Procurement Policy Note (PPN 02/20) Applies to all Schools and Academies

Recently, the Cabinet Office released the ‘Procurement Policy Note – Supplier relief due to COVID-19’ (PPN 02/20) document. The PPN 02/20 sets out information and guidance for public bodies on payments of their suppliers to ensure service continuity during and after the current coronavirus, COVID-19, outbreak.

As public bodies funded by the government, PPN 02/20 applies to all schools and academies; you are in effect contracting authorities. This policy is effective until at least the end of June 2020, so familiarising yourself with this is imperative.

What the document states:

You should continue to pay suppliers at risk due to COVID-19 on a continuity and retention basis; the aim is to protect jobs and maintain cashflow in those businesses.

Important Points to Note

  • You should continue to pay at risk suppliers as normal for the next 3 months, even if they are not able to fulfil all their contractual requirements.
  • Payment should not normally be made to suppliers where the contract does not commit any volumes of business to the supplier – e.g. where a supplier is on a framework but does not have a regular contracted amount.
  • Where contracts operate ‘payment by result’ or are ‘output/ outcome’ based, payments to suppliers should be made on the basis of a calculation of the average of the last three months invoices.
  • To qualify for payment, suppliers should operate an ‘open book’ approach and should not expect to make profits on elements of a contract that are undelivered during this period.
  • In many cases, suppliers in receipt of the continuity and retention payments made under PPN 02/20 will not be required to pay back this money, even if they have not been able to deliver any of the goods, services or works required under the contract due to the impact of COVID-19 during the period. However, the goods, services or works paid for during this period may be required to be delivered at a later date.
  • Suppliers are responsible for ensuring that all their staff identified to deliver the contract in full are not furloughed during this period (under CJRS) because the supplier is receiving the continuity and retention payment and staff being recompensed under CJRS are not able to work.

Payment Processing

Be clear where suppliers should send their invoice, ask for them to be emailed, providing them with the current email address; this process could also be posted on the school’s website. Payment by BACS is preferred as it may be difficult to get cheques signed and payments should not be delayed; alternatively contact your bank about increasing your purchase/debit card limits.

Kim Cannon

Kim Cannon

Kim is the Service Manager of the Finance Support Team. She has worked in schools since 1998 and been a member of the Finance Support team since 2008.