Support for key suppliers and grant-supported providers during COVID-19

Our Key Supplier Support Guidance sets out how we will deal with requests for support under contract arrangements from key suppliers and grant-supported providers in response to the COVID-19 emergency and who are at risk because the payment mechanism in the contract no longer reflects the true cost to the supplier/provider.

It has been developed with Angus Health and Social Care Partnership and reflects national policy and guidance.

Contents


Guidance

Angus Coronavirus Key Supplier Support – A Guide to Our Local Arrangements

1. Introduction

1.1 In this guidance, “Angus Council”, “we”, “our” or “the Council” includes Angus Health and Social Care Partnership in terms of delivery of adult care services.

1.2 This guidance constitutes our local arrangements. These are wholly aligned to and mean we are following and implementing national policy and guidance.

The primary sources of that guidance for this purpose are:

  • Scottish Government procurement guidance SPPN 05/2020 Coronavirus (COVID-19): supplier relief
  • “National principles for sustainability payments to social care providers during COVID 19” issued jointly by COSLA and the Chief Finance Officers of Health & Social Care Scotland with the endorsement of Scottish Government; different versions apply according to when the support request was made:
    • Version 3 to end August 2020
    • Version 4 from September 2020 to end November 2020
    • New version from December 2020 to end 30 September 2021
    •  All versions are available on the COSLA website and Scottish Government website

1.3 Our guide is therefore intended to explain our approach to implementation of national policy and guidance and to highlight specific key points from the national guidance for suppliers to be aware of for their assistance. Suppliers should review the national policy and guidance for themselves rather than rely solely on this local guidance.

1.4 Our objective is to support our commissioned and contracted services and our local economy in response to the Coronavirus / Covid-19 emergency and maintain our supply chains through the emergency for continuity of supply in the provision of essential services once the emergency is passed. We consider this to be vital to support the wellbeing of Angus and its citizens.

1.5 Where we refer in this guidance to “contracted suppliers”, this includes all those whom the council will be paying directly under this guidance and all manner of service providers whether they are commercial bodies or not. In the context of adult care services, this specifically includes “option 2” care providers (within the meaning of the Social Care (Self-directed Support) (Scotland) Act 2013) where services are being arranged and paid for by the Council on an emergency response basis under this guidance.

2. Scope

2.1 For the avoidance of any doubt, the decision to provide support to contracted suppliers or not under this guidance is discretionary on the part of the council. Support offered will be based on the national policy and guidance.

2.2 This guidance will apply on application to the Council by contracted suppliers. In line with national policy, applications will be dealt with on a case by case basis but we may choose to deal with groups of contracts on a collective basis where the effects and risks are comparable.

2.3 The support offered will primarily apply to essential services contracted for by Angus Council. “Essential services” have been determined by the council as:

  • Adult care services
  • Children’s services
  • Early learning and childcare services
  • Criminal justice services
  • Education services
  • Public and school transport services
  • Construction and related services

Within those categories of essential services, the council may identify what groups of contracts should be within or outwith this guidance on a group basis and in terms of what groups need support in the public interest.

Nationally managed contracts within those essential service areas (e.g. the National Care Homes Contract) are outwith the scope of this guidance insofar as the contract rates are set nationally.

3. Duration and Review

3.1 In line with national policy, this guidance lasted initially until 30 June 2020 and has continued now until 30 September, possibly will be further continued to end March 2022.

3.2 Subject to national policy, support under this guidance may terminate at any time after 30 September 2021 on not less than 14 days’ notice by the council to contracted suppliers (provided of course the council receives timely notice from Scottish Government to enable the period of notice to be given). The council will however endeavour to give longer notice of termination of support under this guidance (on a general or supplier-specific basis) where it is feasible to do so.

3.3 The council will review operation of this guidance on a monthly and ongoing basis. The Council reserves the right to make changes to it without notice.

4. The Support Offered

4.1 In line with national policy and in return for support under this guidance, the contracted supplier will be required to enter into a variation of its contract with the Council to give effect to reciprocal expectations of the contracted supplier. The full model agreement terms were issued by the Scottish Government in SPPN5 referred to above and accompany this guidance. Contracted suppliers should make sure that they are content with those terms before seeking support from the Council. The key points are:

  • It will be for a supplier to set out proposals to vary an existing contract and/or request interim / advance payment.
  • Both parties will be required to explore if other changes to the contract (for example, rescheduled delivery dates) would work better.
  • The supplier will not be entitled to combine a claim under the contract with any other COVID-19 related relief, grant, intervention or other measure which results in the supplier receiving more than one benefit/relief for the same underlying cash-flow issue.
  • On request, the supplier will have to evidence that any monies paid out have been used as intended.
  • A condition of payment will be that the supplier must also promptly pay its staff and supply chain under the contract.
  • Suppliers will not be able to claim where there is no contractual volume commitment to deliver nor will not be able to claim for profit on undelivered elements of the contract.
  • Monies paid can be recovered by public bodies in specified circumstances.

4.2 Contracted suppliers may seek whatever support they consider they require from the Council and which the Council is able to give within the terms of the contract and the national policy and guidance. Three examples are offered below of the kind of support which the Council expects could be requested and we may offer. These are not mutually exclusive.

4.3 Example 1 – Reduced Planned Demand

Where the payment mechanism for the contracted service is wholly or partly based upon the volume of service or supply, the Council will move to fixed contract payments based on the actual volume of usage prior to 28 February 2020 and will make no deductions for fluctuation in demand / use for the duration of the support offered under this guidance.

Our normal approach will be that the volume on which the fixed payment is based will be that for the week, month or other period as the case may be (depending on the reference period in the payment mechanism) ending 28 February 2020, unless it is accepted by the Council that another reference period would be appropriate.

In line with the “National principles for sustainability payments to social care providers during COVID 19” guidance referred to above, for care homes:-

  • For care homes where the National Care Homes Contract (NCHC) is in place, payment for reduced occupancy below planned levels (“voids”) will be made on the basis of 80% of the NCHC rate excluding any provision for return for the provider or costs that can be reduced. The weekly payments are Residential Care - £508.63 per week and Nursing - £592 per week rates updated from 12 April 2021 to £523.03 per week for Residential care and £610.94 per week for Nursing
  • These principles apply to voids caused by COVID 19 for places commissioned by the Local Authority or people funding their own care. No increased rate will be paid where a care home does not accept the NCHC rate or to account for care homes who charge higher self-funding fees.
  • For other care home placements such as care homes for adults where the national arrangement is not in place a local agreement will be made using the same principles.
  • Occupancy will be calculated locally by using data submitted by providers to commissioners of average occupancy of the three-month period prior to 23rd March 2020.
  • In line with the 4th version of that guidance as modified by Scottish Government / COSLA letter dated 6 November 2020, care home reduced occupancy payments (at 80% of the National Care Home Rate) were reduced to:
    • 75% of that rate for voids caused by the continued impact of COVID in September
    • 50% of that rate for voids caused by the continued impact of COVID in October and November.
  • In line with the new version of that guidance issued in December, care home reduced occupancy payments were restored to 100% of the 80% National Care Home Rate for voids caused by the continued impact of COVID in December through to 30 September 2021.

In line with the “National principles for sustainability payments to social care providers during COVID 19” guidance referred to above, for planned care (i.e. “care at home”, day care and similar services):-

  • Planned care for services unable to remobilise or redeploy would be supported at local contractual rates under deduction of reduced costs and stripping out profit / surplus elements in line with SPPN 5/2020 up until the end of November.
  • From December:
    • Day care and respite services unable to operate because of the COVID-19 pandemic will be supported at 80% of the normal rate benchmarked to the pre-Covid average level of service provided between January 2020 and 23 March 2020.
    • Care at home services unable to operate because of the COVID-19 pandemic will be supported at 90% (recognising the more limited cost reduction for these kinds of service) of the normal rate benchmarked to the pre-Covid average level of service provided between January 2020 and 23 March 2020.

4.4 Example 2 - Extraordinary Costs

Where the payment mechanism for the contracted service is affected by extraordinary cost increases because of the emergency.

Here are some examples:

  • the payment mechanism hourly rate contains a set allowance for sickness absence in providing for staff costs which is rendered significantly inaccurate due to increased sickness absence because of Coronavirus illnesses
  • input costs on items such as personal protective clothing and equipment have increased beyond reasonably expected levels due to the emergency
  • contracted suppliers incur extra management time to make rapid adjustments to care packages due to e.g. emergency hospital admissions, care visits changed to meet the most urgent needs, homecare visits taking longer due to infection control precautions and the availability of staff.
  • Construction contracts payment mechanism continues to pay actual preliminary costs incurred during a period of contract suspension
  • Contract retentions are reduced or alternative retention mechanisms are provided.

Where those extraordinary cost increases apply, the Council will review allowances for such costs within those payment mechanisms and adjust them accordingly.

4.5 Adjustments will also take into account any extraordinary cost decreases and, in accordance with national policy and guidance, the Council may adjust any payments made to contracted suppliers to ensure that profit margin is not paid on any undelivered aspects of the contract.

The NCHC has been uplifted by up to 4% and all other social care grants and contracts have been uplifted by 2.2%. The Pre-Covid Position / benchmark was set against the contractual price for 2019/20, subsequent uplifts would ordinarily cover the inflationary price increases each year and is therefore covered by the annual uplift for 2021/22. To maintain consistency across all providers, all benchmarks from 12 April 2021.

Although this will be considered on a case by case basis we may apply set allowances across contract groups within essential services.

4.6 Example 3 - Social Care Staff Support Fund

This statutory scheme and the fund under it has been set up for social care workers who, as a group and due to the nature of their work or work environment, may be expected to self-isolate on more than one occasion as part of infection prevention and control. Its purpose is to ensure that social care workers do not experience financial hardship from doing so.

  • If an employer has paid out a sum of money to top up the income of an eligible worker to their expected income, that employer is entitled to seek reimbursement of that amount from the Fund. 
  • In order to make a claim, an employer must verify that the 4 scheme criteria have been met.
  • The claim is made to the Council / Partnership that commissions the employer’s service.
  • Statutory Sick Pay paid, if any should be deducted, so that there is no double funding.
  • Guidance on the fund at gov.scot
  • An online form has been provided to support this guidance where employers can claim under the fund and certify satisfaction of the scheme criteria.

The legal powers for the Social Care Staff Support Fund have been extended until the end of 30 September 2021, and the Fund will continue until this date.

In All Cases

4.7 In line with national policy and guidance, the Council reserves the right to undertake retrospective reconciliation of support in the form of fixed payments addressing reduced planned demand after conclusion of the support and return to an actual demand basis. Retrospective reconciliation will apply to the support provided under this guidance and not to baseline contract payments.

4.8 In line with national policy and guidance there will be no double-funding of increased costs or revenue protection under both this guidance and by central government’s Coronavirus business support schemes. For ease of reference (and in summary only), the main relevant central government schemes are / have been as follows:

UK Level Support

  • the Coronavirus Job Retention Scheme (80% of wages paid for furloughed workers)
  • Support for self-employed workers through the Coronavirus (COVID-19) Self-Employment Income Support Scheme
  • Statutory Sick Pay – The Coronavirus Statutory Sick Pay Rebate Scheme will repay employers the Statutory Sick Pay paid to current or former employees
  • Tax payment deferrals / flexibility – Deferral of VAT payments due to coronavirus (COVID-19) and Deferral of Self-Assessment payments due to coronavirus (COVID-19)
  • Access to the Coronavirus Business Interruption Loan Scheme, Coronavirus Future Fund or Coronavirus Bounce Back Loan (for SMEs)
  • Access to the Coronavirus Large Business Interruption Loan Scheme or COVID-19 Corporate Financing Facility for larger businesses

For more information, please see:

https://www.gov.uk/coronavirus

https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19 

Scotland Level Support

  • A 1-year non-domestic rates (NDR) holiday (100% relief) for all retail, hospitality and leisure properties, from April 2020
  • A 1.6% NDR relief for all properties across Scotland, from April 2020
  • A £10,000 grant is available to non-domestic ratepayers with properties in receipt of:
  • Small Business Bonus Scheme relief (SBBS) or Rural Relief
  • Nursery Relief, Disabled Relief, Business Growth Accelerator, discretionary Sports Relief, Enterprise Areas Relief, Fresh Start Relief, or Charitable Rate Relief but eligible for SBBS
  • (administered by Councils)
  • A £25,000 grant is available to the ratepayers of properties in the retail, hospitality and leisure sectors with property with a rateable value between £18,001 - £51,000 (administered by Councils)
  • A £2,000 grants under the Newly Self-Employed Hardship Fund, available to the newly self-employed who are ineligible for UK support (as they became self-employed since April 2019) but are facing hardship (administered by Councils)
  • A grant of up to £25,000 under the Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies with support from Creative Scotland and VisitScotland for small and micro creative, tourism and hospitality companies not in receipt of business rates relief
  • A £45 million Pivotal Enterprise Resilience Fund, managed by the Enterprise Agencies providing bespoke grants and wrap around business support to viable but vulnerable SMEs who are vital to the local or national economic foundations of Scotland.

For more information, please see:

https://www.gov.scot/collections/coronavirus-covid-19-guidance/

https://findbusinesssupport.gov.scot/

Also in accordance with government guidance, contracted suppliers are required to access available Government schemes where they are eligible to do so as the primary support route albeit it is recognised that there may be a time lag in accessing that support to address cash flow.

Specifically, if the contracted supplier receives central government financial support under the UK Government coronavirus job retention scheme it must declare this immediately to the Council. Support from the Council may be terminated in those circumstances and action taken to reclaim any double-funding.

Alternatively, the Council and the contracted supplier may agree an adjustment to contract payments under this guidance to reflect the effect of central government financial support received.

5. Prompt Payment

5.1 The Council has established systems that will ensure that invoices are paid promptly. This is to support the cash flow and viability of all our contracted suppliers and not just those supplying essential services.

5.2 From Sunday 22 March 2020, we have altered our payment processes to ensure that all of our contracted suppliers are paid at the first opportunity. This means invoices will be paid as soon as they are authorised, irrespective of what is stipulated on existing individual payment terms and conditions.

Information on our current business support measures is published here: https://www.angus.gov.uk/business/coronavirus_outbreak_business_updates

9 September 2021