Coronavirus: Pay suppliers 'as normal', government tells schools

Schools should continue to pay their suppliers “as normal” even if their service delivery is disrupted or suspended by coronavirus, the government has said.

New guidance for public bodies sets out how organisations like schools, local authorities and academy trusts can continue to keep the supply chain moving and protect jobs outside their gates.

The Department for Education confirmed yesterday that schools will continue to get their normal budgets throughout the period of closure, and that they will be able to claim back money to cover additional costs.

The latest advice, published on Friday March 20, states that contracting authorities in the public sector “must act now to ensure suppliers at risk are in a position to resume normal contract delivery once the outbreak is over”.

Schools and other bodies should “urgently review their contract portfolio” and inform suppliers who they believe are at risk “that they will continue to be paid as normal (even if service delivery is disrupted or temporarily suspended) until at least the end of June”, the guidance states.

For example, the guidance states that while schools may not require the same transport services for their children, they should seek to “re-deploy the capacity of those
suppliers to other areas of need”, and do this “wherever policy”.

They should also put in place “the most appropriate payment measures to support supplier cash flow”. This might include approaches like forward ordering, payment in advance or prepayment, interim payments and payment on order (not receipt).

For contracts that involve payment by results, payment should be on the basis of previous invoices, “for example the average monthly payment over the previous three
months”.

However, the government says that to qualify, suppliers should agree to act on an open book basis and make cost data available to the contracting authority during this period”.

“They should continue to pay employees and flow down funding to their subcontractors,” the guidance adds.

Schools should also ensure invoices from suppliers are paid “immediately on receipt in order to maintain cash flow in the supply chain and protect jobs”. The guidance states that “reconciliation can take place in slower time”.

Acknowledging the possibility of “significant levels of staff absence”, the guidance also recommends that schools ensure they have “appropriate contingencies” in place so there are enough staff with the delegated authority to pay invoices.