22 March). The two other recruitment groups were Quality Care London and Mansfield-based Industrial Staff Management.
Keith Stevens, partner at Wilkins Kennedy’s business recovery department, referred to the impact on the agencies as the “first collateral damage from the NHS funding crisis”.
He said: “When an NHS Trust delays payment for the contract staff they are using, the staffing agencies will soon suffer. I’m not saying it was the only thing (that put the firm in administration) but it was certainly a major factor.”
Wilkins Kennedy said staffing agencies are often seen as a soft target by organisations that are looking to improve their cash flow.
Stevens told Recruiter: “We’re chasing payments from six months ago. The Trusts aren’t disputing the invoices. They’re just not paying.”
He added: “Staffing agencies dealing with NHS Trusts need to review their late payment clauses to ensure they aren’t treated as an interest-free piggy bank.”
The NHS says it pays Trusts an interest rate of 3% per year to suppliers paid late. Stevens said: “That’s peanuts compared to what they have to pay the factoring companies (commission paid to those who help recover debts) and what the tax authorities charge.”
Janet Bullard, communications manager of NHS Purchasing, said: “Our temporary agency staffing framework agreements specify payment in 30 days (from receipt of a valid invoice), in line with Government policy. When advised of late payment by a Trust, we have intervened in support of the integrity of the agreement: we do not condone late payment. We have no evidence that late payment has caused a supplier on our agreement to go into administration.”
Wilkins Kennedy has been appointed administrator and liquidator of three recruitment groups that specialise in healthcare cover in the past few weeks. One is Worldwide Recruitment Group, which went into administration in January (Recruiter, 22 March). The two other recruitment groups were Quality Care London and Mansfield-based Industrial Staff Management.
Keith Stevens, partner at Wilkins Kennedy’s business recovery department, referred to the impact on the agencies as the “first collateral damage from the NHS funding crisis”.
He said: “When an NHS Trust delays payment for the contract staff they are using, the staffing agencies will soon suffer. I’m not saying it was the only thing (that put the firm in administration) but it was certainly a major factor.”
Wilkins Kennedy said staffing agencies are often seen as a soft target by organisations that are looking to improve their cash flow.
Stevens told Recruiter: “We’re chasing payments from six months ago. The Trusts aren’t disputing the invoices. They’re just not paying.”
He added: “Staffing agencies dealing with NHS Trusts need to review their late payment clauses to ensure they aren’t treated as an interest-free piggy bank.”
The NHS says it pays Trusts an interest rate of 3% per year to suppliers paid late. Stevens said: “That’s peanuts compared to what they have to pay the factoring companies (commission paid to those who help recover debts) and what the tax authorities charge.”
Janet Bullard, communications manager of NHS Purchasing, said: “Our temporary agency staffing framework agreements specify payment in 30 days (from receipt of a valid invoice), in line with Government policy. When advised of late payment by a Trust, we have intervened in support of the integrity of the agreement: we do not condone late payment. We have no evidence that late payment has caused a supplier on our agreement to go into administration.”
