Annual Report and Accounts · Care Outside of Hospital 16 ... Thinking Differently 32 ... Board Members’ Declarations of Interest 34 Remuneration report 35 Accounts 43. Annual Report

Annual Report and Accountsfor the period 1 April 2007 to 31 March 2008

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NHS Institute for Innovation and Improvement

Annual Report and Accounts for the period 1 April 2007- 31 March 2008

Presented to Parliament pursuant to Paragraph 6(3), Section 232, Schedule 15 of the National Health Service Act 2006

Ordered by the House of Commons to be printed 21st July 2008

HC 927 £13.90London: The Stationery Office

To find out more about the NHS Institute email: [email protected]. You can also visit www.institute.nhs.uk

If you require further copies quote NHSIAR07/08

Contact: Prolog Phase 3Bureau ServicesSherwood Business ParkAnnesleyNottingham NG15 0YUTel: 0870 066 2071Email: [email protected]

NHS Institute for Innovation and ImprovementCoventry HouseUniversity of Warwick CampusCoventry CV4 7AL

Tel: 0800 555 550

© Crown Copyright 2008. The text in this document (excluding any Royal Arms of department logos) may bereproduced free of charge in any format or medium providing that it is reproduced accurately and not used in amisleading context. The material must be acknowledge as Crown copyright and the title of the document specified.Any queries relating to the copyright in the document should addressed to The Licensing Division, HMSO, St Clements House, 2-16 Colegate, Norwich NR3 1BQ. Fax: 01603 723 0000 or email: [email protected].

ISBN: 978 0102957266

Annual Report 2007 - 2008 3

Contents

Welcome from the Chair of the Board 5

Foreword from the Chief Executive Officer 6

Management commentary 7

Year at a glance 11

Director of Finance commentary 14

Priority programmes: 15No Delays 15

Care Outside of Hospital 16

Delivering Quality and Value 17

Safer Care 18

Encouraging innovation, building capability and capacity: 20The National Innovation Centre 20

The Technology Adoption Hub 21

Leadership: 22NHS Graduate Scheme 22

Gateway to Leadership 22

Breaking Through 23

Enhancing Engagement in Medical Leadership 24

Board Level Development 24

Learning: 26NHS Institute Alert 26

National Library for Health 26

NHS Fellows 27

Workforce Matters 27

Service Transformation: 29Transforming Care 29

Clinical Systems Improvement 29

Chief Executive Network 31

Social Movements 31

Thinking Differently 32

Governance Structure 33

Board Members’ Declarations of Interest 34

Remuneration report 35

Accounts 43


Welcome fromthe Chair ofthe BoardWe now estimate that the NHS Institute forInnovation and Improvement works with andsupports 100% of NHS front line organisationsin some way. Our website receives over twomillion hits each month and has over 12,000registered users. We do know that more thanhalf the NHS organisations who are using atleast one major product of the NHS Institutenow know it is ours and would recognise theNHS Institute’s brand.

It has been gratifying to see real impact from theNHS Institute’s work; an estimated 250,000 beddays saved nationally from our high volume carework on hip and knee replacement; anadditional 24% of staff time released for carethrough the Productive Ward series; over £300mproductivity opportunities released through theapplication of the Better Care, Better Valueindicators; and, our Graduate ManagementTraining Scheme has retained its number oneranking as the best in the country public orprivate.

I am always proud of the expertise, dedicationand commitment continually demonstrated byNHS Institute staff. I am also grateful to myBoard for their wisdom and oversight. We arefortunate, as an organisation, to be able toattract talent at executive and non-executivelevels. The NHS Institute’s Sounding Board,under the chairmanship of Sir David Brown of

Motorola,has alsoprovided us withinsight and guidance, inparticular encouraging us tostay focused on a few prioritieswhich are valued by the frontline NHS.

During the year the NHS Institute has becomevalued internationally with eight countries nowbuying our products or in the process ofagreeing partnership arrangements and thereare many others who are keen to work with usto learn from what we do.

My continuing aspiration however, is that theNHS Institute becomes an indispensable supportmechanism for every NHS organisation and isvalued for its contribution to leadership, to thepresent priorities for improvement andinnovation for the NHSand is the ‘natural’centre and source ofexpertise for policymakers, managers andclinicians and frontlinestaff wishing to driveimprovement in theirarea of work.

Dame Yve BucklandChair of the Board

6 Annual Report 2007 - 2008

We have come a long way since the NHS Institutewas formed in 2005. In September I was at ameeting of 100 NHS leaders talking about thefuture of the NHS and I realised that every singlesession in the conference touched on some of theNHS Institute’s work.

The products we have developed are having atangible impact on the NHS. They have releasedtime for nurses to care for patients rather than getbogged down in admin; helped primary care trustsfind and act on opportunities to shift care closer tohome; brought innovations into the NHS; and,shown both providers and commissioners betterways of eradicating delays and equipped chiefexecutives to transform their organisations anddeliver tangible improvements in patient experiencein just a few months. All of these, and so manymore pieces of NHS Institute work, have made animpact and feedback has been fantastic.

The NHS Institute has become a major influence onpolicy and decision makers. We give high qualityinput to critical NHS work being done by others,including the Department of Health, and havecontributed to the Next Stage Review. They reachout for our support because we can bringknowledge of other countries and other sectors,we can host and facilitate great debate and pluginto extraordinary networks to source independentresearch and share knowledge. It is a mark of thesuccess of the NHS Institute that the scope of ourwork has already been broadened from where westarted. Some are extensions of what we werealready doing: including our role in NHS Live, in theHealth & Social Care Awards and in the NationalKnowledge Service. We have also developed ourrole in patient safety from an initial focus onhealthcare associated infection.

Ultimately the work of the NHS Institute has itsimpact on the NHS through the work of others,especially clinicians and frontline service managers.

The development of effective products isextremely important to the NHS Institute and oneway in which we ensure this is achieved is byworking with professionals within the service.Throughout the year a number of arrangements

with trusts have been made where clinicians andmanagers have come to work as secondees withNHS Institute staff on the co-production ofproducts for the NHS. This has proven to beextremely beneficial for all parties and we aim todevelop this collaborative arrangement as wedevelop further products.

Despite the intellectual content of much of whatwe do, we work closely with our clients andsuppliers to design solutions together. The NHSInstitute has a real commitment to testing andrefining our work to make sure our products arerelevant and of high quality.

However, we must do as we say and practiceongoing improvement and innovation within theNHS Institute. We must respond to what our clientswant, become more joined up, better known,more rigorous, more focused, even betterconnected and better able to meet client demandfor new services.

The redevelopment of our website has focused onjoining up the different elements of work withinthe NHS Institute. Our field team is doing somereally important work thinking about our productcatalogue as it would appear to people withdifferent interests across the NHS. We havedelivered a range of internal learning events for ourstaff and those on secondment. Our inductionprocess has been improved and we promote theeffective use of new media and technologies toshare learning – learning that we can share withour stakeholders.

Lots of NHS organisations have told us explicitlythat they want more practical hands on support asthey implement our work. We need to rise to thatchallenge and we have piloted Extended NHSInstitute Services to do this. We will continue tolisten and respond in this way and look forward tofurther developing our relationships within the NHSover the next year.

Foreword from the Chief Executive Officer

Bernard CrumpChief Executive Officer


ManagementCommentary

The NHS Institute was set up on 1 July2005 under the NHS Institute for Innovationand Improvement (Establishment andConstitution) Order 2005 which was laidbefore Parliament on 3 June 2005.

The NHS Institute is established as a specialhealth authority under the National HealthService Act 1977 and is an Arm’s LengthBody sponsored by the Department ofHealth.

The NHS Institute is based at the Universityof Warwick: NHS Institute for Innovationand Improvement, Coventry House,University Warwick, Coventry CV4 7AL.

A small number of our staff are also basedin London, Birmingham and Manchester.

In 2007/08 most of our staff were deployed inour six priority programmes. Others workedin the teams which support the corporatework of the NHS Institute.

We also employed a flexible workforce,principally drawn from frontline NHS staff whowork with us on secondments. We selectedsome organisations with whom we made jointappointments. Last year these included:Connecting for Health, NHS Employers andthe Office of the Strategic Health Authorities.

We also commissioned work from thirdparties. These included universities and other

trainingand educationsuppliers, nationaland international expertorganisations andconsultancies. We developed arange of preferred suppliers in someareas of our work and use nationally approvedprocurement vehicles to ensure a responsiveand efficient service.

Of the NHS Institute’s networks there werefive that were particularly critical last year.The network of the SHA link directors ensuredthat the NHS Institute’s improvement workwas embedded within the SHA improvementsystem. The Practice Partner Network,consisting of front line organisations helped ustest new products and services. There weretwo further networks whose members werefrontline chief executives, of which one wasPCT based with a focus on developingexcellence in commissioning, and the other,the Delivering Through Improvement network,designed to provide practical examples of howthe best organisations deliver their ‘bottomline’ using improvement methods as a keyenabler. Our fifth network, the NHS Livenetwork, connected us with frontline serviceimprovers across the NHS.


Corporate overviewPerformance The NHS Institute has agreed a number of highlevel metrics (HLM) which give an indication ofperformance. We use a ‘traffic light system’ toreport our progress to our Board and sponsors.Using the NHS Institute’s baseline HLM targets,appropriate for measurement in 2007/08, theNHS Institute is at green status for 25 measures,amber status for three measures and red for onemeasure linked to the 18 week patient pathway.

Using the NHS Institute’s internal measures,which assess completion, awareness, spread,impact and learning capture for the year ending31 March 2008, 95/96 (99%) of targets forwhich we are accountable (completion,awareness and learning capture) were reportedas green. One target related to the MedicalLeadership Framework was reported as amber.

Next stage reviewThe NHS Institute has been involved in nearly allof the work streams of the Next Stage Reviewlaunched in October 2007 by Professor LordDarzi. The review aims to set out a 10 yearvision for the National Health Service. Key stafffrom the NHS Institute are involved in manyaspects of the review such as:

• leadership development

• the quality workstream

• a wide range of inputs relevant to innovationincluding membership of the newly formedHealth Innovation Council

• playing a leading role in work to surface thecontemporary values which underpin servicedelivery

• work to support the management ofknowledge to improve clinical effectivenessa programme of work on productivity.

The very significant nature of our role in thereview is testimony to the relevance of the NHSInstitute’s work to the current issues facing theNHS.

NHS ValuesThe NHS Institute is playing a key role in thedesign and delivery of a process to surfacevalues to underpin the work of the NHS. Weworked closely with the Department of Health,NHS Confederation and local NHS Organisations. The NHS Institute will be involved in thegovernance process of the values and compactswork for 2008, working closely with theDepartment of Health, NHS Confederation andlocal NHS organisations over the next 18months.

The Director of Leadership will support theDepartment of Health with the process ofbuilding internal NHS capability to run valuesengagement sessions in all NHS organisationsthroughout 2008/09 supporting localorganisations to embed values into core workprocesses and ways of working.

Involving patients and the public As a result of partnership working and theinvolvement think tank, The Patient and PublicInvolvement (PPI) Framework provides support tothe NHS Institute teams to enable theinvolvement of patients and the public inproduct development and decision making.

The Patient and Public Involvement teamcontinue to performance manage the NationalCentre for Involvement (NCI). The Institute ofHealthcare Management’s chief executive, SueHodgetts, has been appointed as interim chiefexecutive of the NCI.

Highlights for 2007/08 include working on twoinformed decision initiatives which bringtogether key thinkers in the fields of urology andknee surgery to develop informed decision toolsfor patients and healthcare professionals to usetogether.

Evidence shows that involving patients indecision making improves their health outcomesand can reduce the need for invasive surgery.


Involving partnersThe Practice Partner Network (PPN) hasexpanded rapidly and has 50 memberorganisations as at April 2008. The networkboasts membership across all 10 strategic healthauthorities and includes a number of foundationtrusts. Member organisations work closely withother NHS Institute teams and have tested andhelped to improve the No Delays Achiever tooland the Scenario Generator tool.

Three sites tested the Vision to DeliveryAccelerator on behalf of the ServiceTransformation team which led to a number ofimprovements for patients including:

• Walsall Hospital redesigned its porteringservices to improve the patient experience aspart of this test and learn opportunity

• South Staffordshire and Shropshire MentalHealth Foundation Trust involved users in theredesign of follow up/choice for mentalhealth patients requiring further out patientappointments closer to home

• Ealing Primary Care Trust looked at theredesign of key pathways of care using thistool locally.

The NHS Collaborate Social Networking tool hasbeen re-launched for further testing to aidsharing and learning.

NHS LiveNHS Live is a free, national learning networksupporting staff, patients and their communities torealise local ideas for improvement. NHS Live seekto support a movement of enthusiasts looking toimprove health and social care for patients.

The emphasis is on local projects that involvestaff, patients, the public and a wide range of local stakeholders in improving the quality ofhealth and social care. This could mean anythingfrom better coordination of diabetic careprovision through to community based schemesfor keeping older people active.

SomeNHS Liveproject teamsare matched withselected corporate partnerswho offer their private sectorexpertise and project managementsupport.

Highlights for NHS Live in 2007-08 include:

• adding 3,500 members to the NHS Livecommunity

• increasing the number of projects by morethan 320

• running 21 regional events attended byalmost 700 people across the country

• running a national event at the InternationalConvention Centre (ICC) attended by morethan 240 people

• overhauling and re-navigating the NHS Livewebsite to make it more user friendly and abetter representation of our workprogramme

• promoting the national and internationalreputation of NHS Live at conferences,including the Institute of HealthcareImprovement conference in Barcelona

• the NHS Institute board signed off the threeyear plan for NHS Live.

Health and Social Care AwardsThe Health and Social Care Awards are managedby the NHS Institute in partnership with theDepartment of Health.

The awards aim to highlight and celebrateinnovation and excellence across health and socialcare. They also recognise and encourage workingtogether across organisations and professions,with service users and local populations.


Categories range from mental health andwellbeing and dignity in care to improvingaccess and success in partnership working.Applicants can win at regional and nationallevel. The campaign that ran over 2007 to 2008,culminating in the 2008 Awards, attracted morethan 2,500 entries.

NHS Institute Programme Office The NHS Institute has recently recruited staff toform its new programme office. The new teamwill strengthen the management of projects,organisational planning and collaboration betweeninternal and external teams. This should enableenhanced benefits through continuouslydemonstrating a clear linkage between the NHSInstitute’s products and the national agenda andbetter engagement with customers.

Extended Services Pilot ProjectFollowing the launch of the Care OutsideHospital and Releasing Time to Care: ProductiveWard products, extended offerings have beendeveloped and offered to clients to support thespread and adoption of the products.

The NHS Institute is currently working with 11primary care trusts in rolling out the extendedofferings for care outside hospital, and isfollowing up further expressions of interest from10 primary care trusts. For the Productive Ward,the NHS Institute has already reached agreementwith the London South East Coast and WestMidlands Strategic Health Authorities on regionwide rollout of extended offerings. In additionseparate programmes have been agreed with 12individual trusts.

The level of interest for the Productive Wardextended offering has been extensive and theNHS Institute is currently discussing possiblerollout programmes with other strategic healthauthorities following the Secretary of State’sannouncement for funding of £50m. Based on

current levels of interest it is estimated as manyas 150 trusts across the acute, community andmental health sectors may participate in theProductive Ward extended offerings programme.The NHS Institute is currently developing plans torespond to this higher than anticipated demandand to establish the resources required to meetthis customer requirement.

Non-NHS customersNon-NHS offerings are being piloted through anumber of arrangements. Publications are nowavailable for sale via the NHS Institute websiteand licensing arrangements for the exploitationof NHS Institute intellectual property rights arecurrently being negotiated in a number of areas.Consultancy services have been piloted withnon-NHS customers and draft partnershipagreements are being considered for a smallnumber of key markets.

Looking forwardPriority areas for 2008-09 include:

• Commissioning for Health Improvementprogramme, which incorporates the work ofthe former priority programme Care OutsideHospital

• iLinks, a new programme creating customisedpackages of NHS Institute products to meetthe needs of different types of NHSorganisation. The iLinks team will maintainongoing work on the No Delays programme

• greater emphasis on engagement with thewider NHS, including extended services

• focusing work on the new product pipelineunder the Service Transformation team

• increased emphasis on community services.


Year at aglanceOur role is to help the NHS make realsustainable changes for the better and we’veachieved a lot over the last year. We’ve chosensome of the highlights of our year…andhopefully some of yours!

April 2007

Two million hitsWe relaunched the NHS Institute website, whichnow receives more than two million hits eachmonth. Visitors come from more than 80 countriesacross the world and it is we plan to develop anetwork of partnerships with international healthorganisations and derive income from the sale ofour products outside of NHS England through ourextended services project.

May 2007

10 High Impact Changes goes on the websiteThe NHS Institute re-issued the 10 High ImpactChanges for Service Improvement and Delivery,and they are available on the website.

June 2007

Bringing User Experience to HealthcareImprovement; the concepts, methods andpractices of experience based designThis book, written by our academic partners,describes the theory and practice of theexperience based design work that we fieldtested at Luton and Dunstable NHS Trust.

Releasing Time to Care: Productive WardIntroductory EventsThe second of the workshops to introduce anddemonstrate the Productive Ward attracted morethan 300 delegates, including a nursing directorfrom each of the 115 NHS trusts represented.

FreeNHS LiveeventsNHS Live ran aseries of regionalworkshops as part of its newregional seminar series programmeof events. The workshops held in fourvenues aimed to provide inspiration andmotivation, tips and tactics.

July 2007

Graduates successA total of 21 per cent of successful applicantsfor the 2007 NHS graduate training schemecame from the NHS hidden talent pool.

The Graduate Training Scheme attained the ‘Bestof the Best’ award from the Association ofGraduate Recruiters. The scheme also received theaward for best in recruitment and assessment.

August 2007

Recruit and retainThe NHS Graduate Management TrainingScheme was short listed for the HSJ Awards inthe Recruitment and Retention category.

No DelaysThe No Delays team had a busy month,launching version 5 of their No Delays Achieverboasting more intuitive navigation, an improvedlogin function and easier download functionality.

The team held a series of workshops aimed atteaching operational managers how to use theweb based achiever, and hosted a one dayworkshop and masterclass for their newambassadors from the Practice Partner Networkwho will, in turn, introduce colleagues fromother trusts to the benefits of using the NoDelays tools.


CHAINA new PPI (Patient and Public Involvement) incommissioning sub-group of the email networkCHAINs was launched.

CHAINs (Contact, Health, Advice andInformation Networks) are free, multi-professional online networks for people workingin heath and social care. They provide a simplemechanism for mutual support and the sharingof experiences, ideas and aspirations using acombination of facilitation, online directories andtargeted emails.

September 2007We launched the Thinking Differently book andfrontline staff ordered 2,000 copies in the firsttwo weeks.

Commissioning for Patient Pathways guidancewas launched. The first of its kind, thispublication supports commissioners to sustainthe eighteen week pathway. It is available inhard copy and as an interactive PDF.

October 2007

Breaking ThroughThe Fourth National Breaking Throughconference took place. The programme includeda wide range of topics including patient safety,patient and public involvement andunderstanding learning disabilities. Guestspeakers included Lord Nigel Crisp, Lord Ara Darzi and Tim Campbell.

Responsive General PracticeEighty leading thinkers and practitioners fromprimary care attended an accelerated change eventwhich focused on the development of a responsivegeneral practice vision, building a framework forgeneral practice including an understanding ofboth drivers and barriers to achieve the change.The output of the event formed part of thenational report to be fed into Lord Darzi’s review ofthe NHS.

November 2007

Reducing demandUsing the NHS Institute’s Care Outside Hospitalprogramme and by enhancing GP care provision,demand for diabetes outpatient appointments atManchester PCT was reduced by seven per cent.

LIPSTwenty three NHS trusts signed up to theLeading Improvement in Patient Safety (LIPS)programme which focuses on building thecapacity and capability within hospital teams toimprove patient safety.

FellowsThe second intake of NHS Institute fellows tookplace in November 2007. The first fellows havejust successfully completed their year and willform a key part of the NHS Institute’s faculty.

During November the National InnovationCentre held a very successful event entitledDelivering Innovation with delegatesrepresenting all the major organisations on theinnovation landscape. One hundred and thirtydelegates attended from a wide range of publicsector organisations.

December 2007

Library recognisedThe National Library for Health (NLH) won aprestigious Microsoft sponsored award for theNHS website of the year. Angie Clarke and PeterHill accepted this award on behalf of the NLH ata very high profile event held at the RoyalCollege of Physicians.

Breaking ThroughThe second annual Breaking Through Recognitionevent took place to celebrate the achievements ofparticipants who had completed the BreakingThrough programme. Participants were presentedwith certificates of completion from BernardCrump and Yvonne Coghill, National ProgrammeLead for Breaking Through.


January 2008

Finding time to careIndividuals from more than 80 NHS trustscelebrated the launch of Releasing Time to Care:Productive Ward. The event launched 15modules that, when implemented, will increasethe time spent on direct patient care.

One hospital managed to increase the time thatnurses spent on direct patient care from 25 percent to 46 per cent.

The modules are available free as a set orprinted individually, and the NHS Institute offersadditional levels of support.

February 2008

An international audienceThe NHS Institute guest edited ClinicalGovernance: an International Journal. Edition 13Number 1 was a special edition on the work ofthe NHS Institute with articles by Lynne Maher,Bernard Crump, Mark Mugglestone, Julia Taylorand John Clark with an editorial by Hugh Rogers.

Featuresincluded ‘Therole of data withinservice improvement totransform access to services’,‘Accelerating the improvementprocess’, ‘Attainment of competency inmanagement and leadership’ and ‘How canwe make improvement happen’.

March 2008

Save one in five The Productive Leader programme was launchedas part of the NHS Institute’s highly regarded‘Productive’ series. It demonstrates how seniorleaders can claim back up to a day a week oftime by implementing more efficient processes.A series of seminars were held in April tosupport the launch.


Director of Finance Commentary

Finance performance

2007/2008 Finances at a glanceThis report includes the financial informationfor the year ended 31 March 2008. The NHSInstitute was required to achieve a number ofkey and statutory financial targets:

• To maintain its revenue expenditure withina limit of £73,531,000. This was achieved.

• The NHS Institute was required to maintainits capital expenditure within a limit of£2,044,000. This was achieved.

• To maintain its net cash outgoings fromoperating activities in the within a limit of£76,575,000. This was achieved.

• In addition to the key statutory targets, theNHS Institute is expected to undertake itsbusiness in accordance with the BetterPayment Practice Code. The NHS Institute isrequired to meet the better paymentpractice code target of paying all non-NHStrade creditors within 30 days of receipt ofgoods or a valid invoice (whichever is later)unless other payment terms have beenagreed. In this respect the NHS Institutepaid 90.5% (by value) and 92.1% (bynumber) of its non-NHS trade creditorswithin 30 days of receipt of goods or validinvoice, whichever was the later. This wasan improvement on 2006/07 performance.

Director of Finance commentary The accounts on pages 43 to 70 have beenproduced in accordance with the directiongiven by the Secretary of State dated 1 June2005, in accordance with Schedule 15 of theNHS Act 2006, and in a format as instructedby the Department of Health with the approvalof HM Treasury.

Going concernThe balance sheet of 31 March 2008 shows

net liabilities of £693,000. This reflects theinclusion of liabilities falling due in the futurewhich, to the extent that they are not to bemet from the NHS Institute’s other sources ofincome, may only be met by future directfunding from the NHS Institute’s sponsoringdepartment, the Department of Health.

Funding for 2008/09, taking into account theamounts needed to meet the NHS Institute’sliabilities falling due in that year, has alreadybeen included in the Department of Health’sestimates for that year, which have beenapproved by Parliament. It has accordinglybeen considered appropriate to adopt a goingconcern basis for the preparation of the NHSInstitute’s accounts.

The NHS Institute met its key statutoryfinancial targets for 2007/08. The year hasseen us build on the achievements of theprevious year and ensure financial investmentwas there to support the NHS initiatives, manyof which are covered within this report.There remains a continued focus ondeveloping financial controls, governance andassurance processes that will stand us in goodstead for the future.

No DelaysThe No Delays Achiever is an online tool thatcombines analysis of individual trust’s referral totreatment data with the appropriate serviceimprovement tools and case studies to improveflow and reduce waiting times.

The site receives in excess of 15,000 hits permonth. Every NHS organisation now has at leastone registered user, with more than 2,000registered users of the Patient Journey Analyserelement that provides a snapshot of 13 highvolume specialities and their 18 week positionfor the data selected.

The No Delays Achiever has developed into aninternational resource with more than 20countries accessing the No Delays Achiever –including 2,000 hits per month from USA.

Data is entered every month and trusts cancompare their referral to treatment times withany other NHS organisation. It allows data to beviewed in a variety of chart formats includingstatistical process control and facilitates drilldowns to specialty level reports, even down toconsultant level.

The No Delays Achiever incorporates:

• the Patient Journey Analyser

• more than 100 service improvement toolstailored to help 18 week delivery

• six key areas that can really make a differenceto achieving the 18 week wait

• an improvement project guide - an easy tounderstand seven step guide providingassistance for small or large scaleimprovement projects

• case studies - learning from others, realexamples of where the NHS has madeimprovements towards a delay-free system.

In spring 2008 several new modules werereleased:• the facility to upload data so trusts had

access to a free analytical tool and ability to

sharetheir owndata with theircolleagues acrossthe net

• a commissioner module waslaunched in October 2007 andallows commissioners to comparemultiple provider referral totreatment data

• a module for practice-basedcommissioners (PBC) where they canestablish their own clusters and review thedata from the trusts they commission servicesfrom.

Commissioning for Patient Pathways waslaunched in September 2007. It is the firstguidance of its kind to support commissioners incommissioning for patient pathways andsustaining 18 week pathways. It is available inhard copy and as an interactive portabledocument format (PDF), alongside a number ofassociated publications. The guidance wasreleased as a web based tool in March 2008.

Highlights for the No Delays team in 2007/08include:

• running more than 125 workshops for NHSstaff

• establishing a community of practice for NHScommissioners supporting 30 primary caretrusts in learning how to commission patientpathways

• developing two primary care trust and eightacute trusts as ambassador sites for the NoDelays Achiever, with project managersupport


PriorityProgrammes


• rolling out awareness raising workshops forprimary care trusts working with trusts andstrategic health authorities on commissioningfor 18 weeks on a sustainable basis.

www.nhsinstitute.nhs.uk/nodelaysachiever

Commissioning Care OutsideHospitalsThere are seven million avoidable acute hospitalevents each year costing the NHS in excess of £1billion.

The white paper Our Heath, Our Care, Our Sayand the NHS Next Stage Review have set out theGovernment’s vision for the NHS to provide fair,personalised, effective and safe care with moreemphasis on services provided closer to home.

To deliver this vision and meet patients’expectations, NHS organisations need to be able toidentify which services should be redesigned todeliver care closer to home.

The NHS Institute’s Care Outside Hospital team hasworked with health communities across thecountry and developed products designedspecifically to help trusts shift care safely andsuccessfully out of the ward.

Highlights for the Care Outside Hospital team in2007-08 include:

• Getting the Basics Right and Beyond Projectswere produced by the University ofBirmingham’s Health Services ManagementCentre (HSMC). Getting the Basics Right is thefinal evaluation from Phase 1 of the Making theShift programme. Between September 2005and March 2007, we worked with 14 projectsin five healthcare communities to explore howto implement effective change over a 6 monthperiod; projects were implemented in the finalhalf of 2006. Beyond Projects contains casestudies from five of the 14 projectsimplemented during the Making the Shiftprogramme, detailing a project outline and thekey success factors for each project

• ‘Prioritise Opportunities’ was released inNovember 2007 and is now available on theNHS Institute website. The work has twodimensions to it. The first is about identifyingthe areas of activity which provide the greatestpotential to shift care outside hospitals using,amongst other things, another productdeveloped in the Care Outside Hospitalprogramme called the Opportunity Locator. Thesecond dimension relates to the prioritising ofthe initiatives which will deliver that change.Here we use another Care Outside Hospitalproduct called Priority Selector. The PrioritiseOpportunities process has also been pilotedaround to PCTs as part of the NHS Instituteextended offer

• Steps to Success was released in November2007. This is available in both electronic andhard copy format. The Steps to Success hasbeen tested with a number of PCTs to explorethe opportunities of making this productavailable through the NHS Institute extendedoffer

• The Stour Access Project is a new tool whichallows GPs to cut the number of face to faceGP consultations by up to 60 percent waslaunched at the Royal College of GeneralPractitioners' annual national conference inEdinburgh in October 2007. The approach,entitled the Stour Access System, has beendeveloped in conjunction with Stour Surgery inChristchurch, Dorset. It looks at ways ofmanaging GP appointments, putting the GP incontrol by triaging all patients by telephone.This enables them to make decisions about whothe patient needs to see next, therefore moreeffectively managing the GP’s, the nurse’s andthe patient’s time. Tried and tested, thisapproach is now spreading to practices acrossthe UK following the circulation of informationto all GP practices. It allows patients to see theirGP sooner and when most appropriate. It alsohelps reduce the number of missedappointments.

In some practices, missed appointmentsdropped to almost zero

• Emerging from the Care Outside Hospitalprogramme, the NHS Institute has co-developeda product called Clinic to Go. This has beenproduced to support organisations to establishclinics (both services and facilities) quickly,drawing from the experiences of the healthcarecommunities who have taken part in the firstphase of the ‘Making the Shift’ programme,and avoiding difficulties that they may haveexperienced during their initial start up phase.

The work of the Care Outside Hospital team will beincorporated into the new Commissioning forHealth Improvement priority programme for 2008/09.

Delivering Quality and ValueThe Delivering Quality and Value team helpedthe NHS release more than £300m savings forNHS organisations in 2007/8 from the total£2.2bn productivity opportunity identified by theBetter Care, Better Value indicators. The teamalso developed a range of new indicators whichwill be added to the existing set to cover areassuch as readmissions, outpatients and new areasof prescribing.

A relatively small number of care/treatment areasuse half of all NHS bed days and senior clinicalstaff time. Focusing on these areas theDelivering Quality and Value team has continuedits study of how the top performing NHSorganisations delivered the highest quality carewith the most efficient use of resources.

Using the NHS Institute's innovative work processmethodology, the aim of the project is to identifywhat makes the care of these patients work well insome care systems, and how this expertise can beshared and spread to others.

The work has now covered and reported on thefollowing areas:

• Acute admission to adult mental health

• Acute stroke

• Caesarean section

• Fractured neck of femur

• Cholescystectomy

• Short stay emergency admissions

• Urinary tract infections (a trackercondition for frail elderly)

• Primary hip and knee replacement

• Diabetes

• Sick patients with suspected cancer

• Cataracts

• Emergency and urgent care pathway forchildren and young people

• Heart failure

• Magnetic resonance imaging (MRI) in themanagement of low back pain

• Psychiatric intensive care units

• Preparing for end stage renal failure.

For all of these areas the team has developedproducts tailored to help trusts makeimprovements to individual pathways. Theproducts have a wide range of applications: self-assessment against benchmarks, action planningto solve a specific problem for smalldevelopment projects, broader serviceimprovements or redesign and to influencecommissioners.

For six of the pathways the team has developed amore intense and support tailored package forNHS organisations. For 2008/9 the team will inviteapplications and, in conjunction with strategichealth authorities, select trusts to participate in ayear long improvement programme.



Highlights for the Delivering Quality and Valueteam for 2007/08 include the following:

• Service users as NHS Institute members – aspart of the second series of their High VolumeCare programme, the Delivering Quality andValue team worked with the Patient and PublicInvolvement team to look at inpatient care forpeople with diabetes who are admitted fornon-diabetes health problems. Four users wererecruited alongside clinicians and NHS Institutestaff as full team members. A short film wasproduced which outlined the experience of allinvolved

• Promoting normal birth and reducingCaesarean section rates – the team createdtwo resources: the first to help organisationsidentify three clear clinical pathways and 10key principles for reducing intervention rates,and a second with practical techniques forsustainable changes in maternity services,including a self-assessment tool

• Examined high performing services forprimary hip and knee replacement andcreated practical tools for underperformingNHS organisations

• More than 80 per cent of acute and primarycare trust directors are aware of the BetterCare Better Value indicators

• Produced Focus on: Cholecystectomy whichidentifies the key characteristics of highperformance across the patient pathway fromreferral to post-operative care and a follow-up publication for commissioners whichshows how they can save £190 per patientby following the recommended pathway

• Created Focus on: Frail Older People. Onetrust reported a 24 per cent increase intransfers from the acute sector to communityhospitals and a reduction of 10 days inlength of stay.

Safer CareThe Safer Care team was set up as a new priorityprogramme to work with the NHS to help themgain the passion, confidence and skills to eliminateharm to patients.

The NHS Institute was given a remit to developeducation and training to improve patient safety.

The approach taken has been to develop theLeading Improvement in Patient Safety (LIPS)programme, which focuses on building the safetyimprovement capacity and capability withinhospitals.

The programme presently includes six core modulesheld over a nine month period:

• Getting started: a two day workshopintroducing the tools and techniques foridentifying and understanding the rate of harmand for effective measurement of improvement

• Executive Quality and Safety Academy (EQSA):two days of strategic planning on improvingquality and safety for chief executives and theirexecutive/non-executive teams

• LIPS core modules: for teams of senior doctorsand nurses and patient safety managers to buildtheir capacity to lead improvement in patientsafety. Implementation plans are developed tobe shared with chief executives at the end ofthis five day programme

• Pursuing, progressing and sustainingimprovement: three separate events givingteams the opportunity to explore specific issuesin depth, share learning with other trusts andreview and update action plans.

An additional patient safety managercourse has been developed in conjunction withWarwick Medical School. This three dayprogramme will offer trusts the opportunity todevelop additional capacity in safety improvement.

A steering group has been established to develop aquality and safety improvement faculty board. Thisboard will advise and support the development ofclinical quality and safety improvement. This willinclude a cohort of clinical service improvementexperts who will have a role in teaching, coachingand mentoring the wider NHS.

Additional materials are being developed and haveincluded two papers on reducing avoidablemortality and a DVD. The latter highlights the rolehuman factors play in contributing to harm topatients. Martin Bromiley tells the story of his wifeElaine’s death after routine surgery.

The first year has had a primary focus on acutehospitals due to the evidence base available. Inparallel a team has started developing anunderstanding of safety in non-acute settings,particularly in primary care. It is intended toproduce prototype tools for wider testing during 2008.

The NHS Institute was also given a remit to work inpartnership with the National Patient SafetyAgency and the Health Foundation to develop asafety campaign. This is a grass roots campaign tomotivate staff and healthcare providers to addressthe safer care challenge.

Highlightsfor the SaferCare team in2007/08 include:

• Working with 23 hospitals onthe first leading improvementprogramme

• A two day executive quality and safetyacademy for chief executives anddirectors of organisations

• Developing a three day patient safetymanager course in conjunction with WarwickMedical School

• Identifying and developing the skills of a cohortof frontline staff to teach future programmes

• Initiating a work stream to establish anunderstanding and approach to safety in non-acute settings. This will start in primary care andwill extend to include mental health and otherhealthcare settings

• Supporting the development of a safetycampaign to be launched in July 2008.



The National Innovation Centre:accelerating the uptake of newtechnologiesThe NHS National Innovation Centre (NIC) aimsto accelerate the uptake of pre-commercialtechnologies likely to benefit the NHS.

The NIC has built on the cross-Governmentinnovation agenda and Health Industries TaskForce (HITF) deliverables by fostering connectivityand communication between the organisationsacross the innovation landscape.

In November 2007, the National InnovationCentre held a Delivering Innovation eventattended by more than 130 delegatesrepresenting all the major organisations involvedin innovation. Representatives came from theDepartment of Health, Department forInnovation, Universities and Skills andDepartment for Business, Enterprise andRegulatory Reform, the Wellcome Trust and theYoung Foundation, as well as universities andhealthcare bodies such as the Department ofHealth’s commercial directorate, NHS Purchasingand Supply Agency and the NHS Confederation.

Commercialisation of innovations arising fromwithin the NHS is managed by the nineInnovation hubs in England. The hubs offer legaland commercial support to NHS staff who havea pre-market product. In doing so, each hubserves the NHS organisations in its area byidentifying, protecting and developingintellectual property sourced from within theNHS.

New web based tools provide innovators acrossthe landscape with help to manage andaccelerate their innovation's progression:

• The Scorecard enables innovators to carry outtheir own assessment of their innovations

• The Navigator helps innovators find the mostappropriate resources and people on the

public sector landscape and thus creates apathway to help accelerate the developmentof their innovations

• The Prospect Zone is a marketplace in whichindustry, academia and the NHS can formnetworks and partnerships to develop newopportunities. Innovators can both post oraccess ideas to be developed and do businesswith each other independently of the NIC.

Highlights for the National Innovation Centre in2007/08 include:

• Between April 2007 and March 2008, the NICwebsite received almost 6,000 visitors eachmonth

• During the year, 332 people registered on thescorecard tool to conduct a self-assessment oftheir innovations. Of those, 86 submitted theirideas and received professional assessment bythe NIC

• In the first six months of 2007/08 the nineNHS innovation hubs completed twice thenumber of deals as the same time theprevious year. In the first six months of2007/08, the regional NHS innovation hubscompleted 46 deals. In 2007, the nine NHSinnovation hubs reviewed more than 1,000innovations from NHS staff, agreed 54 deals,filed 36 patents and formed three new spin-out companies. Examples of innovativemedical devices included an ear scaffold thatimproves on time, cost and patient comfortand an instrument for detecting peripheralvascular disease

• A technology adoption strategy has beensignificantly advanced with the initiation ofthe technology adoption programme and thelaunch of the Technology Adoption Hub inManchester. There is close collaborationbetween the NIC and the NHS NationalTechnology Adoption Hub and their respectiveactivities complement each other.

Encouraging innovation, building capabilityand capacity:

A new hubThe NHS National Technology Adoption Hub(NTAH) was launched in Manchester inSeptember 2007 to promote the increaseduptake of innovative technology in the NHS.

The hub has the following aims:

• to work with partners to source excellenttechnologies for the benefit of patients

• to increase the uptake of new technologyacross the NHS

• to improve understanding of how newtechnologies are taken up by the NHS.

Over the next three years, the NTAH will reviewup to 200 innovative technologies from NHSpartners and medical technology companies.

Selecting 15 of these technologies forimplementation projects in a wide range of real-time clinical settings in the NHS, they will workwith teams in the trusts to manage theimplementation and systems integration issues.They will identify where additional changes to aclinical pathway or service may be needed andunlock the full benefit of the innovation.

Where technology adoption is successful, thehub will produce technology adoption guidesand full business cases. It will disseminate these

widelyacross theNHS tostimulate uptake ofthe technology.

The hub will also map the widertechnology adoption landscape oforganisations and processes involved intechnology uptake in the NHS. This will include aguide highlighting the role of the differentorganisations both inside and outside the NHS.

The hub has already embarked on severaltechnology implementation projects with NHStrusts to embed innovative technologies intoclinical settings. These projects will also providean understanding of the issues associated withadopting these technologies. The selectedtechnologies for projects have a wide evidencebase of improving patient care and systemefficiencies.



Graduate Management SchemeThe graduate scheme is the launch pad forfuture leaders of the NHS and is designed toprovide the perfect introduction to managementin the NHS, and to build the highest degree ofmanagement capability and leadership capacity.

The scheme was listed in the top five of TheTimes Top 100 Graduate Employers in April2008, rising two places from 2007 andbecoming the highest placed public sector body.In addition, the human resources leg of thescheme won the coveted HR employer of choiceaward for the third year running.

The training programme remains amongst themost respected in the world when it attainedthe ‘Best of the Best’ award from theAssociation of Graduate Recruiters in July. The programme also received the award for bestscheme in Recruitment and Assessment. InAugust 2007, the scheme was short-listed forthe Health Service Journal Awards in theRecruitment and Retention category and theSecretary of State, Alan Johnson wrote to DameYve Buckland, NHS Institute Chair,congratulating all staff for their hard work andachievements.

The programme combines core learning andspecialised modules that support the attainmentof a professional qualification in humanresources, finance or general management.

Graduate trainees work alongside some of thebest clinicians and most inspiring managers inthe NHS. Their development is enhanced byaccess to senior managers, the opportunity toshadow chief executives and attend boardmeetings as well as having their own personalmentor. This year the scheme attracted 220graduates into the NHS.

Trainees from the NHS financial managementtraining scheme performed exceptionally well inthe Chartered Institute of ManagementAccountants (CIMA), with 23 trainees receivingcommendations.

A pilot informatics graduate scheme waslaunched in the autumn, run by three strategichealth authorities, which began withinvolvement from the NHS graduatemanagement training scheme.

Success of the graduate scheme continues with93 per cent of graduates going on to roles inthe NHS or Department of Health.

Gateway to LeadershipGateway to Leadership is an important part ofthe NHS drive towards creating a world classhealth service.

The programme provides a source of new talentto the NHS from the private sector, other publicsector organisations and the third sector. This inturn complements the strengths of our existingmanagement teams in NHS trusts around thecountry.

Now in its fifth year, more than 180 managershave joined the NHS through the scheme.

The Gateway to Leadership programme was re-launched in September 2007 and attracted 168applications. Eighty NHS organisations registeredtheir interest in employing a gateway candidateand 20 high calibre applicants were appointedto participating NHS organisations in April 2008.

Leadership


Breaking ThroughThere is growing recognition that the make upof the NHS workforce should reflect the diversityof the communities that it serves.

Although up to 30 per cent of NHS employeesworking at lower grades come from black andminority ethnic (BME) backgrounds, this figuredrops to 10 per cent at middle managementlevel and less than one per cent at chiefexecutive level.

The NHS Institute’s Breaking Throughprogramme aims to increase the diversity of theNHS workforce at director and chief executivelevel through training, mentoring anddevelopment.

The programme was re-launched at the BreakingThrough’s fourth annual conference in October2007. More than 600 people attended andguest speakers included Lord Nigel Crisp andLord Ara Darzi. The conference also launchedthe new Top Talent programme that aims toidentify the most talented managers from blackand minority ethnic backgrounds and supportthem to progress to director level.

There are 193,000 NHS employees from blackand minority ethnic backgrounds, but less thantwo per cent work at an executive director levelor higher.

The Breaking Through TransformationalLeadership programme is a training programmedeveloped to enhance personal insight, politicaland emotional intelligence and ability to makepowerful, creative interventions. Structured over25 days within a four month period, the aim isto equip participants to play a leadership role inrealising the potential of a diverse NHSworkforce.

Highlightsfor BreakingThrough in 2007/08include:

• Recruiting three regionalcoordinators whose role is to helppromote the programme in each of thevarious regions across England

• Successfully completing the first cohort of theTransformational Leadership Programmewhich was delivered by The Kings Fund andPeople Opportunities. Twenty three candidatescompleted the five week programme over aperiod of seven months

• Holding a recognition event, hosted by LordNigel Crisp in March 2008 at the House ofLords

• Recruiting 15 candidates into the new TopTalent Programme

• The fourth and final cohort for the oldBreaking Through programme completed theirmodules in November 2007. A total of 70candidates have completed this programme

• Holding its second annual recognition event inNovember, attended by more than 130 alumniand invited guests

• Commissioning a study to look at blocks inorganisations that stop BME people fromprogressing in their careers and to identifygood practice in other organisations.


Medical Engagement

Enhancing Engagement in MedicalLeadershipThis joint project with the Academy of MedicalRoyal Colleges aims to help create anorganisational culture where doctors seek to bemore engaged in management and leadership ofhealth services and senior leaders genuinely seektheir involvement to improve services forpatients across the UK.

Highlights for the Medical Leadership team in2007/08 include:

• A medical leadership competency frameworkwhich describes the leadership competencesthat doctors need in their practitioner roles tobecome more actively involved in theplanning, delivery and transformation ofhealth services. The framework applies to allmedical students and doctors and has beenendorsed by the project steering group andacademy and will be published in early 2008/09

• A medical engagement in leadership scale forhealth organisations to assess levels ofengagement and suggest behaviour topromote engagement. Monitor and theHealthcare Commission have expressedinterest in using this scale

• A review of academic literature about medicalengagement and any empirical evidence forits linkage to organisational or clinical aspectsof performance

• An international survey of approaches toengaging doctors in management andleadership

• Interviews with chief executives and medicaldirectors from the best and worst performingtrusts (Health Care Commission 2006) acrossEngland to explore the links between medicalengagement and organisational performance

• A Good Practice Medical Engagementpublication which includes a collection ofindividual examples of good practice,particularly at postgraduate level discoveredduring the project. The publication alsoincludes the results of the literature reviewand interviews.

The findings from the international survey andliterature review are available in the summarypaper ‘Engaging Doctors in Leadership: What wecan learn from international experience andresearch evidence’, published in March 2008.

The project continues in 2008/09 with the focuson raising awareness and sharing knowledge ofthe project outputs with NHS medical leadersand non-medical leaders (both service andeducation) through a series of meetings, roadshows and workshops.

www.institute.nhs.uk/medicalleadership

Leadership: Board leveldevelopmentThe NHS Institute's Board Level Developmentteam aims to help NHS senior leaders with theirpersonal and leadership development needs.

The programme aims to build commissioningrelated capabilities through a comprehensivetraining and development package to supportindividuals and whole boards.

Projects include focusing on developing the skillsthat create personal impact including posture,body language, breathing, voice, energy andlanguage and politics in the NHS design. This isdesigned to provide a deeper understanding ofthe political dimension of the NHS and increasedcapacity to implement government policieswithin the NHS.

Highlights of the Board Level Development teamfor 2007/08 include:


• Commissioning a Patient led NHS - theBoard Level Development team completedthe roll out of products designed to supportprimary care trusts, which had been impactedby the policy ‘Commissioning a Patient ledNHS’. The products were accessed by morethan 1,000 individuals from more than 90primary care trusts across all 10 strategichealth authorities

• The Leadership Qualities Framework (LQF) hascontinued to be used across the service andthis can be seen in the 12 per cent increase inuptake of the 360 degrees diagnostic

• The Board Level Development team havesubsidised four further cohorts of thecoaching skills development programme,accrediting 60 NHS staff to provide coachingsupport to their colleagues across the service

• The Board Development tool has been rolledout with a facilitated support package. A totalof 16 boards have accessed this, receiving afully facilitated diagnostic tool enabling themto review their performance as a board andundertake development planning. Demand forthis product is increasing

• The NHSInstitute, inpartnership withMonitor and the Departmentof Health, has rolled out eightcohorts of the strategic financialleadership programme. The 10 dayprogramme has been accessed by 164delegates and aims to provide development inboth technical and behavioural skills

• In partnership with the Department of Health,the team launched the National LeadershipDevelopment Services Framework. Sevenproviders have been appointed to providedevelopment interventions for aspiring chiefexecutives

• The Executive Coaching Register has beenaccessed by 196 clients, including newlyappointed chairs, chief executives andexecutive directors from all 10 strategic healthauthorities.


Knowledge and Learning for theNHS NeedThe NHS Institute Alert provides a currentawareness scan of newly published literature oninnovation and improvement. This is available asa Word document, a blog and an RSS feed.

Building on this success, work is now underwayto develop it into a national service to include:

• Brief summaries for each item

• Integration with the National Library forHealth My Update service

• Full text links to items

• Online journal club linked to a UK basedjournal

• Online tools to enable subscribers to criticallyappraise the research.

Improvement from the startDeveloping good improvement habits in the nextgeneration of health workers is vital. Thelearning team is working with higher educationinstitutions and local NHS employers to developshort courses on improvement which can beapplied to anyone at undergraduate level. This embeds the idea that everyone, whateverdiscipline or grade, has a contribution to maketo provide better, safer healthcare.

The work began in 2006/07 when the NHSInstitute commissioned pilots at threeuniversities. During 2007/08 the work continuedwith these universities and six new consortiawere recruited, each comprising a university andone or more NHS employer. The aim is to furthertest the feasibility and effectiveness ofincorporating improvement into a highereducation institution’s curriculum forundergraduate training.

During this academic year more than 2,000students experienced improvement in theirprofessional education. The external evaluation

showed benefits all round: for students, theuniversities and the NHS.

A sharing event held in January 2008 to raiseinterest in the work resulted in an additional 10universities expressing interest in being involvednext year. Work is currently underway to agreehow to support implementation.

In addition, a one hour elearning programmeaimed at introducing improvement at inductionwas launched in June 2008.

Award for the National Library forHealthThe National Library for Health website offers asingle source of knowledge that is catalogued,classified and organised so that it is not onlyeasy to find, but can be distributed throughmodern delivery mechanisms such as digitallaboratory reports, and eprescriptions.

In January 2008, a new front end was launched,incorporating a number of new featuresincluding the My Library service which allowsusers to find local NHS Library services nearthem and store them on their own account.

There are currently 257,000 NHS staff andplacement students in England who can accessfull text journals, key clinical databases andebooks via the Athens access and identitymanagement service, signing in just oncethrough the National Library for Health frontpage and searching for all their clinicalpublication via a single interface.

Highlights for the National Library for Health in2007/08 include:

• Establishing a design authority to develop andpromote the standards needed to implementintegrated digital library systems

• Building the standards into a nationalprocurement framework so that, for the firsttime, publishers have to provide content in aninteroperable format

Learning

• Launching NHL Search 2.0 – this willbring together health bibliographicaldatabases from Ovid and EBSCO, onlinejournals and eBooks, a medical images search,NHS guidelines search and the 29 specialistlibrary portals built by the NHS into a singlesearch engine

• Establishing an NLH Link Resolver, which willhold and track all the online journal andebook holdings for the NHS, allowing the linkthe users’ search results to available online fulltext, either at a national level by NLH or bytheir local NHS library service

• Launching a web feed directory and searchengine to allow users to construct their ownpersonalised knowledge update

• Managing the re-procurement of 28 electronicspecialist libraries for a further three years.Specialist libraries are typically delivered byuniversity departments or NHS trusts andinvolve a dedicated information specialistworking with a clinical lead to provide themost up to date health information forparticular topics.

The National Library for Health continues with itsaim to bring together trusted, authoritativeinformation resources in one place for thebenefit of NHS staff.

The NHS Institute FellowsThe NHS Institute Fellowship Scheme launchedwith its first four fellows in March 2007 andtook on its second intake the followingNovember. The first fellows have successfullycompleted their year and will form a key part ofthe NHS Institute’s faculty. An externalevaluation confirmed this to have been anextremely positive and rewarding experience forthose taking part.

The scheme is intended to attract potentialfuture leaders in innovation and serviceimprovement. During the fellowship period there

are opportunitiesto undertake a numberof formal developmentactivities such as:

• Developing a sound understanding ofimprovement science

• Completing an innovation or improvementproject relevant to the NHS and benefitingtheir own organisations

• Building sustainable relationships with keyNHS personnel within the dynamic andsupportive environment of the NHS Institute.

Recruitment will begin in summer 2008 for thenext group of fellows to commence in theautumn.

Workforce Matters: developingstrategic HR improvementcapabilityA new programme has been developed to helpthe human resources (HR) and organisationaldevelopment (OD) community face thechallenges of the pluralist market.

The key challenges include:

• Aiming service planning, financial planningand workforce planning into effectivecommissioning strategy

• Improving productivity and efficiency

• Developing the leadership role andcompetencies for HR and OD directors andworkforce development specialists in worldclass commissioning.

This proof of concept programme is designed tobuild strategic improvement capability. It will



equip the new learning network with thecompetence and confidence to effectivelyaddress these challenges and will focus on twokey strands:

• Establish a whole health community approachto developing the capacity and capability ofthe workforce as part of the commissioningprocess

• Identify improved and innovative models andworkforce planning together with theunderpinning role and competencies of thisspecialist group. This will support delivery ofeffective workforce development and planningand the vision for 21st century health.

The programme will finish by November 2008with an expert panel evaluation of theimprovement projects delivered by theparticipants and external evaluation to providepotential national learning.


Transforming service,transforming careThe NHS Institute’s Service Transformation teamcreates tangible benefits for patients and addsvalue to the NHS by working together withleaders and front line teams to solve problemsfacing the NHS. The team helps to ensure thatall NHS Institute work is robust by supportingthe continued use and development of anintegrated innovation process

The team has taken leading edge conceptsfrom a variety of industries (including the realmof design), and applied them within health.This has created new knowledge andunderstanding which enables the design ofhealth services to be based on the actualexperiences of patients, carers and staff,resulting in tangible benefits for patients andstaff

Highlights from the Service Transformationteam in 2007/08 include:

• The Productive Ward series has sparkedmassive interest from other countries theNHS and international interest fromincluding Australia and New Zealand

• Over 4,000 copies of the Thinking Differentlybook are being used by NHS staff and over100 copies have been purchased byorganisations outside of the NHS. Nearly1,000 NHS staff have received Masterclasstraining in the use of Thinking Differentlyconcepts, tools and techniques

• The NHS Sustainability Model and Guidehave been translated into three languages tosatisfy demand. The model is being usedboth nationally and internationally tomaximize the sustainability of improvementprojects

• The primary care trust’s (PCTs) developmentplanning guide is being used by 60 per centof PCTs to identify capability gaps

• There is anactive SHAnetwork focusing onlarge scale improvement.Four strategic health authoritypilot sites have tested and adoptedDeep Dive, an innovative approach toimprovement and innovation

• Within the Developing through ImprovementProgramme, participating chief executiveshave developed their vision for theirorganisation in the form of a transformation‘story’ which set out challenging goals toimprove patient care in their organisations.

• Almost 300 people have attended trainerdevelopment sessions for the LeanSimulation tool and 200 Lean Simulationtoolkits have been sold

• The team have had six papers published inacademic journals, spreading the theory andpractice of improvement and innovation.

Clinical Systems ImprovementClinical Systems Improvement encompasses theimprovement methods and skills to enableorganisations to transform healthcare services.Through new ways of working they can createa range of benefits for patients.

By increasing clinical systems improvementcapability, the NHS Institute supports NHSorganisations in their efforts to improve healthoutcomes, reduce delays and remove wastethrough identifying activities which add novalue to patient care. This will significantlycontribute to lowering NHS costs andincreasing productivity. Patients will benefit

ServiceTransformation:


from receiving better care, with fewer delaysand improved reliability. The NHS InstituteClinical Systems Improvement strategy hasthree key elements:

1) The Productive series - applies clinicalsystems improvement in specific healthcarecontexts.

On the ward: Releasing Time to CareThe Productive Ward was launched in January.To date more than two thirds of all acutehospitals have shown an active interest in theproduct. The programme features 15 learningmodules which enable staff to use simple leantechniques to redesign their processes todeliver safer, more dignified care.

The programme has been shown to:

• Increase direct care time with no extraresource

• Increase staff morale (evidenced by areduction in sickness absence)

• Reduce inventory costs of ward stock.

There is also evidence of improvements inpatient safety, for example, increasing reliabilityof patient observations and reduction inhospital acquired infections.

NHS leadersThe NHS productive leader programmedemonstrates how a range of simpleinterventions can increase personal productivityand free up significant amounts of time amongsenior leaders.

Test sites report a range of improvementsincluding up to 90 per cent of meetingsstarting and finishing on time and leadersreporting that they are better prepared formeetings.

The programme includes five selfdevelopment modules, senior teamcoaching, email coaching, meetingmanagement coaching, PA workbook anda commitment to improvement module.

In community hospitalsThe productive community hospitalprogramme supports front line staff toimprove quality and reduce waste in theirclinical areas.

The project focuses on three clinicalservices for improvement: minor injuryunits, day hospitals and inpatient wards.Test sites have demonstrated that timespent with patients has increased by 20 percent, as well as an increase in throughputand a decrease in DNA (did not attend)rates for day hospitals of 40 per cent.

In operating theatresThe productive operating theatre is at anearly stage of development with the firstpilot sites starting work in the summer. Thisprogramme aims to develop a number ofpractical tools, such as how to organise keyprocesses like theatre turnover, schedulingor sterile supply. A series of measures thatNHS organisations can use to monitorimprovement in theatre services will also bedeveloped. This will help ensure:

• Safer, more reliable care

• Improved overall experience for patients

• Better run theatres, creating improvedstaff well being

• Higher productivity and better qualityand value from theatre resources.


2) Training – in addition to trainingprovided through the Productive Seriesthere is a specifically designed and testedtraining programme which incorporatesquality improvement tools and methodsadapted to healthcare such as theory ofconstraints, lean thinking and Six Sigma.This training has been delivered to morethan 300 NHS staff.

3) Publications and products – a series ofknowledge products have been developedfor the NHS. These include Going Lean inthe NHS; Reducing Avoidable Deaths inHospital and the Lean Simulation tool-kit.All of these products have attracted a highdemand and over 200 Lean Simulationtoolkits have been sold.

Chief Executive Networks The PCT Chief Executive Network has helped todevelop frameworks and tools to support thedelivery of improvement goals. These include:

• a paper which draws on case examples fromPCTs in the network to illustrate themeasures of efficiency, effectiveness andefficacy can support high performance

• a policy paper on the concept of public valuewhich raises questions relevant to thechallenges faced by PCTs.

The network has taken an active role in thedevelopment of world class commissioning andin the next period will explore key leadershipthemes that are relevant to the Department ofHealth competencies.

The Delivering through Improvement networkconsists of 14 NHS Trust Chief Executives whowork together to develop new and innovativeapproaches, models and tools for

transformationalchange. They havedemonstrated tangibleand measurable improvementsacross two care pathways whichwere their focus for this year: fracturedneck of femur and acute stroke. Improvementsincluded reduction in length of stay by up to 8days, reduction of readmission rates by over5% and reduction in mortality rates by up to 7%.

Social MovementThe NHS Institute has developed a newapproach to change in organisations that canbuild energy and momentum behindimprovement priorities. The work uses socialmovement principles to support organisationscreate and embed organisational changeenabling greater productivity and moreeffective delivery of services.

Work with 17 field test sites has shown thatthis approach can:

• Energise and mobilise staff (includingclinicians)

• Empower staff to take action

• Raise morale and increase positive thinking

• Foster creative thinking and innovativeapproaches

• Lead to concrete achievements and benefitsto patients and staff.


The ‘Power of One Power of Many’ handbookprovides supportive information and practicalideas for anyone wanting to test out thisapproach.

The programme is entering a new phase and isconnecting to the Health Foundation PatientSafety Campaign and the Department ofHealth values and behaviours workstream.

Thinking DifferentlyThe Thinking Differently book contains practicalapproaches and tools for NHS leaders andfrontline teams to fundamentally rethink theway in which care is delivered. Within just fourmonths of its release, over 4,000 NHS stafffrom more than 200 organisations hadrequested the guide. In response to demand,the guide has been made available for sale toorganisations outside the NHS. So far, morethan 100 copies have been sold.

The guide was reviewed in Foresight Journal,which commented: “If a public sectororganisation can do this, how much moreshould others be able to do?”


GovernanceStructureGovernance ArrangementsIn ‘NHS Institute for Innovation andImprovement – Directions 2005 (and amended2007), the Secretary of State sets out thefunctions of the NHS Institute. The ‘NHSInstitute for Innovation and Improvement –Regulations 2005’ sets out the membership andprocedures of the organisation.

The NHS Institute’s role is ‘to support the NHSand its workforce in accelerating the delivery ofworld class health and healthcare for patientsand the public by encouraging innovation anddeveloping capability at the front line’ (NHSInstitute Framework Document issued by theSecretary of State for Health).

The Board of the NHS Institute provides strategicleadership to the organisation and is the bodyresponsible for ensuring that strategic objectivesare met. Membership of the Board consists ofboth executive and non-executive directors. TheBoard is led by a non-executive director chairand non-executive directors are appointed bythe Secretary of State. The chief executiveofficer is appointed by the chair and the non-executive directors and together they appointthe executive directors.

The Board’s current composition is as follows:

Dame Yve BucklandChair

Mike Collier CBEVice-chair and Chair of the Audit and RiskManagement Committee

Professor Dame Carol BlackNon-executive Director

David BowerNon-executive Director and Chair of theRemuneration Committee

ProfessorTony ButterworthCBENon-executive Director

Mike Deegan CBENon-executive Director

Noorzaman RashidNon-executive Director

Andrew SmithNon-executive Director

Professor Bernard CrumpChief Executive Officer

Simone JordanExecutive Director (Director of Learning andDeputy Chief Executive)

Paul AllenExecutive Director (Director of LeadershipDevelopment)

Dr Helen Bevan OBEExecutive Director (Director of ServiceTransformation)

Michael CawleyExecutive Director (Director of Finance andBusiness Services)

Dr Maire SmithExecutive Director (Director of Technology andProduct Innovation)

Committees of the BoardThere are two formal committees of the NHSInstitute Board.


The Audit and Risk ManagementCommitteeThe Audit and Risk Management Committeeroutinely meets bi-monthly and is responsible tothe Board for developing and overseeingeffective arrangements for all aspects of internalcontrol and financial reporting within the NHSInstitute. As part of this remit it is alsoresponsible for maintaining an appropriaterelationship with external and internal auditors.As such, the Committee is the principal body,below the Board, for carrying out scrutiny ofpolicy and processes within the NHS Institute. Itis this remit which distinguishes the work of theAudit and Risk Management Committee fromthe other groups advising the Board. Coremembers are: Mike Collier (Chair), ProfessorTony Butterworth CBE and Andrew Smith. Allother non-executive Directors are welcome toattend.

The Remuneration CommitteeDetails of the Remuneration Committee arecontained within the Remuneration Report onpages 35-41.

Name of auditorThe Comptroller and Auditor General is thestatutory auditor of the NHS Institute forInnovation and Improvement. Auditors’remuneration includes £10,500 for non-auditwork.

Declarations of InterestThe NHS Code of Accountability requires Boardmembers to declare any interests that arerelevant and material to the NHS body of whichthey are a member. Any members appointedsubsequently make this declaration upon theirappointment. The declarations of interest madeby Board members are recorded in the minutesof Board meetings and a declaration of interestform is completed. A register of interests is keptand maintained by the corporate secretary, andis available for public inspection. This register iskept up to date as forms are submitted and alsoby means of an annual review.

The chair will ask whether there are any‘declarations of interest’ at the start of eachBoard meeting. Whenever an interest isdeclared which could amount to a conflict ofinterest, the member concerned does not takeany part in the relevant discussion or decision atthe meeting.

For details of the declarations of interest, pleaserefer to the register of interests and to theminutes of the public Board.

Bernard CrumpChief Executive and Accounting OfficerNHS institute for Innovation and Improvement

17th July 2008


RemunerationReportDetails of the membership ofthe Remuneration and Terms ofServices CommitteeThe NHS Institute has a RemunerationCommittee consisting of all non-executivedirectors, the Chief Executive, the Deputy ChiefExecutive and Director of Learning and theCorporate Secretary.

The Committee meets three times a year,supported by the human resources department,and:

1. Establishes procedures for developing policyon executive director and senior staffremuneration

2. Recommends to the Board terms of serviceand remuneration for the Chief Executive,executive directors and senior staff

3. Ensures that appropriate systems are in placeon job evaluation, individual performanceappraisal and processes for contractualarrangements for senior staff.

Statement of the policy on theremuneration of senior managersfor current and future financialyears Remuneration of senior managers follows twonational policies:

Executive Directors – Very Senior Managers(VSM) Pay Framework All other staff – Agenda for Change

The NHS Institute falls into category two of theVSM Pay Framework and executive directors aresubject to an appraisal process (agreed by theDepartment of Health) which supports therequirements of the VSM Pay Framework.

The framework used by the NHS Institute in itsset-up stage was the HR Best

Practiceand PolicyGuidance forArm’s Length BodiesV1.0, November 2005, asissued by the Department ofHealth. Section 3 of this policy ‘Start-Ups, Mergers and Joint Ventures’ refers tothe recruitment of chief executives and seniorexecutives, with these appointments beinghandled by the NHS Institute’s AppointmentsCommittee, including the NHS Institute Chairand/or senior department sponsor.

All non-executive director appointments wereagreed through the Appointments Commission.

The NHS Institute obtains its guidance andadvice from the Department of Health.

Performance appraisalFor all senior managers below executive directorlevel the NHS Institute complies with and followsthe procedures as set out in the NHS NationalTerms and Appraisal of Service – Agenda forChange – and has in place a personal objectivesetting process with line managers which linksinto the annual appraisals and review processand supports the Knowledge and SkillsFramework.

The Executive Directors take the lead on thisprocess within their individual areas. Executivedirectors are also subject to performance reviewin line with the VSM Pay Framework.


Summary and explanation of policyon duration of contracts, andnotice periods and terminationpayments

For chairs and non-executive members ofthe NHS Institute for Innovation andImprovement the terms and conditions arelaid out below;

1. Statutory Basis for Appointment – Chairs andnon-executive members of Special HealthAuthorities hold a statutory office under theNational Health Service Act 1977. Theirappointment does not create any contract ofservice or contract for services between themand the Secretary of State or between themand the Special Health Authority. Theappointment and tenure of office of chairsand members of the NHS Institute forInnovation and Improvement are governed bythe NHS Institute for Innovation andImprovement Regulations 2005.

2. Employment Law – The appointments are notwithin the jurisdiction of employmenttribunals. Neither is there any entitlement forcompensation for loss of office throughemployment law.

3. Reappointments – Chairs and non-executivemembers are eligible for reappointment at theend of their period of office, but they have noright to be reappointed. The AppointmentsCommission will usually consider afresh thequestion of who should be appointed to theoffice. However, the AppointmentsCommission is likely to consider favourably asecond term of appointment withoutcompetition for people whose performancehas been appraised as consistently goodduring their first term. If reappointed, furtherterms will only be considered after opencompetition, subject to a maximum service often years with the same organisation and inthe same role.

4. Termination of appointment – Regulation 5 ofthe Regulations sets out the grounds onwhich the appointment of the chair and non-executive members may be terminated. A chair or non-executive member may resignby giving notice in writing to the Secretary ofState or the Appointments Commission. Theirappointment will also be terminated if, inaccordance with regulations, they becomedisqualified for appointment. In addition, theAppointments Commission may terminate theappointment of the chair and non-executivemembers on the following grounds:

• If it is of the opinion that it is not in theinterests of the NHS Institute or thehealth service that they should continueto hold office.

• If the chair or non-executive memberdoes not attend a meeting of the specialhealth authority for a period of threemonths.

• If the chair or non-executive memberdoes not properly comply with therequirements of the regulations withregard to pecuniary interests in mattersunder discussion at meetings of thespecial health authority (e.g. a failure todisclose such an interest).

The following list provides examples of matterswhich may indicate to the Commission that it isno longer in the interests of the health servicethat an appointee continues in office. The list isnot intended to be exhaustive or definitive; theCommission will consider each case on itsmerits, taking account of all relevant factors.

a) If an annual appraisal or sequence ofappraisals is unsatisfactory

b) If the appointee no longer enjoys theconfidence of the board

c) If the appointee loses the confidence ofthe public

d) If a chair appointee fails to ensure thatthe board monitors the performance of


the special health authority in aneffective way

e) If the appointee fails to deliver workagainst pre-agreed targets incorporatedwithin their annual objectives

f) If there is a terminal breakdown inessential relationships, for examplebetween a chair and a chief executive orbetween an appointee and the rest of theboard

g) When a new chair is appointed to aboard he/she will be expected to reviewthe objectives of all board members andmay, at the time of their next appraisal,make recommendation to theCommission regarding their continuedappointment

h) There is no provision in the NHS Institute’sannual accounts for the early terminationof any non-executive’s appointment.

5. Remuneration – The chair and non-executivemembers are entitled under the Act to beremunerated by the special health authorityfor so long as they continue to hold office aschair or non-executive member. They areentitled to receive remuneration only inrelation to the period for which they holdoffice. There is no entitlement tocompensation for loss of office.

6. Current rate for chair and non-executives –The current rate of remuneration payable tothe Chair of the NHS Institute for Innovationand Improvement is £60,780 pa for up tothree days a week. The current rate ofremuneration payable to members is £7,597per annum for approximately two days permonth with an additional £5,065 pa for theChair of the Risk and Audit Committee.

7. Tax and National Insurance – Remuneration istaxable under Schedule E, and subject toClass I National Insurance contributions. Anyqueries on these arrangements should be

takenup withthe Inspector ofTaxes or theContributions Agencyrespectively.

8. Allowances – Chairs and non-executivemembers are also eligible to claimallowances, at rates set centrally, for traveland subsistence costs necessarily incurred onspecial health authority business.

9. Public speaking – On matters affecting thework of the special health authority, chairsand non-executive members should notnormally make political speeches or engage inother political activities. In cases of doubt, theguidance of the Appointments Commissionshould be sought.

10. Conflict of interest – NHS boards arerequired to adopt the Codes of Conduct andAccountability, published in April 1994. TheCodes require chairs and board members todeclare on appointment any businessinterests, position of authority in a charity orvoluntary body in the field of health andsocial care, and any connection with bodiescontracting for NHS services. These must beentered into a register which is available tothe public.

11. Indemnity – The special health authority isempowered to indemnify the chair and non-executive members against personal liabilitywhich they may incur in certaincircumstances whilst carrying out theirduties. HSC 1999/104, which is availablefrom the NHS Institute for Innovation andImprovement, gives details.


For executive directors of the NHS Institute for Innovation andImprovement the terms and conditions are laid out below.1. Basis for appointment – All of the executive directors have been appointed on a permanent basis

under a contract of service at an agreed annual salary, an entitlement to a lease car and eligibility toclaim allowances for travel and subsistence costs at rates set by the NHS Institute for expensesincurred necessarily on its behalf.

2. Termination of appointment – On the grounds of incapacity of an executive director, the NHSInstitute will give six months’ notice once sick pay has been exhausted. The notice for terminationfor any other substantive reason is six months. Notice of termination of contract of service to theNHS Institute by an executive director is three months. There were no payments made to executivedirectors for early termination during the 2007/2008 financial year. There is no provision forcompensation included in the NHS Institute’s annual accounts for the early termination of anyexecutive director. These figures are subject to audit.

Details of the service contract for each senior manager who has servedduring the year

Name Title Start date Review date

Yve Buckland Chair 1 July 2005 30 June 2009

Mike Collier Vice-chair and Director of 1 October 2005 30 September 2009Audit and Risk Committee

Carol Black Non-executive Director 15 February 2006 14 February 2010

David Bower Non-executive Director 1 July 2005 30 June 2008

Tony Butterworth Non-executive Director 1 July 2005 30 June 2008

Michael Deegan Non-executive Director 1 July 2005 30 June 2009

Andrew Smith Non-executive Director 15 February 2007 14 February 2011

Noorzaman Rashid Non-executive Director 1 October 2007 30 September 2011

Bernard Crump Chief Executive 1 July 2005 Not applicable

Simone Jordan Deputy Chief Executive 1 October 2005 Not applicableand Director of Learning

Paul Allen Director of Leadership 1 September 2005 Not applicable

Helen Bevan Director of Service 1 July 2005 Not applicableTransformation

Michael Cawley Director of Finance and Business Services 1 October 2005 Not applicable

Maire Smith Director of Technology and Product Innovation 1 September 2005 Not applicable


Salaries and Allowances

Name and Title Salary Other Benefits in Salary Other Benefits in(bands of remuneration kind (bands of remuneration kind£5,000) (bands of (rounded to £5,000) (bands of (rounded to

£5,000) the nearest £5,000) the nearest£100) £100)

£000 £000 £ £000 £000 £

Bernard Crump 160-165 0 4,000 155-160 0 4,900(Chief Executive)

Simone Jordan(Deputy Chief Executive and 115-120 0 3,600 120-125 0 3,900Director of Learning)

Helen Bevan(Director of Service 120-125 0 0 120-125 0 0Transformation)

Maire Smith(Director of Technology & 115-120 0 0 115-120 0 0Product Innovation)

Michael Cawley(Director of Finance & Business 110-115 0 3,800 110-115 0 4,400Services)

Paul Allen 110-115 0 0 110-115 0 0(Director of Leadership)

Yve Buckland 60-65 0 0 60-65 0 0(Chair)

David Bower 5-10 0 0 5-10 0 0(Non-executive Director)

Tony Butterworth 5-10 0 0 5-10 0 0(Non-executive Director)

Mike Collier(Vice-Chair and Chair of 10-15 0 0 10-15 0 0Audit Committee)

Michael Deegan 5-10 0 0 5-10 0 0(Non-executive Director)

Noorzaman Rashid See note 1(Non-executive Director) 0-5 0 0 0 0 0

Carol Black 5-10 0 0 5-10 0 0(Non-executive Director)

Andrew Smith See note 2(Non-executive Director) 5-10 0 0 0 0 0

2007/08 2006/07

Notes:

1. Noorzaman Rashid commenced his post on 1 October 2007.

2. There were no payments made to Andrew Smith in the financial year 2006-07.

The following sections provide details of the remuneration and pension interests of the most seniorofficials in the NHS Institute and are subject to audit.


Pension BenefitsReal Real Total Lump sum Cash Cash Real Employer’s

Name and Title increase in increase in accrued at age 60 equivalent equivalent increase in contributionpension at pension pension at related to transfer transfer cash to

age 60 lump sum age 60 at accrued value at value at equivalent stakeholderat age 60 31 March pension at 31 March 31 March transfer pension

2008 31 March 2008 2007 value2008

(bands of (bands of (bands of (bands of£2,500) £2,500) £5,000) £5,000)

£000 £000 £000 £000 £000 £000 £000 £000

Bernard Crump 0-2.5 5-7.5 55-60 165-170 888 815 37 0(Chief Executive)

Simone Jordan 0-2.5 2.5-5 20-25 65-70 319 287 17 0(Deputy Chief Executive and Director of Learning)

Helen Bevan 0-2.5 5-7.5 30-35 100-105 508 460 26 0(Director of Service Transformation)

Maire Smith 0-2.5 2.5-5 0-5 10-15 68 39 20 0(Director of Technology & Product Innovation)

Michael Cawley 0-2.5 2.5-5 15-20 55-60 244 213 18 0(Director of Finance & Business Services)

Paul Allen 0-2.5 2.5-5 0-5 10-15 55 32 15 0(Director of Leadership)


Cash Equivalent Transfer ValueA cash equivalent transfer value (CETV) is theactuarially assessed capital value of the pensionscheme benefits accrued by a member at a particularpoint in time. The benefits valued are the members’accrued benefits and any contingent spouse’s pensionpayable from the scheme. A CETV is a payment madeby a pension scheme or arrangement to secure pensionbenefits in another pension scheme or arrangementwhen the member leaves a scheme and chooses totransfer the benefit accrued in the former scheme. Thepension figures shown relate to the benefits that theindividual has accrued as a consequence of their totalmembership of the pension scheme, not just theirservice in a senior capacity to which the disclosureapplies.

The CETV figure, and from 2004/05 the other pensiondetails, include the value of any pension benefits inanother scheme or arrangement which the individualhas transferred to the NHS pension scheme. They alsoinclude any additional pension benefit accrued to themember as a result of their purchasing additional yearsof pension service in the scheme at their own cost.CETVs are calculated within the guidelines andframework prescribed by the NHS Institute and Facultyof Actuaries.

Real Increase in CETVThis reflects the increase in CETV effectively funded bythe employer. It takes account of the increase in accruedpension due to inflation, contributions paid by theemployee (including the value of any benefits

transferredfrom anotherscheme orarrangement) and usescommon market valuationfactors for the start and end of period.

Disclosure of relevant auditinformationAs Accounting Officer I confirm that:

So far as I am aware, there is no relevant auditinformation of which the NHS Institute’s auditors areunaware, and I have taken all the steps that I ought tohave taken to make myself aware of any relevant auditinformation and to establish that the NHS Institute’sauditors are aware of that information.

Bernard CrumpChief Executive and Accounting OfficerNHS Institute for Innovation and Improvement

17th July 2008


Accounts

Statement of Accounting Officer’s responsibilities 44

Statement on Internal Control for the year ended 31 March 2008 45

The certificate and Report of the Comptroller and Auditor General 48to the Houses of Parliament

Annual account 51


Under the National Health Service Act 2006and directions made there under by theSecretary of State with the approval of Treasury,the NHS Institute is required to prepare astatement of accounts for each financial year inthe form and on the basis determined by theSecretary of State, with the approval ofTreasury. The accounts are prepared on anaccruals basis and must give a true and fairview of the NHS Institute’s state of affairs atthe year end and of its income andexpenditure, total recognised gains and lossesand cash flows for the financial year.

The Accounting Officer for the Department ofHealth has appointed the Chief Executive ofthe NHS Institute for Innovation andImprovement as the Accounting Officer, withresponsibility for preparing the NHS Institute’saccounts and for transmitting them to theComptroller and Auditor General.

In preparing the accounts, the AccountingOfficer is required to comply with therequirements of the Government FinancialReporting Manual and in particular to:

• Observe the accounts direction issued bythe Secretary of State, including the relevant

accounting and disclosure requirements,and apply suitable accounting policies on aconsistent basis;

• Make judgements and estimates on areasonable basis;

• State whether applicable accountingstandards have been followed and discloseand explain any material departures in thefinancial statements; and

• Prepare the financial statements on a goingconcern basis, unless it is inappropriate topresume that the NHS Institute will continuein operation.

The Chief Executive's relevant responsibilities asAccounting Officer, including responsibility forthe propriety and regularity of the public fundsand assets vested in the NHS Institute forInnovation and Improvement Special HealthAuthority, and for the keeping of properrecords, are set out in the Accounting Officers'Memorandum issued by the Department ofHealth.

Statement of Accounting Officer’s Responsibilities


1. Scope of responsibilityAs Accounting Officer, I have responsibility formaintaining a sound system of internal controlthat supports the achievement of the NHSInstitute’s policies, aims and objectives, whilstsafeguarding the public funds and departmentalassets for which I am personally responsible, inaccordance with the responsibilities assigned tome in the Accounting Officer Memorandum. AsAccounting Officer, I am accountable toParliament and the Secretary of State for Health.Our annual business plan is agreed with ourDepartment of Health Senior DepartmentalSponsor, who monitors achievement against theplan in regular performance review meetings.The Senior Departmental Sponsor has an openinvitation to Board and Audit and RiskManagement Committee meetings and alsoreceives copy minutes of these meetings.

2. The purpose of the system ofinternal control

The system of internal control is designed tomanage risk to a reasonable level rather than toeliminate all risk of failure to achieve policies,aims and objectives; it can therefore only providereasonable and not absolute assurance ofeffectiveness. The system of internal control isbased on an ongoing process designed to:

• Identify and prioritise the risks to theachievement of departmental policies, aimsand objectives.

• Evaluate the likelihood of those risks beingrealised and the impact should they berealised, and

• to manage them efficiently, effectively andeconomically.

The system of internal control has been in placein The NHS Institute for the year ended 31March 2008 and up to the date of approval ofthe annual report and accounts, and accordswith Treasury guidance.

3. Capacity to handle riskMy opinion on the existence of a system ofinternal control is based on evidence primarilyprovided to me from oversight by the Audit andRisk Management Committee. It is informed bythe work of External and Internal Audit togetherwith the work that has been undertaken inmaintaining and updating the AssuranceFramework for the NHS Institute and monitoringthe key risks within that Framework.

The results of work undertaken by Internal Audithave been reported to the Audit and RiskManagement Committee throughout the yearand have shown a significantly improved systemof internal control compared to last year.

Responsibility for overall oversight of the work,on behalf of the Board, remains with the Auditand Risk Management Committee.

The NHS Institute demonstrates leadership and apositive approach to risk management through:

• The identification of key risks through thebusiness planning process.

• Risk assessment workshops involving theexecutive team.

• Regular Audit and Risk ManagementCommittee and Board consideration of keystrategic risks.

• The recruitment of staff to ensure the NHSInstitute is able to manage the risks it faces.

• A programme of control and process workthat supports and develops the NHSInstitute’s existing business model. Thisincludes the creation of a framework tounderpin sound accounting and financialmanagement at the NHS Institute coveringbudgeting, forecasting and month endprocesses.

Programmes of training have been provided toall staff in relation to health, safety and fire risks.

Statement on Internal Control for the Year Ended31 March 2008


4. The risk and control frameworkThe Audit and Risk Management Committee isresponsible for reviewing risk managementactivity under delegation of the Board. It receivesregular reports from the internal auditors andwill receive an annual management letter fromthe external auditors, together with informationfrom other sources deemed necessary for thecommittee to fulfil this function.

The Assurance Framework, together with theassociated strategic and high level risk registers,maps the key objectives of the NHS Institute andidentifies the risks to their achievement. It alsoidentifies the internal control mechanisms tomanage the risks. Finally, it identifies andexamines the review and assurance mechanismsidentifying where gaps in control and/orassurance exist.

Throughout the year the Audit and RiskManagement Committee has been informedabout the ongoing maintenance of theAssurance Framework and Strategic RiskRegister, this has involved:

• Review of the key operational risks asidentified in the business planning process

• Identification of strategic risks through theExecutive Team

• Prioritisation of those risks.

As an employer with staff entitled tomembership of the NHS Pension Scheme,control measures are in place to ensure allemployer obligations contained within theScheme regulations are complied with. Thisincludes ensuring that deductions from salary,employer’s contributions and payments into theScheme are in accordance with the Schemerules, and that member pension scheme recordsare accurately updated in accordance with thetimescales detailed in the regulations.

5. Data SecurityFollowing a number of high profile incidents ofdata losses in other public sector organisations,the NHS Institute submitted to the Departmentof Health on its arrangements for data securityand restated its position that all laptops andremovable media devices containing personidentifiable data must be encrypted. I am awareof my responsibilities in respect of personal dataand am taking steps to address any identifiedissues.

6. Payments on AccountIn 2007-08 the NHS Institute made payments onaccount of £2,445,000 and £1,775,002 to HerMajesty Revenue and Customs and NHSInnovation Hubs respectively. The paymentswere made to satisfy the need to a) fully drawdown 2007-08 cash allocation to settleoutstanding creditors in April 2008; b) to holdminimal cash balances at 31/3/08; and c) toavoid the risk that the NHS Institute’s 2008-09cash allocation would be reduced by anequivalent amount.

I have been advised on the implications ofmaking these payments. As interpreted by theComptroller and Auditor General. Namely that,Managing Public Money regards these paymentsas novel and contentious and requires Treasuryapproval. The NHS Institute submitted aretrospective case for approval to Treasurythrough the Department of Health which wasdeclined. The Comptroller and Auditor Generalhas qualified his audit opinion in this respect. Hisopinion and report on pages 48 and 50 set outthe reasons for this qualification. I am satisfiedthat through discussions with the Department ofHealth that steps are in place to ensure that thesituation will not arise in the future.


7. Review of effectivenessAs Accounting Officer, I have responsibility forreviewing the effectiveness of the system ofinternal control. My review is informed in anumber of ways. The head of internal auditexcept for payments on account as discussed inparagraph 6 provides me with an opinion on theoverall arrangements for gaining assurancethrough the Assurance Framework and on thecontrols reviewed as part of the internal auditwork. His overall opinion for 2007-08 was ofsignificant assurance, and this was confirmed inthe work and comments of external audit.Executive managers within the organisation whohave responsibility for the development andmaintenance of the system of internal controlprovide me with assurance. The AssuranceFramework itself provides me with evidence thatthe effectiveness of controls that manage therisks to the organisation achieving its principalobjectives have been reviewed.

I have been advised on the implications of theresult of my review of the effectiveness of thesystem of internal control by the Audit and RiskManagement Committee. Plans to address anyweaknesses and ensure continuous improvementof the system are in place.

These reviews highlight the need to assesscontrols in the light of any changes to the NHSInstitute’s business model. In particular they willensure that the NHS Institute’s controlmechanisms are reviewed and updated toaddress any risks that arise from any suchchanges. Work is currently underway tounderstand and assess the impact of anychanges. In addition, reviews are currentlyunderway to ensure a focus of whole systemsimprovement, in the context of continuallyimproving governance and control framework.Responsibility for oversight of this work, onbehalf of the Board, remains with the Audit andRisk Management Committee.

Bernard CrumpChief Executive and Accounting OfficerNHS Institute for Innovation and Improvement

17 July 2008


I certify that I have audited the financialstatements of the NHS Institute for Innovationand Improvement for the year ended 31 March2008 under the National Health Service Act2006. These comprise the Operating CostStatement, the Balance Sheet, the Cash FlowStatement and Statement of Recognised Gainsand Losses and the related notes. Thesefinancial statements have been prepared underthe accounting policies set out within them. Ihave also audited the information in theRemuneration Report that is described in thatreport as having been audited.

Respective responsibilities of theAccounting Officer and auditorThe Chief Executive as Accounting Officer isresponsible for preparing the Annual Report, theRemuneration Report and the financialstatements in accordance with the NationalHealth Service Act 2006 and directions madethereunder by the Secretary of State with theapproval of HM Treasury and for ensuring theregularity of financial transactions. Theseresponsibilities are set out in the Statement ofAccounting Officer’s Responsibilities.

My responsibility is to audit the financialstatements and the part of the remunerationreport to be audited in accordance with relevantlegal and regulatory requirements, and withInternational Standards on Auditing (UK andIreland).

I report to you my opinion as to whether thefinancial statements give a true and fair viewand whether the financial statements and thepart of the Remuneration Report to be auditedhave been properly prepared in accordance withthe National Health Service Act 2006 anddirections made thereunder by the Secretary ofState with the approval of HM Treasury. I reportto you whether, in my opinion, the information,

which comprises the Management commentary,Director of Finance commentary andGovernance Structure, included in the AnnualReport is consistent with the financialstatements. I also report whether in all materialrespects the expenditure and income have beenapplied to the purposes intended by Parliamentand the financial transactions conform to theauthorities which govern them.

In addition, I report to you if the NHS Institutefor Innovation and Improvement has not keptproper accounting records, if I have not receivedall the information and explanations I require formy audit, or if information specified by HMTreasury regarding remuneration and othertransactions is not disclosed.

I review whether the Statement on Internalcontrol reflects the NHS Institute for Innovationand Improvement's compliance with HMTreasury’s guidance, and I report if it does not. Iam not required to consider whether thisstatement covers all risks and controls, or forman opinion on the effectiveness of the NHSInstitute for Innovation and Improvement’scorporate governance procedures or its risk andcontrol procedures.

I read the other information contained in theAnnual Report and consider whether it isconsistent with the audited financial statements.I consider the implications for my report if Ibecome aware of any apparent misstatements ormaterial inconsistencies with the financialstatements. My responsibilities do not extend toany other information.

Basis of audit opinionsI conducted my audit in accordance withInternational Standards on Auditing (UK andIreland) issued by the Auditing Practices Board.My audit includes examination, on a test basis,

The Certificate of the Comptroller andAuditor General to the Houses of Parliament


of evidence relevant to the amounts, disclosuresand regularity of financial transactions includedin the financial statements and the part of theRemuneration Report to be audited. It alsoincludes an assessment of the significantestimates and judgments made by theAccounting Officer in the preparation of thefinancial statements, and of whether theaccounting policies are most appropriate to theNHS Institute for Innovation and Improvement’scircumstances, consistently applied andadequately disclosed.

I planned and performed my audit so as toobtain all the information and explanationswhich I considered necessary in order to provideme with sufficient evidence to give reasonableassurance that the financial statements and thepart of the Remuneration Report to be auditedare free from material misstatement, whethercaused by fraud or error, and that in all materialrespects the expenditure and income have beenapplied to the purposes intended by Parliamentand the financial transactions conform to theauthorities which govern them. In forming myopinion I also evaluated the overall adequacy ofthe presentation of information in the financialstatements and the part of the RemunerationReport to be audited.

OpinionsIn my opinion:

• the financial statements give a true and fairview, in accordance with the National HealthService Act 2006 and directions madethereunder by the Secretary of State with theapproval of HM Treasury, of the state of theNHS Institute for Innovation andImprovement’s affairs as at 31 March 2008and of its net resource outturn, recognisedgains and losses and cashflows for the yearthen ended;

• the financial statements and the part of theRemuneration Report to be audited havebeen properly prepared in accordance with

the National Health Service Act 2006 anddirections made thereunder by the Secretaryof State with the approval of HM Treasury;and

• information, which comprises theManagement commentary, Director ofFinance commentary and GovernanceStructure, included within the Annual Report,is consistent with the financial statements.

Qualified Opinion on Regularityarising because of payments inadvance of needPublic bodies are required to follow guidancecontained within the Treasury publication“Managing Public Money”. As disclosed in note6.1, in the 2007-08 financial year the NHSInstitute for Innovation and Improvement madeadvance payments to suppliers which were notproperly due of £4,220,002. Managing PublicMoney allows such payments only where theyhave been approved by the Treasury. TheTreasury have declined to approve thesepayments and accordingly, I have concluded thatthe financial transactions did not conform to theauthorities which govern them.

In my opinion, except for the advance paymentsreferred to above, in all material respects theexpenditure and income have been applied tothe purposes intended by Parliament and thefinancial transactions conform to the authoritieswhich govern them.

My report setting out the reasons for myqualification is at page 50.

T J BurrComptroller and Auditor GeneralNational Audit Office151 Buckingham Palace RoadVictoriaLondon SWIW 9SS

18th July 2008


Report of the Comptroller and AuditorGeneral to the Houses of Parliament

Introduction1. The NHS Institute for Innovation and

Improvement is established as a Special HealthAuthority under the National Health Service Act2006 and is an Arm’s Length Body sponsored bythe Department of Health. The NHS Institutesupports the NHS to improve healthcare forpatients and the public by developing andspreading new ways of working, newtechnology and exemplary leadership.

2. Innovation Hubs were established to managethe commercialisation of innovations arisingfrom within the NHS and are funded by theDepartment of Health through the NHS Instituteand by the Department for Innovation,Universities and Skills. There are ten InnovationHubs, three of which are hosted by NHS Trustsor Foundation Trusts and seven of which arecharitable non-profit making companies limitedby guarantee undertaking work on behalf of theNHS.

3. This report explains the circumstancessurrounding qualification of my audit opinion onthe NHS Institute’s financial statements for 2007-08.

My obligations as auditor4. I am required, under statute, to satisfy myselfthat in all material respects the expenditure andincome shown in the financial statements havebeen applied to the purposes intended byParliament and the financial transactions conformto the authorities which govern them. Indetermining whether expenditure and incomeconform to the authorities which govern them, Ihave regard to:

• the authorising legislation;

• relevant regulations issued under the governinglegislation;

• Parliamentary authorities;

• appropriate Treasury authorities; and

• The Treasury’s Managing Public Money, whichsets out the financial framework within whichgovernment entities are required to operate.

Advance Payments to HMRC andInnovation Hubs5. In March 2008, the Institute made advance

payments of £2,445,000 to HMRC for tax andnational insurance liabilities for the period April2008 to August 2008, and advance payments of£1,775,002 to Innovation Hubs relating to theirfunding for the period April 2008 to June 2008which was not due to be paid until 30 June2008. The NHS Institute considered these to bepayments on account.

6. The NHS Institute did not require its full cashfunding allocation from the Department ofHealth for 2007-08 and took the decision tomake the payments to comply with Departmentof Health guidance to minimise cash balancesand, based on their interpretation of theguidance, to avoid the Department reducingtheir cash allocation for 2008-09 by anequivalent amount.

7. Managing Public Money requires such advancepayments to be made only where a good valuefor money case can be made for them. They areregarded as novel and contentious and requireTreasury approval.

8. Although the Institute had not sought orobtained Treasury approval prior to making thepayments, a retrospective case was submitted toTreasury through the Department of Health inJune 2008. The Treasury have declined therequest to approve the payments.

9. I have therefore concluded that the payments donot conform to the authorities which governthem and I have qualified my opinion on theInstitute’s financial statements for 2007-08 inthis respect.

T J BurrComptroller and Auditor GeneralNational Audit Office151 Buckingham Palace RoadVictoria London SW1W 9SS

18th July 2008


Annual Account of the NHS Institute for Innovation andImprovement for the year ended 31 March 2008

Operating Cost Statement for the year ended 31 March 20082007-08 2006-07

Notes £000 £000

Programme costs 2.1 79,750 56,025

Operating income 4 (6,555) (3,011)

Net operating cost before interest 73,195 53,014

Interest payable 1 0

Net operating cost 73,196 53,014

Net resource outturn 3.1 73,196 53,014

All income and expenditure is derived from continuing operations

Statement of Recognised Gains and Losses for the year ended 31 March 20082007-08 2006-07

Notes £000 £000

Unrealised (surplus) on the indexation of fixed assets 11.2 (151) (155)

Recognised (gains) for the financial year (151) (155)

The notes at pages 54 to 70 form part of these accounts.



Balance Sheet as at 31 March 200831 March 31 March

2008 2007Notes £000 £000

Fixed assets:Intangible assets 5.1 601 250Tangible assets 5.2 4,383 3,611

4,984 3,861Current assets:

Debtors 6 8,706 1,990Cash at bank and in hand 7 574 1,803

9,280 3,793

Creditors: amounts falling due within one year 8 (14,300) (9,767)

Net current (liabilities) (5,020) (5,974)

Total assets less current liabilities (36) (2,113)

Provisions for liabilities and charges 9 (657) (1,982)

(693) (4,095)Taxpayers' equityGeneral fund 11.1 950 4,233Revaluation reserve 11.2 (257) (138)

693 4,095


The financial statements on pages 51 to 53 were considered by the Audit and Risk Management Committee on 25 June 2008.

Bernard CrumpChief Executive and Accounting Officer

17th July 2008



Cash Flow Statement for the year ended 31 March 2008

2007-08 2006-07Notes £000 £000

Net cash (outflow) from operating activities 12 (76,002) (56,170)

Servicing of financeInterest paid (1) 0Net cash (outflow) from servicing finance (1) 0

Capital expenditure and financial investment:(Payments) to acquire fixed assets (1,801) (1,829)Net cash (outflow) from investing activities (1,801) (1,829)

Net cash (outflow) before financing (77,804) (57,999)

FinancingNet parliamentary funding 11.1 76,575 59,800

(Decrease)/increase in cash in the period 7 (1,229) 1,801



1 Accounting policiesThe financial statements have been prepared inaccordance with the Government FinancialReporting Manual issued by HM Treasury. Theparticular accounting policies adopted by theNHS Institute are described below. They havebeen consistently applied in dealing with itemsconsidered material in relation to the accounts.

1.1 Accounting conventionsThis account is prepared under the historical costconvention, modified to account for therevaluation of tangible fixed assets and stockwhere material, at their value to the business byreference to current cost. This is in accordancewith directions issued by the Secretary of Statefor Health and approved by HM Treasury.

Acquisitions and discontinued operationsActivities are considered to be 'acquired' only ifthey are acquired from outside the public sector.Activities are considered to be ‘discontinued’only if they cease entirely. They are notconsidered to be ‘discontinued’ if they transferfrom one NHS body to another.

1.2 IncomeIncome is accounted for applying the accrualsconvention. The main source of funding for theNHS Institute is parliamentary grant from theDepartment of Health from Request forResources 1 within an approved cash limit,which is credited to the general fund.Parliamentary funding is recognised in thefinancial period in which it is received. Incomeother than parliamentary grant is shown net of VAT.

Operating income relates directly to theoperating activities of the NHS Institute. Itprincipally comprises fees and charges forservices provided on a full-cost basis to externalcustomers. Where income is received for aspecific activity which is to be delivered in thefollowing financial year, that income is deferred.

1.3 TaxationThe NHS Institute is not liable to pay corporationtax. Expenditure is shown net of recoverable

VAT. Irrecoverable VAT is charged to the mostappropriate expenditure heading or capitalised ifit relates to an asset.

1.4 Capital chargesThe treatment of fixed assets in the account is inaccordance with the principal capital chargesobjective to ensure that such charges are fullyreflected in the cost of capital. The interest rateapplied to capital charges in the financial year2007-08 was 3.5% (2006-07 3.5%) on all assetsless liabilities, except for donated assets andcash balances with the Office of the PaymasterGeneral, (OPG), where the charge is nil.

1.5 Fixed assets

a. CapitalisationAll assets falling into the following categories arecapitalised:

i. Intangible assets where they are capable ofbeing used for more than one year and have acost, individually or as a group, equal to orgreater than £5,000.

ii. Purchased computer software licences arecapitalised as intangible fixed assets whereexpenditure of at least £5,000 is incurred.

iii. Tangible assets where they are capable ofbeing used for more than one year, and they:

- individually have a cost equal to or greaterthan £5,000;

- collectively have a cost of at least £5,000and an individual cost of more than £250,where the assets are functionallyinterdependent, they had broadlysimultaneous purchase dates, areanticipated to have simultaneous disposaldates and are under single managerialcontrol; or

- form part of the initial equipping andsetting-up cost of a new or leaseholdbuilding, irrespective of their individual orcollective cost.

iv Donated fixed assets are capitalised at theircurrent value on receipt, and this value iscredited to the donated asset reserve.

Notes to the Accounts


b. ValuationIntangible fixed assetsIntangible fixed assets held for operational useare valued at historical cost, except research anddevelopment which is revalued using anappropriate index figure. Surplus intangibleassets are valued at the net recoverable amount.

The carrying value of intangible assets isreviewed for impairment at the end of the firstfull year following acquisition and in otherperiods if events or changes in circumstancesindicate the carrying value may not berecoverable.

Tangible fixed assetsTangible fixed assets are stated at the lower ofreplacement cost and recoverable amount. Oninitial recognition they are measured at cost (forleased assets, fair value) including any costs suchas installation directly attributable to bringingthem into working condition. They are restatedto current value each year.

The carrying value of tangible fixed assets isreviewed for impairment in periods if events orchanges in circumstances indicate the carryingvalue may not be recoverable.

i. Land and buildings (including dwellings)valuations' are carried out by the DistrictValuer of HM Revenue and Customsgovernment department at five yearly intervalsin accordance with Financial ReportingStandard 15 (FRS 15). Between valuations priceindices appropriate to the category of asset areapplied to arrive at the current value. Thebuildings indexation is based on the All inTender Price Index published by the BuildingCost Information Service (BCIS). The land indexis based on the residential building land valuesreported in the Property Market Reportpublished by the Valuation Office. Thevaluations were carried out in accordance withthe Royal Institute of Chartered Surveyors(RICS) Appraisal and Valuation Manual insofaras these terms are consistent with the agreedrequirements of the Department of Health andHM Treasury.

The valuations have been carried out primarilyon the basis of depreciated replacement costfor specialised operational property andexisting use value for non-specialisedoperational property. In respect of non-operational properties, including surplus land,the valuations have been carried out at openmarket value. The value of land for existinguse purposes is assessed to existing use value.The valuations do not include notional directlyattributable acquisition costs nor have sellingcosts been deducted, since they are regardedas not material.

To meet the underlying objectives established bythe Department of Health, the followingaccepted variations of the RICS Appraisal andValuation Manual have been required:

- specialised operational assets have been valuedon a replacement rather than modernsubstitute basis;

- no adjustment has been made to the costfigures of operational assets in respect ofdilapidations; and

- additional alternative open market valuefigures have been supplied only for operationalassets scheduled for imminent closure andsubsequent disposal.

ii. Operational equipment is valued at netcurrent replacement cost through annualuplift by the change in the value of the GDPdeflator. Equipment surplus to requirements isvalued at net recoverable amount.

iii. Assets in the course of construction arevalued at current cost, using the index as forland and buildings. These assets include anyexisting land or buildings under the control ofa contractor.

iv. Subsequent revaluations to donated fixedassets are taken to the donated asset reserve.

v. All adjustments arising from indexation andfive yearly revaluations are taken to therevaluation reserve. All impairments resultingfrom price changes are charged to theStatement of Recognised Gains and Losses.Falls in value when newly constructed assets

1. Accounting Policies (Continued)


are brought into use are also charged there.These falls in value result from the adoption ofideal conditions as the basis for depreciatedreplacement cost valuations.

c. Depreciation and amortisationDepreciation is charged on each individual fixedasset as follows:

i. Intangible assets are amortised, on a straightline basis, over the estimated lives of theassets.

ii. Purchased computer software licences areamortised over the shorter of the term of thelicence and their useful economic lives.

iii. Land and assets in the course of constructionare not depreciated.

iv Buildings are depreciated evenly on theirrevalued amount over the assessed remaininglife of the asset as advised by the DistrictValuer. Leaseholds and leaseholdimprovements are depreciated over theprimary lease term.

v. Each equipment asset is depreciated evenlyover the expected useful life from the start ofthe quarter following the quarter in which theasset was acquired:

YearsFurniture and fittings 7-10 Transport equipment 7Information technology 5

1.6 Donated fixed assetsDonated fixed assets are capitalised at theircurrent value on receipt and this value is creditedto the donated asset reserve. Donated fixedassets are valued and depreciated as describedabove for purchased assets. Gains and losses onrevaluations are also taken to the donated assetreserve and, each year, an amount equal to thedepreciation charge on the asset is released fromthe donated asset reserve to the Operating CostStatement. Similarly, any impairment ondonated assets charged to the Operating CostStatement is matched by a transfer from thedonated asset reserve. On sale of donated

assets, the value of the sale proceeds istransferred from the donated asset reserve tothe general fund.

1.7 Stocks and work in progressStocks and work in progress are valued at thelower of cost and net realisable value. This isconsidered to be a reasonable approximation tocurrent cost due to the high turnover of stocks.Work in progress comprises goods inintermediate stages of production.

1.8 Losses and special paymentsLosses and special payments are items thatParliament would not have contemplated whenit agreed funds for the health service or passedlegislation. By their nature they are items thatideally should not arise. They are thereforesubject to special control procedures comparedwith the generality of payments. They aredivided into different categories, which governthe way each individual case is handled.

Losses and special payments are charged to therelevant functional headings in the OperatingCost Statement on an accruals basis, includinglosses which would have been made goodthrough insurance cover had the NHS Institutenot been bearing its own risks (with insurancepremiums then being included as normalrevenue expenditure). However, note 17 iscompiled directly from the losses andcompensations register which is prepared on acash basis.

1.9 Pension costsPast and present employees are covered by theprovisions of the NHS Pensions Scheme. Detailsof the benefits payable under these provisionscan be found on the NHS Pensions website atwww.pensions.nhsbsa.nhs.uk. The Scheme is anunfunded, defined benefit scheme that coversNHS employers, General Practices and otherbodies, allowed under the direction of theSecretary of State, in England and Wales. Thescheme is not designed to be run in a way thatwould enable NHS bodies to identify their shareof the underlying Scheme assets and liabilities.



Therefore, the Scheme is accounted for as if itwere a defined contribution scheme: the cost tothe NHS Institute of participating in the Schemeis taken as equal to the contributions payable tothe Scheme for the accounting period.

The Scheme is subject to a full actuarialvaluation every four years (until 2004, based ona five year valuation cycle), and a FRS17accounting valuation every year. An outline ofthese follows:

a) Full actuarial (funding) valuationThe purpose of this valuation is to assess thelevel of liability in respect of the benefits dueunder the scheme (taking into account its recentdemographic experience), and to recommendthe contribution rates to be paid by employersand scheme members. The last such valuation,which determined current contribution rates wasundertaken as at 31 March 2004 and coveredthe period from 1 April 1999 to that date.

The conclusion from the 2004 valuation wasthat the Scheme had accumulated a notionaldeficit of £3.3 billion against the notional assetsas at 31 March 2004. However, after takinginto account the changes in the benefit andcontribution structure effective from 1 April2008, the Scheme actuary reported thatemployer contributions could continue at theexisting rate of 14% of pensionable pay. Onadvice from the Scheme actuary, schemecontributions may be varied from time to time toreflect changes in the scheme’s liabilities. Up to31 March 2008, the vast majority of employeespaid contributions at the rate of 6% ofpensionable pay. From 1 April 2008, employeescontributions are on a tiered scale from 5% upto 8.5% of their pensionable pay depending ontotal earnings.

b) FRS17 Accounting valuationIn accordance with FRS17, a valuation of theScheme liability is carried out annually by theScheme Actuary as at the balance sheet date byupdating the results of the full actuarialvaluation.

Between the full actuarial valuations at a two-year midpoint, a full and detailed member data-set is provided to the Scheme Actuary. At thispoint the assumptions regarding thecomposition of the Scheme membership areupdated to allow the Scheme liability to be valued.

The valuation of the Scheme liability as at 31March 2008, is based on detailed membershipdata as at 31 March 2006 (the latest midpoint)updated to 31 March 2008 with summary globalmember and accounting data.

The latest assessment of the liabilities of theScheme is contained in the Scheme Actuaryreport, which forms part of the annual NHSPension Scheme (England and Wales) ResourceAccount, published annually. These accountscan be viewed on the NHS Pensions website.Copies can also be obtained from The Stationery Office.

Scheme provisions as at 31 March 2008The Scheme is a “final salary” scheme. Annualpensions are normally based on 1/80th of thebest of the last 3 years pensionable pay for eachyear of service. A lump sum normally equivalentto 3 years pension is payable on retirement.Annual increases are applied to pensionpayments at rates defined by the Pensions(Increase) Act 1971, and are based on changesin retail prices in the twelve months ending 30September in the previous calendar year. Ondeath, a pension of 50% of the member’spension is normally payable to the survivingspouse.

Early payment of a pension, with enhancement,is available to members of the Scheme who arepermanently incapable of fulfilling their dutieseffectively through illness or infirmity. A deathgratuity of twice final year’s pensionable pay fordeath in service, and five times their annualpension for death after retirement, less pensionalready paid, subject to a maximum amountequal to twice the member’s final year’spensionable pay less their retirement lump sumfor those who die after retirement, is payable.



For early retirements other than those due to illhealth the additional pension liabilities are notfunded by the scheme. The full amount of theliability for the additional costs is charged to theincome and expenditure account at the time theNHS Institute commits itself to the retirement,regardless of the method of payment.

The Scheme provides the opportunity tomembers to increase their benefits throughmoney purchase Additional VoluntaryContributions (AVCs) provided by an approvedpanel of life companies. Under the arrangementthe employee/member can make contributionsto enhance an employee's pension benefits. Thebenefits payable relate directly to the value ofthe investments made.

Scheme provisions from 1 April 2008

From 1 April 2008 changes have been made tothe NHS Pension Scheme contribution rates andbenefits. Further details of these changes canbe found on the NHS Pensions websitewww.pensions.nhsbsa.nhs.uk.

1.10 Research and developmentResearch and development expenditure ischarged against income in the year in which it isincurred, except insofar as developmentexpenditure relates to a clearly defined projectand the benefits of it can reasonably beregarded as assured. Expenditure so deferred islimited to the value of future benefits expected

and is amortised through the Operating CostStatement on a systematic basis over the periodexpected to benefit from the project. It isrevalued on the basis of current cost. Theamortisation should be calculated on the samebasis as used for depreciation i.e. on a quarterlybasis.

1.11 Foreign exchangeTransactions which are denominated in a foreigncurrency are translated into sterling at theexchange rate ruling on the date of eachtransaction, except where rates do not fluctuatesignificantly, in which case an average rate for aperiod is used.

1.12 LeasesAssets held under finance leases and hirepurchase contracts are capitalised in the BalanceSheet and are depreciated over their useful livesor primary lease term. Rentals under operatingleases are charged on a straight line basis overthe terms of the lease.

1.13 ProvisionsThe NHS Institute provides for legal orconstructive obligations that are of uncertaintiming or amount at the Balance Sheet date onthe basis of the best estimate of the expenditurerequired to settle the obligation. Where theeffect of the time value of money is significant,the estimated risk-adjusted cash flows arediscounted using the Treasury’s discount rate of2.2% in real terms.



2.1 Programme costs2007-08 2006-07

Notes £000 £000 £000

Non-executive members' remuneration 124 115Other salaries and wages 2.2 10,577 9,297Supplies and services - general 36 54Establishment expenses 3,798 4,138Premises and fixed plant 1,395 1,312External contractors 1,706 1,233Capital: Depreciation and amortisation 5.1, 5.2 795 400

Capital charges interest (128) (291)667

Auditors' remuneration: Statutory external audit fees 43 43Non statutory external audit fees1 11 0Internal audit fees 57 41

Other finance costs:Bad debt provision 63 0Foreign currency losses 16 0Unwinding of discount 17 0

96Miscellaneous:Redundancy and early retirement costs (288) 392Residual NHSU activities transferred 1,041 2,055Other 161 11

914Commissioning expenditure 2.3 60,326 37,225

79,750 56,025

1Advice on the set up of the Innovation Fund.


2.2 Staff numbers and related costs

2007-08 2006-07£000 £000

Salaries and wages - staff on the NHS Institute payroll 7,362 6,768Seconded, contract and agency staff 1,823 1,099Salaries and wages - recharges to other NHS organisations (198) (415)Social security costs 612 547Employer contributions to NHS Pension scheme 968 897NHS Institute employees 10,567 8,896

NHSU residual employees 10 4011

Total salaries and wages 10,577 9,297

2007-08 2006-07Average Average

WTE2 WTE

Salaries and wages - staff on the NHS Institute payroll 163.3 1213

Seconded, contract and agency staff 28.0 17Salaries and wages - recharges to other NHS organisations (2.4) (11)NHS Institute employees 188.9 127

NHSU residual employees1 0.5 6Total average whole time equivalent (WTE) 189.4 133

1These costs relate to former NHSU staff transferred to the NHS Institute but placed on secondment with other NHS

organisations2The NHS Institute has a WTE limit set by the Department of Health of 217.3The introduction of a new payroll system in February 2008 has led to greater accuracy in the reporting of WTEs.

Expenditure on staff benefitsThe amount spent on staff benefits during 2007-08 totalled £11,514 (2006-07 £13,226).

Retirements due to ill-healthDuring 2007-08 there were no early retirements from the NHS Institute on the grounds of ill health.

Early retirements and redundanciesDuring 2007-08 there were no early retirements or redundancies.During 2006-07 provision was made for 7 early retirements or redundancies from the NHS Institute totalling£787,137.


2.3 Commissioning expenditure

2007-08 2006-07£000 £000 £000

Building leadership capability 5,710 Building leadership capability 2,988Building leadership capacity-pay 11,349 Building leadership capacity-pay 10,713Building leadership capacity-non pay 8,506 19,855 Building leadership capacity-non pay 6,728Clinical Systems Improvement 2,723 Clinical Systems Improvement 1,076Delivering for Improvement 1,478 Delivering for Improvement 1,022Care Outside Hospital 1,011 Care Outside Hospital 1,276Safer Care 1,343 Healthcare Associated Infections 1 282No Delays 1,878 No Delays 682Delivering Quality and Value 1,624 Delivering Quality and Value 2,421PCT development 893 PCT development 860Joint working with Strategic 898 Joint working with Strategic 1,127Health Authorities Health AuthoritiesNational Innovation Centre 8,239 National Innovation Centre 3,746Strategic Partnership 596 Strategic Partnership 568Productive Series 567 Productive Series 264National Library for Health2 7,425Commissioning for Health Improvement3 89New Business Model (pilot) 480Corporate Organisation Development in the NHS 497Other - included in business plan 5,020 Other included in business plan 3,472(64 projects) (43 projects)

60,326 37,225

1 The priority programme Healthcare Associated Infections ended during 2006-072 The National Library for Health transferred to the NHS Institute on 1 April 2007 from NHS Connecting for Health.3 The priority programme Commissioning for Health Improvement is effective from 1 April 2008.

2.4 Better Payment Practice Code - measure of compliance

Number £000

Total non NHS bills paid 2007-08 15,454 53,237Total non NHS bills paid within target 14,235 48,194Percentage of non NHS bills paid within target 92.1% 90.5%

Number £000

Total NHS bills paid 2007-08 724 12,688Total NHS bills paid within target 393 7,924Percentage of NHS bills paid within target 54.3% 62.5%

The Late Payment of Commercial Debts (Interest) Act 1998£674.98 interest was paid under this legislation during 2007-08


3.1 Reconciliation of net operating cost to net resource outturn

2007-08 2006-07£000 £000

Net operating cost for the financial year 73,196 53,014Net resource outturn 73,196 53,014Revenue resource limit 73,531 56,231Under spend against revenue resource limit 335 3,217

3.2 Reconciliation of gross capital expenditure to capital resource limit

2007-08 2006-07£000 £000

Gross capital expenditure 1,768 1,829NBV of assets disposed 0 0Capital grants 0 0Net resource outturn 1,768 1,829Capital resource limit 2,044 1,900Under spend against capital resource limit 276 71

4 Operating incomeOperating income analysed by classification and activity, is as follows:

2007-08 2006-07£000 £000

Programme income:Fees and charges 6,276 2,921Income received from:Scottish Parliament 98 55National Assembly for Wales 84 31Northern Ireland Assembly 10 4Other 87 0Total 6,555 3,011


5 Fixed Assets5.1 Intangible fixed assets

Softwarelicences

£000

Gross cost at 31 March 2007 300Additions - purchased 411Gross cost at 31 March 2008 711

Accumulated amortisation at 31 March 2007 50Charged during the year 60Accumulated amortisation at 31 March 2008 110

Net book value:Total at 31 March 2008 601Net book value:Total at 31 March 2007 250

5.2 Tangible fixed assetsInformation technology Leasehold Total

improvementsWeb based

Websites Tools Hardware£000 £000 £000 £000 £000

Cost or valuation at 31 March 2007 365 846 711 2,212 4,134Additions - purchased 739 518 69 31 1,357Indexation 0 0 0 184 184Gross cost at 31 March 2008 1,104 1,364 780 2,427 5,675

Accumulated depreciation at 31 March 2007 6 86 33 398 523Charged during the year 141 203 144 247 735Indexation 0 0 0 34 34Accumulated depreciation at 31 March 2008 147 289 177 679 1,292

Net book value:Total at 31 March 2008 957 1,075 603 1,748 4,383Net book value:Total at 31 March 2007 359 760 678 1,814 3,611


6 Debtors6.1 Amounts falling due within one year

2007-08 2006-07£000 £000

NHS debtors 1,517 507Trade debtors - non NHS 913 74Provision for irrecoverable debts (63) 0VAT amount due 1,080 502Prepayments 5,2411 569Accrued income 13 143Other debtors 4 5

8,705 1,800

1Included within prepayments are £4,220,002 of payments on account to HMRC and Innovation Hubs which were not due at 31

March 2008 (see page 45). These payments have reduced the cash balance at 31 March 2008 by an equivalent amount. The

payments were made to satisfy the need to a) fully draw down 2007-08 cash allocation to settle outstanding creditors in April

2008; b) to hold minimal cash balances at 31 March 2008; and c) to avoid the risk thatthe NHS Institute’s 2008-09 cash

allocation would be reduced by an equivalent amount.

6.2 Amounts falling due after more than one year2007-08 2006-07

£000 £000Prepayments 1 190

1 190

Total debtors 8,706 1,990

7 Analysis of changes in cashAt 31 Change At 31March during March2007 the year 2008£000 £000 £000

Cash at the Office of the Paymaster General 1,803 (1,229) 574

1,803 (1,229) 574


8 Creditors amounts falling due within one year2007-08 2006-07

£000 £000

NHS creditors 601 330Trade creditors-non NHS 3,269 1,557Tax and social security 1 0Capital creditors 424 458Accruals 7,294 7,404Deferred income 2,425 0Other creditors 286 18

14,300 9,767

9 Provisions for liabilities and charges

Pensions for Legal Restructuring Other Totalformer claimsstaff£000 £000 £000 £000 £000

At 31 March 2007 1,265 0 154 563 1,982Arising during the year 40 106 0 159 305Utilised during the year (854) 0 (150) (211) (1,215)Reversed unused (336) 0 (4) (92) (432)Unwinding of discount 0 0 0 17 17

At 31 March 2008 115 106 0 436 657

Expected timing of cash flows:Within 1 year 115 106 0 0 221Over 5 years 0 0 0 436 436

1The NHS Institute has received a damages claim for personal injury during 2007-08.

2The NHS Institute has contracted for services with indirect workers and has provided for tax relating to their employment status.

10 Movements in working capital other than cash

2007-08 2006-07£000 £000

Increase in debtors 6,716 564(Increase) in creditors (4,567) (772)

2,149 (208)

1 2

The NHS Institute takes account of movements in capital creditors in the calculation of movements in workingcapital other than cash


11 Movements on reserves11.1 General fund

2007-08 2006-07£000 £000

Balance at 31 March 2007 4,233 10,745Net operating costs for the year 73,196 53,014Net parliamentary funding (76,575) (59,800)Revaluation transfer (32) (17)Non cash items: Capital charge interest 128 291

Balance at 31 March 2008 950 4,233

11.2 Revaluation reserve 2007-08 2006-07

£000 £000

Balance at 31 March 2007 (138) 0Indexation of fixed assets (151) (155)Transfer to general fund of realised elements 32 17of revaluation reserve

Balance at 31 March 2008 (257) (138)

12 Reconciliation of operating costs to operating cash flows

2007-08 2006-07£000 £000

Net operating cost before interest for the year 73,195 53,014Adjust for non cash transactions (667) (109)Adjust for movements in working capital other than cash 2,149 (208)Decrease in provisions 1,325 3,473

Net cash outflow from operating activities 76,002 56,170


13 Contingent liabilitiesAt 31 March 2008, there were no known contingent liabilities (2006-07 £nil).

14 Capital commitmentsAt 31 March 2008 the value of contracted capital commitments was £nil(2006-07 £143,154).

15 Commitments under operating leasesExpenses of the NHS Institute include the following in respect of hire and operating lease rentals:

2007-08 2006-07£000 £000

Hire of plant and machinery 26 35Property rental - including headquarters and 667 678other propertiesOther operating leases 45 47

738 760

Commitments under non-cancellable operating leases:

Commitments under operating leases to pay rentals during the year following the year of these accounts are given

in the table below, analysed according to the period in which the lease expires.

2007-08 2006-07Land and buildings £000 £000

Operating leases which expire: within 1 year 233 100between 1 and 5 years 0 163after 5 years 434 415

667 678

Other leasesOperating leases which expire: within 1 year 15 29

between 1 and 5 years 56 5371 82

16 Other commitmentsThe NHS Institute has not entered into any additional non-cancellable contracts which are notoperating leases (2006-07 £nil).


17 Losses and special paymentsThere were 9 cases of losses and special payments (2006-07 24 cases) totalling £3,475 (2006-07£53,342) approved during 2007-08.

18 Related partiesThe NHS Institute is a special health authority established by order of the Secretary of State for Health.

The Department of Health is regarded as a controlling related party. During 2007-08 the NHS Institutehas had a significant number of material transactions with the Department, and with other entities forwhich the Department is regarded as the parent department. Only those entities where totaltransactions have exceeded £100,000 are disclosed.

Income Expenditure£000 £000

Department of Health 4,570East Midlands SHA 848 150East of England SHA 164London SHA 271North East SHA 150North West SHA 151South Central SHA 168South East Coast SHA 701 150South West SHA 166West Midlands SHA 103Yorkshire and the Humber SHA 228Salford PCT 296NHS Business Services Authority 188Central Manchester and Manchester Children's University Hospitals NHS Trust 1,675North Bristol NHS Trust 105Nottingham University Hospitals NHS Trust 447Oxfordshire and Buckinghamshire Mental Health Partnership NHS Trust 163Oxford Radcliffe Hospitals NHS Trust 418University Hospital of North Staffordshire NHS Trust 150Chelsea and Westminster Hospital NHS Foundation Trust 300Guys and St Thomas NHS Foundation Trust 229Salisbury Health Care NHS Foundation Trust 471Sheffield Children's NHS Foundation Trust 119

19 Post balance sheet eventsThere are no material post balance sheet events. This annual report and account has been authorisedfor issue on 17th July 2008 by the NHS Institute Chief Executive and Accounting Officer.


20 Financial instrumentsFRS 13, Derivatives and Other Financial Instruments, requires disclosure of the role that financial instrumentshave had during the period in creating or changing the risks an entity faces in undertaking its activities. Becauseof the way special health authorities are financed, the NHS Institute is not exposed to the degree of financial riskfaced by business entities. Also, financial instruments play a much more limited role in creating or changing riskthan would be typical of the listed companies to which FRS 13 mainly applies. The NHS Institute has limitedpowers to borrow or invest surplus funds. Financial assets and liabilities are generated by day to day operationalactivities rather than being held to change the risks facing the NHS Institute in undertaking its activities. Asallowed by FRS 13, debtors and creditors that are due to mature or become payable within 12 months from thebalance sheet date have been omitted from all disclosures other than from the currency profile.

Liquidity riskThe NHS Institute's net operating costs are financed from resources voted annually by Parliament. The NHS Institute largely finances its capital expenditure from funds made available from government under anagreed capital resource limit. The NHS Institute is not, therefore, exposed to significant liquidity risks.

Interest rate riskAll of the NHS Institute's financial assets and financial liabilities carry nil or fixed rates of interest. The NHS Institute is not, therefore, exposed to significant interest rate risk.

Foreign currency riskThe NHS Institute has foreign currency income and expenditure which results in transactional currencyexposures. These exposures arise from sales or purchases in currencies other than sterling. The NHS Institute'scurrency exposure is limited by the expectation that any balance will mature within 30 days of its first arising.

Fair valuesA comparison, by category, of book values and fair values of the NHS Institute's financial assets and liabilities asat 31 March 2008 is as follows:

Book value Fair value£000 £000

Financial assets:Cash 574 574Debtors over 1 year 1 1Total 575 575

Financial liabilities:Provisions over 1 year 436 436Total 436 436

Fair value is not significantly different from book value since in the calculation of book value, the expected cash flowshave been discounted by the Treasury discount rate of 2.2% in real terms.


21 Intra-government balancesDebtors: Debtors: Creditors:

Amounts falling Amounts falling Amounts fallingdue within one due after more due within one

year than one year year

£000 £000 £000

Balances with other central government bodies 4,700 0 3,961Balances with local authorities 0 0 0Balances with NHS Trusts 1,346 0 1,242Balances with public corporations and trading funds 0 0 0Balances with bodies external to government 2,659 1 9,097At 31 March 2008 8,705 1 14,300

Balances with other central government bodies 845 0 1,420Balances with local authorities 0 0 0Balances with NHS Trusts 307 0 177Balances with public corporations and trading funds 0 0 0Balances with bodies external to government 648 190 8,170At 31 March 2007 1,800 190 9,767

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Documents

Annual Report and Accounts · Care Outside of Hospital 16 ... Thinking Differently 32 ... Board Members’ Declarations of Interest 34 Remuneration report 35 Accounts 43. Annual Report