Council of Governors...Financial Performance Report ... financial arrangements, IP, governance, branding, fundraising to ensure this principal partnership can function optimally. The

Council of Governors Board Room, The Royal Marsden, London

14th September 2016, 11am – 1pm followed by lunch

1. Minutes of the meeting held on 20th June 2016

(Chairman)

(enclosed)

2. Matters Arising 2.1 Private Care: Management of Debt (Shams Maladwala, Managing Director of Private Care)

(enclosed)

3. Report from the Chief Executive (Chief Executive)

(enclosed)

4. Governance and Compliance 4.1. Nominations Committee Report (Nancy Hallett, Senior Independent Director) 4.2. Trust Constitution (Trust Secretary)

(enclosed)

(enclosed)

5. Junior Doctors update (Medical Director/Director of Workforce)

(enclosed)

6. Finance and Quality 6.1. Financial Performance Report (Chief Financial Officer) 6.2. Auditor’s Report on the Annual Report & Accounts 2015/6 (Julia Kratke, Deloitte LLP) 6.3. Quality Account for May – July 2016 (Chief Nurse) 6.4. Key Performance Indicators Q1 (Director of Performance and Information)

(enclosed)

(enclosed)

(enclosed)

(enclosed)

7. Board Sub-Committee Report (Ian Farmer, Chair of the Audit and Finance Committee & Nancy Hallett, Chair of the Quality, Assurance and Risk Committee)

(enclosed)

8. Any Other Business

Date of next meeting: 7th December 2016, 11am – 1pm, Boardroom, Chelsea.

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Council of Governors Boardroom, The Royal Marsden Hospital, Chelsea

Wednesday 20th June 2016 11am – 1pm

Minutes

Present:- R. Ian Molson (Chairman) Governors as per attached attendance list In attendance Cally Palmer (Chief Executive) Ian Farmer (Non-Executive Director) Dr. Liz Bishop (Chief Operating Officer) Karry Tymniecka (Associate Finance Director of Operations) Dr. Shelley Dolan (Chief Nurse) Dr. Nick van As (Medical Director) Steven Francis (Director of Performance & Information) Nina Singh (Director of Workforce) – for item X Syma Dawson (Trust Secretary) (minutes)

MEETING BUSINESS

1 Apologies – as noted in the attached attendance list Welcome to New Governors The Chairman welcomed the new Governors to the meeting as per the enclosed paper.

2 Minutes of meeting held on the 2nd March 2016 and 7th April 2016 The minutes of the meeting held on the 2nd March 2016 and 7th April 2016 were approved as an accurate record.

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Matters Arising: 3.1. Medication Errors Jatinder Harchowal, Chief Pharmacist, presented the report on Medication Errors. He summarised the Trust’s work to review adverse incident reporting while encouraging staff to report all incidents to promote openness and transparency, including near misses, and to better understand the range and types of issues. It was further noted that Boots Pharmacy staff are also reporting incidents via the Trust incident management system Datix. The Chairman asked that this matter is reviewed in six months’ time to satisfy the Board and Council of Governors with regard to the increase in incident reporting. Governor Andrew Pearson queried the manual and electronic use of records. The Chief Pharmacist confirmed that data is entered manually on the Datix system however, the Trust has an electronic prescribing system which enables the Trust to monitor and track changes / entries. It was agreed that the electronic data requirements for the Pharmacy Service should be considered as part of the IT Strategy. Governor Robert Freeman left the meeting at this point.

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Report from the Chief Executive The Chief Executive presented her report and noted that Governors would be informed of the CQC ratings once these had been officially received. She explained the RM position with regard to the STP process. She added that in light of the current economic climate in the NHS, the Board was unable to commit to Monitor’s original control fund conditions to

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achieve a surplus of £5.4m against an allocation of an additional £1.5m to the Trust. This has now been adjusted with the achievement of an additional £0.8M which the Board will function on at its meeting on the 6th July 2016. It was also noted that the Trust had been asked to contribute to the new STP plans in NW and SW London and additionally to a specialist service planning board. All these initiatives are aimed at closing the financial gap in the NHS and ensuring a sustainable service and financial model long term. With reference to the Paediatric Service, it was noted that the Regional Medical Director for London had commissioned a review to look at service configuration pathways for patients in London. The draft report recommending a paediatric oncology centre in London had not been shared with The Royal Marsden but had been leaked to the national press. This was obviously of concern to staff and the Trust particularly given the quality of Royal Marsden’s outcomes both in terms of survival and patient experience. The Medical Director and Chief Nurse had subsequently provided comments on the factual accuracy of the report and its evidence base so that full information was available to specialised commissioners in making a decision about the Report’s recommendations. The Royal Marsden has consistently supported a recommendation to reduce the number and improve the quality of patient pathways from shared care units to centres but has suggested any reconfiguration of centres should be based on evidence assessing the risk and benefits to patients of the changes proposed.

The Chief Executive confirmed that the magnet for the MR Linac has now been delivered. She reminded the Council of Governors that the Trust is one of six MR Linac centres in the world trialling this prototype which will commence with healthy volunteers in October 2016. The Royal Marsden has formed a partnership with Imperial Academic Health Science Centre to enhance value in treatment and care, research and education. Governor Andrew Pearson queried the IT arrangements as part of the Genomics programme with Imperial. The Chief Executive confirmed that there are technical challenges to be worked through and built into the RM IT Strategy. The Trust is also further strengthening its partnership with its academic partner the Institute of Cancer Research (ICR). Both organisations are at the stage of signing a Joint Working Agreement which will govern all major areas of the partnership such as the financial arrangements, IP, governance, branding, fundraising to ensure this principal partnership can function optimally. The Council of Governors noted the report and update from the Chief Executive on relevant business matters.

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NHS England Cancer Implementation Plan The Chief Executive summarised the national context for cancer services and reported that the new cancer taskforce plan, which was published last year, has 96 recommendations. The purpose of the implementation plan is to transform this into a deliverable plan over the next 4 years with implementation of all recommendations by 2020/21. She was pleased to report that all Arms Length bodies such as Public Health England, CQC and Health Education England, have signed up to deliver the recommendations in full. The Chief Executive noted the highlights of the implementation plan. The main principles of the Cancer Strategy are entirely consistent with The Royal Marsden’s Five Year Strategy.

6.

Standing Responsibilities of the Council of Governors 6.1. Nominations Committee Report The Senior Independent Director Nancy Hallett presented the Nominations Committee Report. She explained the position with regard to the membership of the Committee, including the appointment of Public Governor Ann Curtis to replace former member and former Public Governor Robert Shearer, and thanked those who put themselves forward to assist the Committee in its difficult task of seeking a new Chair. She also took the

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opportunity to express her personal thanks and admiration to the departing Chair, R. Ian Molson. Nancy Hallett highlighted the Nominations Committee recommendations in relation to the enclosed position specification which are as follows:

• To confirm that the new Chair will serve a first term of 3 years; • A time commitment 6-8 days per month; • That the remuneration of the Chair position is aligned with other NHS Trusts

across the country and increased to £50,000. Nancy Hallett also presented the outline of the process and approximate timeline for appointing the new Chair but noted that the Nominations Committee is meeting later in the week and will review the specifics of the timeline at that meeting. The Council of Governors noted and approved the Chair position specification, including the tenure, time commitment and remuneration. The Council of Governors also approved the proposed process and timeline with regard to the Chair’s appointment. 6.2. Membership and Communications Group Report The Governor Co-Chair of the Membership and Communications Group Ann Curtis presented the enclosed report. She highlighted that the Group has aimed to simplify the process of becoming a member of the Trust and have also introduced new initiatives such as providing a letter from the CEO to new patients which explains the importance of being a member. The volunteers of the Trust are also being contacted about becoming a member. Governors have visited local schools in attempt to recruit young adult members. A current proposal is to consider an e-bulletin to members who have provided their email addresses. The Council of Governors noted the Membership and Communications Group Report. 6.3. Lead Governor The Chairman explained to the Council of Governors that a suggestion has been put forward to extend the Lead Governor role from a 12 month period to two years. Feedback provided is that the current term is too short but also the extension will align the lead Governor term with the other standing responsibilities of the Council of Governors. The Council of Governors agreed to extend the Lead Governor term from 12 months to two years.

7. IM&T Strategy The Chairman introduced the item and Dr Tim Wigmore, Chief Clinical Information Officer, who is leading the IM&T Strategy for the Trust. Dr Wigmore explained that he is progressing the IM&T Strategy to ensure that this is fit for purpose for the future, particularly to support programmes such as the Cancer Vanguard. He explained that the current system cannot deliver such demands and is therefore restricting the organisation’s future strategy and ambitions. The key areas under consideration as part of the Strategy were highlighted. The Strategy aims to have a non-complex system which is flexible and its design and development is led by the users. It is likely that the Trust will have to work in partnership with an external party that has the resources to work with and support internal staff. A large part of the Strategy is the move to electronic systems, i.e. patient records and document management system. A data warehouse will be developed to support this and provide access to real time information. In terms of timescales, the Trust is working towards producing an outline business case by early 2017, full business case by early 2018 with implementation achieved by 2020. Dr Wigmore stressed the importance of taking the time to achieve the right results for the organisation in the long term and not to underestimate the size of the task at hand. As

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part of the Strategy development, the Trust must not only seek a suitable partner to work with but also map all of its workflows to ensure that these are incorporated and supported by the new system. Governor Charmaine Griffiths for the ICR gave assurance from the ICR perspective on their commitment to their digital strategy and development which will coincide with RM’s work in this area for the long term. Dr Wigmore agreed to discuss the risk assessments with regard to the IT Strategy at a future meeting should the Governors request this. A discussion ensued about the source of the financial investment required to deliver the IT Strategy to which the Chairman confirmed that the business case, which as noted is yet to be developed, will address this issue. The Council of Governors noted the position with regard to the IT Strategy and thanked Dr Wigmore for presenting this to them.

8. Junior Doctors Update

The Chief Operating Officer gave an update on the contractual position with regard to the junior doctors and noted that the Trust is currently awaiting further instruction from the government and in the meantime is in the process of appointing a guardian of safe working. It was noted that the junior doctors’ industrial action has provided an opportunity for the organisation to review the medical workforce model to ensure this is fit for purpose. The Transformation Board will oversee this project as part of an overall efficiency and sustainability management programme. Following a query raised by Governor Ann Curtis as to why the number of trainees allocated to the Trust will decrease, the Chief Operating Officer explained that this was expected and for RM, only a small number of trainees have been affected which is speciality dependent. The Council of Governors discussed the financial implications of the junior doctors’ contracts and noted that this will affect the Trust from April 2017 and therefore will be reflected in the financial plan for 2017/18. The Council of Governors noted the Junior Doctors update.

9 BRC Submission update The Chief Operating Officer updated the Council of Governors on the Trust’s recent submission for BRC funding. Following this, the Council of Governors watched the BRC video that had been produced for the submission. Governor Duncan Campbell referred to the example in the appendix of Abiraterone which was designed and developed clinically at the RM/ICR and the reference to Johnson & Johnson paying £600m. He asked whether the new joint working agreement between RM & ICR, which the Chief Executive had reported on earlier, would affect the intellectual property in any future developments. The Chief Executive responded that there was a particular history to Abiraterone and the way in which royalties were attributed for the invention of the original compound. However, and partly as a result of this experience, the Trust and ICR needed an IP Agreement which properly reflected both discovery and clinical trial activity and expertise in the hospital. The Council of Governors noted the BRC Submission update.

10 Finance and Quality 10.1. Finance Performance Report The Associate Finance Director of Operations attended and presented this item on behalf of the Chief Financial Officer. She highlighted the position and controls in place with regard to agency spend against the cap set by healthcare regulator Monitor which is a current challenge for the Trust. The financial position was summarised and it was noted that the Trust is currently operating at a financial risk rating of 3.

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Following a query raised by Governor Ann Curtis regarding PP debt, it was noted that a commercial manager will be appointed to address this issue. The Chairman added that this issue is a matter of timing as opposed to a loss of money. The Private Care business in London is becoming increasingly competitive and the Trust must therefore consider the most effective and efficient ways to grow the business. It was agreed that the Managing Director of Private Care, Shams Maladwala, would be invited to attend the next Council of Governor meeting to discuss this issue and the Private Care Strategy. The Council of Governors noted the Finance Performance Report and agreed that the Managing Director of Private Care, Shams Maladwala, would be invited to attend the next meeting to discuss the Private Care debt management and strategy. 10.2. Financial Plan 2016/17 The Associate Finance Director of Operations reminded the Council of Governors that they had already been presented with the draft financial plan and that the enclosed slides were a summary of the final financial plan submitted to Monitor. She noted the planning context for the one year operational plan as well as the five year sustainability and transformation plans (STPs) required to be submitted by the 30th June 2016. For RM, there are three STPs which the Trust will be a party to. The Associate Finance Director of Operations summarised the financial plan and highlighted that Commissioner contracts had now been signed with a backdate provision from April 2016. Following a query raised regarding the displayed surplus, the Associate Finance Director of Operations noted that it is accounting convention to display the surplus information in this way however she agreed to look into this further. The Council of Governors noted the Financial Plan 2016/17. 10.3. National Inpatient Survey The Chief Nurse informed the Council of Governors that the National Inpatient Survey is similar to that of the Picker Inpatient Survey which the Council had already received. Approximately 40% of patients responded to this survey, for RM the response was 60% which is the highest response rate for this survey in three years. She was pleased to report that the Trust continues to score in the best 20% of Trusts but highlighted the areas of which it can improve on, e.g. ensuring patients leave with the right information when discharged. Governor Andrew Pearson queried whether there were plans to try and approach non-responders to the survey. The Chief Nurse responded that this survey is 1 of 12 types of surveys that the Trust conducts every year and highlighted the Friends and Family Test in particular which is conducted every month and presented to every Board and Council of Governor meeting via the Quality Account and is also published in the quarterly Integrated Governance Monitoring Report. The Council of Governors noted the results of the National Inpatient Survey.

Monthly Quality Account The Chief Nurse reported on the Trust position regarding Healthcare Associated Infections and noted NHS England guidelines on reporting C. Difficile Infection (CDI). She also commented on Pressure Ulcers and explained the Trust work in Community Services to improve embedded learning in this area. The results of the Friends and Family Test were also highlighted as well as the Trust’s efforts in the recruitment and retention of nurses. The Council of Governors noted the Monthly Quality Account. Annual Quality Account The Chief Nurse introduced the Annual Quality Account (AQA) and noted that 86% of the wording is mandated. The AQA considers the previous year’s priorities and performance as

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well identifying the quality priorities for the upcoming year. The Chief Nurse also noted that the Plain English Society review the AQA to ensure this complies with their standards. The Council of Governors noted the Annual Quality Account. Auditor’s report The Chief Nurse introduced Heather Bygrave from the Trust’s external auditor’s Deloitte LLP who led the audit on the AQA. Heather Bygrave explained to the Council of Governors the change in approach of monitoring the 18 week Referral to Treatment (RTT) pathway indicator which was implemented during the year and therefore affected previous data. She summarised the errors which the auditors detected and the reasons for their modified opinion, some of which is a result of incorrect reporting from other Trusts and some of which was human error in the Trust system. She highlighted that the issue is not about problems with delays of referrals or patient pathways, but rather the monitoring of a complex system. The national context was noted and that all London Trusts which Deloitte LLP audit had received qualified opinions on the 18 week RTT indicator. It was further noted that the auditors are encouraging Monitor to review this indicator as systems are not in place to capture the information correctly. The other two deep dives carried out by the auditors; 62 day cancer waiting times and the time taken to dispense medicine upon receipt of the prescription, received unmodified opinions. The Council of Governors thanked Heather Bygrave for presenting the Auditor’s Report and noted the position with regard to their opinions on the relevant audits.

KPIs for Quarter 4 The Director of Performance and Information presented the KPIs for Q4 and reported on the reasons for the red indicators, in particular the change in the national reallocation policy for 62 days cancer wait which means that from the next quarter reporting will be different and more challenging. He added that a deep dive was carried out into the recruitment clinical trial figures, the conclusion of which is that there are optimistic and ambitious targets. He was pleased to highlight the areas which are changing from amber to green, particularly those relating to workforce. A discussion followed about the need to show tumour site information (page 6) and that some pathways are simpler, for example breast pathways are referred from GPs to RM whereas for Urology for example, almost all go to other trusts first before being referred to RM. The Council of Governors noted the KPIs for Quarter 4.

National Staff Survey 2015 Results Summary The Director of Workforce presented the results for the National Staff Survey 2015. In summary, she was pleased to report there had been a significant improvement compared to previous years with an increase in green indicators from 28% to 56%. Six of those indicators placed RM best in the country. She noted that workforce equality has seen a significant improvement which has been a challenge historically. The Trust wants to focus on disability in particular as this is an area where you see the widest variation. The areas for improvement were noted and that the Workforce and Education Committee will monitor progress. The Chairman concluded the item by thanking the Director of Workforce and her team for their hard work and added that the Board carefully reviews these results and looks forward

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to receiving the next update. The Council of Governors noted the Staff Survey Results.

10 Any other business No other business was raised.

Date of next meeting: 14th September 2016, 11am – 1pm, Boardroom, Chelsea

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Council of Governors Attendance List 20th June 2016

Elected Governors

Constituency

Signature

Maggie Harkness Kensington & Chelsea and Sutton & Merton Armine Afrikian Kensington & Chelsea and Sutton & Merton Colin Peel Kensington & Chelsea and Sutton & Merton Apologies

Fiona Stewart Elsewhere in London Apologies Dr Peter Lewins Elsewhere in London Apologies Dr Andrew Pearson Elsewhere in England Simon Spevack Elsewhere in England Apologies

Lesley-Ann Gooden Carer Duncan Campbell Carer

Public Governors Dr Carol Joseph Kensington and Chelsea Tim Howlett Sutton & Merton Ann Curtis Elsewhere in England Bernadette Knight Elsewhere in England Apologies Staff Governors Hardev Sagoo Corporate Support Services Rach Nabuwanka Clinical Professionals Vacant Clinical Support Staff - Dr Claire Dearden Doctor Apologies Maureen Carruthers Nurse Nominated Governors

Dr Charmaine Griffiths Institute of Cancer Research Robert Freeman Local Authority: Borough of Kensington &

Chelsea

Anne Croudass Cancer Research UK (Charity) Cllr Stephen Alambritis Local Authority: Boroughs of Sutton & Merton Dr Chris Elliot Clinical Commissioning Group Apologies Dr Philip Mackney Clinical Commissioning Group Apologies

COUNCIL OF GOVERNOR PAPER SUMMARY SHEET

Date of Meeting: 14th September 2016

Agenda item 2.1.

Title of Document:

Matters Arising, Private Care: Management of Debt

To be presented by

Shams Maladwala, Managing Director of Private Care

Executive Summary It was agreed at the last Council of Governor meeting that the Managing Director for Private Care would be invited to discuss the management of Private Care debt following previous discussions. Recommendations The Council of Governors is asked to note and discuss the report presented from the Managing Director for Private Care. Author: Shams Maladwala Managing Director for Private Care

Contact Number or E-mail:

Date: 31st August 2016

PRIVATE AND CONFIDENTIAL 1

Private Care Management of Debt update

1.1 Background Private Care activity is with three broad sponsor types: Embassy, Private Medical Insurers (PMIs) and Self Payers. At 31/7/16 the debt with these was:

• Embassy: £12m total debt, £6.4m > 90 days

• PMI: £9.8m total debt, £2.2m > 90 days

• Self Pay: £1m total debt, £0.8m > 90 days

Private Care Debt has been increasing over the last few years as illustrated in the chart below.

1.2 Rationale for debt increase

Private Care debt has increased due to the compounding effects of:

− A significant & accelerated growth in private patient income since 2014:

− A high increase in Embassy activity where payment cycles are longer due to the absence of

any formal contract with this payor group. Operationally this group are also more difficult to reclaim aged debt from (if a patient is given treatment without a valid Letter of Guarantee from the sponsoring embassy).

PRIVATE AND CONFIDENTIAL 2

− A delay in signing contract renewal agreements with Axa and Bupa. This delay was due to negotiations that resulted in higher price uplifts but took longer to agree (resulting in a significant increase in held invoices).

− An understaffing in the credit control department which had an imbalance of resource against the better staffed billing team (who processed billing volume very quickly in the latter part of 2014).

− The continued manual processing of billing and invoices. This puts the Trust at a competitive disadvantage to competitors who run automated systems.

− Additionally, some of these factors continued to adversely impact on billing lag, which peaked at 28 days in June. A plan was constructed and resourced to achieve a sustainable target of 10 days billing lag. This is proving effective and confidence is high that this outcome will be delivered by the end of October (the billing lag mid-August is 16 days).

1.3 Key actions to reduce Private Care debt (whilst continuing to support income growth)

Action Target date

Consolidation of the Billing and Credit departments to manage complete risk process.

Completed

Implementation of a specialised approach to debt management by sponsor group to increase effectiveness.

Dec 2016

Development of performance management reports to track team and individual performance against detailed targets.

On-going

Improved leadership with an appointment of a seasoned credit control manager.

Completed

Addressing the issue of Letters of Guarantees to reduce risk of non-payment of service by embassies.

On-going

Designated central point for private patient to check in to control and manage credit risk at both sites.

Dec 2016

IT development scheduled, Nov 2016, to reduce the manual activity and reduce errors; which ultimately become barriers to repayment.

Starting Nov 2016

Introduction of tokenisation, credit card details at point of entry to reduce shortfalls and reduce risk.

Oct 2016

Write off process and policy under construction to increase control while empowering credit controllers to act within an agreed framework.

Oct 2016

Shifting business focus from volume to account management to increase accuracy.

On-going



Agenda item 3.

Title of Document:

Chief Executive’s Report

To be presented by

Chief Executive

Executive Summary The Chief Executive will brief the Council on the matters specified in her report.

Recommendations The Council of Governors is asked to note and discuss the Chief Executive’s Report.

Author: Liz Bishop Chief Operating Officer

Contact Number or E-mail: Ext 1915


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COUNCIL OF GOVERNORS

Chief Executive’s Report

1. Chief Nurse Dr Shelley Dolan has been appointed as Chief Nurse at King’s College Hospital NHS Foundation Trust and leaves us at the end of September. I am delighted for Shelley, while being very sad to lose her from The Royal Marsden. I would like to take this opportunity to thank her for her exceptional dedication and commitment to The Royal Marsden over more than 20 years, and for the wonderful contribution she has made to patients, staff, and the spirit and life of our hospital as a clinician and as Chief Nurse. Shelley joined the Trust as a Sister in ITU/HDU, developing her career here as a Specialist Nurse and subsequently as a Nurse Consultant in Critical Care. She has been Chief Nurse since 2007 and her extensive experience as a clinician, professional leader and Executive Director have enabled us to develop as a collegiate, innovative and clinically led organisation. Shelley’s achievements are extensive and important across treatment and care, research and education. She has developed a clinical governance model that has been widely emulated in the NHS, helping to ensure an open and transparent culture and an ability to operate as a learning organisation, always driving to improve patient experience and outcomes. Shelley has led the work of the London Cancer Alliance to ensure we can improve performance across whole pathways of care for patients across West and South London, and more recently she has been Executive lead for the Cancer Vanguard to test an innovative new model of care for patient benefit. Under Shelley’s leadership as Chief Nurse, The Royal Marsden has been consistently ranked among the best hospitals in the country for the quality of care and service to patients. Shelley’s exceptional impact and contribution to oncology nursing was recognised in 2013 by the European Oncology Nursing Society with a Lifetime Achievement Award. She will be very much missed by her many friends and colleagues at The Royal Marsden and I would like to record my personal appreciation to Shelley for her wise advice, her energy, enthusiasm and her unwavering support to me and the Leadership Team over many years. We are in the process of recruiting a new Chief Nurse and Managing Director for RM Partners and will inform you when we have made successful appointments.

2. Service Planning

2.1 Sutton Site Plans The Development Framework for The London Cancer Hub has been developed by the Local Borough of Sutton in conjunction with ICR, with a view to being published at the end of September. The Development Framework is a tool to help the translate the vision of the London Cancer Hub into a reality over a twenty year period and to put forward an indicative spatial vision for the whole site, including RM, ICR and Epsom & St Helier Hospital (ESH) land on the Sutton site (subject to ESH completing land sale of their Sutton site). The Development Framework will be used to inform business cases for new projects and infrastructure, and informs and supports all future planning applications for the site. For these reasons we have taken legal advice and submitted our recommended changes to the Development Framework to

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ensure that it is fit for the future of our Sutton site. We have also written to Niall Bolger, CEO, Sutton Council to ensure we can retain the ability to expand healthcare services and research within our 7.5 hectares. If the ESH land sale proceeds, we need to ensure sufficient estate is available for cancer healthcare and for the success of the London Cancer Hub.

2.2 Sustainability & Transformation Planning/Specialised Commissioning

A London Specialised Commissioning Board has been established, chaired by Anne Rainsberry, Regional Director, NHSE (London) to review and rationalise specialised services across London. Following a meeting of the Specialised Commissioning Planning Board, it was agreed that the Tier 1 providers (Imperial NHS Healthcare Trust, Chelsea and Westminster, St George’s, Guy’s and St Thomas’, UCLH, Kings College Hospital, Bart’s and West London Mental Health Trust) and four single speciality providers (The Royal Marsden, The Royal Brompton Hospital, Great Ormond Street Hospital and the Royal national Orthopaedic Hospital) should come together to form a Planning Board Advisory Group to report into the London Specialised Commissioning Board. There will also be a Planning Executive Board which will be comprised of NHSE Specialised Commissioners Senior Management Group and STP Programme Directors and Commissioning Leads. We will therefore be represented at the Tier 1/four specialty provider Advisory Group and the Clinical Board, both of which are being established and will feed into Anne Rainsberry’s Board. This is important because Cancer, alongside Paediatrics and Cardiology are likely to be transformational priorities for the Specialised Commissioners and 74% of our NHS activity falls within specialised commissioned services.

It is also important that we don’t duplicate the work of the Cancer Vanguard and Alliance models across London, both of which focus on improving value and quality in the delivery of cancer services. Kathryn Magson, South West London STP SRO will be preparing proposals for the Planning Board on the cancer workstream so that we can avoid unnecessary duplication.

Following the issues at St George’s Hospital, NHSE asked Guy’s and St Thomas’s assist with a review of Specialised Commissioning across South London. In reviewing South London pathways and acute service configuration, including the activity which flows into London from the South East, it was agreed with Anne Rainsberry the South London Group will include a representative from the Royal Marsden. We have a significant service interaction with St George’s across a range of services including its role as the principal radiotherapy and transplant/haematology service provider for South West London and beyond. We also operate with St George’s Hospital as a Principal Joint Treatment Centre for Children with 62% of our activity originating outside London from the South Coast, therefore we have insisted in being involved with the South London service review because it directly affects our services and patient flows.

2.3 Private Care Business Case

To assist with our financial sustainability and because we are capacity constrained at the Chelsea site, we are exploring a Diagnostic & Treatment Centre in the Harley Street Medical Area as part of a growth option for Private Care. A new Centre would extend our footprint into Central London offering access to a wider, larger London market which is valued at £250m pa with a potential 32% annual under-supply. Detailed assessment has been conducted to plan layout, services and conduct an operational feasibility. The proposed Centre would accommodate outpatients, diagnostics, chemotherapy and minor procedures, allowing for growth of existing oncology referrals and services. Consultants have indicated strong support for the centre which would improve the Trust’s private service model, unlock bottlenecks in

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outpatient capacity and enable younger consultants to build private income within the Trust. A 19,000 sq. ft. site has been identified and is situated on Cavendish Square, London W1, within the Harley Street Medical Catchment. A detailed Business Case has been created and the Board will be asked to approve an up-front investment of £12m which is forecast to generate a 10 year cumulative Net Present Value of £26m with payback within 5 years. Assuming Board sign-off in September and successful lease negotiations, the Centre is planned to be operational by March 2019. This proposal aligns with our strategy to grow private care to support financial sustainability and the NHS cancer services.

3. Research

3.1 Genomics England Project The 100,000 Genomes Project is an ambitious three-year programme to sequence 100,000 whole genomes from NHS patients across England by 2017. Identifying the genomic make-up of patients and their tumours is crucial for pinpointing whether they are eligible for targeted therapy. The knowledge we have gained in recent years has provided us with an opportunity to accelerate our understanding of cancer, particularly in the area of personalised medicine. We are part of the West London Genomic Medicine Centre which includes Imperial, Royal Brompton and Chelsea & Westminster Hospitals. RM is taking the role of Cancer Consultant Medical Oncologist. Recruitment at The Royal Marsden began in January 2016 and by the end of July, 85 patients had been recruited to the Project, placing us fourth in the national ranking currently; we anticipate recruitment to accelerate now the systems and processes have been established. In July 2016 The Royal Marsden joined the Imperial College Academic Health Science Centre (AHSC) which is a partnership arrangement with the vision of improving the quality of life of patients and populations by taking new research discoveries and translating them into new therapies as quickly as possible. The AHSC will build on existing collaborative projects between the partners, including the West London Genomic Medicine Centre, which is playing a key role in the successful delivery of the 100,000 Genomes Project, as well as the RM Partners Cancer Vanguard, which is developing new models of cancer care.

3.2 CR UK Centre Submission

The ICR and RM have made submissions to CRUK to renew our joint CRUK Centre/Experimental Cancer Medicine Centre (ECMC) grants and to apply for a CRUK Major Centre grant, with a combined value of £38m over 5 years. The Major Centre grant submission is also in collaboration with Imperial College London. The ICR has led on these grant submissions but they have been developed in conjunction with RM clinicians and researcher teams. The submissions are complimentary to the NIHR BRC grant submission we put in this year and align with the ICR/RM research strategy, with the aim of maximising research income for the benefit of cancer patients in the future. We will know the outcome of all of our grant submissions, including the renewal of our joint NIHR Imaging Clinical Research Facility by the end of the year. We expect the BRC outcome in September.


Date of Meeting: 14 September 2016

Agenda item 4.1

Title of Document:

Nominations Committee Report

To be presented by

Nancy Hallett, Senior Independent Director

Executive Summary The Nominations Committee met on the 8th September to discuss the Chair’s search and selection process please find enclosed the Nominations Committee Report.

1

Nominations Committee Report

1.0. Introduction At the last Council of Governor meeting on the 20th June 2016, Governors approved the specification for the Chair position and the search and selection process put forward by the Nominations Committee. The purpose of this paper is to update the Council of Governors on progress to date. 2.0. Recruitment Process At the last meeting the Council of Governors approved the use of external advertising and use of a search firm to find suitable candidates for the Chair position. The Nominations Committee has therefore undertaken this task and is pleased to report that four candidates have been shortlisted from a longlist of eight candidates. The shortlisted candidates will meet with the Executive Team w/c 12th September prior to their interview on the 19th September with Governors, the Senior Independent Director and the Chief Executive in attendance. Following this, the Nominations Committee will meet to agree a recommendation of appointment to the Council of Governors on the afternoon of the 19th September. Given the timing of the next Council of Governor meeting (7th December 2016), the Nominations Committee asks that an extra-ordinary meeting of the Council is arranged for 20th September to receive their recommendation following interviews the day before so as to not keep candidates waiting. To help inform their decision of appointment, the Council of Governors will receive a written report from the Nominations Committee on the afternoon of the 19th September prior to appropriate discussion and deliberation at the Council of Governor meeting with all of the Nominations Committee members present. 3.0. Conclusion Governors are asked to note the update from the Nomination Committee and approve their request to hold an extraordinary meeting 20th September subject to Governors availability in order to receive their recommendation of appointment.



Agenda item 4.2.

Title of Document:

Constitution

To be presented by

Trust Secretary

Executive Summary The Trust has reviewed the current Trust Constitution to ensure it remains ‘fit for purpose’ and would like to propose the constitutional changes outlined in the enclosed paper subject to approval from the Council of Governors and Board of Directors. Recommendations

The Council of Governors is asked to: 1) Approve the amendment that Governors / attendees of Council of Governor

meetings may attend meetings via teleconference at the discretion of the Chair; 2) Approve the removal of the Paediatric and Young Adult patient sub constituency

and distribute the 11 members to the appropriate geographical patient sub constituencies;

3) Approve the removal of the Staff Clinical Support seat and move the 122 staff to the Corporate and Support Staff sub constituency;

4) Approve the insertion of an indemnity clause as per other NHS Trust Constitutions.

Author: Syma Dawson Trust Secretary



COUNCIL OF GOVERNORS Trust Constitution

1.0. Introduction

The Trust has reviewed the current Trust Constitution to ensure it remains ‘fit for purpose’ and would like to propose the constitutional changes outlined in this paper subject to approval from the Council of Governors and Board of Directors.

2.0. Proposed Amendments

2.1. Governor Constituencies 2.1.1. Paediatric and Young Adults Constituency The Council of Governors removed the Paediatric and Young Adult Governor at a meeting in December 2013 and agreed to incorporate the responsibility of those members to the Public Sutton and Merton Governor, whom volunteered to represent these members given their professional background. The Governor decided not to re stand in the May 2016 elections, therefore the Trust went out for election for a Paediatric and Young Adult Governor. The seat remains vacant as no nominations were received. In light of this the Trust would like to propose the 11 members within this sub constituency are appropriately distributed within the patient geographical sub constituencies and for all patient governors to ensure efforts to engage with the paediatric and young adult patients. 2.1.2. Removal of the Clinical Support Staff Constituency

Since the reconfiguration of the Council of Governors in April 2013, the Clinical Support Staff Constituency, which was a new seat introduced at that time, has remained vacant. The Trust Secretary has sought assistance from Directors and Divisional Directors in finding suitable candidates to approach for the position. However, despite these efforts in addition to the four elections the Trust has held trying to fill the seat, unfortunately no candidates have put themselves forward. It should be noted that the approx. total cost to run an election for this standalone seat is £2320. Furthermore, the Trust has to report to healthcare regulators on the number of elections run and their outcomes.

In light of this, the Trust would like to propose that this Constituency is removed from the Council of Governors. Subject to Council of Governor approval, the 122 staff that come under the Clinical Support Staff constituency would be transferred to the Corporate Support Services Constituency.

2.2. Indemnity

The Trust would like to propose that the following indemnity clause is inserted into the Trust Constitution which is an indemnity clause that can be found in other NHS Trust’s Constitutions:

‘Governors and Directors who act honestly and in good faith shall not have to meet out of their personal resources any personal civil liability which is incurred in the execution of their functions, save where they have acted recklessly. Any costs arising in this way shall be met by the Trust.

The Trust may purchase such insurance or make such arrangements as it considers appropriate to meet all or any of such costs’.

3.0. Conclusion

The Council of Governors is asked to: 1) Approve the removal of the Paediatric and Young Adult patient sub constituency

and distribute the 11 members to the appropriate geographical patient sub constituencies;

2) Approve the removal of the Staff Clinical Support seat and transfer the 122 staff to the Corporate Support Services Staff Constituency;

3) Approve the insertion of an indemnity clause as per other NHS Trust Constitutions in order to protect Governors and Directors from personal liability.

*A copy of the revised Trust Constitution shall be provided to the Council of Governors and Board of Directors pending the outcome on the proposed amendments.

COUNCIL OF GOVERNOR PAPER

SUMMARY SHEET

Date of Meeting:

14th September 2016

Agenda item 5.

Title of Document: Junior Doctors update

To be presented by

Medical Director/Director of Workforce

Executive Summary This report provides the Council of Governors with an update on the key issues relating to the junior doctors:

a) Industrial action

b) Introduction of the new junior doctor contract

c) GMC survey results and outcome of the Quality Visit by Health Education North West London (HENWL)

d) Development of a more sustainable medical model.

Recommendations

The Council of Governors is asked to note the report and raise any questions accordingly.

Authors: Nina Singh, Director of Workforce / Gary Wares, Director of Medical Education and Consultant in Critical Care and Anaesthesia

Contact Number or E-mail: Ext. 2141

Date: 1st September 2016

1

Junior Doctors

1. Introduction

This report provides the Council of Governors with an update on the key issues relating to junior doctors:

a) Industrial action b) Introduction of the new junior doctor contract c) GMC survey results and outcome of the Quality Visit by Health Education North

West London (HENWL) d) Development of a more sustainable medical model.

2. Industrial action

At the time of writing this report, the British Medical Association (BMA) had just announced announced plans for further industrial action. The planned industrial action is due to take place from 12 to 16 September 2016. This will involve full withdrawal of labour between 8:00am and 17:00am and emergency cover will not be provided. On previous occasions the participation rates in industrial action has varied from 30% to 45% with minimal number of patients affected.

3. Introduction of the junior doctor contract

The Government announced on 6 July that the new contract would be introduced in 2016. There is a nationally determined timetable for implementation and for The Royal Marsden implementation will commence in February 2017 and the process should be complete by October 2017. There are 17 rotas and approximately 113 junior doctors in training to transition to the new terms and conditions. There are 250 junior doctors in total.

The implementation of the junior doctor contract will include review of rotas, understanding longer term service and workforce implications, engagement and communications with junior doctors, developing an approach for addressing implications for non-training grades and modelling financial implications. With regard to the latter, once the new rotas have been developed, we will be able to better understand the financial implications using the modelling tool provided by NHS Employers.

4. GMC survey results and outcome of Quality Visit by Health Education (North West London)

The Trust saw a significant improvement in the GMC survey results in several high risk areas, namely Clinical Oncology and Core Medical Training, which has reflected the investment and commitment to training and education in these areas. On analysis of the whole data set comparing the Trust to last year resulted in a significant improvement. The Trust will be required to report on a series of action plans based on the current red outliers that will form the basis of the compliance reporting to the Post Graduate Dean. Work has already begun with the educational leads in these areas to address and take action.

The Trust hosted a visit from HENWL on 19 July 2016. This was both a Trust wide review and a Quality visit for medical oncology, clinical oncology, core medical training and paediatrics. There were several key areas of outstanding practice commented on during the visit summary such as access to study leave, a supportive educational culture within several training programmes and a view from the trainees that RM was an outstanding place to train

2

for oncology-related experience. We received two concerns relating to handover and consent, both of which have been actioned and closed.

Overall the Trust is in an improved position and has demonstrated significant commitment to training and education. The Clinical Oncology programme remains on GMC enhanced monitoring, with the onus on the Trust to demonstrate sustainability of the actions already in place.

5. Developing a Sustainable Medical Workforce

One of the recommendations from the last speciality focused Clinical Oncology visit in December 2015 was to develop a new multi-professional workforce model that revised the medical model that maximised the skills of the multi-professional workforce and tackle the workload issues for junior doctors which impact on their training and education. Furthermore, we have challenges recruiting Junior Doctors and it is, it is expected that the number of trainees allocated to the Trust will decrease over the next few years due to the reduction in training numbers nationally, with the greatest reduction expected in London. This is already having an impact for the Trust with the decommissioning of four training posts.

A project has therefore been established to review the most appropriate workforce model for each speciality. There are a number of new roles e.g. advanced practitioner roles, that have been recruited to over the last few years and therefore the project will also include a review of these roles to understand the impact they have had on service delivery and reducing demand for junior doctor roles. In collaboration with clinical leads, this information will be used to scope a new medical staffing workforce plan. This will provide the Trust will a financially viable and operationally sustainable medical workforce model with recommendations for a phased implementation.



Agenda item 6.1

Title of Document:

Summary Financial Performance Report for 4 Months to July 2016

To be presented by Chief Financial Officer

Executive Summary The paper provides a summary of the financial position after 4 months of 2016/17. The reporting format has been developed to provide consistent reporting to all Trust Committees and it will be adapted as required. Recommendations The Council is asked to note the contents of the report and the risks highlighted. Author: Marcus Thorman, Chief Financial Officer


Date: 2nd September 2016


1 | P a g e

1. Introduction The paper provides a summary of the financial position for the financial year 2016/17. The reporting format has been developed to provide consistent reporting to all Trust Committees. The Council of Governors is requested to note the contents of this report and the risks highlighted.

2. Summary Financial Position In month 4 the Trust had a surplus of £1.7m, which was a favourable variance against the plan by £0.2m. This brought the year to date surplus to £2.1m, £0.8m favourable to plan. Private Care income was strong again in month, £0.1m favourable to plan but NHS Clinical Income was behind plan by £1m, primarily due to low pass-through drugs income. Other minor variances in grant and R&D income resulted in the overall position for income being adverse by £1.1m against the plan. On expenditure, agency usage was £648k in month (4%) which was below the spend cap. YTD the Trust is £100k over the spend cap. 330 shifts breached the rate cap, which is low when benchmarked against other London Trusts and a reduction on June. These shifts were all Medical and Nursing and only framework agencies continue to be used in non-corporate areas. Corporate areas are in the process of transitioning to framework agencies. Overall pay expenditure was favourable to plan (£0.2m). The other key variances relate to non-pay expenditure which was favourable in month (£0.7m). This was driven by low drugs costs corresponding to the low drugs income identified above. The Financial Risk Rating is that the Trust has improved and is an overall 4 against a planned position of a 4. The Key Risk and Issues to highlight relate to the 2016/17 plan, which were discussed at the Board in March. These continue to be:

• NHS Commissioner Contracts – the Trust has requested that local prices are re-based as per the Monitor framework so that the income covers the cost of the services provided. In addition, the Trust runs 25 MDTs a week for which it receives only a small contribution towards four of them. Both of these issues have been accepted by the Commissioners to review and the Trust has agreed a timetable to achieve this by the end of Quarter 2.

• Private Care Strategy – there has been significant growth in the past few years on income, however the embassy work does fluctuate and other areas are being pursued to continue the growth ahead of the additional capacity that opens in the second half of the year.

• Junior doctors’ contract – the Trust has taken the national guidance that the contract is cost neutral for providers. The rotas are currently being reviewed and any impact will need to be discussed further with Commissioners.

• Temporary staffing – controls are in place and have been for several months, however a cap has been imposed upon the Trust which is a 35% reduction from the forecast 2015/16 expenditure. Additional measures are in place and the agency run rate of expenditure is reducing.


2 | P a g e

3. Income and Expenditure The Income and Expenditure position for the Trust, in month, year-to-date and the forecast is set out in Appendix 1. Income – The income position in month 4 was a £1.1m adverse variance in month. NHS Clinical Income was adverse to plan in month due to continued underspend in the Cancer Drug Fund and High Cost Drugs pass-through income. Activity was broadly on plan in month with no additional income accrued for local price negotiations as the review with NHSE continues.

Private Care had a favourable variance of £0.1m. Tariffs have been uplifted for the new financial year and activity was strong across the board. Private Care income continues to grow and although debt levels have stabilised, this is partly due to an increase in the billing lag. Additional resources and processes improvements aim to reduce this to normal levels by Oct 16. The trend chart below shows actual income compared to the 2016/17 plan, alongside 2015/16 and 2014/15 income levels.


3 | P a g e

The remaining variance on income in month of £0.2m relates to a number of smaller offsetting variances: Commercial Trials income had an adverse variance of £0.2m, with Grants Income adverse by £0.4m. This was offset by Research and Development Income favourable variances of £0.2m and Other Operating Income favourable variances of £0.2m. Pay expenditure – was a favourable variance of £0.2m in month compared to the plan. The two charts below provide pay and temporary staffing data for 2016/17. Costs were slightly under plan for July, with the amount spent on agency reducing from the previous month and also under the cap imposed before the start of the year by NHSI. Agency usage in a number of areas has been consistent across the years as recruitment remains a national issue; junior doctors, theatres and CCU staff, community nurses and AHPs. Other areas of usage have been managed down with any usage in the corporate divisions requiring COO approval. The first chart shows total pay costs against the budget by month. The second chart reflects the bank and agency usage. The focus on agency staffing spend continues with NHSI requiring weekly reporting and the Trust has a spend cap that it is required to work towards as well as caps on agency rates for suppliers. The Trust is expected to utilise only agencies that apply the caps in rates although Pulse, the main nursing agency and a number of individual Medics have not conformed to the caps, so 330 cap shift breaches were recorded in July. These individuals are being managed out and converted to bank where feasible. In month the expenditure was 4%, below the NHSI cap by £108k (Appendix 2, chart 2.2). A number of controls, initiatives and monitoring tools are continuing to bring this down as YTD the Trust is £100k over the cap.


4 | P a g e

Non-pay expenditure – is £0.7m under plan in month. This is primarily driven by the underspend in drugs in the month.

4. Efficiency Programme The Trust reported that it is ahead of its CIP programme year-to-date by £41k. Although a number of schemes have started slower than anticipated and some have been cancelled, these have been replaced with other scheme. This is presented in Appendix 2, chart 2.1.

5. Capital Expenditure Capital expenditure showed an adverse variance of £1.7m YTD. There is no clinical risk impact with the slippage of any schemes, with timing differences in spend on the large Estates projects driving this YTD variance.


5 | P a g e

6. Cash and Debt Cash – The Trust ended July with £20m cash in the bank. Chart 2.3 in Appendix 2 shows the trend of cash balances in the last four months and the forecast and plan for the next 12 months. Debt – Invoices raised but not yet paid have decreased to £46m at the end of July. This was driven by a reduction in both NHS and non NHS debt. Private Care debt however increased slightly in month by £0.8m, and is now £23m. Notwithstanding this stabilisation, debt with embassies and overseas sponsors continues to be a concern and there is continual dialogue with each of the agencies. Chart 2.4 in Appendix 2 provides a trend of debtor balances for the last twelve months by age of debt, which shows the increase in debt over 90 days, the majority of which is with embassies.

7. Conclusion and Recommendation Month 4 has been a strong month and balances the slower start to the 2016/17 financial year, meaning the year-to-date position is better than planned. Agency spend continues to be closely monitored and controlled with the NHSI caps proving challenging as expected. The Board is requested to note

• The financial performance as at month 4; • The continued risks highlighted in section 2.

6 | P a g e

Budget Actual Var Budget Actual Var Actual Var Budget 1516 Q2 1516 Q3 1516 Q4 1617 Q1

£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

Income Actual Actual Actual Actual

NHS Clinical Income (1 5,999) (1 5,009) 990 (64,37 3) (63,251 ) 1 ,1 22 (68,048) 4,7 97 (1 96,490) (1 7 ,362) (1 7 ,558) (1 8,537 ) (1 6,080)

Non NHS Clinical Income (7 ,1 04) (7 ,243) (1 39) (28,094) (29,581 ) (1 ,488) (26,806) (2,7 7 6) (89,57 0) (6,858) (7 ,1 27 ) (7 ,282) (7 ,446)

Non Clinical Income (5,845) (5,643) 202 (24,005) (23,651 ) 353 (23,821 ) 1 7 0 (7 1 ,895) (6,1 46) (5,320) (7 ,047 ) (6,003)

(28,949) (27 ,896) 1 ,053 (1 1 6,47 1 ) (1 1 6,484) (1 2) (1 1 8,67 5) 2,1 92 (357 ,955) (30,365) (30,004) (32,866) (29,529)

Expenditure

Pay 1 6,7 82 1 6,556 (227 ) 66,644 66,7 26 82 67 ,635 (909) 202,661 1 7 ,1 43 1 7 ,230 1 7 ,67 2 1 6,7 24

Non Pay 1 1 ,621 1 0,91 8 (7 03) 46,1 7 1 45,692 (47 9) 46,380 (688) 1 40,583 1 1 ,384 1 1 ,950 1 3,634 1 1 ,591

28,404 27 ,47 4 (930) 1 1 2,81 5 1 1 2,41 8 (397 ) 1 1 4,01 5 (1 ,597 ) 343,244 28,526 29,1 7 9 31 ,305 28,31 5

Operating Surplus (545) (422) 1 23 (3,656) (4,065) (409) (4,660) 595 (1 4,7 1 2) (1 ,839) (825) (1 ,561 ) (1 ,21 4)

PDC, Interest, JV 438 556 1 1 9 1 ,7 31 1 ,856 1 25 1 ,629 227 5,31 3 401 352 343 433

Development Reserve for Inv (1 08) 1 34 242 (1 ,925) (2,209) (285) (3 ,031 ) 822 (9,399) (1 ,438) (47 2) (1 ,21 8) (7 81 ) -

Donated Asset Income (2,565) (2,967 ) (402) (3 ,894) (4,1 92) (298) (1 ,090) (3 ,1 02) (7 ,000) (387 ) (651 ) (565) (408)

Depreciation 1 ,1 65 1 ,088 (7 7 ) 4,551 4,288 (262) 4,589 (301 ) 1 3 ,984 1 ,1 1 3 964 1 ,1 42 1 ,067

Loss Disposal Fixed Assets - - - - - - 1 ,328 (1 ,328) - - (41 0) - -

Impairment - - - - - - - - - - 496 653 -

Retained Surplus (1 ,509) (1 ,7 45) (236) (1 ,268) (2,1 1 3) (845) 1 ,7 96 (3,909) (2,41 5) (7 1 2) (7 4) 1 2 (1 23)

Financial Risk Rating Pla n YTD A ctu a l YTD

Liqu idit y 4 4 (1) - Liquidity Ratio = Cash for liquidity purposes (net current assets excluding inventories) divided by operating expenditure expressed in days

Ca pit a l Debt Cov er Ra t io 3 3 (2) - Capital Debt Cover Ratio = revenue available for debt servicing (EBITDA plus interest receivable) divided by annual debt (PDC Dividends, Loan repayments, Loan interest)

I&E Ma rgin 4 4 (3) - I&E Margin - degree to which the Trust is operating at a surplus / deficit

V a ria n ce From Pla n 3 4 (4) - Variance between the Trust's planned I&E Margin and its actual I&E Margin year to date

Fin a n cia l Risk Ra t in g 4 4

The Trust delivered a £1.7 m surplus in month, £0.2m favourable to plan. This was driven by donated asset income offseting higher PDC costs and a small operating surplus shortfall. PP Income remained strong, though NHS Income fell. Both pay and non-pay costs were within plan. Y TD this brought the Trust to a £2.1m surplus, £0.8m favourable to plan. The control total continues to be achieved, with the Q1 STF received in month. Agency usage was 3.9%, an improvement on prev ious months, with 330 shifts exceeding the NHSI cap in month (Medical and Nursing only ). This is low when benchmarked against other London Trusts. Only framework agencies continue to be used in non-corporate areas, with plans to move the corporates over in place. This delivers a Y TD Financial Risk Rating of 4, compared to a plan of 4.

Appendix 1: Income and ExpenditureIn Month Year to Date Year - 2016/17 Average Monthly Run RatesPrior Year to Date

-20

-10

0

10

20

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

1.1 Liquidity Ratio 2015/16 (1)

-3

-1

1

3

5


1.2 Ca pital Debt Cover 2015/16 (2)

-3%

-2%

-1%

0%

1%

2%


1.3 I&E Ma rgin 2015/16 (3)

-3%

-2%

-1%

0%

1%

2%

1.4 V ariance from plan (4)

1

2

3

4

Actual

7 | P a g e

Appendix 2: CIPs, Capital, Debt and Cash

Efficiency programme - The Trust reported that it is £41k ahead of its CIP programme YTD July 2016. Private Care Schemes to increase prices have delievered additional income that has been recognised YTD and that is offsetting the pay and procurement CIPs in Clinical Services that are slipping. Monthly CIP tracking meetings in each division ensure progress is being monitored and action taken when schemes fall behind. Agency - the £756k NHSI monthly cap was met in month showing a steady reduction since the start of the year. The Trust remains over YTD by £100k. The overspends continue in Community and Clinical Services, so biweekly meetings are being conducted with management to control and monitor this position.Cash - the cash balance increased to £19.7m, slightly ahead of plan. This is largely temporary as an RMCC payment was received a day earlier than planned. The opening position was £2.7m behind plan due to the CHP settlement at year end and this is forecast to continue all year. Debt collection was however strong in month, improving the working capital position.Debt - invoices raised to customers not yet paid has decreased by £3.3m in July to £46m. Large payments were received from NHSE, EPSH, Sutton CCG and the ICR. Private Care debt increased by £0.8m in month despite significant payments received from Embassies for aged debt.

£-

£5.0

£10.0

£15.0

£20.0

£25.0

2.3 Cash Balance

Actual Forecast Plan

£12

.3

£11

.4

£13

.2

£13

.2

£13

.7

£14

.9

£14

.2

£13

.5

£14

.1

£18

.4

£18

.6

£15

.3

£14

.3

£14

.5

£13

.1

£2

5.5

£13

.1

£14

.4

£14

.5

£15

.3

£14

.3

£11

.7

£16

.2

£13

.9

£-

£10.0

£20.0

£30.0

£40.0

£50.0

£60.0

2.4 Debtors - Aging over time

>365 90-365 30-90 0-30

1



Agenda item Item 6.2.

Title of Document: Auditor’s Report- Annual Report and Accounts

To be presented by Jonathan Gooding / Julia Kratke, Deloitte LLP

Executive Summary

Jonathan Gooding and Julia Kratke at Deloitte LLP, will attend for this item and present the auditor’s report on the Trust’s Annual Report and Accounts for the year ended 31st March 2016. Governors will have received their copy of the Annual Report and Accounts already. Recommendations Governors are asked to note the auditor’s report and discuss accordingly. Author: Deloitte LLP

Contact Number or E-mail: PA 2151


The Royal Marsden NHS Foundation TrustFinal report to the Audit Committee on the year ended 31 March 2016

23 May 2016

Contents

© 2016 Deloitte LLP. All rights reserved. 2

Our final report

5 Partner introduction

6 Responsibilities of the Audit Committee

7 Our audit explained

8 Impact of “one-off” items

9 Significant risks

21 Value for Money

24 Other findings

27 Our audit report

29 Your annual report

Appendices

32 Purpose of our report and responsibilities statement

33 Audit adjustments

35 Fraud responsibilities and representations

36 Independence and fees

39 Representation letter

42 Draft enhanced audit opinion

Our final report

Partner introduction


The key messages in this reportPartner introduction

© 2016 Deloitte LLP. All rights reserved.5

I have pleasure in presenting our final report to the Audit Committee for year ended 31 March 2016 audit. I would like to draw your attention to the key messages of this paper:

Heather BygraveLead audit partner

Conclusions from our testing

• The key judgements in the audit process related to:• Recoverability of receivables both in terms of NHS balances and private patient debtors; and • The valuation of the Trust’s estate and assumptions taken in determining this; and

• Management override. • We have not identified any significant audit adjustments or disclosure deficiencies.• Based on the current status of our audit work and subject to satisfactory clearance of the below items, we envisage issuing an

unmodified audit opinion, with no reference to any matters in respect of the Trust’s arrangements to secure economy, efficiency and effectiveness in the use of resources, or the Annual Governance Statement.

• Our work is ongoing in regard to consistency of the Foundation Trust Consolidation (“FTC”) schedules and accounts.

Quality Accounts • We anticipate to issue an unmodified (“clean”) limited assurance opinion re the 62 day cancer waits indicator but a except for (“modified”) limited assurance conclusion re 18 weeks incomplete referral to treatment (“RTT”) pathways. The findings from our work are set out in the accompanying paper, which will also be presented to the Council of Governors at their next meeting.

Insight • We have reviewed the annual report and set out our observation on page 30, and made recommendations to management on structure and content.

• Where possible, we have benchmarked the Trust against other Trusts to provide further context in our discussion of the significant risks.

• We have made a number of internal control recommendations on page 24.

Status of the audit • The audit is substantially complete subject to the completion of the following principal matters which we will verbally update you on during the meeting:• completion of internal quality assurance procedures;• Completion of audit field testing in relation to accruals (£29m), deferred income (£19m), trade creditors (£17m), private

patient debtors (£24m) and other income (£53m);• our review of events since 31 March 2016; and • Completion of FTC and accounts tie through and procedures required by the NAO on our role as component auditor;• receipt of signed management representation letter.

Helping you fulfil your responsibilities as an Audit CommitteeResponsibilities of the Audit Committee


As a result of regulatory change in recent years, the role of the Audit Committee has significantly expanded. We set out here a summary of the core areas of Audit Committee responsibility to provide a reference in respect of these broader responsibilities and highlight throughout the document where there is key information which helps the Audit Committee in fulfilling its remit.

The primary purpose of the Auditor’s interaction with

the Audit Committee

Clearly communicate the planned scope of the

financial statements audit

Provide timely observations arising from the audit that

are significant and relevant to the Audit Committee’s

responsibility to oversee the financial reporting

process

In addition, we seek to provide the Audit

Committee with additional information to help them

fulfil their broader responsibilities

We use this symbol throughout thisdocument to highlight areas of our audit where the Audit Committee need to focus their attentions.

Oversight of

external audit

Integrity of

reporting

Internal controls and risk

Oversight of

internal audit

Whistle-blowing

and fraud

• Impact assessment of key judgements and level of management challenge.

• Review of external audit findings, key judgements, level of misstatements.

• Assess the quality of the internal team, their incentives and the need for supplementary skillsets.

• Assess the completeness of disclosures, including consistency with disclosures on business model and strategy and, where requested by the Board, provide advice in respect of the fair, balanced and understandable statement.

•Assess Quality Accounts disclosures and reporting.

•Consider the content of the Annual Governance Statement.

• Review the internal control and risk management systems (unless expressly addressed by separate board risk committee).

• Explain what actions have been, or are being taken to remedy any significant failings or weaknesses.

• Ensure that appropriate arrangements are in place for the proportionate and independent investigation of any concerns that are raised by staff in connection with improprieties.

• Monitor and review the effectiveness of the internal audit activities and the work of the Local Counter Fraud Service.

• At the start of each annual audit cycle, ensure the scope of the external audit and fee are appropriate.

• Make recommendations as to the auditor appointment and implement a policy on the engagement of the external auditor to supply non-audit services.

Our audit explained


We tailor our audit to your business and your strategy

Identify changes in your business and environmentIn our planning report we identified the key changes in your business and articulated how these impacted our audit approach.

ScopingOur risk assessment process has included benchmarking your results against other trusts and reviewing quality data to plan our Quality Accounts work. Our findings are set out below.

Significant risk assessmentIn our planning report we explained our risk assessment process and detailed the significant risks we have identified on this engagement. We report our findings and conclusions on these risks in this report.

Identify changesin your

business and environment

Determinemateriality Scoping

Significant risk

assessment

Conclude on significant risk

areas

Otherfindings

Our audit report

Determine materialityWhen planning our audit we set our materiality at £3.4m (2014/15: £3.1m) based on actual revenue for the year.

Other findingsAs well as our conclusions on the significant risks we are required to report to you our observations on the internal control environment as well as any other findings from the audit. We would like to draw to your attention to our findings on page 24.

Our audit reportBased on the current status of our audit work, we envisage issuing an unmodified audit report.

Conclude on significant risk areasWe draw to the Audit Committee’s

attention our conclusions on the significant audit risks. In particular the Audit Committee must satisfy themselves that management’s

judgements in relation to going concern are appropriate. We note that these judgements are highly sensitive to future growth rates.

There have been significant movements in year with one-off impact on resultsImpact of “one-off” items


Deloitte viewThere have been a number of one of items during the year including;• Termination payment of £2.6m made to Mitie as part of the purchase of the combined Sutton heat and power plant transaction. • Capital to revenue transfers amounting to £3.4m received from the Department of Health• Impairment of non-specialised IT assets of £1.4m which have been transferred to Sphere. • Impairment of buildings due to revaluation of estates which has resulted in an impairment of £1.9m.

We have therefore recalculated the (£781k) deficit with the above items removed from the year end results and note that it would result in the trust being in a £1.7m surplus.

Significant risksSignificant risk dashboard

Fraud risk Controls approach and findings

Consistency of judgements with

Deloitte expectations

Included in the Audit Committee’s

report

Expected to be included in

our audit report

Comment

Revenue Recognition

We have evaluated the design and implementation

of controls and there areno observations.

NHS debtors of £16.3m has decreased on prior year by £2.5m largely due to the fact there is no Project Diamond income which resulted in a £7.3m debtor at 31 March 2015. The level of provisioning against these debtors is a key judgement in approval of the financial statements. We note that the Trust has amended their bad debt provision in the current year and that debt aged over 365 days is now provided for at 50% instead of 100%. The overall provision for NHS debt is £2.2m in comparison to £2.3m in prior year.

Property valuations

We have evaluated the design and implementation

of controls and our observations are noted on

page 24.

The Trust’s revaluation has increased land values by £2.1m (0.8%), and buildings

by £5.8m (4.1%).The Depreciation Replacement Cost method, used for valuingthe Trust’s properties in line with other NHS bodies, is particularly judgemental.

We note that the Trust has not considered material movements in valuation indices between January and March 2016.

Capital additions

We have evaluated the designed and

implementation of controls and our observations are

noted on page 24.

The Trust had a significant capital expenditure of £18.1m against a capital plan of £30.6m and decisions to capitalise costs can be judgmental. In quarter four there have been £4.1m capital additions to land and buildings and the Trust have gained confirmation that £3.7m of these additions do add value to the Trust’s

estate.

Management override of controls

We have evaluated the design and implementation of controls and there are no

observations.

No issues identified during the course of our testing. In particular, we assessed there to be a heightened risk of management override across the NHS as a result of Monitor’s letter to Trusts regarding financial sustainability. We are satisfied that

management has not made any significant changes to management estimates or balances as a result of this letter.


Overly prudent, likely to lead to future credit

Overly optimistic, likely to lead to future debit.

G

G

G

G

Significant risks


Recognition of NHS revenue and recoverability of receivablesRisk identified

As set out in our Audit Plan, we identified recognition of NHS revenue and associated provisions as a key risk due to he complexity of the payment by results revenue regime, the judgemental nature of provisions for disputes with commissioners and the risk of revenue not being recognised at fair value due to adjustments agreed in settling current year disputes and agreement of future year contracts

Key judgements

NHS debtors have decreased on prior year due to the fact that Project Diamond is no longer received. The level of provisioning against these debtors is a key judgement in approval of the financial statements. Our testing indicates that overall the provision is considered prudent but it is important to note that there has been a decline in post year end cash receipts for debtors of which we have been in previous years been able to take comfort from in our testing. This year we have placed more reliance on the agreement of balances exercise and we note that overall the Trust has £386k of un-agreed debtor balances with commissioners in comparison to £706k in the previous year. The Trust is in a net under-performance position of £288k and this has therefore led us to consider the completeness of under-performance and we have traced a sample of under-performance commissioners through to AOB to ensure completeness.

The table below summarises the Trust’s gross and net receivable recognised, and the proportion of the net balance agreed as part of the Agreement of Balances (“AoB”)

exercise.

The table below summarises the Trust’s top 5 Debtors (NHS) at 31 March 2016 and the amount agreed in the Agreement of Balances exercise that the Trust partakes in:

Gross NHS receivables Provisions as at 31 March Net NHS receivables Balances agreed as part of AoB

Trust Exposure

£m £m £m £m £m[1] [2] [1] – [2] [3] [1] – [2] – [3]

2015/16 16,307 2,187 14,120 13,734 3862014/15 18,831 2,275 16,556 15,850 706


The top 5 NHS debtors accounts for 78% of NHS receivables (please note the above table includes £2m of accrued income) as at 31 March 2016. The Trust have £331k of comfort in regards to their exposure for the Trust for recoverability of their top 5 overall debtors yet we note that overall the Trust have exposure of £386k in regards to their NHS recoverability. The Trust do not not have a history of writing bad debts off with £98k bad debt expense in the current year.

Gross NHS receivables

Provisions as at 31 March

Net NHS receivables Balances agreed as part of AoB

Trust Exposure

£m £m £m £m £m[1] [2] [1] – [2] [3] [1] – [2] – [3]

NHS England 8,155 261 7,849 7,148 746NHS Sutton CCG 1,441 111 1,330 1,734 (404)NHS Merton CCG 1,526 14 1,548 1,507 41Epsom and St Helier University Hospital Trust 2,247 832 1,415 1,851 (436)St George’s Healthcare NHS Trust 667 267 400 678 (278)Total 14,033 1,485 11,192 12,918 (331)

Inclusion in our audit report

We expect to include this risk in our audit report because it had a significant effect upon our overall audit strategy, allocation of resources, and direction of the efforts of the team.

Recognition of NHS revenue and recoverability of receivables

Deloitte viewThe increasingly established nature of the Trust’s commissioning relationships would be expected to increase the reliability of revenue recognition estimates. There is evidence of improved patterns of settlement with commissioners in the current year. At the time of writing this report we note that the Trust is due to sign a contract with NHS England for 2016/17 imminently. We do not consider there to be evidence of management bias in the revenue recognition policies adoptedThe revenue recognition policies are in line with other TrustsOur clearance to the National Audit Office will note the provisions noted outside the Agreement of Balances exerciseWe have benchmarked the gross NHS debtor days to other trusts we audit, to evaluate the overall level of risk associated with your year-end debtors, as shown in the table below and chart of movements in the year. We note that currently the Trust’s position is relatively weak in comparison to the sector and especially in

comparison to other specialists trusts.

© 2016 Deloitte LLP. All rights reserved.

12

Deloitte response

• We have reviewed the Payment by Results process and the design and implementation of controls over the provisioning process, and not identified any significant issues in respect of PbR revenue process.

• We have agreed a sample of baseline contract income to underlying contracts, and a sample of significant year-end income balances to activity data. • We have agreed a sample of under-performance to the agreements of balances exercise. • We note that the Trust agreed £3.4m of additional income in relation to the revenue for capital transfer received from the Department of Health– the Trust do not

expect to receive this income stream in the future. We consider the Trust’s recognition of this revenue in the year ended 31 March 2016 to be in accordance with the ARM and the Trust was then required to repay PDC to DoH equal to the value of the capital reduction flagged as the capital to revenue transfer.

• We are currently reviewing the results of the agreement of balances exercise and are investigating significant disagreements between parties.

Risk Identified

The Trust is required to hold property assets within Property, Plant and Equipment at valuation, which will usually be on a modern equivalent use basis. As detailed in our Audit Plan, valuations are by nature significant estimates which are based on specialist and management assumptions and which can be subject to material changes in value. The Trust has had an independent valuation carried out for the purposes of the 31 March 2016 financial statements. It is important to note that this valuation was performed as at 31 December 2015 and the Trust has gained confirmation the valuer that £3.7m of the quarter four additions to the estate add value.

Key judgements

The Trust’s revaluation has increased land values by £2.1m (0.8%), and buildings by £5.8m (4.1%). The result of the valuation is a gain of £9.8m recognised in the revaluation reserve and an impairment of £2m charged to Statement of Comprehensive Income in the year.The impact of this will be to increase PDC dividends payable in the coming year by £297k. The chart below shows the movements in the period. The movement compares to an average movement of (3.2%) across the London trusts we audit.

Property valuations


5.2 1.9 11.8 9.8

168.4 182.9

-

20

40

60

80

100

120

140

160

180

200

31 March 2015 Additions and AUCreclassifications

Depreciation Impairment Revaluation gain 31 March 2016

£m

Movement in property valuations - Land, Buildings and Dwellings

Source: Management information

Deloitte response

• We engaged our property specialists Deloitte Real Estate to review the assumptions and methodology used to value the estate. We have used their findings to challenge management’s assumptions. We note that:

• the useful economic lives of certain assets have been reappraisedThe depreciated Replacement Cost method, used for valuing the Trust’s properties in line with other NHS bodies, is particularly judgemental. There are a variety of assumptions that must be made, which we have summarised in the table below, together with the potential impact to give an indication of where the Trust lies within the acceptable range.

Inclusion in audit report


Deloitte viewThe Trust’s valuation assumptions are in line with other Trusts and fall within the expected range highlighted by Deloitte Real Estate. It is important to note that at the time of writing this report we are awaiting upon the Trust’s assessment that quarter four additions and their effect upon the valuation.The Trust currently disclose their net revaluation gain and impairment. Revaluations gains and losses and impairment increases and reverses should be disclosed separately in the financial statements. This is not materially significant for the Trust in the current year but we recommend that the Trust disclose for this going forward. The Trust currently has £486k of additions to land and buildings in quarter four that do not add value and the valuer have recommended to “write-off”. We understand that the Trust

have not yet finalised their accounting for this but we have raised a recommendation on page 24.

Property valuations

Area Typical valuation practice Trust valuation Potential impact£m

Floor plan assumptions Preferred approach – specify a “Modern Equivalent Asset” with

floor plan matching services provided (plus an allowance for growth)Common approach – use of current floor areas.

The Trust has used current floorplans and layouts for the valuation. This is on the basis that there is an absence of further land capacity for developing the modern equivalent asset required.

Typically would lower valuation, but not possible to quantify.

Cost assumptions Indexing historic values using relevant BCIS index (typically healthcare construction costs). More detailed analyses would consider specific costs for rebuilding.

The Trust used appropriate BCIS indices.

The impact of a more detailed valuation is not possible to quantify.

Land location MEA valuations can be on alternative site basis, but valuations usually consider the current site.

The Trust has considered land values up to 7 miles from the current Chelsea site. For Sutton a range of residential and industrial development land in the wider range of the actual site has been considered.

The approach adopted by the Trust to determine the likely site of the size and location of the MEA is in accordance with guidance and considered reasonable.


Risk Identified

The Trust has spent £18.1m on capital additions a £13.5m underspend on their 2015/16 capital programme. Capital additions have included the Maggie centre at the Sutton estate and the MR Linac project.

Key judgements

As detailed in our Audit Plan, accounting for capital expenditure can involve significant judgements. Determining whether expenditure should be capitalised can involve significant judgement as to whether costs should be capitalised under IFRS, and when to commence depreciation. In addition, previously capitalised works that are being replaced or refurbished need to be appropriately written down. Where existing properties are being modernised, the "modern equivalent use" valuation rules can lead to a "day one" impairment where the accumulated cost of the asset exceeds the cost of a newly built facility.The table below summarises the movements in the assets under construction balance in the year.

Deloitte response

We have challenged management’s assumptions and judgements by means of enquiry and testing performed:

• We have reviewed the Trust’s capital plans with input from our property specialists, Deloitte Real Estate.

• We have tested the design and implementation of controls around the capitalisation of costs.• We have tested spending on a sample basis to confirm that it complies with the relevant accounting requirements, and that the depreciation rates adopted are appropriate.• We have reviewed the projects ledger and the status of individual projects to evaluate whether they have been depreciated from the appropriate point.• We have challenged management’s assessment whether any impairment arises in respect of newly capitalised expenditure, as mentioned above in key judgments.



Deloitte viewNo material issues were identified throughout our work. However, within our sample we noted several errors. These errors were in relation to assets not being transferred out of assets under construction in a timely manner when it became operational. This therefore resulted in a delay in the depreciation being started, these errors were cumulatively immaterial, and immaterial upon extrapolation over the AUC balance.

Accounting for capital expenditure

£m 31 March 2015 Costs capitalised in year Transfers out 31 March 2016Projects underway at 31 March 2015 £11,254k £12,676k (£15,669) £8,261kNew projects in the year £5,414k (£3,538) £1,876kImpairment (£165k)Total £11,254 £18,090 (£19,207) £9,972


Risk Identified

International Standards on Auditing requires auditors to identify a presumed risk of management override of control. This presumed risk cannot be rebutted by the auditor. This recognises that management may be able to override controls that are in place to present inaccurate or even fraudulent financial reports.We consider that in the current year there is a heightened risk across the NHS that management may override controls to fraudulently manipulate the financial statements or accounting judgements or estimates. This is due to the increasingly tight financial circumstances of the NHS and close scrutiny of the reported financial performance of individual organisations. All NHS Trusts and Foundation Trusts have been requested by NHS Improvement to consider a series of “technical” accounting areas and assess both whether their current accounting approach meets the requirements of International Financial Reporting Standards, and to remove “excess prudence” to support the overall NHS reported financial position. The areas of accounting estimate highlighted included accruals, deferred income, partially completed patient spells, bad debt provisions, property valuations, and useful economic lives of assets.

Key judgements

Our audit work is designed to test for instances of management override of controls. We have summarised above our work on key estimates around revenue recognition, property valuations, debtor recovery and provisioning.

Deloitte response

We have considered the overall sensitivity of judgements made in preparation of the financial statements, and note that:• Deloitte had agreed that the change to the NHS debtors provision would be a reasonable one to make to the provision at the end of the 14/15 audit, before the NHSI letter was

circulated;• We have performed an exercise where we assessed the impact of the change in the provision and concluded it to be immaterial - £167k;• We have considered these factors and other potential sensitivities in evaluating the judgements made in the preparation of the financial statements. Specific areas of work are:JournalsWe have used Spotlight data analytics tools to select a sample of journals, based upon identification of items of potential audit interest. We have analysed and investigated our samples for indication of management override. Accounting estimatesIn addition to our work on key accounting estimates discussed above, our work included considering each of the areas of judgement identified by NHS Improvement. In testing each of the accounting estimates included in the NHS Improvement letter, engagement team members were directed to consider their findings in the context of the identified fraud risk. Where relevant, the recognition and valuation criteria used were compared to the specific requirements of IFRS. Significant transactionsThe only significant transaction in the year was the transfer of IT assets over to the JV in Sphere. However, Deloitte has reviewed the accounting treatment of this transaction and have deemed this satisfactory.



Deloitte viewWe have not identified any significant bias in the key judgements made by managementThe control environment is appropriate for the size and complexity of the Trust.




We do not expect to refer to this risk in our auditor’s report because it did not have a significant effect upon our overall audit strategy, allocation of resources, or direction of the efforts of the team.

Risk Identified

The Trust has a significant private patient practice, accounting for £83m of revenue in 2015/16 (£76m in 2014/15). Due to the nature of this debt (either Embassy or private funded), amounts typically take longer to recover than NHS receivables and balances tend to be individually large, heightening the risk of recovery.The level of gross Private Patient debt has increased significantly from £16.2m to £24.0m. (48% increase) whereas overall Private Patient income has only increased by 9.2% to £83m (14/15 £76m). This demonstrates increased risk in regards to the recoverability of debt in the year. There is significant judgement in regards to recoverability and bad debt provisioning.

Key judgements

The table below summarises private patient receivables and provisions for bad debts. The amounts are within ‘other receivables’ in the financial statements. The debtor balance has

increased significantly;

The significant increase in private patient debt is due to increased debts, with a number of customers but particularly the Kuwait Health (£7.1m) , Kuwait Military (£2.4m) and Kuwait oil (£1.8m). There is £1.8m of debt with these three debtors that is not yet due, representing an increase in billings late in the period. Due to the fact that it is the Trust’s policy to

provide for embassy debt only when they do not have a letter of guarantee from the embassy while the debt has increased the provision has not increased. We note that the Trust’s

exposure for un-provided debts has increased by £7.4m to £13.3m in the current year.

Areas of other focus – Private Patient debtors


Gross PP receivables

Provisions as at 31 March Net PP receivables Amounts Not Yet Due as

at 31 March 2016

Amounts due but not provided as at

31 March 2016£'000 £'000 £'000 £'000 £'000

[1] [2] [1] – [2] [3]

Embassy 13,466 613 12,853 2,247 10,606

Sponsored 9,438 804 8,634 5,947 2,687 Self-paying 1,110 763 347 293 54

Total 2015/16 24,014 2,180 21,834 8,487 13,347

Embassy 7,003 707 6,296 2,247 4,049 Sponsored 8,577 609 7,968 5,947 2,021 Self-paying 626 485 141 253 - 112

Total 2014/15 16,206 1,801 14,405 8,447 5,958

Area of other focus- Private patient debtors Deloitte response

• We held discussions with the Trust’s Private Patient Finance Business Manager to understand the overall balance.

• We assessed the payment history of significant individual debtors where there was no cash received to gain assurance that amounts were recoverable and testing validity of the debtors by tracing a sample of debtors to underlying patient records.

• We tested the accuracy of individual provisions amounts to gain assurance that balances were not understated.• We traced a sample of debtors to letters of guarantee.• We challenged the judgements around the £2.1m bad debt provision, including whether it was adequate for the Trust to only provide for embassy patients without a letter of

guarantee. We have performed a review of how much cash had been received against fully provided debts at 31 March 2015 (no substantial cash receipts).• We reviewed the historical accuracy of provisioning, and did not identify any material concerns.


We do not expect to refer to this risk in our auditor’s report.

Deloitte viewOur audit work identified that the Trust has potential exposure to un-provided, overdue debt of £13.3m. We are currently still performing our procedures to give us assurance that management’s judgements in relation to the recoverability of these debts and the level of provisioning is appropriate.


19

Value for money


Value for moneyWe are required to satisfy ourselves that the Trust has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. VfM is assessed against the following criterion, and three sub-criteria (informed decision making, sustainable resource deployment, and working with partners and other third parties):

“In all significant respects, the audited body had proper arrangements to ensure it took properly informed decisions and deployed resources to achieve planned and sustainable outcomes for taxpayers and local people.”

Our work takes account of the Annual Governance Statement and the findings of regulators. We are required to perform a risk assessment through the course of our audit to identify whether there are any significant risks to our VfM conclusion, and perform further testing where risks are identified.

Overall financial and quality performanceAs part of our risk assessment, we have considered how the Trust’s performance compares to plan and prior year:

* The Trust underwent a CQC inspection in April 2016 and are currently awaiting the results of the report

Risk Assessment work performedAs part of our risk assessment, we have considered information from: a combination of:

• review of the Trust’s draft Annual Governance Statement;

• consideration of issues identified through our other audit and assurance work;• consideration of the Trust’s results, including benchmarking of actual performance

(including on CIP delivery as summarised below) and the 2016/17 Annual Plan;

• review of the Care Quality Commission’s report on the Trust from March 2013;

• review of Monitor’s risk ratings;

• benchmarking of the Trust’s performance

• consideration of the Trust’s NHSLA risk rating; and

• consideration of the Trust’s Information Governance toolkit score

ConclusionWe have not identified any specific risks in respect of Value for Money.

Current year 2015/16 Planned 2015/16 Variance Prior year 2014/15 Planned 2016/17

Surplus/ (deficit) (£0.8m) £3.7m 108% £1m £0.1mEBITDA margin 4.4% 4.1% 0.3% 5.7% 3.5%

CIP target and identified to date £9.3m (£5.9m revenuegenerated and £3.4m CIPs)

£10.8m (£5.9m revenue generation and £4.9m CIPs) (£1.5m)

£9.5m (£8m revenue generation and £1.5m CIPs)

£10.8m (£5m revenue generation and £5.8m CIPS)

Monitor Financial Sustainability Risk Rating 3 3 0 4 3Monitor governance risk rating

Breaches of Monitor performance targets None None None

CQC report conclusion Met all standards* Met all standards

NHSLA risk ratingLevel 3 Level 3

Value for moneyWe have not identified any VfM significant risks


Cost improvement programmes Value for Money (continued)

As part of our risk assessment procedures, we considered how the Trust’s CIP delivery and programme compares to our other Foundation Trust clients:

Sector average Royal Marsden All trusts Specialist Trusts

Royal

Marsden

%/£m 2015/16 2015/16 2015/16 2014/15

CIP - plan £10.8m £12.3m £8m £15.3mCIP - actual £9.3m £10.8m £6.7m £9.5mActual CIPs as % of plan 86% 88% 84% 63%Planned CIPs as a percentage of operating expenses 1.4% 2.6% 1.9% 1.2%

The chart below demonstrates the current year CIP compared to other Trusts. In line with other Trusts it demonstrates that the largest CIPs are in relation to pay expenses.


22

Although most trusts did not meet their CIP targets for the year, the Trust’s

performance of 86% achievement of CIPs is ahead of the specialist sector and an improvement on prior year achievement of 63%.This had a (£1.6m) impact on the surplus. The Trust delivered a greater proportion of revenue generation schemes than plan. Its overall mix of delivered schemes was similar to other acute trusts.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

YTD Q4Actual

YTD Q4Actual

YTD Q4Actual

YTD Q4Actual

Trust Specialist Acute +Specialist

All Trusts

Current year CIPs compared to other trusts

Other expense

Misc. Other OperatingExpenses

Non-clinical Suppliesexpense

Clinical Suppliesexpense

Drugs expense

Pay Expense

Source: Deloite analysis of Monitor submissions

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

Achieved CIPs and revenue schemes as % of plan (2015/16)

Royal Marsden Acute Specialist Mental Health

Source: Deloitte analysis of Monitor submissions


Other findings

23

Internal control and risk managementOther significant findings

We present a summary of observations on the Trust’s internal control and risk management processes

Key:

Medium Priority

ISA 265 requires that all significant deficiencies in internal controls are communicated. All significant deficiencies should beincluded in this section, and should be cross-referenced to other sections of the document as appropriate.

Observation Management responses

Reconciliation of year end cash balance

We note that for your Private Patients bank accounts the year end bank balance is understated by £30k due to an error made in the bank reconciliation. We would stress to management that cash is a balance material by nature and accurate bank reconciliations should be performed on a monthly basis, reviewed and reconciling items followed up in a timely manner.

Noted. Bank reconciliations are performed and reviewed monthly. The reconciliation methodology of one of the Private Patient accounts requires improvement and will be implemented immediately.

Miscalculation of prepayments

During our testing of prepayments we found firstly that the Trust had been calculating prepayments using months instead of days and secondly using out of date information to calculate the prepayment. The Trust should ensure that prepayments are accurately calculated and ensure that they use the most recent supporting documentation to calculate the prepayment if available.

Noted. A consistent methodology for prepayment calculations will be implemented going forward although we note that this will have minimal financial impact

Accrued Income We have noted £604k of misclassification errors in accrued income which in their nature are accruals balances. We understand that management are planning to adjust for this and we are awaiting confirmation of this. We would stress that accurate reconciliations of ledger balances to the trial balance should be performed on a monthly basis and that these should be reviewed to an appropriate level.

Noted. We would stress that reconciliations are currently performed and reviewed monthly and that this adjustment concerns the classification of unusual items within those balances, which have subsequently been adjusted for within the accounts.

Capitalisation of Friends of Marsden donated assets

Historically the Trust has not been recognising income received from the charity Friends of Marsden to purchase fixed assets nor has the Trust been recognising the subsequently purchased assets. The Trust has undertaken a review which estimated there have to have been £300k of non capitalised donated assets and income in 2015/16 financial year and 2014/15 financial year. We recommend that the Trust develops a process where these assets are flagged and recognised on the balance sheet.

Noted. We will adjust the treatment going forward.

Capital items in expenditure We identified two capital items during our operating expenses testing which amount to £100k and we

deemed capital in nature. We recommend that the Trust performs a review of operating expenses for items of a capital nature on a quarterly basis.

Noted. Operating expenses are currently reviewed on a monthly basis. The items identified are exceptional in nature and we consider that the risk of future recurrence is minimal

H

M


M

M

M

Medium PriorityHigh Priority Low Priority

Internal control and risk management

Other significant findings

We present a summary of observations on the Trust’s internal control and risk management processes

Key:

Observation Management response

Delayed capitalisation of Additions

During our capital expenditure testing we have identified £2.8m additions which were capitalized post their operational date. We recommend that the Trust improve communication between estates and the finance team to ensure that assets are capitalized as soon as they operational.

Noted. Monthly meetings between Estates and Finance are now occurring to keep track of all capital programmes. These are also now monitored as part of the month-end balance sheet review.

GNRI accrual We have performed a review of the aging of the GRNI accrual and have noted that there is £1.3m of items that are older than a year in age. We note also that the GRNI has doubled in the current year to £8m. We recommend the Trust introduces a month end process which investigates the ageing of the GRNI accrual.

Noted. We will implement this going forward.

Post revaluation consideration of quarter four capital expenditure

During the audit we flagged to the Trust that there was £4.1m of capital additions to post revaluation Land and Buildings. The Trust have now engaged their valuer to assess whether these additions did add value or should have been subject to an impairment. Going forward we advise the Trust if they were to undergo a valuation at 31 December in future years they should engage in this process as part of their year end procedures.

Noted and agreed

Private patient debtors

Private Patient debtors have increased to £24m from £16m in the prior year and we note that debtor days have increased across the board especially for Embassy debtors where it has increased from 165 days in the prior year to 245 days in the current year. We recommend that the Trust reassess their cash-flow forecast to take account of the decline in private patient’s recoverability and assess the potential impact this will have

upon the Trust.

The Trust has already taken potential increases in PP debt into account when planning the cash flow for the current year.

Disclosure of Revaluations and Impairments

Currently the Trust are presenting Revaluations and Impairments on a net basis in their financial statements. Revaluations gains and decreases and Impairment increases and reversals should be represented separately on the financial statements. Currently this does not have a material impact on the financial statements but we recommend that the Trust account for this going forward.

Noted and agreed

M


M

M

Medium PriorityHigh Priority Low Priority

H

M


Our audit report

26

The Audit Committee will need to pay particular attention to the risks of material misstatement, calculated materiality and audit scope that we have used. These judgements will be more transparent to all stakeholders in this year’s report.

Scoping: We disclose an overview of the audit scope, as set out in our previous communications with you, and how we have responded to the identified risks.

Materiality: An explanation of our assessment and application of the concept of materiality is included in the audit opinion. This includes disclosure of the absolute materiality level £3.4m (£3.1m 2014/15) and the error reporting threshold to the Audit Committee £170,000 (£158,000 2014/15).

Significant risks: The opinion includes a summary of the risks of material misstatement assessed as being significant to the audit, and that take the greatest audit effort. At this stage we expect that this will include:• Recognition of NHS revenue;• Property valuation; and• Capital ExpenditureOther matters to report by exception: We are also required to report by exception on the following matters:• if the Board statement on fair, balanced and understandable is inconsistent with the knowledge

we have acquired during our audit; • if the description of the significant issues considered by the Audit Committee does not

appropriately address matters communicated by us to you, the Audit Committee; or • proper practices have not been observed in the compilation of the financial statements.

FT specific reports by exception: Under the Audit Code for NHS Foundation Trusts, we are also required to report to you if, in our opinion:• the Annual Governance Statement does not meet the disclosure requirements set out in the

ARM, is misleading, or is inconsistent with information of which we are aware from our audit; or• the Trust has not made proper arrangements for securing economy, efficiency and effectiveness

in its use of resources.

Summary of the risks we comment onOur audit report

Last year ISA 700 (UK and Ireland) changed the format of audit opinions to include additional disclosures. Here we discuss the items that we intend to comment on in our audit report. Our audit report includes comment on materiality and scoping, including how this has changed from last year. We also comment on the key significant risks which have been the focus of our time and efforts on the audit and our observations on internal control. Further detail of the significant risks we will comment on in our audit report can be found on the following page.

In our planning report we explained our risk assessment process and how we selected our significant audit risks. Below is a summary of the significant risks we identified. For each we explain the basis on which we have included or excluded from our audit report. We explain why the risk is relevant within the specific circumstances of the Trust and clearly document the specific procedures we have performed to address the risk.



Your Annual Report

28

The reporting requirementsOur comments on your annual report

Monitor has revised the format of the Annual Report, reflecting HM Treasury’s “Simplifying and Streamlining” project in central government.The reorganised format consists of a Performance Report, Accountability Report, Quality Report, and financial statements. While the Quality Report and financial statements are largely unchanged from previous years, the structure of the Annual Report has therefore been significantly revised. This has provided an opportunity for trusts to revisit their approach to narrative reporting. We have set out on the following slide our key observations.

Performance Report Accountability ReportOverview Directors’ Report

Detailed performance analysis Remuneration reportCompanies Act Strategic Report requirements Staff report

Accounting officer responsibilities Governance disclosures

Remuneration reportStatement of Accounting officer’s

responsibilityAnnual Governance statement

Areas to consider this year include:• New disclosures on senior staff pay above the Prime Minister’s salary, explaining the steps taken by the Trust to satisfy itself the level of pay is

reasonable.• Disclosure of the accounting for Capital to Revenue transfers.• “Requested” additional disclosures on current Departmental priorities in the Quality Report.


Review of Report Deloitte response

The Performance Report The report outlines the Trust’s performance, both financial and

non-financial, focussing on strategic priorities. It outlines the strategic objectives, business plan and key risks as required.

Deloitte has ensured that the disclosures meet the minimum requirements of the ARM.

The Accountability Report –

overall observationsManagement have ensured that the accountability report meets the requirements of the ARM, consolidating their previous remuneration reporting, directors report and governance statement sections within this part of the report.

Deloitte has ensured that the disclosures meet the requirements of the ARM. We have raised recommendations to management, in particular around presentation of the staff number disclosures.

The audit committee report The report discusses the challenge and discussion undertaken by the Audit Committee in relation to the key areas and issues discussed during the year.

Deloitte has ensured that the disclosures meet the requirements of the ARM. We are satisfied that the content reflects the nature of discussions held during the year.

Remuneration policy and reporting requirements

The Trust has appropriately disclosed changes to directors and senior managers in the report.

We have tested to ensure that the remuneration report includes required disclosure and disclosures are accurate. Based on our review, we have made recommendations to ensure all required disclosure is included in the correct section of the annual report.

Going concern Management has made appropriate disclosure relating to Going Concern matters.

Deloitte have challenged the assumptions built into the Trust’s annual

plan, and sensitised these to gain assurance that the Trust has sufficient reserves and the plan is sufficiently robust to demonstrate that the Trust will be a Going Concern for 12 months from signing the accounts.

We have reviewed a draft of your annual reportOur comments on your annual report

We welcome this opportunity to set out for the Audit Committee our observations on the annual report.


Appendices

Our report is designed to help you meet your governance dutiesPurpose of our report and responsibility statement

What we report Our report is designed to help the Audit Committee and the Board discharge their governance duties. It also represents one way in which we fulfil our obligations under ISA 260 (UK and Ireland) to communicate with you regarding your oversight of the financial reporting process and your governance requirements. Our report includes:• Results of our work on key audit judgements and our observations on

the quality of your Annual Report.• Other insights we have identified from our audit and in following our

audit plan, Audit Quality Promise and Insight Plan.

What we don’t report

• As you will be aware, our audit was not designed to identify all matters that may be relevant to the board.

• Also, there will be further information you need to discharge your governance responsibilities, such as matters reported on by management or by other specialist advisers.

• Finally, our views on internal controls and business risk assessment should not be taken as comprehensive or as an opinion on effectiveness since they have been based solely on the audit procedures performed in the audit of the financial statements and the other procedures performed in fulfilling our audit plan.

The scope of our work• Our observations are developed in the context of our audit of the financial

statements.• The Insight and Additional assurance findings sections of this report

provide details of additional work we have performed alongside the audit of the financial statements.

We welcome the opportunity to discuss our report with you and receive your feedback.

Deloitte LLPChartered AccountantsSt Albans23th May 2016

This report has been prepared for the Audit Committee, as a body, and we therefore accept responsibility to you alone for its contents. We accept no duty, responsibility or liability to any other parties, since this report has not been prepared, and is not intended, for any other purpose. Except where required by law or regulation, it should not be made available to any other parties without our prior written consent.



Misstatements – adjusted and unadjusted Audit adjustments

1) Misclassification of credit notes to Accrued Income (adjusted)

As noted on page 24 the Trust has misclassified £604k of credit notes to accrued income.

We recommend that the Trust makes the following adjustment to correct this;

DR Accruals £604k

CR Accrued Income £604k

2) No capitalisation of Friends of Marsden donated fixed assets (unadjusted)

As noted on page 24 The Friends of Marsden have donated £301k of fixed assets to the Trust during the year 31 March 2016. We recommend that the Trust makes the following adjustment to correct this;

DR Fixed Assets £301k

CR Income £301k

3) Impairment of quarter four additions to land and buildings that do no enhance value (adjusted)

The Trust’s valuer has confirmed that £486k of the Trust’s quarter four capital additions to Land and Buildings do not add value. We recommend that the Trust make the following adjustment to correct this;

DR Expenditure £486k

CR Fixed Assets £486k

4) Over/(under) performance (unadjusted)

The Trust first estimated itself to be in a position of net under-performance of £288k. Month 12 estimates have now been finalised and the Trust is in a £88k over-performance position of £88k. We recommend that the Trust makes the following adjustment to correct this;

DR Accrued Income £377k

CR Income £377k

*The Trust has adjusted for adjustment 1 and 3 documented above

33

DisclosuresAudit adjustments

Disclosure misstatementsThe following uncorrected disclosure misstatements have been identified up to the date of this report which we request that you ask management to correct as required by International Standards on Auditing (UK and Ireland).

Disclosure Summary of disclosure requirement Quantitative or qualitative consideration

Note 10.1 Disclosure of the valuation of the property estates

Revaluation gains and losses have been offset and Impairment increases and decrease have been offset.

Revaluation gains of £10m have been offset with losses of £238k to give a net revaluation of £9.8m.

Impairment decreases of £2.1m have been offset against impairment reversals of £800k to give a net impairment of £1.3m.

This does not have a material impact on the financial statements and we would recommend going forward that the Trust ensure they show these figures gross.


Responsibilities explainedFraud responsibilities and representations

• In our planning we identified the risk of fraud in revenue recognition and management override of controls as a key audit risk for the Trust.

• During course of our audit, we have had discussions with management and those charged with governance, which did not identify any instances of fraud that may impact materially or otherwise on the financial statements.

• In addition, we have reviewed management’s own documented

procedures regarding the fraud and error in the financial statements.

• We have considered the findings of the Local Counter Fraud Specialist (LCFS).

The primary responsibility for the prevention and detection of fraud rests with management and those charged with governance, including establishing and maintaining internal controls over the reliability of financial reporting, effectiveness and efficiency of operations and compliance with applicable laws and regulations. As auditors, we obtain reasonable, but not absolute, assurance that the financial statements as a whole are free from material misstatement, whether caused by fraud or error.

Responsibilities

Concerns

• None noted

Audit work performed

We have asked the Board to confirm in writing that you have disclosed to us the results of your own assessment of the risk that the financial statements may be materially misstated as a result of fraud and that you have disclosed to us all information in relation to fraud or suspected fraud that you are aware of and that affects the entity or group. We have also asked the Board to confirm in writing their responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud and error.

Required representations


Independence and fees

As part of our obligations under International Standards on Auditing (UK & Ireland), we are required to report to you on the matters listed below:

Independence confirmation

We confirm that we comply with APB Ethical Standards for Auditors and that, in our professional judgement, we and, where applicable, all Deloitte network firms are independent and our objectivity is not compromised.

Fees Our audit fee for the year from 1 April 2015 to 31 March 2016 is £76,300.

Non-audit services In our opinion there are no inconsistencies between APB Ethical Standards for Auditors and the Trust’s policy for the supply

of non-audit services or of any apparent breach of that policy. We continue to review our independence and ensure that appropriate safeguards are in place including, but not limited to, the rotation of senior partners and professional staff and the involvement of additional partners and professional staff to carry out reviews of the work performed and to otherwise advise as necessary. It is the audit partner’s tenth year with the Trust and Heather Bygrave will be rotating off the audit post

completion of the 31 March 2016 audit. Relationships The following slides provides details of all the relationships (other than the provision of non-audit services which are covered

above) we have with the Trust its directors and senior management and its affiliates, and other services provided to other known connected parties that we consider may reasonably be thought to bear on our objectivity and independence, together with the related safeguards that are in place.


As part of our obligations under International Standards on Auditing (UK & Ireland) and the APB’s Ethical Standards we are required to report to you on all relationships (including the provision of non-audit services) between us and the audited entity:

None Noted

Independence and feesThe professional fees earned by Deloitte in the period from 1 April 2015 to 31 March 2016 are as follows:


Current year£

Prior Year£

Audit of Foundation Trust 49,300 49,300

Enhanced audit report - 2,500

Whole of government accounts (“WGA”) 3,600 3,600

Quality Accounts 20,400 20,400Value for Money 3,000 3,000Total audit 76,300 77,800

Assistance in the preparation of the Trust’s response to the Sutton and Merton Community Services

bids 123,307 -Services in relation to Sphere - 2,500Total non-audit services 123,307 2,500

Total fees 199,607 80,300

Draft Letter of Representation


Deloitte LLP3 Victoria Square Victoria Street St. Albans AL1 3TF

20 May 2016

Our Ref: HAB/JKDear Sirs

This representation letter is provided in connection with your audit of the annual financial statements and consolidation schedules (together “the financial statements”) of the Royal Marsden NHS Foundation Trust for the year ended 31 March 2016 for the purpose of expressing an opinion as to whether the financial statements give a true and fair view of the financial position of the Royal Marsden NHS Foundation Trust as of 31 March 2016 and of the results of its operations, other recognised gains and losses and its cash flows for the year then ended in accordance with the directions given by Monitor - Independent Regulator of NHS Foundation Trusts in accordance with paragraph 25 of Schedule 7 of the National Health Service Act 2006. It is also provided in connection with your limited assurance report on the quality report for the year ended 31 March 2016.

As Accounting Officer and on behalf of the board of directors, I confirm, to the best of my knowledge and belief, and in line with the materiality level set in the external audit (£3.4m), the following representations:

Financial statements and quality report

1. I understand and have fulfilled my responsibilities for the preparation of the financial statements in accordance with the directions given by Monitor - Independent Regulator of NHS Foundation Trusts in accordance with paragraph 25 of Schedule 7 of the National Health Service Act 2006 which give a true and fair view, as set out in the terms of the audit engagement letter.

2. Significant assumptions used by us in making accounting estimates, including those measured at fair value, are reasonable. 3. Related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of IAS24 “Related party disclosures”.

With regard to the transactions and balances listed in the notes to the financial statements, we confirm that to the best of our knowledge and belief these transactions are not significant to the related party or to the Trust such that they would influence decisions made by a user of the financial statements.

4. All events subsequent to the date of the financial statements and for which the applicable financial reporting framework requires adjustment of or disclosure have been adjusted or disclosed.

5. The effects of uncorrected misstatements and disclosure deficiencies are immaterial, both individually and in aggregate, to the financial statements as a whole.6. We confirm that the financial statements have been prepared on the going concern basis. We also confirm the completeness of the information provided regarding events and

conditions relating to going concern at the date of approval of the financial statements, including our financial plan and future actions to deliver the plan. This includes the status of contract negotiations with commissioners. After consideration of the financial plan and making reasonable enquiries, the Directors have a reasonable expectation that despite the uncertain environment the Trust has adequate resources to continue as a going concern for the next 12 months.

7. We acknowledge our responsibility for ensuring the Trust has put in place arrangements for securing economy, efficiency and effectiveness in its use of resources. 8. We are not aware of any material deficiencies in the Trust’s arrangements to secure economy, efficiency and effectiveness in its use of resources.

Draft Letter of Representation (continued)


9. All grants or donations, the receipt of which is subject to specific restrictions, terms or conditions, have been notified to you. We have evaluated whether the restrictions, terms or conditions on grants or donations have been fulfilled with and deferred income to the extent that they have not.

10. Based on discussions with other NHS bodies, we consider that the resolution of disputed balances and accrued over performance will not result in a material adverse effect on the reported financial position. Similarly with outstanding receivables relating to private or overseas patients we are satisfied as to their recoverability and the adequacy of our provisioning thereon.

11. With respect to the revaluation of properties in accordance with the Annual Reporting Manual:a) the measurement processes used are appropriate and have been applied consistently, including related assumptions and models;b) the assumptions appropriately reflect our intent and ability to carry out specific courses of action on behalf of the entity where relevant to the accounting estimates and

disclosures;c) the disclosures are complete and appropriate.d) there have been no subsequent events that require adjustment to the valuations and disclosures included in the financial statements.

13. We confirm that we consider that depreciated historic cost is an appropriate proxy for the fair value of non-property assets, and are not aware of any circumstances that would indicate that these assets require revaluation.

14. We understand and have fulfilled our responsibilities for the preparation of the quality report in accordance with the NHS Foundation Trust Annual Reporting Manual.15. We have made available to you all records, correspondence, information and explanations necessary for you to perform your work. All the records have been made available to

you for the purpose of your work and all the data collected by the Foundation Trust has been properly reflected and recorded.16. Significant assumptions that have been made by us in determining the indicators are reasonable. We have set out in the Quality Report potential limitations in the accuracy of

some indicators.17. All events subsequent to the date of the quality report and for which the NHS Foundation Trust Annual Reporting Manual requires adjustment of or disclosure have been

adjusted or disclosed.18. Aside from the disclosures made in the Quality Report in relation to the referral to treatment time for incomplete pathways, we are not aware of any deficiencies in internal

control over the collection and reporting of the measures of performance included in the quality report

Information provided

19. We have provided you with all relevant information and access as agreed in the terms of the audit engagement letter and required by Appendix B of the Audit Code for NHS Foundation Trusts.

20. All material transactions have been recorded and are reflected in the financial statements and the underlying accounting records.21. We acknowledge our responsibilities for the design, implementation and maintenance of internal control to prevent and detect material fraud and error.22. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.23. We have disclosed to you all information in relation to fraud or suspected fraud that we are aware of and that affects the entity or group and involves:

i. management;ii. employees who have significant roles in internal control; oriii. others where the fraud could have a material effect on the financial statements.

24. We have disclosed to you all information in relation to allegations of fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees, former employees, analysts, regulators or others.

Draft Letter of Representation (continued)


25. We have disclosed to you all known instances of non-compliance, or suspected non-compliance, with laws, regulations and contractual agreements whose effects should be considered when preparing financial statements

26. We have disclosed to you the identity of the Trust’s related parties and all the related party relationships and transactions of which we are aware.27. All known actual or possible litigation and claims whose effects should be considered when preparing the financial statements have been disclosed to you and accounted for

and disclosed in accordance with the applicable financial reporting framework. On the basis of legal advice we have set them out in the attachment with our estimates of their potential effect. No other claims in connection with litigation have been or are expected to be received.

28. We have no plans or intentions that may materially affect the carrying value or classification of assets and liabilities reflected in the financial statements. 29. We acknowledge our responsibilities for the design, implementation and maintenance of internal control to prevent and detect fraud and error when preparing the quality report.30. We have disclosed to you all known instances of non-compliance, or suspected non-compliance, with laws and regulations whose effects should be considered when preparing

the quality report.

We confirm that the above representations are made on the basis of adequate enquiries of management and staff (and where appropriate, inspection of evidence) sufficient to satisfy ourselves that we can properly make each of the above representations to you.

Yours faithfully

Cally Palmer, Chief Executive OfficerSigned as Accounting Officer, and on behalf of the Board of Directors

Draft Enhanced Auditor’s Report


Opinion on financial statements of the Royal Marsden NHS Foundation Trust

In our opinion the financial statements: give a true and fair view of the state of the Trust’s affairs as at 31 March 2016 and of its income and

expenditure for the year then ended; have been properly prepared in accordance with the accounting policies directed by Monitor –

Independent Regulator of NHS Foundation Trusts; and have been prepared in accordance with the requirements of the National Health Service Act 2006.

The financial statements comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Cash Flow Statement, the Statement of Changes in Taxpayers’ Equity and the related notes 1 to 25. The financial

reporting framework that has been applied in their preparation is applicable law and the accounting policies directed by Monitor – Independent Regulator of NHS Foundation Trusts.

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF GOVERNORS AND BOARD OF DIRECTORS OF THE ROYAL MARSDEN NHS FOUNATION TRUST

Qualified Certificate We certify that we have completed the audit of the accounts in accordance with the requirements of Chapter 5 of Part 2 of the National Health Service Act 2006 and Code of Audit Practice, except that: As noted below in the section ‘Matters on which we are required to report by exception’, we have been unable to

conclude that Great Ormond Street Children’s Hospital NHS foundation trust has made proper arrangements for

securing economy, efficiency and effectiveness in its use of resources.

Going concern We have reviewed the Accounting Officer’s statement contained on page 61 of the Strategic Report that the Trust is a going concern. We confirm that: we have concluded that the Accounting Officer’s use of the going concern basis of accounting in the preparation

of the financial statements is appropriate; and we have not identified any material uncertainties that may cast significant doubt on the Trust’s ability to continue

as a going concern.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Trust’s ability to continue as a going concern.

Independence We are required to comply with the Financial Reporting Council’s Ethical Standards for Auditors and we confirm that

we are independent of the group and we have fulfilled our other ethical responsibilities in accordance with those standards. We also confirm we have not provided any of the prohibited non-audit services referred to in those standards.

Our assessment of risks of material misstatement

The assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team:

Draft Enhanced Assurance Opinion (continued)


NHS revenue and provisions

As described in note 1.19, Accounting Policies there are significant judgements in recognition of revenue from care of NHS patients and in provisioning for disputes with commissioners due to:

the complexity of the Payment by Results regime, in particular in determining the level of overperformance; and

the judgemental nature of provisions for disputes, including in respect of outstanding overperformance income for quarters 3 and 4.

Details of the Trust’s income, including £214m (£216m as at 31 March 2015) of

Commissioner Requested Services, are shown in note 3.1 to the financial statements. NHS debtors are shown in note 13.1 to the financial statements

The majority of the Trust’s income is commissioned by NHS England. The

settlement of income with Clinical Commissioning Groups continues to present challenges, leading to disputes and delays in the agreement of year end positions.

We evaluated the design and implementation of controls over recognition of Payment by Results income.

We performed detailed substantive testing on a sample basis of the recoverability of overperformance income and adequacy of provision for underperformance through the year, and evaluated the results of the agreement of balances exercise.

We challenged key judgements around specific areas of dispute and actual or potential challenge from commissioners and the rationale for the accounting treatments adopted. In doing so, we considered the historical accuracy of provisions for disputes and reviewed correspondence with commissioners,

Property valuations

The Trust holds property assets within Property, Plant and Equipment at a depreciated replacement cost valuation (which takes account of the modern equivalent asset basis) of £237.1m (£226.8m as at 31 March 2015). The valuations are by nature significant estimates which are based on specialist and management assumptions (including the floor areas for a Modern Equivalent Asset, the basis for calculating build costs, the level of allowances for professional fees and contingency, and the remaining life of the assets) and which can be subject to material changes in value.

We evaluated the design and implementation of controls over property valuations, and tested the accuracy and completeness of data provided by the Trust to the valuer.

We used Deloitte internal valuation specialists to review and challenge the appropriateness of the key assumptions used in the valuation of the Trust’s properties,

including through benchmarking against revaluations performed by other Trusts at 31 March 2016.

We assessed whether the valuation and the accounting treatment of the impairment were compliant with the relevant accounting standards, and in particular whether impairments should be recognised in the Income Statement or in Other Comprehensive Income.

Risk How the scope of our audit responded to the risk



Risk How the scope of our audit responded to the riskCapital Expenditure

The Trust has capital expenditure of £18.1m (£21.8m as at 31 March 2015) in the year and assets under the course of construction of £10.0m at year-end, as part of its extensive capital programme. Judgement is exercised in determining whether expenditure can be capitalised and when to commence depreciation.

Further details upon the associated balances are included in note 10 to the financial statements.

We reviewed the Trust’s capital plans to identify potential risks or issues. We tested

the design and implementation of controls around cost capitalisation. We tested a sample of assets remaining in construction at 31 March 2016 to assess whether this remained appropriate, including physically verifying a sample of assets.

On a sample basis we reviewed spending to confirm amounts capitalised were in line with relevant accounting requirements. On a sample basis we reviewed the status of individual projects to evaluate whether they have been depreciated for the correct period.

The description of risks above should be read in conjunction with the significant issues considered by the Audit Committee discussed on page .

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Our application of materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.

We determined materiality for the Trust to be £3.4m (2014/15: £3.1m), which is below 1% of revenue (2014/15: 1% of revenue). Revenue was chosen as a benchmark as the Trust is a non-profit organisation, and revenue is a key measure of financial performance for users of the financial statements.

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £170,000 (2014/15: £158,000), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.



An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the entity and its environment, including internal control, and assessing the risks of material misstatement. Audit work was performed at the Trust’s head offices directly by the audit

engagement team, led by the audit partner.

The audit team included integrated Deloitte specialists bringing specific skills and experience in property valuations and Information Technology systems.

Data analytic techniques were used as part of audit testing, in particular to support profiling of populations to identify items of audit interest.

Opinion on other matters prescribed by the National Health Service Act 2006

In our opinion: the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the

National Health Service Act 2006; and the information given in the Performance Report and the Accountability Report for the financial year for which the

financial statements are prepared is consistent with the financial statements.



Matters on which we are required to report by exception

Use of Resources

Annual Governance Statement and

compilation of financial statements

The Trust has described, in its Annual Governance Statement, on page xx, weaknesses in its arrangements to ensure the quality of reported data around the 18 weeks Referral to Treatment indicator, and is currently on a reporting break in relation to this indicator.

This matter is evidence of weaknesses in proper arrangements to ensure that the Foundation Trust can take properly informed decisions to achieve planned and sustainable outcomes.

Except for the matter referred to above in relation to the data reporting around the 18 weeks Referral to Treatment indicator, no matters have come to our attention that indicate that the NHS foundation trust has not made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.

Under the Code of Audit Practice, we are required to report to you if, in our opinion: the Annual Governance Statement does not meet the disclosure requirements set out in the NHS Foundation Trust

Annual Reporting Manual, is misleading, or is inconsistent with information of which we are aware from our audit; or proper practices have not been observed in the compilation of the financial statements.

We have nothing to report in respect of these matters

We are not required to consider, nor have we considered, whether the Annual Governance Statement addresses all risks and controls or that risks are satisfactorily addressed by internal controls.

Our duty to read other information in

the Annual Report

Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is: materially inconsistent with the information in the audited financial statements; apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Trust acquired in the

course of performing our audit; or otherwise misleading.

In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors’ statement that they consider the annual report is fair, balanced and understandable and

whether the annual report appropriately discloses those matters that we communicated to the audit committee which we consider should have been disclosed. We confirm that we have not identified any such inconsistencies or misleading statements.



Respective responsibilities of the accounting officer and auditor

As explained more fully in the Accounting Officer’s Responsibilities Statement, the Accounting Officer is responsible for

the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law, the Code of Audit Practice and International Standards on Auditing (UK and Ireland). We also comply with International Standard on Quality Control 1 (UK and Ireland). Our audit methodology and tools aim to ensure that our quality control procedures are effective, understood and applied. Our quality controls and systems include our dedicated professional standards review team.

This report is made solely to the Board of Governors and Board of Directors (“the Boards”) of The Royal Marsden NHS Foundation Trust, as a body, in accordance with paragraph 4 of Schedule 10 of the National Health Service Act 2006. Our audit work has been undertaken so that we might state to the Boards those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the trust and the Boards as a body, for our audit work, for this report, or for the opinions we have formed.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Trust’s circumstances and

have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Accounting Officer; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Heather Bygrave FCA BA Hons (Senior statutory auditor)for and on behalf of Deloitte LLPChartered Accountants and Statutory AuditorSt Albans, United Kingdom[xx] May 2016

Other than as stated below, this document is confidential and prepared solely for your information and that of other beneficiaries of our advice listed in our engagement letter. Therefore you should not, refer to or use our name or this document for any other purpose, disclose them or refer to them in any prospectus or other document, or make them available or communicate them to any other party. If this document contains details of an arrangement that could result in a tax or National Insurance saving, no such conditions of confidentiality apply to the details of that arrangement (for example, for the purpose of discussion with tax authorities). In any event, no other party is entitled to rely on our document for any purpose whatsoever and thus we accept no liability to any other party who is shown or gains access to this document.

Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 2 New Street Square, London EC4A 3BZ, United Kingdom.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

http://www.deloitte.co.uk/about

COUNCIL OF GOVERNOR PAPER

SUMMARY SHEET


Agenda item 6.3.

Title of Document:

Quality Account for May – July 2016

To be presented by

Chief Nurse

Executive Summary The monthly Quality Account reports the current Trust performance against the targets for 2016/17 described in the Annual Quality Account under the following three nationally agreed categories:

• Safe care • Effective care • Patient experience.

Recommendations The Council is invited to note the performance of the Trust against the agreed national and local quality targets for May – July 2016 and the actions being taken. Author: Dr Shelley Dolan Chief Nurse



1

The Royal Marsden NHS Foundation Trust Quality Account for May, June and July 2016

1.0. Introduction

The monthly Quality Account reports the current Trust performance against the targets for 2016/17 described in the Annual Quality Account (2016/7) under the following three nationally agreed categories:

• Safe care • Effective care • Improved Patient experience.

1.1. Data Quality Information and data at the Royal Marsden is produced by a centralised expert team separate from the clinical and operational teams. This separation and expertise is critical to ensure that the data is accurate and is not affected by the operational teams who are trying to comply with local and national improvement targets. All healthcare associated incidents, falls, medication incidents and pressure ulcers are reported locally onto the central Datix incident reporting system. The Datix analyst from the risk management team who is separate to the clinical care team compiles the reports for the quality account. All falls and medication incidents are also reviewed by subject matter experts to ensure accuracy and learning from themes. Every month a report is generated for each clinical area and if there is a reduction in reporting there is a central and local alert with action taken.

2.0. Safe Care

2.1. Reduction in Healthcare Associated Infections (MRSA bactereamia and C Difficile infections)

Target: <31 C Difficile infections and <1 MRSA bactereamia

The NHSE guidelines on reporting of C.Dificile infection (CDI) allows commissioners to use discretion as to whether a case is considered against the trajectory. Only cases deemed as a ‘lapse in care’ are attributed against the objective number (for the RM in 16/17 =31 cases). Where a Trust can demonstrate that the case is a single isolated case, or there are sound clinical reasons which may lead to CDI (such as chemotherapy or gut surgery) and that procedures have been correctly followed including antibiotic prescribing, hand hygiene, device care and environmental cleaning, then the commissioners are able to exclude the case from trajectory numbers. The C. difficile toxin objective for 2016/17 has been set at 31 again this year. In 15/16 there were two cases that were categorised as “lapse in care” by the commissioners and therefore counted against the trajectory of 31.

2

QAR members will recall that there was a cluster of CDI cases on the Blood and marrow Transplant unit in July and therefore a query whether there had been any cross infection. The samples have now all been processed by the Public health England Specialist and Reference Microbiology laboratory and the cases were all different ribotypes and therefore no cross infection or lapse in care.

In July there was one MRSA septiceamia queried in an outpatient from the RM who had had his port removed at the RM. The case was fully investigated and a post infection review was undertaken with West Kent CCG. Upon investigation it was agreed that the specimen was on balance of probability, contaminated when it was taken. The patient who was on a clinical trial was known to be MRSA positive and did not exhibit any overt signs of blood stream infection. The initial presentation suggested that there may be infection associated with his port device. The port was removed and he was given treatment for MRSA bacteraemia Multiple peripheral blood culture specimens were negative for MRSA as was the port device after removal. The gentleman had been an outpatient when he presented for blood cultures and as such this may not have been attributable to the Royal Marsden, however when reporting as a contaminant, the responsibility lies with the organisation who took the specimen and it became attributable. The RM will ensure that training on the collection of blood cultures is highlighted in Trust mandatory training for the next 12 months.

Table 2.1

No. Organism RM attributable May 16

RM attributable June 16

RM attributable July 16

YTD Trajectory

1. MRSA

bactereamia

0 0 1 1 0*

2. C.Difficile

3 3 6 16 31

2.2. Rate of patient safety incidents and percentage resulting in severe harm or death

To include: • Reduction of severe/moderate risk medication errors • Reduction of harm from falls

3

Target: Reduction in the rate of patient safety incidents per 100 admissions and the proportion that have resulted in severe harm or death

2.3. Reduction in Falls Target: < 0.7 moderate and above (resulting in harm) falls per 1000 bed days Year to date - to the end of July 2016 the Trust has met the target.

4

5

6

Severity of Patient Fall incidents: 3 - Severity - Current Period

2015 08

2015 09

2015 10

2015 11

2015 12

2016 01

2016 02

2016 03

2016 04

2016 05

2016 06

2016 07 Total

No Harm 8 18 13 15 10 18 18 24 9 18 12 12 176 Low / Minor (Minimal harm) 11 11 9 9 6 5 7 13 9 7 5 6 99 Moderate (Short term harm) 0 0 0 1 0 1 1 0 0 0 0 1 4 Severe / Major (Permanent or long term harm) 0 0 0 0 0 0 0 0 0 0 0 0 0 Death / Catastrophic (Caused by the incident) 0 0 0 0 0 0 0 0 0 0 0 0 0 Totals: 19 29 22 25 16 24 26 37 18 25 17 19 279 % Harm Patient Fall 58% 38% 41% 40% 38% 25% 31% 35% 50% 28% 29% 37% 37%

2.4. Reduction in medication errors Target: To increase the reporting of near misses and decrease the incidents that cause actual harm (low<2 per 1000 bed days and moderate <0.17 per 1000 bed days). N.B. To place medication errors in perspective, annually 0.09% of all medicines administered result in a medication error. For July 2016, the figure is 0.08%. There has been an increase of 67% in medication incidents categorised as near miss in comparison to the same period in 2015/2016. A streamlined near miss reporting method utilising the current IT system has now been embedded. The Pharmacy department has been raising awareness on reporting near misses and a plan has been agreed at the Executive Medication Safety Group to increase identification and reporting to ensure the Trust has meaningful data to help improve the management of systems thus, reducing risk and increasing safety. In the current period, 1282 attributable medication incidents have been reported, of which 69% caused no harm. 388 incidents have been categorised as low severity and 9 incidents as moderate severity (resulting in harm), this represents 6.50 and 0.15 medication incidents per 1000 bed days respectively. As such, the Trust has missed the target relating to low severity medication incidents, however the target relating to moderate severity incidents has been met.

7

8

9

Severity of medication incidents: 3 - Severity - Current Period

2015 08

2015 09

2015 10

2015 11

2015 12

2016 01

2016 02

2016 03

2016 04

2015 05

2016 06

2016 07 Total

No Harm 52 51 69 81 59 76 103 89 87 71 77 69 885 Low / Minor (Minimal harm) 34 27 21 30 34 31 30 46 29 33 39 33 388 Moderate (Short term harm) 1 0 2 0 0 1 1 1 0 0 0 3 9 Severe / Major (Permanent or long term harm) 0 0 0 0 0 0 0 0 0 0 0 0 0

Death / Catastrophic (Caused by the incident) 0 0 0 0 0 0 0 0 0 0 0 0 0 Totals: 87 78 92 111 93 108 134 136 116 104 116 105 1282 % Harm Medication Incidents 40% 35% 25% 27% 37% 30% 23% 35% 25% 32% 34% 34% 31%

2.5. Percentage of admitted patients risk assessed for Venous Thrombo-embolism (VTE) Target: 95% have completed VTE risk assessments Performance: The Trust consistently achieves >90% compliance with risk assessment (CQUIN target is 90%). All patients with confirmed VTE as reported by radiology undergo a Root Cause Analysis (RCAs). The VTE steering board monitor all confirmed VTE and scrutinise the RCAs.

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3.0 Effective Care

Incidence of Trust acquired pressure ulcers

3.1 The number and severity of healthcare acquired pressure ulcers are used internationally as a proxy for the effectiveness of care provision. Many people with cancer and or co-morbidity are more vulnerable to tissue damage for the following reasons; multiple hospital admissions, frailty, multiple drugs including high dose steroids (decreases skin elasticity), immobility, malnutrition or susceptibility to infection.

3.1 Data for this report was taken on 2 August (hospital) and on 1 August (SCHS) 2016 from DATIX. Data may have been updated since. From 1 April 2016 community services data only contains pressure ulcers reported from Sutton Community Health Services.

3.2.2 Total number of patients with the Trust (hospital/community services) attributable pressure ulcers for the month of

July 2016: 32 [Hospital=15, Community services=17]

3.2.3 For serious incident reporting to Steis [Strategic Executive Information System] as Hospital/Community Services. Only category 4 pressure ulcers are reportable. Number of patients with Trust attributable pressure ulcers at category 4 for the month of July 2016: 0 [Hospital=0, Community services=0] Number of patients with Trust attributable pressure ulcers at category 3 for the month of July 2016: 7 [Hospital=1, Community services=6]

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Number of patients with Trust attributable category 4 pressure ulcers

12

Number of patients with Trust attributable pressure ulcers, all categories

13

3.2.4 Number of patients with all categories of Trust attributable pressure ulcers with monthly and cumulative totals

Description of European Pressure Ulcer Advisory Panel (EPUAP) pressure ulcer classification system.

EPUAP Description of Stage 1 Non blanching redness of intact skin 2 Partial thickness skin loss or blister 3 Full thickness skin loss (fat visible) 4 Full thickness tissue loss (muscle/bone visible)

3.4 Emergency re-admissions to hospital within 28 days of discharge Target: Reduction in the number of avoidable re-admissions to hospital within 28 days of discharge

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Some emergency re-admissions following discharge from hospital are an unavoidable consequence of the original treatment, however some can be potentially avoided through ensuring the delivery of optimal treatment according to each patient’s needs, careful planning and support for self care. It is important to note that some readmissions will inevitably include patients who are admitted with side effects of treatment therefore it may be difficult to explain any differences between RMH with other acute Trusts. Performance: Within 28 days of original admission there were the following emergency admissions:

15

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4.0 Patient Experience 4.1. Reduction in Chemotherapy Waiting times

Background:

A review group has been set up to identify reasons for delays in patients receiving their parenteral systemic anti-cancer treatment (SACT) and how these can be improved. The table below shows the chemotherapy waiting times for 2015/16, broken down by site .

Current Performance

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4.1.1. Service improvement initiatives

Much has been done to improve the prescribing, screening, ordering and making of chemotherapy. These are summarised below

1) E-CHEMO E-chemo was introduced in October 2014 as a pilot in the Lung unit, and subsequently rolled out to all adult clinical units throughout 2015-16. E-chemo has facilitated a more streamlined patient pathway through reduction in prescription transit time, real time updates to the system, remote access. In addition, the system is able to be interrogated to provide significant audit data and enable quality improvement / route cause analysis of quality exceptions. As of April 2016, all adult clinical units are live on the e-chemo system and the paediatric rollout has commenced.

Pre-prescribing of chemotherapy

Pre-prescribing of chemotherapy >5days in advance of patients’ appointments is well established within the Trust in recognition of the significant benefits related to chemotherapy ordering and availability for patients.

Although improvements have been made in areas, the overall pre-prescribing rates >5 days remains at above 70% . Discussions have taken place with clinical units where the rates can be improved and this needs further focus and ownership by the CBUs.

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4.1.2. Pre-screening of chemotherapy In addition to pre-prescribing efficiency, it was evident from early e-chemo performance data that there was significant improvement to be made in the efficiency in the pharmacy team screening the prescriptions prior to passing to the aseptic unit for ordering. This was particularly evident on the Sutton site where capacity was significantly constrained. A quality improvement exercise was undertaken to better understand where improvements could be made with the aim to improve process efficiency. Process mapping and staff engagement resulted in the following actions being undertaken:

a) Regular sharing of performance data with the team b) Early escalation to the pharmacy management team when c) Additional e-chemo system development (Ward / Date functionality) to reduce the time required by clinical pharmacy staff to move patient

appointments. d) Cross site coordination of clinical pharmacy services e) Introduction of proscriptive daily task lists to improve consistency of service f) Skill mix review and better utilisation of admin grade staff.

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The result of this work has been to improve pre-screening rates on the Sutton site from approximately 80% in Q1 2015/16 to 97% in Q4. This has enabled a larger proportion of prescribed treatments to be processed and ordered on time.

4.1.3. Patient pathway and opportunities for improvement

Whilst there are notable areas of improvement, there remain areas where the waiting times can be improved but this now requires a whole system review. There are a number of contributing factors that can cause delays in patients receiving their chemotherapy and these are listed in the table below. These primarily centre around the patient and fitness for treatment (Late attendees, require repeat bloods or additional investigations etc), Facilities and infrastructure (IT / sophisticated scheduling capability, adequate waiting areas, available treatment chairs etc), workforce (trained medical, nursing and pharmacy workforce), availability of chemotherapy treatment (Prescribing in advance, timely clinical pharmacy screening, preparation and supply of chemotherapy).

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Issues that contribute to delays Part of pathway Possible solutions identified by MDT

Drugs / IV can arrive late due to delays in that team or due to late orders Patient preparation • Education of Drs about the impact of late ordering and (if taken forward) segmented ordering

• Collect data on ‘late ordering’ and target repeat offenders

• Regular feedback to CBUs who consistently fail to meet minimum service standards

Delays in supplying SACT from pharmacy.

This is due to late orders and dose reductions, staffing constraints, aging software & facilities, multiple entries required on to three different software systems.

Patient preparation • Regular meetings now being held between Aseptic unit and MDU / wards and Clinical trial areas to improve scheduling.

• A drive on ordering well in advance from external partner (Hospira).

• Dose banding and purchasing in batches to dispense ‘off the shelf’ will speed up dispensing times.

‘Difficult’ cannulations (taking longer than 30mins); either one off or ‘repeated’ difficulties (with limited feedback about booking these patients with ‘extra’ time)

Patient preparation • Enhanced cannulation training • Re-deployment of Trust IV team for difficult

cannulations • More warm water facilities (promote

vasodilation) • Additional time built into schedule for patients

with regular challenges in venous access Bloods done >24 hrs in advance of treatment in order to facilitate 2-stop pathway – number of patients subsequently require repeat blood tests on day of treatment.

Patient preparation • Quicker blood test mechanisms for this cohort of patients (potentially ‘point of care’ testing)

Delays in getting samples to labs (possibly due to bundling of samples or delays in being transported around the hospital)

Patient preparation • Need data regarding source of delays – i.e. time taken on whole pathway, not simply turnaround within labs

Chairs are not always available (e.g. due to overrunning) Infrastructure / Space • Creation of additional space in Mobile Chemo Unit

• Build in flexibility into schedule for ‘some’ appointments

Patients arrive late (e.g. due to delays for getting a car park spot) Infrastructure / Space • Update patient information / patient education about blood requirements and ‘space issues’

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Overruns / Limited flexibility of seats (due to high utilisation) / inflexible schedule

Infrastructure / Space • Build in flexibility into schedule for ‘some’ appointments

Short staffed / nursing availability Schedule / management of service

• Availability of MDU ‘supporter’ (floating / supernumerary role to support MDU nursing team)

Length of appointment is unrealistic / incorrect for regimen Schedule / management of service

• Measure ‘compliance’ with type of appointment

4.1.4. Aseptic preparation and supply

Significant work and review has taken place within the aseptic unit to improve the processing, ordering and manufacturing of SACT.

Improvements have been made in the ordering from the external partnership with Hospira and a new contract is about to be signed with Hospira to allow batch production of SACT for common doses used. This will significantly improve the turnaround time for supply of SACT as doses will be available ‘off the shelf’.

There is a remaining concern on the aging manufacturing facilities on both sites and these will form part of the capital works programme in the coming 2-3 years. The current manufacturing IT system that is used to order SACT needs replacing as this does not facilitate an efficient way of working. The replacement of the manufacturing system will be reviewed as part of the Trust EPR replacement programme.

4.1.5. Next steps for 2016/17

1) Identify a lead / group to identify and improve the contributing factors to efficient prescribing, supply and administration of SACT across the Trust and target improvements in all of these.

2) Complete actions from the qualitative audit to establish route cause for all patients on MDUs waiting >30mins for their chemotherapy administration. Sep 2016. Associate Chief Pharmacist, Clinical Services.

3) Introduce batched production of dose banded SACT from Hospira. Nov 2016. Chief Pharmacist / Associate Chief Pharmacist. 4) Consider introduction of electronic scheduling to manage the scheduling of chemotherapy administration on MDUs.

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4.2. Ensure that we are responding to inpatient’s personal needs: The Friends and Family Test

The national mandated question asked is: “How likely are you to recommend our ward to friends and family if they need similar care or treatment?”The Royal Marsden has a second question: What was good about your care and what could be improved? Patients answer this question with free text comments. The RM receive monthly responses covering all inpatient, outpatient and Day Care areas. To reduce the pages of reports some examples of ward reports from July for Sutton and Chelsea are included followed by the areas for improvement for July only:

4.2.1. Kennaway ward, Sutton

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24

4.2.2 Burdett Coutts ward, Chelsea

25

26

27

28

29

4.3. FFT areas for improvement, July

July 936 responses overall: Inpatients 211, Day Care 323, Outpatient (OPD) 384 Inpatients 11 patients made suggestions for improvement: Everything was extremely good- Especially all the staff the only problem. Had was when dressing was removed and it took over four hours to get a replacement. Didn't need the patient console but couldn't figure it out :-) Lights going off at 11pm was a bit late for me. Lovely nurses. Ward really nicely decorated. Bathroom very clean. I think it would be better to stay in 2 nights. I am very wobbly. It's a difficult journey home because I could not go to RM Sutton. I have to get tube and ER train and taxi/bus only decision not involved in re discharge. There is aesthetic still in my system. I am wobbly and head is fuzzy. We also asked all inpatients on discharge the following questions about their care.

Day care 23 patients made the following suggestions for improvement:

Score (out of 5) Jan 2016

Feb Mar Apr May Jun Jul

Were you treated with dignity and respect? 4.94 4.91 4.86 4.98 4.87 4.85 4.95

Did you feel involved enough in decisions made about you?

4.79 4.79 4.80 4.84 4.75 4.75 4.86

Did you receive timely information about your care and treatment?

4.76 4.78 4.70 4.89 4.74 4.76 4.87

Was the location clean? 4.88 4.87 4.82 4.88 4.78 4.78 4.89

Were you treated well by the staff looking after you?

4.94 4.91 4.88 4.98 4.88 4.88 4.94

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As his partner I was not kept well informed while he was away. All I was told was that he was in recovery, and as he was down there a good two hours longer than they had told me he would be, I was extremely worried and kept asking. Apparently theatre staff were complaining because I kept asking? Well, if they had just told me he was in some pain and they were monitoring it, I would have not worried, so much, information, any info, is comforting! Lovely receptionist and nurse Important getting my test results back. I only came once a year and you try and put it to the back of your mind but to have to wait 5 months for the results with this nagging worry that it hasn't been done and then having to phone up and speak to someone who are not 100% confident in giving you the correct answer....it's unnecessarily stressful. I am a haematology patient and I've been coming here 17 years. I still can't see any signs of any psychological support either volunteer or in house at the Marsden. There seems to be a group for carers but patients I was 30 when I was first diagnosed. As always I have been treated kindly and professionally. Today there was a very happy atmosphere which of course helps both patients and staff! The ECG machine that I use is defected out, as often happens it took time to make it work. Care is all very good and the staff are always considerate and helpful. It was unfortunate that we had to wait about 3 and a half hours for the pharmacy to prepare the drugs. Nursing staff are brilliant! Caring, compassionate. Ward clerk very efficient and friendly. Communications are very often inaccurate. Wrong address. Incorrect use of am/pm with times. Use of old out of date accommodation. 29/6/2016. Had to return to medical unit after chemo and canister fitted on 28/6/2016. PICC line leaking. On removal of dressing a hole was discovered in the tube. The PICC line was removed. Canister was removed, had been connected for 24 hours but some had leaked out hours of substance from cannister. Tube should be sent to manufacturer as faulty. PICC had to be removed for fear of embolism. New one to be fitted at Sutton, 5/7/2016. Sometimes the queue can be a bit worrying at Kingston. Some form of visible monitor to confirm you are in the stack would be nice (using the last 4 digits of the Hospital No for confidentiality). However, this would require IT development so probably not possible given budget constraints. And I have never had to wait an unacceptable time. We also asked all day case patients on discharge the following questions about their care. Score (out of 5)



Were you treated with dignity and respect? 4.95 4.91 4.92 4.95 4.90 4.98 4.97 Did you feel involved enough in decisions

made about you? 4.86 4.81 4.82 4.87 4.82

4.87 4.91


4.84 4.77 4.77 4.88 4.82 4.84 4.88

Was the location clean? 4.91 4.88 4.88 4.90 4.88 4.94 4.95 Were you treated well by the staff looking 4.97 4.92 4.94 4.98 4.91 4.96 4.97

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after you? OPD 28 patients made suggestions for improvement: Mullard- machine has broken down twice this week during my treatments. Staff great but this causes me great anxiety and it's stressful having engineers wander in and out during treatment whilst in a gown. This business with the lift is ridiculous radiotherapy is bad enough. I understand it needs a new part (1) source the part today (2) send someone to get it (3) pay someone to fit it. All the staff are so kind, considerate and caring. Nothing has been too much trouble, I have felt supported at all times through my treatment. I have come to love this hospital and am so grateful for everything. Only thing I would say is it would have been nicer to have had a female photographer so I didn't feel I needed a chaperone. Radiotherapy: To improve: Please cover patients as soon as practically possible. Half naked immobile stretched out is a horribly vulnerable position, almost humiliating and can be very emotional and upsetting. Staff cover as an afterthought not a priority – patient even begins to worry they will forget. Wednesday, 29th June, started well with blood tests and observations completed before 10.00 (0900 appointment for blood tests). Appointment with doctor on time but the learned the hospitals computer system had crashed. This did not help anyone and led to delays but everybody was well informed. The big problem, as usual, was the very long delay with the pharmacy for my medication. Appointment 1400, medication commenced about 1710. Final observations at 1855 and left hospital at 1900, after 10 hours. For too long a day!. We arrive at the appointment, only to find that the results of my scans (bone scan, CT) from Charing Cross Hospital, done 4 weeks ago. Had still not been transmitted to the Mardsen - nor did the receptionist at the Mardsen check my record well before my appointment to see they were missing/request them - your clinic dysfunctional and inept I always get a different registrar. Charming and smiling staff, helpful and informative. Very difficult to phone this hospital I have on occasions tried with little or no success, this is the only thing that could be greatly improved. We also asked all outpatients on discharge the following questions about their care. Score (out of 5)



Were you treated with dignity and respect?

4.85 4.94 4.91 4.92 4.96 4.91 4.96

Did you feel involved enough in 4.77 4.87 4.80 4.85 4.85 4.81 4.87

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decisions made about you?


4.75 4.82

4.79 4.89 4.89 4.83 4.84

Was the location clean? 4.85 4.93 4.90 4.93 4.93 4.91 4.94

Were you treated well by the staff looking after you?

4.86 4.96 4.90 4.93 4.96 4.93 4.95

Sutton Community Health Services (18) Comments

The comments were all positive and suggestions for improvement but there has been a drop in returns during July.

We also asked all people who use community services the following questions about their care. 4.2.4. National FFT inpatient results reporting:

From November 2014 NHS England report a percentage of those who would recommend the Trust to friends and family.

Inpatient data was collected for 170 Acute NHS trusts and independent sector providers. Nationally, the overall average percentage for those who would recommend the service to friends and family was 96% in June. The Trust is above this with an average of 97% in June.

Outpatient data was collected for 234 Acute NHS trusts and independent sector providers. Nationally the overall average percentage for those who would recommend outpatients to friends and family was 93% in June. The trust was above this with an average of 97% in June.

Community health services data was collected from 137 NHS organisations and independent sector providers who provide community health services. Nationally the overall average percentage for those who would recommend community services to friends and family was 95% in June. The trust was above this with an average of 97% in June.

The tables below show the results for the Trust each quarter or month to date. At the time of reporting (12 August 2016) national figures were available up to June 2016.

Score (out of 5) Apr May Jun Jul

Were you treated with dignity and respect? 4.68 4.95 4.94 4.96

Did you feel involved enough in decisions made about you? 4.57 4.88 4.87 4.84


4.59 4.84 4.91 4.88

Were you treated well by the staff looking after you? 4.71 4.83 4.83 5.00

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INPATIENTS Q4 20142015

Q2 20152016

Q3 20152016

Q4 20152016

Apr 2016

May 2016

Jun 2016

The Royal Marsden percentage of inpatients who would recommend

99% 96.7%

96.7%

97% 98% 100% 97%

National average 95% 95.7%

96% 96% 96% 96% 96%

Response number 601 1986 1986 1691 483 533 457 OUTPATIENTS Q2

2015- 2016

Q3 2015- 2016

Q4 2015-2016

Apr 2016

May 2016

Jun 2016

The Royal Marsden percentage of outpatients who would recommend

97% 98% 96% 98% 99% 97%

National average 92% 92% 93% 93% 93% 93% Response number 451 1084 918 320 348 489 Community health services (overall)

Q4 2015-2016

Apr 2016

May 2016

June 2016

The Royal Marsden percentage of those in community services who would recommend

98% 98% 98% 97%

National average 95% 95% 95% 95% Response number 733 121 107 36 5.0. Nurse Safer staffing From June 2014 all Trusts are required by the Department of Health, Monitor and the Care Quality Commission to be able to assure their Boards around the provision of nursing care on its wards and units. This requirement followed the national failings in care at Mid Staffordshire NHS Foundation Trust and other Trusts since placed on “special measures”. The final Francis report recommended that Boards regularly check that levels of nurse staffing are appropriate for

34

good quality care. Therefore from June 2014 the RM Board has received a monthly summary of planned numbers of nurses and Health Care Assistants (HCA) during the day and at night, versus the actual numbers. It is also mandated that the Board receive a six monthly report from the Chief Nurse regarding all issues regarding Safe Nurse staffing across the Trust. The Board has received these reports since June 2014 with the last one being received in March 2016. Overall the percentages are as follows: May 2016 Average fill rate for night staff 102.1% Average fill rate for day staff 99.0% Average fill rate for Registered staff 99.5% Average fill rate for Care staff 103.2% Average Trust wide fill rate (All staff, night and day) 100.2%

June 2016 Average fill rate for night staff 101.9% Average fill rate for day staff 95.4% Average fill rate for Registered staff 97.6% Average fill rate for Care staff 99.6% Average Trust wide fill rate (All staff, night and day) 97.9%

July 2016 Average fill rate for night staff 101.5% Average fill rate for day staff 98.5% Average fill rate for Registered staff 97.8% Average fill rate for Care staff 108.1% Average Trust wide fill rate (All staff, night and day) 99.7%

5.1 Nursing Leavers and Starters Report The tables below show the number of nurse starters and leavers over a two year period. In November 2014 the Chief Nurse began a monthly recruitment meeting to address the issues around recruitment and retention of nurses. For the first time in February the meeting was able to review the results of a small exit questionnaire, questionnaires were sent retrospectively to 35 nurses who had left and nine were returned. In all but one case the nurses left for personal or financial reasons. The questionnaires are now reviewed monthly. Board members will note below that the concerted work of nursing and HR, marketing and communications demonstrated positive results for 11 consecutive months with more nurses recruited than left the Trust. However over the last three months this has been challenging again. The Trust has a major recruitment event planned at the national Royal College of Nursing recruitment Fair in London

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on the 1st and 2nd of September. The Trust has a stand with live film footage, marketing material and RM senior and junior nurses available, we also have a room booked so that we can interview and test nurses on site and employ them immediately. Other initiatives have been the Capital nurse project and we have been awarded one of the rotations (equals 20 nurse places) and the nursing associate application (successful applicants will be notified of next steps in October).

Band 5-7 Nurses (2015/16) Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Total

Starters (wte) 6 12 16 13.6 13.8 22.49 21.27 21.45 12.8 17.59 21.08 10.57 188.65

Leavers (wte) 15 15 14 11.5 10.66 7.18 8.75 10.61 11.61 13.18 15.18 9.33 142

Variance -9 -3 2 2.1 3.4 15.31 12.52 10.84 1.19 4.41 5.9 1.24 46.62

Band 5-7 Nurses (2015/16)

Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Total Starters

(wte) 21.52 13 9.88 11.6 56 Leavers

(wte) 10.74 14.11 7.29 15.21 47.35 Variance 10.78 -1.11 2.59 -3.61 8.65

Nurse leavers in July 2016

Nursing Leavers Bands 5-7 July 2016 Area Job Title Leaving date LOS Band WTE Reason for leaving

Cancer Services Division- 9.09 WTE Wilson Ward Senior Staff Nurse 03-Jul-2016 3 y 3 m XR06 1.00 Voluntary Resig. - Relocation

Breast Unit (L) Clinical Nurse Specialist 05-Jul-2016 10 y 2 m XR07 .68 Retirement - Age G I Tract Unit (L) Clinical Nurse Specialist 05-Jul-2016 1 y 7 m XR07 1.00 Voluntary Resig. - Promotion

Wilson Ward Staff Nurse 08-Jul-2016

0 y 9 m XR05 1 Voluntary Resign. – Work Life Balance - Cost of Living (Travel,

Accommodation)

Children's Unit (S) Nurse Consultant in Adolescents and

Young People with Cancer 10-Jul-2016 6 y 0 m XR10 1.00

Voluntary Resign. – Work Life Balance - Cost of Living (Travel, Accommodation)

Medical Day Unit (L) Senior Staff Nurse 17-Jul-2016 2 y 0 m XR06 1.00 Voluntary Resig. - Relocation

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Bud Flanagan West Staff Nurse 21-Jul-2016 1 y 0 m XR06 1.00 Voluntary Resig. - Better Reward Package Smithers Ward Senior Staff Nurse 27-Jul-2016 12 y 10 m XR06 .61 Voluntary Resig. - Promotion

Bud Flanagan OPD Healthcare Assistant 28-Jul-2016 5 y 6 m XR03 .80 Voluntary Resig. - Relocation Ellis Ward Staff Nurse 31-Jul-2016 1 y 8 m XR05 1.00 Voluntary Resig. - Relocation

Clinical Services Division- 2.04 WTE Theatres (L) Staff Nurse 05-Jul-2016 0 y 10m XR05 1.00 Voluntary Resig. - Relocation Theatres (L) Staff Nurse 06-Jul-2016 4 y 5 m XR06 0.64 Voluntary Resig. - Relocation

Co-Ordinate My Care

Coordinate My Care Community Training Nurse

27-Jul-2016 4 y 3 m

XN07 0.40 Voluntary Resignation - Adult Dependants

Clinical Research Division - 1.00 WTE GEL Research Nurse 10-Jul-2016 0 y 7 m XR06 1.00 Voluntary Resig. - Relocation

Community Services- 1.08 WTE

Heart Failure Nurses Heart Failure Specialist Nurse 03-Jul-2016 0 y 9 m XR07 .80 Voluntary Resign. – Work Life Balance - Shift Patterns Carshalton Senior Sister 31-Jul-2016 4 y 9 m XR07 1.00 Voluntary Resign. – Work Life Balance - Shift Patterns

Private Care - 2.00 WTE GH Day Services Staff Nurse 14-Jul-2016 3 y 4 m XR06 1.00 Voluntary Resign. – Work Life Balance - Cost of Living (Travel,

Accommodation) Robert Tiffany Unit (S)

Staff Nurse 31-Jul-2016 6 y 0 m XR06 1.00 Volun. Early Retirement - with Actuarial Reduction

Total WTE Leavers - 15.21

6.0. The Council of Governors are invited to note the performance of the Trust against the agreed national and local quality targets for May, June and July 2016 and the actions being taken.



Agenda item 6.4.

Title of Document:

Key Performance Indicators for Quarter 1

To be presented by Director of Performance and Information

Executive Summary This paper provides a report on the Trust’s performance for quarter 1 2016/17 including the balanced scorecard for the Trust and a commentary on the red rated indicators and actions underway to improve performance. Recommendations The Council of Governors is asked to discuss and note the Trust’s performance against the balanced scorecard indicators for quarter 1 2016-17. Author: Steven Francis Director of Performance and Information



1

KEY PERFORMANCE INDICATORS

QUARTER 1 2016/17 1. PURPOSE This paper is intended to provide the Council of Governors with an update on the Trust’s performance for quarter 1 2016/17. The scorecard and narrative is also submitted to the Board. The report includes the balanced scorecard for the Trust and a commentary on the red-rated indicators in the quarter 1 report including actions underway to improve performance. The Staff Friends and Family Test did not take place in quarter 3 as the annual staff survey is undertaken during this time period and therefore this is intentionally left blank on the scorecard.

2. KPI REVIEW

A full review of the scorecard metrics, definitions and thresholds has now been completed. There has been an overall reduction in the number of measures to ensure continued focus in line with the Trust’s strategy and statutory requirements. New measures and attendant targets can be found in appendix A. 3. PERFORMANCE FOR QUARTER 1 Appendix B shows the balanced scorecard report for quarter 1 for 2016/17. Since the last scorecard, Monitor has been disbanded and has been superseded by NHS improvement. There are a number of measures that the Trust reports to NHSi and these are highlighted on the scorecard as NHSi A commentary is only provided for indicators where performance is ‘red’ rated.

3.1

Q1

62 day wait for first treatment – GP referral to treatment (before reallocation)

Actual: 77.1% Target: 85% Forecast: Meet target using national reallocation methodology

RMH did not meet the 62 day urgent GP referral standard (before reallocations) with performance at 77.1%. The Trust met the standard following the national reallocation guidance at 85.4%. The new national guidance allows the Trust to reallocate all late referrals received after day 38 providing treatment takes place within 24 days of referral.

2

During Q1 there were 45.5 accountable breaches prior to reallocation. Of those, 31.5 accountable breaches were received late in the pathway (defined as after day 38). Out of the Trust’s control

• Complex pathway (3.0) • Late notification of patient’s pathway (1.0) • Patient fitness (2.5) • Other medical (BRCA testing) 0.5 • Patient initiated delay (0.5) • Patient compliance (0.5) • Trial work-up (0.5)

Within the Trust’s control

• Administrative delays (1.5) • Capacity (2.5) • Delay to diagnostics (1.5)

RMH continues to receive a high number of late referrals, as shown in the graph at Appendix C. A full action plan is in place and has been shared with commissioners and covers internal improvements and work with referring Trusts. In addition, the Trust continues to work closely with its referrer trusts through the System Leadership Forum and the South West London Providers’ Group. The Trust expects to continue to meet the standard post-reallocation. The full breakdown of performance by tumour site prior to reallocation can be found in the table at Appendix D. 3.2

Q1

62 day wait for first treatment – Screening referral to treatment (after reallocation) Actual: 78.3% Target: 90% Forecast: Meet new

reallocation target

RMH did not meet the 62 day urgent screening referral standard (after reallocations) with performance at 78.3%. During Q1 there were 7.5 accountable breaches after reallocation. Out of the Trust’s control

• Trial protocol (1.0) • Late notification of breach date (0.5) • Patient initiated delay (1.0) • Complex pathway (2.0) • Patient fitness (1.0)

3

Within the Trust’s control • Delay to outpatient appointment (1.0) • Delay to diagnostics (1.0)

3.3

Q1

62 day wait for first treatment – Screening referral to treatment (before reallocation) Actual: 84.3% Target: 90% Forecast: Meet new

reallocation target

RMH did not meet the 62 day urgent screening referral standard (before reallocations) with performance at 84.3%. During Q1 there were 5.0 accountable breaches prior to reallocation. Out of the Trust’s control

• Late referral (1.5) • Trial protocol (0.5) • Patient initiated delay (0.5) • Complex pathway (1.0) • Patient fitness (0.5)

Within the Trust’s control

• Delay to outpatient appointment (0.5) • Delay to diagnostics (0.5)

3.4

Q1

Percentage variance from Agency Spend Cap Actual: 9.3% Target: >2% above

cap Forecast: Green

The new cap on monthly agency spend is a 35% reduction on spend from 15/16. Numerous controls and restrictions have been put in place to achieve this large reduction, with regular monitoring to ensure this is being achieved and action plans put in place where non-compliance remains. Whilst April and May saw a reduction in spend from the previous year, both months were above cap, although June came below the cap. This reducing trajectory is expected to continue so the cap will be delivered for the whole year. The forecast for this metric is therefore green. 3.5

4

Q1 PP Debtors over 90 days (% of total PP-debtors) Actual: 47% Target: <25% Forecast: Green As PP activity grows so has the aged debt. Processes are being constantly reviewed to ensure swift and accurate billing whilst historic items are addressed and cleared. Embassy debt in particular fluctuates in an inconsistent manner and is highly dependent on close organisational relationships between RMH and the embassies. Closer monitoring with the Private Care Managing Director ensures this area is a constant focus and thus an improvement is forecast, improving the metric to green. 3.6

Q1 Non-PP Debtors over 90 days (% of total PP-debtors) Actual: 52% Target: <25% Forecast: Green Non-PP Debtors over 90 days is driven by a small number of organisations and historic issues which NHS Improvement have been involved in to help settle this. £2m of this debt has been cleared in July thus improving the forecast metric to green. 3.7

Q1

Achievement of Efficiency Programme YTD Actual: 66% Target : Greater than

100% of plan Forecast: Green by year end

The Trust has seen a slow start to the Efficiency Programme in 2016/17 with a small number of schemes requiring substitution. Monthly tracking is in progress with replacement schemes being devised where required. It is anticipated that the Programme will get back on track and return to plan by year end. The forecast for this metric is therefore green. 4.0 Conclusion The Council of Governors is asked to note the Trust balanced scorecard and commentary for Q1 2016/17 and is invited to discuss the position.

Page 1 of 2

The Royal Marsden NHS Foundation Trust Appendix ABalanced Scorecard 2016/17 RAG thresholds

NHSi denotes NHSi standard

Patient Safety, Quality & Experience Rationale TARGET R A G

NHSi Monitor governance risk rating As per NHSi risk rating <1 >2 1<2 <1

MRSA positive cultures 0C Diff lapses of care < 31 per annum

VTE risk assessment 95%

NHSi NHSi target G R A G

Serious incidents (excl pressure sores) Internal target 3 >6 between 4-5 <=3Complaints - % upheld internal target 24.0% >30% 25-30% <=24%

MortalityHospital Standardised Mortality Ratio (rolling 12 month - qtr in arrears - NHS patients on National benchmark 75.0 <=100 >75 - <100 <=75

Mortality audit (based on qtr data in arrears)

Each indicator to be assessed on the following

Green Amber Red100% 80-99% <79%

G1 amber, 2 red; 1 green, 2 red or 3

red

1 green, 2 amber; 3 amber; 2 amber, 1

red; 1 green, 1 amber, 1 red; or 2 green, 1

red

>=2 indicators green

30 day mortality post surgery Internal target 0.8% >1.2% 0.8-1.2% <0.8%30 day mortality post chemotherapy Internal target 2.2% >2.5% 2.2-2.5% <2.2%100 day HSCT mortality in previous 6 months (Deaths related to SCT) Internal target <5% >10% 5%-10% <5%100 day HSCT mortality in previous 6 months (All deaths) Internal target <5% >10% 5%-10% <5%

Medicines Management% Medicines reconciliation on admission Internal target 90% <85% 85-90% >=90%Unintended omitted critical medicines Internal target 0 >5 between 1-5 0

Cancer stagingStaging data completeness sent to Thames Cancer Registry (1 qtr in arrears) National benchmark >70% <50% 50-70% >70%

Patient satisfaction

Friends and Family Test (inpatient and day care)Internal target - no national

target 95% <90% 90-94% >=95%

Friends and Family Test (outpatients) Internal target - no national

target 95% <90% 90-94% >=95%Waiting times for day chemotherapy (over 3 hrs) Internal target 13.0% >17% 14-16% <=13%Mixed sex accommodation breaches Contractual requirement 0 >0 N/A 0PP access to single rooms - Chelsea % Internal target 97.0% <91% 91-96% >=97%PP access to single rooms - Sutton % Internal target 98.0% <92% 92-97% >=98%

National waiting times targets

NHSi 2 wk wait from referral to date first seen: all cancers National standard 93.0% <93% N/A 93.0%NHSi symptomatic breast patients National standard 93.0% <93% N/A 93.0%

NHSi31 day wait from diagnosis to first treatment National standard 96.0% <96% N/A 96.0%

NHSi 31 day wait for subsequent treatment: surgery National standard 94.0% >94.0 N/A 94.0%NHSi drug treatment National standard 98.0% <98% N/A 98.0%NHSi radiotherapy National standard 94.0% <94% N/A 94.0%

NHSi 62 day wait for first treatment: GP referral to treatment (reallocated) National standard 85.0% <85% N/A 85.0%NHSi

reallocations) National standard 85.0% <85% N/A 85.0%

NHSi Screening referral (reallocated) National standard 90.0% <90% N/A 90.0%

NHSi Screening referral (pre-reallocations) National standard 90.0% <90% N/A 90.0%NHSi 18 wks from Referral to Treatment still waiting (incomplete) National standard 92.0% <91% N/A 92.0%NHSi 18 wks pathways - patients waiting > 52 wks. (distinct patients across the quarter) NHSi trajectory 6 >6 N/A 6

Rationale TARGET R A GRecommend – Care Internal target 96.0% <=90% 91-95% >=96%Not recommend – Care Internal target 1.0% >5% between 2-5>5% <=1%

Definition TARGET R A GNHSi Community care data completeness referral to treatment information NHSi measure >=50% <50% N/A >=50%NHSi referral information NHSi measure >=50% <50% N/A >=50%NHSi activity information NHSi measure >=50% <50% N/A >=50%

Certification against compliance : access to health care for people with a learning disability

3. NHSi Community Measures

2. Staff Friends and Family Test - How likely are you to recommend this organisation to friends and family… as a place to receive care or treatment

1. To achieve the highest possible quality standards for our patients, exceeding their expectations, in terms of outcome, safety and experience

Quality Account indicators1 met 2 met All 3 met

Page 2 of 2

The Royal Marsden NHS Foundation Trust Appendix ABalanced Scorecard 2016/17 RAG thresholds

NHSi denotes NHSi standard

Finance, Productivity & Efficiency Definition TARGET R A GNHSi NHSi financial sustainability risk rating NHSi target 4 1 or 2 2* or 3 4

NHSi%age variance from Agency Spend Cap NHSi target On/below cap >2% above cap 2% above cap On/below cap

Cash (£m) Annual plan Over Plan Less than £15m Between £15m and Plan Over Plan

NHS activity Income Variance YTD (£000) Annual plan

Breakeven or ahead of plan

Less than 5% of plan

Less than breakeven but within 5% of plan


PP activity Income Variance YTD (£000) Annual plan


Less than 5% of plan

Less than breakeven but within 5% of plan


PP Debtors over 90 days (% of total PP debtors) Annual plan Less than 25% More than 35% Between 25 and 35% Less than 25%

Non-PP Debtors over 90 days (% of total non PP-debtors) Annual plan Less than 25% More than 35% Between 25 and 35% Less than 25%

Achievement of Efficiency Programme YTD (%) Annual planGreater than 100% of plan

Lower than 75% of plan

Between 75% and 100% of plan

Greater than 100% of plan

Capital Expenditure Variance YTD (£000) Annual plan

Between 85% and 115% of

Plan

Greater than 115% of Plan or less than 50% of

Plan

Between 85% and 50% of Plan

Between 85% and 115% of

Plan

Contractual Sanctions incurred (£000) Internal target 0 >£10,000 £0-10,000 0CQUIN %age achievement Acute Internal target >90% <80% 80-89% >90%CQUIN %age achievement Sutton Community Services Internal target >90% <80% 80-89% >90%

Productivity & Asset UtilisationBed occupancy - Chelsea Internal target 85% >95% or < 80% 90% - 95% or 80 - 85% 85% - 90%Bed occupancy - Sutton Internal target 85% >95% or < 80% 90% - 95% or 80 - 85% 85% - 90%Theatre utilisation - Chelsea Internal target >80% <70% 70% - 80% >80%Theatre utilisation - Sutton Internal target >80% <70% 70% - 80% >80%MDU Patients per Chair Internal target >2.5 <2 2-2.5 >2.5

Clinical and Research Strategy Definition TARGET R A GTotal NHS referrals Internal target 4900-5250 >5500; <4800 5250-5500; 4900-4800 4900-5250Total PP referrals Internal target 935 <910 910 - 935 >935RMH Patients recruited to 100K Genome Project External trajectory

meet trajectory

More than 5% below trajectory

Between 5-0.1% below trajectory

Meeting trajectory

Efficient clinical modelsNHS Average (mean) Elective LoS Internal target New in Q1 >5.3 5-5.3 <5NHS Non-Elective Admissions as %age of all NHS Admissions Internal target New in Q1 >30% 26-30% <26%

Workforce Definition TARGET R A G

Workforce productivityVacancy rate Internal target 5.0% >10% >5%-10% 5.0%Staff turnover rate Internal target 12% >15% 12% - 15% >12%Sickness rate Internal target 3.00% >5% 3 - 5% 3% or less

Quality & developmentConsultant appraisal (number with current appraisal) Internal target 90% <80% 80%-90% 90%

Appraisal & PDP rate

85% Best for Acute Specialist Trusts from NHS staff survey 2010

85% <75% 75% - 84% 85%+

Completed induction NHSLA requirement 70% <60% 60 - 69% >70%Statutory and Mandatory Staff Training Internal target 90% <80% 80 - 89% >90%

6. To recruit, retain and develop a high performing workforce to deliver high quality care and the wider strategy of the Trust

4. To improve the productivity and efficiency of the Trust in a financially sustainable manner, within an effective governance framework

5. To deliver the Trust's clinical and research strategy; to better meet the needs of patients and commissioners

Page 1 of 2

The Royal Marsden NHS Foundation Trust APPENDIX BBalanced Scorecard 2016/17

NHSi denotes NHS Improvement standard

Patient Safety, Quality & Experience Q1(Apr-Jun 16/17)

Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

NHSi Governance risk rating G G G G G

Quality Account indicators G G G G G

NHSi G G G G G

Serious incidents (excl pressure sores) 3 0 2 0 3Complaints - % upheld 29.0% 18.0% 25.0% 30.0% 22.2%

MortalityHospital Standardised Mortality Ratio (rolling 12 month - qtr in arrears - NHS patients only) 76.9 74.7 77.2 83.3 90.4Mortality audit (based on qtr data in arrears) A G G A G30 day mortality post surgery 0.6% 0.7% 0.3% 0.4% 0.6%30 day mortality post chemotherapy 2.2% 2.2% 0.2% 0.3% 0.3%100 day HSCT mortality in previous 6 months (Deaths related to SCT) 4.3% 0.0% 3.2% 0.0% 7.3%100 day HSCT mortality in previous 6 months (All deaths) 5.8% 0.0% 3.2% 1.8% 7.3%

Medicines Management% Medicines reconciliation on admission 96% New in Q1Unintended omitted critical medicines 1.6 New in Q1

Cancer stagingStaging data completeness sent to Thames Cancer Registry (1 qtr in arrears) 70% 65% 72% 65% 71%

Patient satisfaction Friends and Family Test (inpatient and day care) 97.90% 97% 97% 97% 97%Friends and Family Test (outpatients) 98.40% 97% 98% 97% 97%Waiting times for day chemotherapy (over 3 hrs) 13.1% 11.9% 12.4% 12.3% 11.4%Mixed sex accommodation breaches 0 0 0 0 0PP access to single rooms - Chelsea % 100.0% 98.8% 98.9% 99.9% 99.8%PP access to single rooms - Sutton % 95.0% 98.8% 100.0% 97.1% 98.9%

National waiting times targetsNHSi 2 wk wait from referral to date first seen: all cancers 93.9% 95.3% 96.9% 95.9% 96.2%NHSi symptomatic breast patients 93.3% 96.1% 95.4% 94.3% 94.2%NHSi 31 day wait from diagnosis to first treatment 99.3% 99.0% 98.8% 98.7% 99.5%NHSi 31 day wait for subsequent treatment: surgery 95.2% 97.6% 96.4% 98.4% 96.3%NHSi drug treatment 99.8% 100.0% 100.0% 99.8% 99.8%NHSi radiotherapy 98.3% 98.3% 98.5% 96.9% 98.3%NHSi 62 day wait for first treatment: GP referral to treatment (reallocated) 85.4% New in Q1NHSi GP referral to treatment (pre-reallocations) 77.1% 78.6% 79.0% 78.9% 73.1%NHSi Screening referral (reallocated) 78.3% New in Q1NHSi Screening referral (pre-reallocations) 84.3% 95.9% 90.8% 94.5% 89.8%NHSi 18 wks from Referral to Treatment still waiting (incomplete) 94.3% 95.9% 94.8% 95.1% 93.2%NHSi 18 wks pathways - patients waiting > 52 wks. (distinct patients across the quarter) 6 5 6 2 3

Q1(Apr-Jun 16/17)

Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

Recommend – Care 95.5% 96.3% N/A 96.5% 94.7%Not recommend – Care 0.9% 1.8% N/A 0.5% 1.7%

Q1(Apr-Jun 16/17)

Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

NHSi Community care data completeness referral to treatment information 75.0% 75.0% 75.0% 75.0% 75.0%NHSi referral information 75.0% 75.0% 75.0% 75.0% 75.0%NHSi activity information 76.2% 76.2% 76.2% 76.2% 76.2%

Certification against compliance : access to health care for people with a learning disability

3. NHSi Community Measures

2. Staff Friends and Family Test - How likely are you to recommend this organisation to friends and family… as a place to receive care or treatment

1. To achieve the highest possible quality standards for our patients, exceeding their expectations, in terms of outcome, safety and experience

Page 2 of 2

The Royal Marsden NHS Foundation Trust APPENDIX BBalanced Scorecard 2016/17

NHSi denotes NHS Improvement standard

Finance, Productivity & Efficiency Q1(Apr-Jun 16/17)

Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

NHSi NHSi financial sustainability risk rating 4 3 3 3 3NHSi %age variance from Agency Spend Cap 9.3% New in Q1

Cash (£m) 10.9 24.1 34.7 33.9 30.6NHS activity Income Variance YTD (£000) 680 -4487 -3257 -3685 -2000PP activity Income Variance YTD (£000) 1,349 -537 -568 -664 -95PP Debtors over 90 days (% of total PP debtors) 47% 46% 49% 37% 47%Non-PP Debtors over 90 days (% of total non PP-debtors) 52% 35% 36% 43% 41%Achievement of Efficiency Programme YTD (%) 66% 87% 89% 89% 93%Capital Expenditure Variance YTD (£000) -1,781 -12,007 -5,684 -4,429 -414

Quarter in arrears Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

Q4(Jan-Mar

15/16)Contractual Sanctions incurred (£000) New in Q1CQUIN %age achievement Acute New in Q1CQUIN %age achievement Sutton Community Services New in Q1

Productivity & Asset UtilisationBed occupancy - Chelsea 83% 82% 82% 83% 82%Bed occupancy - Sutton 83% 83% 80% 82% 82%Theatre utilisation - Chelsea 97% 93% 96% 95% 93%Theatre utilisation - Sutton 76% 72% 75% 87% 77%MDU Patients per Chair 3.0 New in Q1

Clinical and Research Strategy Q1(Apr-Jun 16/17)

Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

Total NHS referrals 5141 New in Q1Total PP referrals 1091 1026 1024 1075 1056RMH Patients recruited to 100K Genome Project 74 New in Q1

Efficient clinical modelsNHS Average (mean) Elective LoS 5.1 New in Q1NHS Non-Elective Admissions as %age of all NHS Admissions 23.70% New in Q1

Research (1 QUARTER IN ARREARS) Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

Q4(Jan-Mar

14/15)70 day target (for externally sponsored trials) NIHR Adjusted figure (excl delays due to

sponsor/neither sponsor or trust)96.4 98.0% 90.9% 88.0% 90.0%

Accrual to target (1Q arrears) - New National definition % of closed commercial interventional trials meeting contracted recruitment target (excluding trials with no set target)

New definition for Q1

Accrual to target (1Q in arrears) - Local definition New in Q1No. of 1st European patients in previous 12 months New in Q1Patients on interventional trials as %age of first treatments New in Q1Trials lead by RMH as %age of all trials with RMH involvement

New in Q1

Workforce Q1(Apr-Jun 16/17)

Q4(Jan-Mar

15/16)

Q3(Oct-Dec

15/16)

Q2(Jul-Sep 15/16)

Q1(Apr-Jun 15/16)

Workforce productivityVacancy rate 6.6% 6.3% 6.4% 6.8% 5.8%Staff turnover rate 15.1% 14.6% 14.3% 13.6% 13.6%Sickness rate 2.9% 3.1% 3.2% 2.7% 2.8%

Quality & developmentConsultant appraisal (number with current appraisal) 91.7% 90.0% 72.9% 84.7% 81.8%Appraisal & PDP rate 82.4% 85.4% 84.8% 84.2% 78.4%Completed induction 84.5% 78.6% 73.4% 57.2% 46.7%Statutory and Mandatory Staff Training 90.4% 89.5% 86.8% 85.8% 84.2%

6. To recruit, retain and develop a high performing workforce to deliver high quality care and the wider strategy of the Trust

4. To improve the productivity and efficiency of the Trust in a financially sustainable manner, within an effective governance framework

5. To deliver the Trust's clinical and research strategy; to better meet the needs of patients and commissioners

APPENDIX C

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%16

:01

16:0

2

16:0

3

16:0

4

16:0

5

16:0

6

15/16 Q4 16/17 Q1

The Royal Marsden NHS Foundation Trust 62 Day GP Urgent Patients split into Day Referral was Received at RMH

1st January 2016 to 30th June 2016

>62 Days

Day 39-62

<= Day 38

85% target

APPENDIX D 62 Day Wait for First Treatment (GP Urgent). Performance by Tumour Type. Tumour site Q2 15/16 Q3 15/16 Q4 15/16 Q1 16/17

Breast 97.5% 96.5% 95.7% 96.7%

Children's 100.0% 100.0% N/A N/A

Gynaecological 74.1% 85.7% 66.7% 57.1%

Haematological (excl. Acute Leukaemia) 87.5% 100.0% 77.3% 85.7%

Head & Neck 35.7% 47.6% 81.3% 50.0%

Lower GI 61.5% 75.0% 62.96% 75.7%

Lung 86.0% 83.3% 58.3% 71.1%

Referred elsewhere for treatment N/A 100.0% N/A N/A

Other/Unknown 100.0% 71.4% 100.0% 71.4%

Sarcoma 69.6% 58.3% 65.7% 57.6%

Skin 66.7% 72.7% 91.3% 71.4%

Testicular 100.0% 50.0% N/A N/A

Upper GI 62.5% 70.0% 72.7% 76.5%

Urological 45.0% 40.5% 64.9% 45.8%



Agenda item Item 7.

Title of Document: Board sub-committee report for the Audit & Finance Committee and Quality, Assurance & Risk Committee

To be presented by Ian Farmer, Chair of Audit and Finance Committee / Nancy Hallett, Chair of Quality, Assurance and Risk Committee

Background The NHS Act 2006 as amended by the Health and Social Care Act 2012 specifies that it is the duty of the Council of Governors to hold the Non-Executive Directors (NEDs) to account for the performance of the Board. In summary, “holding the NEDs to account” requires Governors to scrutinise how well the Board is working, challenge the board in respect of its effectiveness, and ask the Board to demonstrate that it has sufficient quality assurance in respect of the overall performance of the Trust. In contrast, Directors are responsible and accountable for the performance of the Trust (‘Your Statutory Duties’, Monitor). Executive Summary The performance of the Board sub-committees is an important consideration for Governors in order to help them hold the NEDs to account for the performance of the Board. The purpose of this report, which will be reported on an annual basis, is to set out how the Board sub-committees have met their terms of reference whilst highlighting key issues the Committee has considered for the year of 2015/16. Recommendations The Council is asked to note the report and are invited to raise any questions. Author: Ian Farmer, Chair of Audit and Finance Committee / Nancy Hallett, Chair of Quality, Assurance and Risk Committee

Contact Number or E-mail:


1

2015/16 Audit & Finance Committee / Quality, Assurance & Risk Committee Report

1. Introduction The NHS Act 2006 as amended by the Health and Social Care Act 2012 specifies that it is the duty of the Council of Governors to hold the Non-Executive Directors (NEDs) to account for the performance of the Board. In summary, “holding the NEDs to account” requires Governors to gain assurance on the effectiveness of the Board, and ask that the Board confirm and explain to demonstrate that it has assurance relevant to the overall performance of the Trust. In contrast, Directors are responsible and accountable for the performance of the Trust (‘Your Statutory Duties’, Monitor).

The Board sub-committees is therefore an important consideration for Governors to help them hold the NEDs to account for the performance of the Board. The purpose of this report is to set out how the Board sub-committees have met their terms of reference while highlighting key issues the Committees have considered for the year of 2015/16.

2. Key Issues Key Issues Key Points

Audit and Finance Committee 1. Performance of the External Auditor

• Audit of Financial Accounts for the year to 31 March 2016.

• The Annual Audit Plan 2015/16 was presented by the Trust’s External Auditors, Deloitte LLP, and approved at the September 2015 meeting.

• Discussion on the results of the audit and Letter of Representation.

• The Committee members held a closed session with Deloitte in January 2016 following good practice guidelines.

2. Annual Report and Accounts • The Committee considered the annual accounts and took specific note on the following areas:

o Discussions on levels of income as they relate to patient activity.

o Further Income opportunities and the Trust’s overall financial position.

o The Trust’s pharmacy outsourcing to Boots.

o The significant increase in Private Care income.

o The Trust’s overall operational costs, including staffing costs and charitable expenditure.

• The Committee also reviewed the Quality Accounts and local quality indicator in conjunction with Quality, Assurance and Risk Committee.

3. Performance of the Internal Auditor • The Committee reviewed seven reports during the year relating to 2015/16. These included:

o Dissemination of guidance. o Education Strategy. o IT Infrastructure. o Financial controls. o Financial management.

2

o Temporary staff management. o Recruitment. o Costs and benefits of the ICR

partnership. • The Committee received a technical update from

KPMG at each of its meetings. • The Committee held a closed session with

KPMG in April 2016 following good practice guidelines.

4. Anti-Fraud • A number of investigations took place during the year and the Committee received updates and reports on each area.

5. Internal Control and Risk Management • The Committee reviewed a number of other areas for assurance purposes. These included:

o Annual review of Reference Costs o Pharmacy Outsourcing o Service Line Management o Clinical Research o Private Care Business Case o Sutton & Merton Community

Services tenders & disaggregation o IT Shared Services (Sphere)

6. Terms of Reference review • The AFC Terms of Reference was presented at the September 2015 meeting for the Committee’s Annual Review and approved.

Quality, Assurance and Risk Committee 1. Terms of Reference review

The Terms of Reference were reviewed and approved at the September 2015 meeting.

2. Quality related mandatory inspections Annual staff survey: The Trust had a positive survey report with staff rating the Trust as a good place to work and receive health care. The national cancer patient survey runs annually and covers all acute trusts which provide cancer care. The Trust has identified areas of the survey results for action.

3.Risk register The change in a number of risks highlighted from the risk register were discussed, including those relating to the implementation of the new Junior Doctor contract and financial risk associated with the loss of Merton Community services. Others included the risk associated with future funding of Biomedical Research Centre, and recruitment and retention of specialist nursing and theatre staff.

4. Board Assurance Framework Issues included control of expenditure on temporary staff, ensuring the Paediatric service model at the RM remains sustainable, and that the Trust remains globally competitive as a centre for clinical trials whilst developing a new IT strategy and programme.

5. Face to face frontline staff reports Attendance by frontline staff including Diagnostic Radiographers, Pharmacists, and staff from the Paediatrics and Haemato-Oncology departments.

6. Monthly and annual quality accounts The quality accounts were reviewed. At QAR’s request, information validating the data in the accounts was added to the documents. Areas monitored through the Quality Accounts include rates of healthcare associated infections, rates of incidents resulting in serious harm or death, monitoring of community acquired pressure ulcers, chemotherapy waiting times, nurse staffing levels and medication errors.

7. Emergency and fire planning Preparedness for emergencies and fire was scrutinised.

8. Research governance Governance structures between the Trust and the Institute of Cancer Research are now integrated and a new Joint Executive Group has been established

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bringing together members of the Leadership Teams of both organisations.

9. Annual clinical audit forward plan The Trust’s clinical audit programme was reviewed. The trust has undertaken a comprehensive programme of clinical audit across many healthcare discplines. The plan includes all mandatory (e.g. National; CQUINs); internal “must do” audits or audits related to local interest/priorities or clinical innovation.

10. Complaints monitoring Selected complaints and complaints summaries were monitored as indicators of quality of care. The Committee reviews Serious Incident reports and Complaints reports at each meeting. Sample complaint letters and Trust responses are also reviewed at each meeting.

11. Safeguarding vulnerable adults and children Trust arrangements for protecting vulnerable adults and children were discussed at each meeting. No issues were identified.

12. Integrated Governance Monitoring Report The Integrated Governance Monitoring Report, describing the governance of care, research and infrastructure, assured QAR of the quality of care provided by the Trust.

3. Coordination between Audit & Finance Committee and

Quality, Assurance & Risk Committee The Chair of the Audit and Finance Committee (AFC) and Quality, Assurance and Risk Committee (QAR) have discussed priorities for the respective Committees and the use of internal audit resources to provide assurance in key risk areas. In addition, forward Agendas and Minutes are regularly provided to each Committee and key items from QAR are reported at each AFC meeting as a standing item.

4. Conclusion The Chairs of each Committee confirm the following:

• The Terms of Reference for each Committee have been reviewed and approved during 2015/16;

• The Committee has adhered to the terms outlined in its Terms of Reference as well as received good attendance from its members;

• The performance of the external auditor is deemed satisfactory by the Audit and Finance Committee and Governors are notified of the retirement by rotation of the audit partner and the appointment of a new one;

• There are no major concerns or issues to raise with the Governors with respect to the performance of the Trust.

• Each of the two Committees is currently undergoing a process of self-assessment in line with that carried out by the Trust Board earlier in the year.

The Council is asked to note the report.

Documents

Council of Governors...Financial Performance Report ... financial arrangements, IP, governance, branding, fundraising to ensure this principal partnership can function optimally. The