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The Government has produced and published three new Procurement Policy Notes as a direct result of the ever changing Covid-19 environment.

PPN 01/20: Responding to COVID-19

The purpose of PPN 01/20 is to ensure that contracting authorities are able to procure goods, services and works with extreme urgency, to allow them to respond to the pandemic efficiently.

This PPN provides guidance for the following circumstances:

• Direct award due to extreme urgency (regulations 32(2)(c)) (click here to read our article regarding regulation 32)
• Direct award due to an absence of competition or protection of exclusive rights
• Call off from an existing framework agreement or dynamic purchasing system
• Call for competition using a standard procedure with accelerated timescales
• Extending or modifying a contract during its term

PPN 02/20: Supplier relief due to COVID-19

PPN 02/20 focuses predominantly on the supplier to assist in keeping supply chains open and ensuring that suppliers are kept financially sound during these unpredictable times.

This PPN provides guidance for the following circumstances:

• Urgent reviews of contract portfolios and to update suppliers if they believe they are at risk
• Put in place appropriate payment measure to support supplier cash flow
• Where contract payments are based on ‘payment by results’ make payments based on previous invoices
• Ask suppliers to act on a ‘open book’ basis and make cost data available to the contracting authority during this period
• Ensure invoices submitted by suppliers are paid immediately on receipt

PPN 03/20: Use of Procurement Cards

The third guidance note PPN 03/20 relates to the use of procurement cards to increase efficiency and accelerate payment to suppliers.

This PPN provides the following advice and urges organisations to arrange with their procurement card provider to:

• Increase a single transaction limit to £20,000 for key card holders
• Raise monthly limits on spending with procurement cards to £100,000 for key card holders
• Spend on procurement cards each month in excess of £100,000 should be permissible to meet business needs

Although the above advice has been provided, should these limits not be necessary, organisations should seek an appropriate transaction limit or monthly limit.

The PPN also advises that by 30 April 2020, in scope organisations should:

• Ensure that a number of appropriate staff have the authority to use these cards
• Open all relevant categories of spend to enable these cards to be used more widely

Another obvious cost cutting measure is to reduce working hours, either temporarily or permanently. Again, it should be done fairly, either across the board or by selecting teams/individuals based on objective business reasons. Imposing without agreement would create significant risk, therefore would require fair selection and consultation.

The Business and Planning Act 2020 entered the statute books on 22 July 2020. Section 18 of the Act includes provisions for the extension of the date by which a reserved matters application must be submitted where the original date falls between 23 March 2020 and 31 December 2020. Where the original time limit for the submission of reserved matters is on or after 19 August 2020, the relevant conditions will be automatically read as requiring the reserved matters application to be submitted by 1 May 2021.

Where the original time limit for the submission of reserved matters is before 19 August 2020, an application will need to be made to the LPA for an Additional Environmental Approval (“AEA”), which the LPA must determine within 28 days otherwise the approval is deemed to be provided. The purpose of the AEA is to consider whether the environmental assessments carried out at the time of the original outline determination remain valid and up to date, and where that is not the case, the AEA will be refused. In such circumstances a new planning application will be required where an application is now out of time to comply with the original date for submission of reserved matters.

There are two stages:

• Stage 1 – The provision of written information to the representatives.
• Stage 2 – Consultation on the proposed redundancies “with a view to reaching agreement” about certain matters

Stage 1: Provision of information

The first stage in the collective consultation process is to provide the representatives with written information including details of the proposed redundancies (often called a section 188 letter). This information must be given to the appropriate representatives and the time limit before dismissals can take effect does not start to run until they have received it. It is this information which ‘starts the clock’.

It is possible that there will be changes to the proposals during the consultation process: indeed that is part of the reason for the process. The employer’s obligation is not just to provide the appropriate representatives with the relevant information at the start of the process. It is under a continuing obligation to provide them with information in writing about any developments during the consultation process (although later changes do not ‘restart the clock’ before dismissals can take effect).

Stage 2: Consultation on the proposed redundancies “with a view to reaching agreement” about certain matters

The consultation process must include consultation “with a view to reaching agreement with the appropriate representatives” on ways of:

• Avoiding the dismissals
• Reducing the number of employees to be dismissed
• Mitigating the consequences of the dismissals

The guidance from the Government concerning private sector organisations is very different from the guidance for public sector and organisations that receive public funding. The guidance states:

“The government expects that the scheme will not be used by many public sector organisations, as the majority of public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak.

Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs. Organisations who are receiving public funding specifically to provide services necessary to respond to Covid-19 are not expected to furlough staff.”

This guidance isn’t particularly clear but it appears that there is a recognition that there are different types of organisations which could be caught by this:

1. Organisations who will be required to provide frontline services during the Covid-19 response. It is interpreted that NHS organisations such as NHS Trusts will fall firmly into this category. Employees of such organisations are expected not to be furloughed and to continue to work and be paid their normal salary in the usual way.
2. Organisations who receive public funding to provide services to respond to the Covid-19 crisis. These organisations are not expected to furlough their staff. The type of organisation that would fit into this category are those that have been commissioned to developing breathing apparatus or testing kits to meet the needs of the healthcare sector during the peak of the pandemic.
3. Organisations who receive public funds for staff costs to operate services. Employers are expected to continue to pay staff if the money to pay them is publicly funded. It is strongly inferred that this is irrespective of whether such staff have any work to perform. The type of organisation that is likely to fall into this category are GP practices, charities and private sector companies that have won contracts with the public sector.