Recommendation 18

On 1 March 2021, NHSBSA learned that Greensill Capital might be unable to fully fund that month’s payments to pharmacies. On the instructions of the Department, NHSBSA took emergency action to make direct payments to all pharmacies within the scheme and processed total payments of £144 million directly from government funds. Approval for this course of action was sought and received from the Department and HM Treasury. NHSBSA halted new applications to the scheme, while continuing it for pharmacies already enrolled. The Department told the National Audit Office that it believed that if it had not intervened, a significant number of PEPS pharmacy contractors could have had financial difficulties and potentially gone out of business. This could have led to a deterioration of access to NHS pharmaceutical services in certain areas of the country. Subsequent to the failure of Greensill Capital, CCS suspended the framework and told Taulia to source a replacement subcontractor, which it was unable to do. Following legal advice and instructions from the Department, NHSBSA terminated the PEPS contract in June 2021.19