Creditors and purchase policy

Document control:

Document control information

Policy Name: Creditors and purchase policy
Policy Number: F004
Version: 1.0
Status: Final – approved
Author / lead: Director of Capital and Estates
Responsible Executive Director: Executive Director Finance & Commercial Officer
Responsible Committee: Audit Committee
Date ratified by Responsible Committee: 3 March 2026 (Finance & Performance Committee)
Date approved by Board: 1 April 2026
Next review date: April 2028
Target audience: Essex ICB staff (including temporary/ bank/agency staff) Contractors engaged by the Essex ICB Staff from other Essex Partnership organisations working on behalf of the ICB
Stakeholders engaged in development of policy (internal and external):
Impact assessments undertaken: Equality & Health Inequalities Impact Assessment

Version history:

Version: 0.1
Date:
Author (Name and title): Ashley King Director of Capital & Estates
Summary of amendments made: Draft ICB Policy

Version: 0.2
Date: 28/01/26
Author (Name and title): Natalie Brodie Associate Director of Financial Management, Accounts & Financial Services Darren Mellis Head of Financial Services Rob Chivas Senior Financial Accountant
Summary of amendments made: Draft ICB Policy

Version: 0.3
Date: 26/02/2026
Author (Name and title): Victoria Sawtell, Director of Commercial Suzy Cooper, Head of Contracting Finance
Summary of amendments made: Review of draft ICB Policy

Version: 0.4
Date: 03/03/2026
Author (Name and title):
Summary of amendments made: Draft Policy for consideration by Committee

Version: 1.0
Date: 03/03/2026
Author (Name and title): Corp Svcs & Gov Support Officer
Summary of amendments made: Final Approved version

Introduction

The Executive Director of Finance & Commercial Officer takes a lead role for the ICB to ensure there are appropriate and effective financial, contracting, monitoring and performance arrangements in place to ensure the delivery of effective health services (ICB Standing Financial Instructions).

This is a controlled document. Whilst this document may be printed (please consider if this is necessary), the electronic version posted on the intranet is the controlled copy. Any printed copies of this document are not controlled.  As a controlled document, this document should not be saved onto local or network drives but should always be accessed from the website (or requested from the Governance Lead/Team) to ensure the most up-to-date version is used.

Purpose / policy statement

This policy is a key element of the ICB’s internal control environment and describes how to ensure that the creditor and purchasing responsibilities placed on the Chief Executive Officer and Executive Director of Finance & Commercial Officer are discharged and implemented. Key responsibilities are set out to make staff aware of their responsibilities.

All revenue and non-pay expenditure must be approved in accordance with the ICB Standing Financial Instructions.

Remit

This policy applies to all ICB staff (including temporary/ bank/agency staff), contractors engaged by the ICB and staff from other Essex  Partnership organisations working on behalf of the ICB.

Definitions

• Better Practice Payment Code (BPPC) – Code NHS organisations are required to sign up to that encourages good supplier payment practices – notably that at least 95% of valid, undisputed invoices will be paid within 30 days of receipt. 
• Business Case – a document that provides justification for undertaking a project or programme which evaluates benefits, cost and risks of alternative options and provides a rationale for the preferred solution.
• CDEL – capital departmental expenditure limit – capital resource total allocated to each system by NHSE.
• Creditor – an organisation or individual who is owed money for goods or services provided.
• ICS – Integrated Care System – the partners of Essex Integrated Care System are Mid and South Essex NHS Foundation Trust, Essex Integrated Care Board, Essex Partnership University NHS Foundation Trust, North East London NHS Foundation Trust, The Princess Alexandra Hospital NHS Trust, Essex County Council, Southend City Council, Thurrock Borough Council and Provide Community Interest Company.
• IFRS16 – International Financial Reporting Standard 16 – sets out accounting requirements related to lease accounting.
• ISFE2– Integrated Single Financial Environment – uses standard NHS Oracle platform to provide a common accounting system with a single Chart of Accounts and standardised processes and reporting to all ICBs.
• Invoice Payment Files (IPF)– spreadsheet forms used to submit details of bulk payments to providers via ISFE2.
• NHS SBS – NHS Shared Business Services – NHSE mandated provider of ledger system and transactional financial services provider.
• Purchase Order – document used to authorise expenditure that is raised in ISFE2.
• Purchase Requisition – document completed to request that a purchase order is raised in ISFE2.
• Remittance Advice – document sent to suppliers to confirm an invoice(s) has been paid that helps suppliers to match payments with invoices.
• Schedule of detailed delegated financial limits – document which shows what authority the Board has delegated to committees or staff under the powers of the Constitution. This is a schedule within the Scheme of Reservation and Delegation (SoRD) within the Constitution.
• Senior Financial Services Officer –members of the financial services team, grade 8B and above.
• Tradeshift – NHS SBS e-invoicing network.

Roles and responsibilities

Commissioning, Quality and Resource Committee

The Commissioning, Quality and Resource Committee is responsible for assuring the ICB Board that investment proposals and procurement routes follow the principles set out in the ICB and contained within this policy. The ICB Procurement and Contracting Policy principles are in accordance with the Procurement Act 2023 (PA 23) and The Procurement (Transitional Provisions) Regulations 2024 (the Transitional Provisions) and the ‘Health Care Services (Provider Selection Regime) Regulations 2023’ (the PSR 23) and the associated statutory requirements which aim to secure value for money and sustainability (ICB Standing Financial Instructions).

Executive Director of Finance & Commercial Officer

The Executive Director of Finance & Commercial Officer is responsible for the design and implementation of the purchasing strategy and ensuring that relevant financial controls are in place and operating effectively.

Financial services team

The financial services team is responsible for ensuring that internal control is maintained in accordance with all relevant policies, the Standing Financial Instructions, and the schedule of detailed delegated financial limits.

The financial services team will work with the wider organisation to ensure that all payments for goods and services are made accurately and that the requirements of the Better Payments Practice Code, to pay suppliers within 30 days of a valid invoice, are followed wherever possible.

The financial services team will work to implement processes to keep the number of urgent and manual payments to a minimum and to identify and work with the contracts team to consolidate payments wherever appropriate to reduce the overall number of transactions.

The financial services team is responsible for leading the process of proactively managing aged creditors and providing updates for monthly Finance Reports as required.

Finance business partners/management accounting hub

Finance business partners and management accounting hub are responsible for liaising with budget holders to signpost them to the requirements of the schedule of detailed delegated financial limits and the ICB’s Procurement and Contracting Policy and obtain appropriate advice from the ICB’s procurement advisors when considering entering contractual relationships with suppliers.

Finance business partners and the management accounting hub play a key liaison role between the financial services team and budget holders to ensure training needs are identified and training is delivered, ensuring appropriate financial codes and budgets are identified before expenditure is committed, assisting budget holders to code and clear invoices and process goods and services receipts and identifying opportunities to consolidate invoicing.

Finance business partners and the management accounting hub will work with budget holders to reduce the need for urgent and manual payments and are the key contact to identify changes to budget holder responsibilities.

Budget holders

Budget holders are responsible for seeking competitive quotes and/or entering into full tendering processes as required by the schedule of detailed delegated financial limits and the ICB Procurement and Contracting Policy. Budget Holders are also required to follow the ICB’s Conflicts of Interest and Standards of Business Conduct Policies.

Budget holders should note the limited and exceptional circumstances under which tender waivers can be used as set out in the Procurement and Contracting Policy. 

Budget holders are required to obtain advice from the contracts team and if appropriate the ICB’s procurement advisors, to establish the appropriate procurement pathway depending on the type and value of the proposed purchase.

Budget holders are responsible for updating the contracts team with details of quotes, contract details and updates as appropriate.

Budget holders are not authorised to enter into a lease agreement before discussing with a senior financial services officer and Head of Capital and Estates to establish if the agreement is likely to have an impact on the system’s Capital Departmental Expenditure Limit (CDEL) under IFRS16. If an impact is anticipated the expenditure cannot be committed unless the Head of Capital and Estates agrees to include the expenditure in the relevant year’s capital plans.

Budget holders are responsible for ensuring that adequate budget is available and identified before committing expenditure.

ISFE2 has an in-built hierarchy for escalating invoices or other documents that are not dealt with in the prescribed timescale. These timescales are communicated to budget holders in reminder emails that are auto generated, and each Oracle user has a superior in the system.

NHS SBS payments/invoices team

The SBS payments team make physical payments to suppliers based on payment runs which are authorised by the ICB financial services team. (See Banking and Cashflow Policy – section 6.2.3).

The SBS invoice team process all invoices received via Tradeshift, email and through the post addressed to the ICB and add them to the ISFE2 finance ledger system routing them through to the named budget holder for coding and authorisation.

Policy detail

NHS healthcare payment arrangements

Payment for healthcare services provided by NHS organisations continues to be made through the Aligned Payments and Incentives (API) scheme which was introduced by NHSE in 2021/22.

Contract amounts are agreed during the annual planning process and the ICB will make a single monthly payment to NHS providers normally equal to 1/12 of the Expected Annual Contract Value (EACV) to cover fixed and variable elements. Adjustments through the year can be made as agreed by commissioner and provider but should be kept to a minimum and paid at year end following reconciliation unless values are significant.

NHS providers should not raise invoices to ICBs as payment is made via Invoice Payment Files (IPF) on the 15^th of the month to which they relate. IPFs are authorised in accordance with the ICB’s schedule of detailed delegated financial limits and must not be authorised by the person compiling the IPF.

NHS contracts should have standard numbering in the format CPQH8NNN where CP indicates that it is a contractual payment, QH8 is the ICB’s 3-digit organisation code and NNN is the contractual sequential numbering determined by the contracts team and shared with the NHS provider.

The invoice number recorded on the IPF is CPQH8NNNMMYY where 01 represents January and YY represents the last 2 digits of the relevant year.

The transaction description can be up to 200 characters long, but it is recommended to limit to the 40 characters that form the remittance advice. Transaction descriptions should be shown as CPQH8NNNDescMMYY where Desc is a brief description of the supplier and contract.

Low volume activity payments are made to NHS providers by IPF where annual estimates of amounts due are less than £500,000 and are made once in the year in line with national NHSE deadlines using the transaction description ORGLVAYYYYYY where the relevant financial year is shown in the format 202223 for 22/23.

NHS organisations will only raise invoices to other NHS organisations for non-healthcare items such as seconded staff and the provision of other non-healthcare goods and services.

Non-NHS suppliers

The principles of reducing the number of transactions also applies to non-NHS suppliers. The ICB will work with suppliers to establish good financial operational practice through using contracts where appropriate and proportionate, by always pre-approving expenditure to an agreed level either by a contract or a use of a purchase order and by efficient receipting and processing of payments. 

The ICB will work to reduce the number of financial transactions by working with suppliers who send multiple low value invoices by either agreeing estimated activity levels and reconciling at appropriate intervals (no more frequently than quarterly) or by requesting consolidated monthly invoices with agreed supporting information. Where appropriate, consolidated invoices can be paid promptly if within expected levels and coded to a control code and reviewed, recoded and where necessary queried as part of month end processes.

E-invoicing

To increase efficiency and to reduce the ICB’s carbon footprint the use of e-invoicing is strongly encouraged. The expectation is that all suppliers will register and invoice via Tradeshift or, as a minimum, email invoices directly to SBS. 

Invoices are to be addressed as follows:

XX initial surname
Essex ICB
QH8 Payables N175
PO BOX 312
LEEDS
West Yorkshire 
LS11 1HP

Where initial and surname are the authorizing budget holder (if the budget holder’s name is Tim Smith the first line would read XXTSMITH).

Purchasing card

The ICB holds a purchasing card account to enable payments to be made for expenditure which does not, at the point of payment, have invoices issued. The cards should be used on an exceptional basis only and invoices should be obtained and paid in the usual way via BACS where possible. This type of expenditure includes, but is not exclusive to, deposits for room hire, accommodation for staff attending courses and internet orders including payment for social media. 

The ICB purchasing card account should not be used as an alternative to the normal procurement systems but may be used in exceptional circumstances if authorised by the Associate Director of Financial Management, Accounts & Financial Services.

To comply with the requirement in the ICB’s Standing Financial Instructions that all expenditure must have prior approval before a commitment to expenditure is made an appropriately authorised purchasing card request form must be completed and submitted to the card holder prior to any payments being made. A copy of this form must be emailed to the financial services team within 24 hours of the transaction. The form must be authorised by an officer with the relevant delegated authority other than the card holder prior to the payment being made.

The purchase card account is with Barclaycard Commercial and any changes to card holders and limits are to be authorised by the Associate Director of Financial Management, Accounts & Financial Services. The number of card holders and financial limits are to be determined by the Associate Director of Financial Management, Accounts & Financial Services. The list of cardholders will usually comprise of appropriate senior finance and corporate team officers as well as the Chief Executive’s Executive Assistant although it may be appropriate to extend card holders to specific project leads for a limited time. Any requests to be included as a card holder should be made to a senior financial services officer in the first instance.

Purchase cards should be locked away and only used by the named card holder on completion of authorised purchasing card request form.

The purchase card must only be used for ICB business use and should never be used for personal use. The purchase card must not be used to reimburse staff for expenses that should be claimed via the electronic payroll expense system.

Card usage can be limited by Barclaycard Commercial on card issue or at any time thereafter. All cards should restrict card holders so that they are unable to withdraw cash or use the card for types of retailers that are not required.

Each month, collection of the outstanding balance is taken via direct debit. A senior financial services officer will review the monthly statement to ensure that all expenditure is appropriate and supported by appropriately authorised purchase card request forms and will arrange for a member of the team to recode the expenditure from the control code to the nominated account code supplied on the form.

A VAT invoice should be requested from the supplier by the budget holder if the supply is vatable and forwarded to the financial services team to enable the correct treatment of the VAT.

Aged creditor reports are summarised for inclusion in the ICB’s finance report to the Commissioning, Quality and Resource Committee and Board. 

A senior financial services officer will review usage on a periodic basis to ensure that all cards held are still required and all limits still valid. Cards held by leavers must be returned to a senior financial services officer prior to departure.

Fraud awareness

If a staff member or officer believes or suspects that a fraudulent transaction has been processed, they should consult the ICB Counter Fraud, Bribery and Corruption Policy and contact the Anti-Crime Specialist – [email protected]. The ICB Counter Fraud, Bribery and Corruption Policy provides more guidance on what to do if fraud is suspected and offers alternative contacts for reporting concerns. 

Monitoring compliance

Due to the implementation of ISFE2, NHS SBS are not currently producing monitoring metrics which include the number of credit notes which is an indication of the efficiency. When these metrics become available, they will be reported to the Commissioning, Quality and Resource Committee.

Implementation and staff training

Line managers must ensure that all relevant staff are aware of the contents of this policy document and the processes required to comply.

The Executive Director of Finance & Commercial Officer is responsible for ensuring that appropriate training is given to finance staff and budget holders in order that they can fulfil their responsibilities outlined in this policy document.

Arrangements for review

This policy will be reviewed no less frequently than every two years.  An earlier review will be carried out in the event of any relevant changes in legislation, national or local policy/guidance, organisational change or other circumstances which mean the policy needs to be reviewed.

If only minor changes are required, the sponsoring Committee has authority to make these changes without referral to the Integrated Care Board. If more significant or substantial changes are required, the policy will need to be ratified by the relevant committee before final approval by the Integrated Care Board.

Associated policies, guidance and documents

• ICB Procurement & Contracting Policy
• ICB Banking and Cash Management Policy
• ICB Standards of Business Conduct Policy
• ICB Conflicts of Interest Policy

References

• ICB Scheme of Reservation and Delegation
• ICB Standing Financial Instructions 

Equality impact assessment

1. The EIA has identified no equality issues with this policy. 
2. The EIA has been included as Appendix A.

Appendix A – Equality impact assessment

Assessor’s name:  Natalie Brodie

Assessor’s job title: Associate Director of Financial Management, Accounts & Financial Services 

Date: 28 January 2026

Outcomes 

Evidence

Analysis of impact on equality

The Public Sector Equality Duty requires us to eliminate discrimination, advance equality of opportunity and foster good relations with protected groups. Consider how this policy / service will achieve these aims.  

N.B. In some cases it is legal to treat people differently (objective justification).

• Positive outcome – the policy/service eliminates discrimination, advances equality of opportunity and fosters good relations with protected groups
• Negative outcome – protected group(s) could be disadvantaged or discriminated against
• Neutral outcome – there is no effect currently on protected groups

Please tick to show if outcome is likely to be positive, negative or neutral. Please fill all boxes, any that aren’t applicable enter N/A.

Consider direct and indirect discrimination, harassment and victimisation.

Monitoring outcomes

Monitoring is an ongoing process to check outcomes. It is different from a formal review which takes place at pre-agreed intervals.

Review