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Greensill recalled

Front Desk

Greensill recalled

By Rob Darracott

Pharmacy’s had a problem with advance payments for years. The continuing impasse over Covid costs and the advance covering the massive increase in prescribing at the start of the pandemic is the current frustration. The precise workings of remuneration and reimbursement have been the subject of disputes for decades.

I was talking to an old friend the other day about Lex Greensill. We decided that pharmacy ended up connected to his now failed company because his former employee, our erstwhile prime minister David Cameron, hadn’t wanted to close the loophole Labour left for central government when it demanded local government pay suppliers in full within 28 days. As a result, some monies outstanding to pharmacy at the end of each month remained in the system, and sharp operators were able to suggest handy ways to help out, while taking a cut on the side.

As the chief executive of the Company Chemists’ Association between 2007 and 2015, I saw the inside of lots of government buildings, but I only visited Number 10 once. Early in 2013 I got an invitation from Mr Greensill himself. He was working on the first version of what became the Pharmacy Earlier Payments Scheme (PEPS), in which NHS receipts are paid up front in return for a cut of the remuneration and reimbursement cheque. 

Given the challenges for many businesses of managing cashflow, some were prepared to buy in, but Mr Greensill, and the account manager at Citibank, the first providers of the scheme, were concerned that the large players appeared disinterested in such a great deal. 

I got a nice tour of what lies behind the famous black door. The portraits up the staircase, the Cabinet room, the door in the passage through to the Cabinet Office, the works. Then we got down to business.

Desperate though both of my inquisitors were for the participation of Boots, Lloyds and the rest in their scheme, I had to report that there was little appetite among CCA members, multinationals and major UK businesses with fractional pharmacy interests, for the add on, given their expertise in internal cash management. I agreed, however, to pass on an offer of individual meetings to CCA members and that was the end of my involvement. I hadn’t thought about it since until Mr Greensill’s name hit the headlines.

It has been interesting, therefore, to discover that when Citibank pulled out of the scheme in 2019, Greensill Capital stepped in, and the advisor (and architect?) of the scheme became its provider. As a side note, Bill Crothers (whose employment by Greensill Capital while still technically a civil servant has been the subject of a separate political argument) was quoted in last July’s Pharmacy Network News story announcing the extension of the PEPS scheme to provide advance payments even earlier, before prescriptions are even dispensed. 

It is ironic that a scheme that filled a gap created by the refusal of government to pay pharmacies on time for their services has now been bailed out by, I assume, the same government, through the NHS Business Services Authority. Any move to unwind these schemes will be messy, and could push pharmacies into even greater jeopardy. It might have been easier for government to have done the decent thing by businesses years ago.

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Front Desk