The Department of Health and Social Care has been criticised by MPs for being ‘naive’ in its dealings with Greensill Capital in a private finance deal that supported the finances of community pharmacies.

The subsequent collapse of Greensill may have put the pharmacy businesses signed up to the Pharmacy Earlier Payment Scheme (PEPS) at risk.

A report from The Commons Public Accounts Committee, published today (4 February), said the DHSC admitted that if it had not intervened after Greensill collapsed, a ‘significant number of PEPS pharmacy contractors could have had financial difficulties and potentially gone out of business’.

‘This could have led to the deterioration of access to NHS pharmaceutical services in certain areas of the country,’ it said.

The committee also said that there was ‘no evidence’ that the Greensill Capital scheme delivered any of £100 million-a-year savings promised to Government.

When Greensill Capital went out of business in March 2021 no other finance providers were willing to take on the scheme, the committee said, and the Government had to step in to pay pharmacies £144m.

The report said that 14% of pharmacy contractors were signed up to PEPS.

Ultimately, in November 2021, the DHSC introduced a new payment schedule that allowed for pharmacies to be paid earlier, in four business days following the submission of their claims.

Scheme not needed in first place

The committee chair, Dame Meg Hillier, said the DHSC was ‘at best terribly naive and at worst negligent’ in its dealings with Greensill Capital.

‘The promises made by Greensill and the easy acceptance of these by the Department of Health and Social Care are reminiscent of the emperor’s new clothes.

‘That DHSC is now paying pharmacies more quickly itself begs the question why it ever engaged with ‘supply chain finance’ in the first place.’

PEPS was a concept that was announced by former Prime Minister David Cameron that allowed pharmacies to access their monthly advance payments up to 60 days earlier, supporting cash flow and .

In the report, the DHSC told the committee that ‘knowing what it knows now’, it would not embark on such a scheme again.