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Board of Directors’ Meeting Report – 28 January 2015
Agenda item 11/15
Title
Financial Position
Sponsoring Director
James O’Sullivan
Authors
Adrian Buggle – Deputy Director of Finance Marie Miller – Assistant Director of Finance Lisa Keith – Assistant Director of Finance
Purpose
To present the financial position for December 2014.
Previously considered at
Executive Team 19 January 2015 and Finance & Investment Committee 20 January 2015
Executive Summary There was a deficit of £1.4m in December which increased the cumulative deficit to £7.7m. Cash balances remained strong and the Trust’s CoSRR is a 2.
Related Trust Objective
Sustainability – keeping the core strong
Related Risk
Various
Legal implications / regulatory requirements
The Trust’s financial position forms part of Monitor’s regulatory regime.
Quality impact assessment
The delivery of the financial position and maintaining and improving quality are integral. Each cost improvement programme has a quality impact assessment.
Equality impact assessment
As far as can be considered this paper has no detrimental impact for the 9 protected characteristics under the Equality Act 2010
Recommendations The Board is asked to note this.
2
Income and Expenditure Summary
I&E Summary
Annual RAG RAG
Plan Plan Actual Variance Plan Actual Variance Plan Actual Variance
£'000 £'000 £'000 £'000 £'000 £'000 £'000
223,578 Clinical Income 18,767 18,817 50 168,848 169,608 760 0 223,578 224,561 983 0
21,727 Other Income 1,833 1,620 (213) 16,255 16,823 568 0 21,727 22,942 1,215 0.1
24,635 Pass Through Income 2,006 2,356 350 18,231 19,513 1,282 0.1 24,635 26,017 1,382 0.1
269,940 Total Income 22,606 22,793 187 203,334 205,944 2,610 0 269,940 273,520 3,580 0
169,878 Pay 13,855 14,366 (511) 128,718 133,268 (4,550) -0 169,878 178,082 (8,204) -0
62,099 Non Pay 5,523 6,304 (781) 45,890 50,479 (4,589) -0 62,099 63,173 (1,074) -0
24,630 Pass Through Non Pay 2,018 2,357 (339) 18,253 19,513 (1,260) -0 24,630 26,017 (1,387) -0
256,607 Total Expenditure 21,396 23,027 (1,631) 192,861 203,260 (10,399) -0 256,607 267,272 (10,665) -0
13,333 EBITDA 1,210 (234) (1,444) 10,473 2,684 (7,789) -1 13,333 6,248 (7,085) -1
9,062 Depreciation 755 785 (30) 6,797 6,784 13 0 9,062 9,060 2 0
4,990 Financing 415 410 5 3,742 3,646 96 0 4,990 4,943 47 0
(719) Net Surplus / (Deficit) 40 (1,429) (1,469) (66) (7,746) (7,680) (719) (7,755) (7,036) ###
Adverse variances are shown
in brackets ( )
Current Month Year to date Forecast
-9,000
-8,000
-7,000
-6,000
-5,000
-4,000
-3,000
-2,000
-1,000
0
1,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Cumulative I&E Performance
Actual
Plan
Budget Variances by Business Unit
Corporate D&T Facilities Medicine MSK Surgery Theatres W&C Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Income (391) 1,926 11 (1,226) (183) 1,727 (200) 468 478 2,610
Pay (114) (887) 401 (3,437) (423) (851) (1,206) (1,098) 3,065 (4,550)
Non pay (840) (1,366) 477 (1,565) (972) (1,273) (43) (61) (206) (5,849)
SLR Recharges - (245) - 199 (505) 279 275 (2) (1) -
EBITDA (1,345) (572) 889 (6,029) (2,083) (118) (1,174) (693) 3,336 (7,789)
Depreciation & Financing - - - - - - - - 109 109
Net Budget Variance (1,345) (572) 889 (6,029) (2,083) (118) (1,174) (693) 3,445 (7,680)
(6.34) (0.40) 1.71 (0.76) (0.87) (0.07) (1.23) (0.06) 0.50 (3)
Adverse variances are shown in
brackets ( )
3
Commentary Current month
There was a deficit of £1.4m in the month versus the original plan of break even.
There was a reduction in Other Income in the month of £275k which represents a change to the way the Deanery funds Medical training. Although the Trust received notification in September there have been difficulties reconciling the funding received (with the trainee doctor placements) and this involved considerable discussion and delay with the Health Education East of England in clarifying the position. This has caused a retrospective adjustment for the 9 month period.
Pay costs reduced for the second month in a row to £14.3m with agency costs representing £1.2m of this. The largest pay overspend was in Medicine.
Forecast
Whilst there have been a number of compensating variances to the forecast, the bottom line forecast position remains unchanged at a £7.8m deficit.
At month 9, the Trust is performing slightly better than the forecast (by £0.3m). An analysis of the variances is shown below:
Analysis of Actuals Compared to Forecast
Full Year
Forecast
Adverse variances are
shown in brackets ( )
YTD
Forecast
YTD
Actual
Pass
Through
£000s £000s £000s £000s % £000s £000s £000s £000s £000s £000s £000s
250,578 NHS Clinical Income 186,955 189,121 2,166 1.2% 1,098 - - 1,068 - (0)
22,942 Other Income 17,125 16,823 (302) (1.8%) - (275) - - - (27)
273,520 Sub Total 204,080 205,944 1,864 0.9% 1,098 (275) - 1,068 - - (27)
178,083 Pay 134,835 133,268 1,567 1.2% - - 319 (365) 1,281 332
89,192 Non Pay 66,750 69,992 (3,242) (4.9%) (1,098) - (150) (389) (1,281) (324)
267,274 Sub Total 201,585 203,260 (1,675) (0.8%) (1,098) - 319 (150) (754) - 8
6,246 EBITDA 2,496 2,684 188 7.5% - (275) 319 918 (754) - (20)
14,004 Non EBITDA items 10,528 10,430 98 0.9%
(7,758) Grand Total (8,033) (7,746) 287 (3.6%)
OtherPathology
JV
Overspend
on RTT
funding
Variance
Deanery Slippage
on
managem
ent posts
and HASU
Net
activity
over
perform-
ance
4
Clinical Income
Activity and Income Analysis
Annual YTD Actual Annual YTD Actual
Plan Plan Plan Plan
units units units units % £'000 £'000 £'000 £'000 %
Elective : In-Patients 8,159 6,148 7,546 1,398 22.7% 22,969 17,308 19,259 1,951 11.3%
Elective : Planned Same Day 41,306 31,021 32,520 1,499 4.8% 24,886 18,713 19,147 434 2.3%
Non-Elective 32,446 24,448 27,028 2,580 10.6% 65,704 49,503 50,935 1,432 2.9%
Out-Patients : First 105,786 79,445 79,007 (438) (0.6%) 16,760 12,599 12,662 63 0.5%
Out-Patients : Follow-ups 196,880 147,857 148,102 245 0.2% 16,761 12,588 11,375 (1,213) (9.6%)
Out-Patients : Procedures 29,296 22,001 21,762 (239) (1.1%) 4,699 3,575 3,730 155 4.3%
Non Face to Face Contacts 11,246 8,446 7,981 (465) (5.5%) 276 207 203 (4) (1.9%)
Pre-op Assessments 12,629 9,484 9,078 (406) (4.3%) 883 663 641 (22) (3.3%)
Critical Care 14,691 10,220 10,414 194 1.9% 11,499 8,664 7,828 (836) (9.6%)
GP Direct Access 3,470,073 2,614,598 2,533,560 (81,038) (3.1%) 13,902 10,472 10,887 415 4.0%
Accident & Emergency 93,402 70,378 64,731 (5,647) (8.0%) 9,356 7,050 6,827 (223) (3.2%)
Pass Through n/a n/a n/a 24,275 18,235 19,513 1,278 7.0%
Maternity Pathway n/a n/a n/a 14,219 10,714 10,077 (637) (5.9%)
Block Contracts n/a n/a n/a 6,464 4,853 4,685 (168) (3.5%)
Other Clinical Income n/a n/a n/a 15,200 11,939 11,352 (587) (4.9%)
Totals n/a n/a n/a n/a n/a 247,853 187,083 189,121 2,038 1.1%
Variance Variance
Activity FinancialAdverse variances are shown in
brackets ( )
16,500
17,000
17,500
18,000
18,500
19,000
19,500
20,000
20,500
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Clinical Income excluding Pass Through
Actual
2014/15
Plan2014/15
Actual
2013/14
Analysis of Income Variances
Budget Actual
£000s £000s £000s % £000s £000s £000s £000s £000s £000s £000s
Diagnostic & Therap. 30,568 32,607 2,039 6.7% 506 (360) - 369 - 913 611
Medicine 61,390 59,514 (1,876) (3.1%) 1,627 (651) (266) 7 (223) (174) (2,196)
MSK 28,004 27,968 (36) (0.1%) 353 (270) - - - (165) 46
Surgical 39,489 41,203 1,714 4.3% 727 (158) (117) 39 - 712 511
Theatres & CC 2,527 2,281 (246) (9.7%) - - (231) - - (15) -
Women & Children 23,628 24,097 469 2.0% 603 417 (222) - - (3) (326)
Centrally Managed 1,477 1,451 (26) (1.8%) - - - - - 10 (36)
Totals 187,083 189,121 2,038 1.1% 3,816 (1,022) (836) 415 (223) 1,278 (1,390)
Inpatient
s
Pass
Through
OtherAdverse variances are shown in
brackets ( )
Outpatien
ts
Critical
Care
GP Direct
Access
A&EVariance
5
Commentary Clinical income continues to be ahead of plan at the end of December by £2m. The effect of the major incident status at the end of December is reflected in the Trust performance. The estimated reduction on clinical income for the incident is £317k in month, excluding fines and penalties. The cancellation of elective activity was replaced by increased non elective activity. Due to the contractual cap on non-elective activity, this income will be paid for at the 30% marginal rate by Commissioners. The over performance on income arises from activity levels across different points of delivery within the hospital.
Elective inpatient & planned same day procedure activity in December was ahead of plan and continued to reflect the additional work associated with 18 week waits, even allowing for the cancellation of elective activity at the end of the month.
Non Elective activity was ahead of plan due to the high level of emergency attendance in December, including the impact of the major incident.
Income for Out-patient First and Follow-up appointments, were again behind plan in the month with the latter continuing to be affected by schemes to cap the number of follow-ups attendances. Attendances in excess of the cap are not reimbursed by the CCGs and the year-to-date value of these is £1.4m, an average monthly charge of £245k per month since July. We expect to continue to make improvements as schemes are put in place to reduce follow ups and improve the Trust’s follow up ratios.
Critical Care is £836k below plan, of which £614k relates to Adult care. This is due to activity performance being 250 spells behind plan although work is currently in progress to investigate the reasons for this low level.
Pass Through activity is continuing the trend of being ahead of plan and reflects the Trusts high levels of in patient activity. Pass Through funding is for high cost drugs and devices that are reimbursed separately from PbR tariffs and directly offsets the costs of these items included with our expenditure.
The total additional funding for 18 weeks RTT (referral to treatment) is being accrued by the Trust. The cumulative value of this is £1.1m.
The Trust has received Winter Resilience funding of £1.8m, of which £495k has been included in the cumulative position. This has been matched to expenditure.
The year-to-date provision for fines and challenges are: o Contractual challenges £ 402k o 18 Weeks breaches £ 136k o 52 weeks breaches £ 40k o A&E 4 hour waits £ 184k o Cancer waits £ 41k o Ambulance turnaround £ 487k o C2C Referral £ 0k o MRSA £ 20k
£1,310k
There have been large increases in A&E and Ambulance fines. This reflects the level of breaches in month and reflects the pressure on the Emergency Department.
6
There continues to be no fines in month for RTT 18 week breaches, and we anticipate that this will continue until the year end.
The year-to-date provision for PbR contractual penalties are: o ERT – emergency £2,760k
rate threshold o Re-admissions £ 420k o Unbundled Radiology £ 640k o Planned procedure not £ 122k
carried out £4,721k
The Trust has provided £2.7m for ERT Emergency threshold. Under PbR rules the Trust is only paid 30% of the value of activity over the 2008-09 baseline. This penalty goes back to the Commissioners for them to reinvest in schemes to reduce non elective admissions.
The readmission provision is based on last year’s value, until a joint audit has been done with the Commissioners. This is a penalty for inpatient readmissions within four weeks of discharge.
Unbundled Radiology is a PBR transitional risk share to mitigate the risk on Radiology activity that was previously part of the Outpatient tariff (in 2013/14). The Trust is paid 50% of activity above the contract value.
We are not paid for planned procedures not carried out for non-clinical reasons. Currently the provision is 40% of all cancelled procedures.
7
Pay Expenditure Pay Analysis
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Pay : Budget 14,170 14,415 14,313 14,337 14,799 14,930 13,950 13,950 13,854 13,738 13,746 13,676 169,878
: Expenditure 14,476 14,885 14,929 14,900 15,007 15,269 14,970 14,467 14,366 133,269
: Variance (306) (470) (616) (563) (208) (339) (1,020) (517) (512) - - - n/a
Total Income 22,219 22,935 21,514 24,178 22,230 23,293 24,741 22,041 22,793 - - - 205,944
Pay Percentage 65.2% 64.9% 69.4% 61.6% 67.5% 65.6% 60.5% 65.6% 63.0% - - - 64.7%
Last Year's Pay Spend 14,079 14,326 14,228 14,436 14,330 14,173 14,379 14,184 14,241 14,310 14,360 14,721 171,767
Adverse variances are
shown in brackets ( )
13,600
13,800
14,000
14,200
14,400
14,600
14,800
15,000
15,200
15,400
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Spe
nd
£0
00
s
Pay Actual & Budget 2014/15
Actual 13/14
Actual 14/15
Plan 14/15
Analysis of Pay Variances by Business Unit
Adverse variances are
shown in brackets ( )Budget Actual
Other
Additional
Payments
£000s £000s £000s % £000s £000s £000s £000s £000s £000s
Corporate Services 12,229 12,343 (114) (0.9%) - (271) (210) (187) (570) - 1,124
Diagnostic & Therap. 20,820 21,707 (887) (4.3%) (212) (374) (3) (417) (1,694) - 1,813
Facilities 6,484 6,083 401 6.2% - - (8) (611) (450) - 1,470
Medicine 30,197 33,634 (3,437) (11.4%) (184) (448) (138) (2,142) (4,751) - 4,227
MSK 11,806 12,229 (423) (3.6%) (36) (142) (6) (622) (945) - 1,329
Surgical 18,761 19,612 (851) (4.5%) (82) (35) (34) (1,172) (1,495) - 1,967
Theatres & CC 10,755 11,961 (1,206) (11.2%) (341) (397) (5) (399) (1,145) - 1,081
Women & Children 14,545 15,643 (1,098) (7.5%) (35) (236) (17) (844) (1,557) - 1,590
Sub Total 125,597 133,212 (7,615) (6.1%) (890) (1,904) (421) (6,395) (12,608) - 14,601
Reserves / Central 3,121 56 3,065 98.2% - - - - 1,105 1,902 58
Grand Total 128,718 133,268 (4,550) (3.5%) (890) (1,904) (421) (6,395) (11,503) 1,902 14,659
Vacancies
/(Over
Establish
ments)
Variance
CIPs (Not
Delivered)
/ Over
Delivered
One-off
Payments
Locum /
Bank
Agency Pay
Reserves
8
Analysis of Pay Variances by Staff Group
Adverse variances are shown in
brackets ( )Budget Actual
Other
Additional
Payments
£000s £000s £000s % £000s £000s £000s £000s £000s £000s
Medical 35,925 39,877 (3,952) (11.0%) (714) - (159) (960) (6,394) 4,276
Nursing 44,326 45,960 (1,634) (3.7%) (88) - (10) (3,705) (3,236) 5,406
Snr. Managers 7,241 6,901 340 4.7% (0) - (236) - (347) 923
Scientific, Therapeutic & Technical 20,618 20,715 (97) (0.5%) (81) - 1 (208) (1,599) 1,790
Support Staff 19,567 19,765 (198) (1.0%) (6) - (17) (1,521) (1,031) 2,377
Other Pay (1,966) 50 (2,016) 102.5% - (1,904) - - (112)
Sub Total 125,711 133,268 (7,557) (6.0%) (890) (1,904) (421) (6,395) (12,608) 14,660
Pay Reserves 3,007 - 3,007 100.0% - - - - 1,105 1,902
Grand Total 128,718 133,268 (4,550) (3.5%) (890) (1,904) (421) (6,395) (11,503) 16,562
Vacancies
/(Over
Establish
ments)
Variance
CIPs (Not
Delivered)
/ Over
Delivered
One-off
Payments
Locum /
Bank
Agency
500,000
700,000
900,000
1,100,000
1,300,000
1,500,000
1,700,000
1,900,000
2,100,000
Spe
nd
(£
)
Agency Expenditure
Agency Spend
Linear (Agency Spend)
Commentary
Pay expenditure in December was £101k lower than November and £604k lower than October (which was the first month to include the transfer of Pathology staff). The main reasons for this decrease are lower agency costs and holding back on the recruitment of non-front line posts.
Agency spend was £1,244k in December, which is the lowest value since April. This reduction reflects the work being led by the Transformation Director with the Business Units. Controls have been put in place on nursing agency staff and this has reduced costs by £270k in December (compared to October).
Despite the pay costs reducing, there is still a significant overspend on pay in the month. The main reasons for this are the under delivery of CIPs (393k) and agency premium.
9
Non-Pay Expenditure
Non-Pay Analysis (excluding "pass through")
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Non-Pay : Budget 4,802 4,758 4,783 5,003 4,957 4,979 5,611 5,488 5,511 5,420 5,378 5,411 62,101
: Expenditure 5,013 4,912 5,529 5,464 5,376 5,666 6,323 5,894 6,303 50,480
: Variance (211) (154) (746) (461) (419) (687) (712) (406) (792) - - -
: YTD Variance (211) (365) (1,111) (1,572) (1,991) (2,678) (3,390) (3,796) (4,588) - - -
Total Income (excl. Pass Through) 20,237 20,913 19,749 21,702 20,245 21,020 22,171 19,958 20,437 - - - 186,432
Non-pay Percentage 24.8% 23.5% 28.0% 25.2% 26.6% 27.0% 28.5% 29.5% 30.8% - - - 27.1%
Last Yrs Non-Pay Spend 4,508 5,003 4,804 5,146 4,816 4,668 5,397 4,994 5,009 5,313 4,946 5,961 60,565
Adverse variances are shown in
brackets ( )
3,6003,8004,0004,2004,4004,6004,8005,0005,2005,4005,6005,8006,0006,2006,4006,6006,8007,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Spe
nd
£0
00
s
Non-Pay Actual & Budget 2014/15
Actual13/14
Actual14/15
Plan 14/15
Analysis of Non-Pay Variances
Budget ActualDrugs Clinical
Supplies
Reserves
£000s £000s £000s % £000s £000s £000s £000s £000s £000s
Corporate Services 7,848 8,688 (840) (10.7%) (2) 1 (366) (38) (436)
Diagnostic & Therap. 11,592 12,056 (464) (4.0%) (33) (26) (375) 238 (268)
Facilities 6,288 5,810 478 7.6% - 7 34 437
Medicine 5,148 6,884 (1,736) (33.7%) (159) (345) (225) (120) (887)
MSK 4,377 5,513 (1,136) (26.0%) (175) (116) (35) (810)
Surgical 4,734 5,296 (562) (11.9%) 96 (196) (34) (300) (128)
Theatres & CC 4,079 4,137 (58) (1.4%) (15) 34 (90) 13
Women & Children 1,498 1,562 (64) (4.3%) (40) (37) 110 (19) (78)
Centrally Managed 326 533 (207) - - - (48) 287 (446)
Total 45,890 50,479 (4,589) (10.0%) (328) (678) (981) (287) 287 (2,603)
Adverse variances are
shown in brackets ( )
VarianceCIPs (Not
Delivered)/
Delivered
Non
recurrent
Items
Other
Commentary
The increase in expenditure in December was largely driven by drug spend (£115k) and pathology (£90k). The movement between the months is affected by the release of a legal provision of £136k which lowered the net expenditure in November.
£199k has been spent on outsourcing activity to other providers in December (£1.6m YTD). This was predominantly part of the actions to clear RTT backlogs.
The Pathology JV (which commenced in October) has a 3 month cumulative adverse variance of £111k, due to costs being higher than contract value. This issue is being investigated and the Trust is in conversations with the private provider about the accuracy of the data being received.
Centrally managed costs include GP trainee expenses (travel, relocation and training) which are offset by other income.
10
Cost Improvements
Summary by Business Unit December 2014
Annual
Target
YTD
Target
YTD
VarianceRAG
Forecast
VarianceRAG
RecurrentNon
RecurrentTotal
£'000 £'000 £'000 £'000 £'000 £'000 £'000
723 Theatres and ITU 525 17 20 37 (488) (683)
1,419 Corporate Services 1,057 480 111 591 (466) (498)
667 Procurement 500 215 - 215 (285) -
1,537 Diagnostic & Therapeutic 912 105 129 234 (678) (1,116)
500 Drugs 375 297 - 297 (78) (73)
327 Facilities 245 326 - 326 81 126
1,710 Medicine 985 85 174 259 (726) (1,356)
721 MSK 460 221 1 222 (238) (423)
1,098 Surgical 803 665 - 665 (138) -
798 Women & Children 514 138 142 280 (234) (394)
9,500 Total 6,376 2,549 577 3,126 (3,250) (4,417)
YTD Actual AchievedAdverse variances are shown in
brackets ( )
Note: Values are reported in whole thousands and may differ from PMO reported totals due to rounding
differences.
Commentary
CIP delivery in the month was £400k. Cumulative CIP delivery is £3,126k or 51% behind plan.
Since the appointment of the Transformation Director, the Trust is now concentrating on reducing the expenditure “run rate” to minimise the deficit, rather than focusing on developing further, individual CIP schemes. Work is now commencing on identifying CIPs for the next two financial years.
11
Cash and Working Capital
Cash & Working Capital
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Forecast
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Cash
FT Plan (closing balance) 13,904 14,400 12,700 11,027 11,030 11,040 11,044 11,550 12,050 12,517 12,450 12,380 12,310 12,310
Actual 16,012 14,576 17,511 17,918 21,446 19,780 18,847 22,029 27,456 24,291 2,000
Variance 3,702 176 4,811 6,891 10,416 8,740 7,803 10,479 15,406 11,774 - - - (10,310)
Working Capital Balances
Trade Debtors 9,048 10,152 9,768 7,106 5,879 7,538 9,814 13,996 11,378 17,903 n/a
Trade Creditors 11,839 8,947 8,402 7,438 9,025 8,245 11,701 12,920 10,153 10,879 n/a
Accrued Income 7,744 6,739 3,969 3,446 1,384 445 94 (6,541) (11,724) (17,190) n/a
Accrued Expenditure 12,886 12,835 12,811 12,823 11,630 10,439 11,247 10,759 11,294 10,730 n/a
Stock 5,730 5,722 5,694 5,677 5,899 5,914 5,918 5,686 5,850 6,361 n/a
Available Finance Facility 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 n/a
Adverse variances are shown in
brackets ( )
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
30,000
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Val
ue
£0
00
Cash Balances
Plan
Actual
Minimum Cash F loor
Commentary
Cash balances at the end of December were £24m which is significantly above plan.
The cash position continues to benefit from the “front loading” of contract payments from the CCGs and is the reason behind the negative accrued income value.
The average number of days that invoices are outstanding before payment was 55 days in December, a decrease on 61 days for October.
The Trust’s performance against the PSPP (Public Sector Payment Policy) was 33% compliance in respect of the value of bills paid within 30 days.
The liquidity position is supported by the availability of an overdraft facility of £4.5m provided by Barclays Bank and none of the funds are currently invested.
The year-end forecast of £2m reflects the I&E deficit and capital slippage.
12
Balance Sheet
Statement of Financial Position
Annual
Target
YTD
Target
YTD Actual
AchievedVariance RAG
Mar-15 Total
£'000 £'000 £'000 £'000
161,197 Non Current Assets 158,085 152,165 (5,920) R
34,624 Current Assets 39,180 35,342 (3,838) R
(33,217) Current Liabilities (33,525) (38,078) (4,553) G
1,407 Net Current Assets (Liabilities) 5,655 (2,736) (8,391) R
162,604 Total Assets less Current Liabilities 163,740 149,429 (14,311) R
(11,569) Non Current Liabilities (11,687) (4,832) 6,855 R
151,035 Total Assets Employed 152,053 144,597 (7,456)
Financed By (Taxpayers Equity): -
101,421 Public Dividend Capital 101,421 101,645 224 G
28,096 Revaluation Reserve 28,586 28,586 - G
21,518 Income and Expenditure Reserve 22,046 14,366 (7,680) R
151,035 Total Taxpayers Equity 152,053 144,597 (7,456)
Adverse variances are shown in brackets ( )
13
Capital Expenditure Capital Expenditure
Annual Monthly
Plan ActualOriginal
PlanActual Variance
Under/
(Over)
spend
Slippage Actual Variance
£000 £000 £000 £000 £000 £000 £000 £000 £000
Estates
350 Project management etc - building maint. 26 264 243 21 - - 350 -
4,356 Backlog maintenance 3 2,178 1,692 486 (82) 250 4,187 169
4,706 29 2,442 1,935 507 (82) 250 4,537 169
Medical Equipment
1,500 Medical equipment replacement 469 750 825 (75) (192) - 1,692 (192)
600 X-ray equipment - 600 - 600 - 600 - 600
3,000 2 MRI scanners 1 2,250 1 2,249 - 3,000 - 3,000
2,180 Linacc - 763 - 763 - 2,180 - 2,180
7,280 470 4,363 826 3,537 (192) 5,780 1,692 5,588
I.T.
110 CEDM resources 9 84 78 6 - - 110 -
905 Replacement programme 24 634 394 240 26 - 879 26
376 PAS phase 2 (14) 282 (23) 305 - 300 77 300
242 E-Rostering 7 183 22 161 150 - 92 150
1,071 E-Prescribing 244 804 284 520 (49) 601 519 552
(536) Central Funding (E-Prescribing) (122) (402) (142) (260) - (301) (236) (301)
156 PACS Upgrade - 156 172 (16) - - 156 -
2,324 148 1,741 786 955 127 600 1,597 727
Other
2,300 Vascular theatre 1 1,725 55 1,670 - 1,920 380 1,920
500 Contingency 12 300 446 (146) (432) - 932 (432)
15 Art in hospital - 12 - 12 15 - - 15
400 Medical Day Stay - - - - - 200 200 200
(400) Resilience Funding - - - - - (200) (200) (200)
275 RTT Expenditure 0 103 - 103 - - 275 -
(275) RTT Funding (0) (103) - (103) - - (275) -
2,815 13 2,037 501 1,536 (417) 1,920 1,312 1,503
17,125 Total 660 10,583 4,048 6,535 (563) 8,550 9,138 7,987
Year to Date
Adverse variances are shown in brackets ( )
Forecast
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Capital Expenditure
Actual
Plan
Commentary
The capital spend for December was £0.8m.The year-end forecast shows a slippage of £8.6m which comprises the leasing of two MRI scanners, LINAC and some of the vascular theatre development
14
Risks, Mitigation and Actions
Risk Description Mitigations Action
1 Income lower than plan
This would occur if the CCGs are successful in their plan to disinvest £4.3m (as described in the Heads of Terms)
None have yet been identified although additional cost improvements would inevitably be necessary
Reviews of the CCG’s plans will continue in order to assess the likelihood of such a disinvestment occurring.
2 Cost overspends
The level of spend in December is higher than plan and without action this is likely to continue. Agency costs are a particular feature of this.
Although there is a small amount of contingency, there are no mitigations for this risk other than the application of tighter controls on expenditure.
A Transformation Director came into post in September and the implementation of a recovery plan is in progress.
3 CIP non delivery
CIP delivery in the new year has started slowly with a shortfall on the plan in the period to December. The programme is also back-ended with a number of schemes awaiting final sign off.
A number of cross business unit schemes are being considered which might have longer term impacts. Work continues to develop new schemes.
CIP performance will need to be monitored even more rigorously in this year and the new financial performance meetings will be used to drive this. Reviews will continue with the Finance and Investment Committee.
4 Pressures on the capital programme
Further unplanned demands for capital investment may occur during the year.
A £500k contingency is included in the programme to meet some or all of these pressures.
Some schemes have slipped into 2015/16 which has reduced some of the risk during this year. No further actions are necessary at this stage.
5 Pressures on the cash balances
This could occur for a number of reasons: a). Delays in payments from the CCGs b). Delays from other Trusts with regard to the GP Trainee hosting c). The Trust’s own underlying trading position.
The commissioner issue has been mitigated by this year’s contract which stipulates that block contract payments are to be made on 10ths (rather than 12ths) .
Cash will continue to be monitored weekly and creditors and debtor balances will managed rigorously. Discussion with the NHS East of England with regard to the cash difficulties from hosting the GP trainees have been productive.
6 Non payment for over activity
This would occur if the levels of activity and charges to the local CCGs are above their overall resources. This becomes more likely as activity increases.
Mitigation is difficult unless activity is physically reduced. In the past Trusts generally have been asked to slow down activity.
No further actions are necessary at this stage.
7 Fines The level of fines has, in the past, exceeded the budgeted level and this remains a significant risk for the Trust.
A level of fines has already been anticipated within the budget but there is a possibility that this level will be insufficient.
The Trust needs to continue its efforts to perform at a level that does not trigger fines and also focus its attention on managing the contract to ensure it is applied correctly.
15
Continuity of Service Risk Rating (CoSRR)
Continuity of Service Risk Rating (CoSRR)
Metric Original
Weighting Actual ScorePlan
4 3 2 1
Debt Service Cover Rating 50% 0.68 1 n/a 2.5 1.75 1.25 <1.25
Liquidity Rating 50% -12.08 2 n/a 0 -7 -14 <-14
Total 1.5 n/a
Overall CoSRR 2 n/a
Performance Parameters
Year to date
Monthly Movements
2013/14 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Plan Forecast
Metric
Debt Service 2.67 1.77 2.22 0.87 1.43 1.09 0.93 1.09 0.85 0.68 n/a 1.16
Liquidity -3.43 -4.33 -3.58 -5.69 -4.84 -6.63 -7.76 -6.44 -9.88 -12.08 n/a -13.95
Total 3.5 3.0 3.0 2.0 2.5 1.5 1.5 1.5 1.5 1.5 n/a 1.5
Risk rating (rounded) 3.5 3 3 2 3 2 2 2 2 2 n/a 2
FT Plan 4 4 4 4 4 4 4 4 4 4 n/a 4 Commentary:
The CoSRR comprises two elements as follows:
Debt Service Rating (ability of the Trust to service its debt) Liquidity Ratio (No. of days the Trust can sustain itself on its working capital)
The overall CoSRR for December is 2 against a plan of 4. This difference is due to the overall I&E deficit position.
The year-end forecast is also a 2.
16
Conclusions and Actions
The cumulative position for December showed a deficit of £7.7m which is adverse to the original plan (which assumed break-even at this stage of the year). However, the position is favourable by £0.3m against the profiled year-end forecast which expects the Trust to achieve a final deficit of £7.8m The performance in the month suffered from a retrospective loss of income in respect of medical training and there are still significant pressures on drugs and clinical supplies as well as cost-improvements in general. Attention will continue to be focussed on these areas as well. The Trust’s cash position remained strong in the month but is expected to come under substantial pressure in the final two months of the year and will continue to be managed carefully. The Trust’s Continuity of Service Risk Rating is a 2 for both the year-to-date position and the forecast.
