Embed Size (px)
Citation preview
1
Monthly Finance Report For September 2014
Prepared by:
Stephen DunhamFinancial Controller
Charlotte SparrowHead of Financial Performance and Decision Support
Steven DaviesNHS Finance Director & Deputy Chief Financial Officer
Presented By:
Charles NallChief Financial Officer
Board of Directors Meeting30th October 2014
Date produced 15th October 2014
Action for Board:
For information
For consideration
For decision
Item 7B
2
Contents of Main ReportPage Number
Detailed Income and Expenditure Position 4
Underlying Position 5
NHS Income 6
NHS Operating Expenditure 8
Efficiency Scheme Performance 11
Research & Development and Commercial Trading Position 12
Capital Expenditure 13
Continuity of Service Risk Rating (CoSRR) 14
Balance Sheet 15
Cashflow 16
Debtors Management and Credit Control 17
3
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)1.1 0.4 (0.7) 1.9 3.4 1.5 5.0 5.0 0.0
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)13.1 13.4 0.3 71.9 77.0 5.1 148.0 154.5 6.512.4 13.1 (0.7) 72.5 73.3 (0.8) 148.9 149.2 (0.3)
0.6 0.4 (0.2) (0.6) 3.7 4.3 (0.9) 2.9 3.8
67%
26% Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
73% 1.7 1.1 (0.6) 4.4 3.2 (1.2)
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
0.1 0.1 0.0 0.5 0.8 0.3 1.2 1.1 0.1
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
0.4 0.0 (0.4) 1.9 (1.1) (3.0) 4.7 1.0 (3.7)
YTD
44
4
Year End 2013/14
End of Quarter 1
Current Month
End of Quarter 2
Forecast Year End
(Qtr 4)24.29 17.76 16.91 16.91 15.87
3- 6 Mths 2 Mths TotalLast Qtr
Total(£M) (£M) (£M) (£M)
1.26 0.82 5.38 8.480.71 0.33 3.89 4.040.22 0.31 1.12 2.262.20 1.45 10.39 14.78
Cash Flow Forecast Qtr 3
20.90
Cash Balance (£M)
Continuity of Service Risk Rating
Liquidity
Continuity of Service Risk Rating
Comment
Debt Service Cover
Indicator
Rating of 4 (highest rating) is maintained in September.
Research & Development
Position
In Month Year to Date Full Year Forecast
Commercial Trading Unit
Position
In Month Year to Date Full Year Forecast
Full Year Forecast
% Full Year achieved
Full Year % forecast
NHS In Month Year to Date Full Year Forecast(exc. R&D)
IncomeExpenditure
Overall Position
Efficiency Scheme Performance
YTD % achieved Year to Date
Executive Financial Summary
Overall Position - Surplus / (Deficit)
In Month Year to Date Full Year Forecast Key Risks and Actions Required
3.162.320.435.91
Prior Month
34.27
6 Mths +(£M)
NHS Contract DebtsCommercial DebtsOtherTOTAL
Debtors
Overdue Debts
0.83
1 Mth(£M)
0.140.520.17
Key Income and Expenditure Risks: The net position in month is below plan for both the NHS
and Commercial Trading Units. The year to date position benefits from non-recurrent items.
Commercial position was break even in month due to better than expected results in one division.
NHS income is above plan in month as per the year to date trend, but costs have increased and more than offset the income overperformance.
Plans for achieving the 18 week standard still subject to change & financial impact could exceed current forecast.
Actions: Focus on NHS expenditure control. Ensure efficiency is
maintained within planned levels in the delivery of other operational priorities.
Ensure the Commercial position is on track to return to a surplus position in quarter 4.
Efficiency schemes with delayed start dates this year should be reassessed for their recurrent impact.
Action taking place for achievement of the 18 week standard should be measured against planned timescales and current financial forecast.
Cashflow and Balance Sheet Risks: Debt recovery. Overdue debts total £10.4M, with £5.4M of
NHS contract debts. Higher total capital spend and lower operational cash
performance forecast for 2014/15 imply lower than budgeted cash balances.
Actions: Maintain high level dialogue with relevant NHS organisations
and levy interest charges where appropriate. Monitor cash position carefully in conjunction with
authorisation of capital purchases.
4
£000s £000s £000s £000s £000s £000s £000s £000s £000s £000s £000sIncome
NHS Clinical Income 12,233 12,481 249 66,878 68,633 1,755 138,003 141,434 3,431 57,203 11,430Commercial Trading Units 2,872 2,389 (483) 16,629 13,113 (3,516) 34,705 29,314 (5,391) 15,816 (2,703)Other Income 1,738 1,739 1 10,441 13,534 3,093 20,727 23,553 2,826 9,953 3,581Total Income 16,842 16,609 (233) 93,949 95,281 1,332 193,435 194,300 865 82,972 12,308
NHS ExpenditurePay ExenditureMedical 2,330 2,526 (196) 13,784 14,479 (696) 27,986 29,150 (1,163) 11,968 (2,511)Nursing 1,723 1,791 (67) 10,259 10,423 (164) 20,858 21,929 (1,071) 8,781 (1,643)Scientific, Theraputic & Technical 917 907 10 5,412 5,207 206 10,968 10,785 183 4,927 (280)Admin and Clerical 2,050 1,886 165 12,101 11,818 284 23,936 23,998 (63) 9,109 (2,708)Ancillary Services 167 159 8 997 971 27 1,990 1,919 71 961 (10)Research & Development Pay 599 547 52 3,620 3,379 241 7,160 7,283 (123) 2,990 (389)Total Pay Expenditure 7,787 7,815 (28) 46,174 46,277 (103) 92,897 95,064 (2,167) 38,735 (7,541)
Non-Pay ExenditureDrugs 1,672 1,724 (51) 9,295 9,325 (30) 19,097 19,298 (201) 6,542 (2,783)Clinical Supplies and Services 1,115 1,307 (193) 6,508 6,801 (293) 13,519 14,063 (543) 5,612 (1,190)Premises 695 725 (29) 4,102 4,107 (5) 8,243 8,798 (556) 3,978 (129)Other Expenditure 1,142 1,422 (281) 6,156 6,387 (231) 14,385 13,765 620 6,210 (177)Research & Development Non-Pay 198 152 46 1,174 878 296 2,165 1,892 273 362 (516)
Total Non-Pay Expenditure 4,822 5,329 (507) 27,235 27,499 (264) 57,409 57,817 (408) 22,703 (4,795)
Total NHS Expenditure 12,609 13,145 (536) 73,409 73,775 (367) 150,306 152,881 (2,575) 61,439 (12,337)
Commercial Trading Unit Costs 2,380 2,277 102 14,023 13,531 492 28,370 26,806 1,564 12,495 (1,036)
Total Expenditure 14,989 15,422 (433) 87,431 87,306 125 178,676 179,687 (1,011) 73,934 (13,373)
EBITDA 1,854 1,187 (667) 6,517 7,974 1,457 14,759 14,613 (145) 9,039 (1,064)EBITDA Margin % 11.0% 7.1% 6.9% 8.4% 7.6% 7.5% 11%NHS Interest, Dividends, Depreciation 653 636 18 3,888 3,850 38 8,171 8,064 107 3,277 (573)
Trading Unit Interest, Depreciation, Dividends 133 121 12 772 721 50 1,588 1,549 38 697 (24)Surplus / (Deficit) - before impairment 1,068 430 (637) 1,858 3,403 1,545 5,000 5,000 (0) 5,064 (1,661)
Impairment 0 0 0 0 0 0 8,500 8,500 0 0 0Surplus / (Deficit) 1,068 430 (637) 1,858 3,403 1,545 (3,500) (3,500) (0) 5,064 (1,661)
Note: NHS EBITDA 1,362 1,076 (286) 3,911 8,392 4,481 8,424 12,105 3,682 5,717 2,675NHS EBITDA Margin % 9.7% 7.6% 5.1% 10.2% 5.3% 7.3% 9%NHS Surplus / (Deficit) 708 440 (268) 23 4,542 4,519 253 4,041 3,788 2,440 2,102
Commercial Trading Unit EBITDA 492 111 (381) 2,606 (418) (3,024) 6,335 2,508 (3,827) 3,321 (3,739)Commercial Trading Unit EBITDA Margin % 17.1% 4.7% 15.7% -3.2% 18.3% 8.6% 21%Commercial Trading Unit Surplus / (Deficit) 360 (10) (369) 1,835 (1,139) (2,974) 4,747 958 (3,789) 2,624 (3,763)
Actual Variance BudgetOverall Trust I&E Summary
In Month Year to Date Full Year Forecast
Budget Actual Actual VarianceVariance Budget
Prior Year YTD
VarianceActual
Detailed Income and Expenditure Position - Surplus / (Deficit)
5
£000s £000s £000s £000s £000s £000s £000s £000s £000s £000s
Total Income 16,842 16,609 14,659 18,041 48,323 50,684 45,626 44,597 93,949 95,281
Total NHS Expenditure 12,609 13,145 12,426 12,566 37,307 37,925 36,102 35,850 73,409 73,775
Commercial Trading Unit Costs 2,380 2,277 2,311 2,349 7,003 7,046 7,020 6,485 14,023 13,531
Total Expenditure 14,989 15,422 14,737 14,915 44,309 44,971 43,122 42,335 87,431 87,306
EBITDA 1,854 1,187 (78) 3,126 4,013 5,712 2,504 2,262 6,517 7,974EBITDA Margin % 11.0% 7.1% -0.5% 17.3% 8.3% 11.3% 7.0% 6.7% 7.0% 6.7%NHS Interest, Dividends, Depreciation 653 636 656 689 1,914 1,949 1,974 1,901 3,888 3,850Trading Unit Interest, Depreciation, Dividends 133 121 133 121 398 361 374 360 772 721Surplus / (Deficit) 1,068 430 (867) 2,316 1,702 3,402 156 1 1,858 3,403
Adjustment to Reach Underlying Position:Income- Release of prior year provision (3,486) (3,486) (3,486)
Total Income 0 (3,486) (3,486) 0 (3,486)
Expenditure- Non-recurrent benefitsStaff award provision release (91) (91)Fellow back-pay release (211) (211)
NHS rental and facilities charges prior 2013/14 (391) (391)
- Non-recurrent costs
Project Oriel 243 243 109 109 506 506 264 264 770 770
Pay Restructuring costs (120) 434 314 314RTT Enhanced Pay Costs 148 203 351 351
Total Expenditure 243 271 109 746 506 780 264 (38) 770 742
Total 243 271 109 (2,740) 506 (2,706) 264 (38) 770 (2,744)
Revised Underlying Position 1,311 701 (758) (424) 2,208 696 420 (37) 2,628 659
Qtr 2 Qtr 1
Budget ActualOverall Trust I&E Summary Budget Actual
In Month Previous Month
Budget Actual ActualBudget
Year to date
Budget Actual
Underlying Position
Notes: Underlying position in month is a £0.7M surplus. Last month’s underlying position is also shown here and was a deficit of £0.4M due to low patient activity. This
was anticipated due to recurrent high absence levels in August and reflected in the plan accordingly. The surplus in month was due to the release of prior year income provisions of £3.5M following assurances received in month.
The year to date surplus of £0.7M was generated entirely in quarter 2 with surpluses in July and September. The quarter 1 underlying position was break even. Non-recurrent expenditure items total £0.7M in the year to date position, with a mixture of benefits and costs. The full year forecast remains at £5.0M surplus, inclusive of non-recurrent items which total a benefit of £2.7M after the first half of the year.
6
NHS Income
Commentary:
High income in August is due to a £3.5M release of prior year provisions. Discounting this non-recurrent item, August income was slightly above plan.
September income is above plan due to overperformance of elective income at City Road and Moorfields South in refraction, strabismus, glaucoma and cataract services.
Monthly income targets for NHS patient income are higher (relative to working days) from August to the end of the year due to the phasing in of service developments. In Moorfields North, developments at Darrent Valley, Northwick Park and the Ludwig Guttman Centre have added an additional £0.4M to the income target each month.
Moorfields North NHS patient income was £0.2M behind plan in month due to lower than anticipated patient attendances in relation to these developments.
7
20 17 21 23 18 22 20 20 18 21 20 22
129 130 129 132 133 134 146 146 148 146 146 145
142 151 131 134 161 14413 21 1 2 28 10
Workings Days Inc. adjustments
Target per working day (£'000)Actual per working day (£'000)Variance (£'000)
20 17 21 23 18 22 23 20 18 21 20 22227 228 227 222 235 233 236 237 239 237 237 236222 233 221 212 235 234(5) 5 (7) (10) 1 1
Actual per working day (£'000)Variance (£'000)
Workings Days Inc. adjustmentsTarget per working day (£'000)
Elective Activity Analysis (Inpatients and Outpatients)
Elective income has been above target this month and last, a return to the trend of overperformance seen in April and May.
In August and September however, additional resources have been used resulting in increased marginal costs particularly due to enhanced staff pay rates.
The target per working day increased slightly in quarter 2 and increases further in the second half of the year due to service developments.
Forecast is for high activity in October and November. The October plan for elective income has the equivalent of 3 working days removed for planned theatre closures. The December forecast is for activity to fall in line with plan.
Outpatient income has been on plan in August and September which is an improvement on the year to date trend.
The forecast is for this to continue in October.
Increased activity to achieve the RTT 18 week standard has until now mainly impacted elective activity. It will however, also lead to increased outpatient activity as the whole patient pathway is addressed. This is reflected in the forecast for November and December, with overperformance against plan.
8
Staff Group & Directorate Staff Group & Directorate
Medical Prior Qtr (Q1 2014/15)
Quarter 2 2014/15
Increase / (Decrease)
Nursing Prior Qtr (Q1 2014/15)
Quarter 2 2014/15
Increase / (Decrease)
Moorfields North 163 169 6 Moorfields North 344 385 40Moorfields South 328 380 52 Moorfields South 262 266 4
Outpatient & Diagnostic Servs 1,060 1,037 (23) Outpatient & Diagnostic Servs 471 498 28Surgical Services 753 799 45 Surgical Services 553 586 33
Additional Enhanced RTT costs 0 59 59 Additional Enhanced RTT costs 0 55 55Corporate Departments 34 45 11 Corporate Departments 27 28 1
Total 2,338 2,488 151 Total 1,657 1,818 161
Average Monthly Expenditure (£'000) Average Monthly Expenditure (£'000)
Other Clinical Prior Qtr (Q1 2014/15)
Quarter 2 2014/15
Increase / (Decrease)
Non-Clinical Prior Qtr (Q1 2014/15)
Quarter 2 2014/15
Increase / (Decrease)
Moorfields North 41 46 5 Moorfields North 167 189 23Moorfields South 27 29 2 Moorfields South 155 161 7
Outpatient & Diagnostic Servs 729 745 16 Outpatient & Diagnostic Servs 414 353 (61)Surgical Services 58 57 (1) Surgical Services 216 248 32
Corporate Departments 1 2 0 Corporate Departments 1,133 1,178 45Total 856 879 23 Total 2,085 2,131 46
NB. Research and Development Pay is excluded from the tables above and shown as part of the Research and Development position on page 11. Research and Development have a separate quarterly board report.
NHS Operating Expenditure – Pay Costs by Staff Group and Area
NHS Operating Expenditure – Pay Costs Agency and Bank Analysis
- Increase in average monthly expenditure of £23k, (3%) in quarter 2 compared to quarter 1.
- Increase in Outpatients and Diagnostics is in Pharmacy, Optometry and the Prosthetics department.
- Increase in average monthly expenditure of £46k, (2%) in quarter 2 compared to quarter 1.
- Costs in ODS have decreased by 14% due to drop in agency costs across departments, offset by a smaller increase in admin bank staff.
- Corporate deptartments costs have increased due to agency usage.
- £161k (10%) increase in quarter 2 average monthly expenditure compared to quarter 1. Enhanced pay rates make up £55k of this increase.
- As reported in the July Board report, the increase in Moorfields North is due to substantive recruitment. Outpatients and Diagnostics has seen increased costs in A&E and the new MEH Direct service. Surgical Services has increased costs in theatres.
- £151k (6%) increase in quarter 2 average monthly expenditure compared to quarter 1. Enhanced pay rates for additional theatre lists explains £59k of the increase.
- Other increases are in Moorfields South, due to expenditure at Croydon, and within Surgical Services the increase is mainly on anaesthetist costs but also in the adnexal and VR services.
9
Staff Type
Employed Bank Agency Total % Change Employed Bank Agency Total % Change Employed Bank Agency TotalNursing 1,556 296 51 1,903 9% 1,501 185 54 1,740 12% 1,411 104 38 1,553
Other Clinical 835 2 43 881 3% 821 5 32 858 2% 795 2 40 837Non-clinical 1,629 147 355 2,131 2% 1,563 75 447 2,085 18% 1,457 2 303 1,762
Average Prior Year Comments
Nursing
Other Clinical
Quarter 2 Previous Quarter
Staff Type
Non-Clinical
Average Prior Year (£'000)Quarter 2 (£'000) Previous Quarter (£'000)
82%
15%
3%
Nursing Expenditure Current Quarter
Employed Bank Agency
86%
11%
3%
Nursing Expenditure Previous Quarter
Employed Bank Agency
95%
0% 5%
Other Clinical Expenditure Current Quarter
Employed Bank Agency
96%
0% 4%
Other Clinical Expenditure Previous Quarter
Employed Bank Agency
76%
7%
17%
Non Clinical Expenditure Current Quarter
Employed Bank Agency
75%
4%
21%
Non Clinical Expenditure Previous Quarter
Employed Bank Agency
91%
7%
2%
Average Nursing Expenditure Prior Year
Employed Bank Agency
95%
0% 5%
Average Other Clinical Expenditure Prior Year
Employed Bank Agency
83%
0%17%
Average Non Clinical Expenditure Prior Year
Employed Bank Agency
Increase in nursing costs has been mainly through increased bank usage which is preferential to increased agency usage.
Specific recruitment drives for overseas nurses are taking place with the aim to decrease temporary staffing expenditure and replace with substantive staff.
Increase in costs this quarter by 3%.
This increase has been through a combination of substantive staff overtime and agency usage.
Non-clinical costs have increased by 2% but total agency use in this quarter has decreased by 20% compared to last quarter.
This is due to the hard work at City Road to embed the administrative restructure allowing the release of agency staff.
The % of bank usage has increased from 4% to 7%. In terms of temporary staffing cover, the bank gives better value for money than agency use.
10
NHS Operating Expenditure – Non-Pay Costs
Comments:
Corporate department’s non-pay costs increased in August and again in September, under the category of “Other Costs”.
The increase in September is due to expenditure on IT projects. Other increases were due to expenditure on patient surveys and estates costs on photocopiers and telephone services.
July benefitted from a release of a prior year provision.
Comments:
A £0.4M increase in clinical supplies and drugs expenditure in September compared to August. Increases are across all Directorates but the largest increase of £0.2M is in Moorfields North, due to stocking up for new developments. Generally though, this expenditure is activity related and reflective of increased activity in September just as August saw low expenditure and decreased activity.
Increased costs in the forecast for October and November relate to anticipation of additional resources to support delivery of the 18 week standard.
11Moorfi elds North 179,018 162,760 -16,258 91% 413,676 648,083 514,151 124% 39%
Moorfi elds South 143,223 120,198 -23,025 84% 325,359 325,359 276,084 85% 37%
Outpatient & Diagnostic Services 771,321 589,937 -181,384 76% 1,579,730 1,457,366 1,034,799 66% 37%
Surgica l Services 561,224 292,787 -268,437 52% 1,082,281 748,901 603,584 56% 27%Clinical Directorates 1,654,786 1,165,682 -489,104 70% 3,401,046 3,179,709 2,428,619 71% 34%Chief Executive's Offi ce 5,412 5,412 0 100% 10,819 10,819 10,824 100% 50%Chief Operating Offi cer 13,077 13,077 0 100% 26,154 26,154 26,154 100% 50%Corporate Governance 15,624 15,624 0 100% 31,248 31,248 31,248 100% 50%Director of Nurs ing 21,764 21,764 0 100% 43,527 43,527 43,527 100% 50%Director of Stra tegy 24,931 19,878 -5,052 80% 61,014 50,909 68,357 112% 33%Education 14,303 14,303 0 100% 31,096 28,605 28,605 92% 46%Estates and Faci l ities 160,827 160,827 0 100% 399,748 321,654 321,654 80% 40%Finance 70,430 70,430 0 100% 140,860 140,860 140,860 100% 50%Human Resources 33,986 7,850 -26,136 23% 67,972 15,700 15,700 23% 12%
Information Technology 42,239 0 -42,239 0% 126,716 212,996 141,997 112% 0%
Qual i ty and Sa fety 9,400 9,400 0 100% 18,800 18,800 18,800 100% 50%Corporate Department Initiatives 411,991 338,564 -73,427 82% 957,954 901,272 847,726 88% 35%
TRUST TOTAL 2,066,778 1,504,246 -562,531 73% 4,359,000 4,080,981 3,276,345 75% 35%
Unidentified amount of the full year target has fall to £123k, however forecast achievement is £544k below the target. The schemes underperforming year to date are on management pay costs, drugs costs and AMD income. Performance has improved in August and September due to revenue schemes, the main area being Occular Prosthetics,starting and overperforming this month and last.
Unidentified amount has remained at £333k. The YTD variance to target of £268k consists of £167k, due to 6 months equivalent of the unidentified amount, and £101k shortfall on identified schemes, pay expenditure schemes for medical pay and working hours review.
Unidentified amount of £52k
Schemes phased to start from July 2014 but forecast is now to start the scheme in October 2014.
0
50
100
150
200
250
300
350
400
Amou
nt (£
'000
)
Period
Efficiency Schemes Profile and Forecast
Target
Actual
Forecast
Summary of Performance:
- Year to date (YTD) achievement is £1,504k, 73% of YTD target and 35% of the full year target.- The year to date shortfall against the original phased target (including a phased share of unidentified schemes) is £563k.- Total schemes worth £4,080k have been identified which is 94% and only £279k below the target of £4,359k. - Full year forecast del ivery however, is only 75% of the target at £3,276k. All schemes that are not del ivering will be re-assessed for their potential full year recurrent value as part of setting the budget for next financial year.
10%12%
27%8%
43%
Breakdown of Forecast AchievementClinical Supplies
Drugs
Non-clinical supplies
Pay
Revenue
£000s £000s £000s £000s £000s £000s £000s £000s £000s
Total Income 904 788 (117) 5,439 5,143 (296) 10,725 10,485 (240)
Expenditure Pay Costs 599 547 52 3,620 3,379 241 7,160 7,283 (123) Non-Pay Costs 198 152 46 1,174 878 296 2,165 1,892 273Total Expenditure 797 699 98 4,793 4,257 537 9,324 9,175 149Interest, Dividends, Depreciation 26 26 0 116 116 0 217 217 0
Total Contribution to overhead 81 63 (19) 529 770 241 1,183 1,093 (90)
Variance Budget Forecast VarianceResearch and Development Budget Actual Variance Budget Actual
In Month Year to Date Full Year
Efficiency Scheme Performance
Research and Development Position
Commercial Trading Unit Position
Income: Income is £0.1M behind plan in month and adverse year to date by £0.3M. Income is forecast to end the year below plan by £0.2M.
Expenditure Expenditure is £0.1M favourable in month and £0.5M favourable year to date. Expenditure is forecast to end the year £0.1M below plan as additional income
receipts are anticipated to be spent in year.
12
£000s £000s £000s £000s £000s £000s £000s £000s £000s £000s £000s
Total Income 2,945 2,412 (533) 16,984 13,305 (3,679) 35,485 29,766 (5,719) 16,267 (2,962)
Expenditure Pay Costs 857 841 16 5,191 5,458 (267) 10,503 10,119 384 5,024 (434) Non-Pay Costs 1,523 1,437 87 8,832 8,074 759 17,867 16,687 1,180 7,471 (602)Total Expenditure 2,380 2,277 102 14,023 13,531 492 28,370 26,806 1,564 12,495 (1,036)
Commercial Trading Unit EBITDA 565 134 (431) 2,961 (226) (3,187) 7,116 2,961 (4,155) 3,772 (3,998)
Commercial Trading Unit EBITDA Margin % 19.2% 5.6% 17.4% -1.7% 20.1% 9.9% 23%
Interest, Dividends, Depreciation 133 121 12 772 721 50 1,588 1,549 38 697 (24)
Commercial Trading Unit Surplus / (Deficit) 433 13 (419) 2,189 (948) (3,137) 5,528 1,411 (4,117) 3,075 (4,022)Internal Sales (73) (23) (50) (354) (191) (163) (781) (453) (328) (450) 259
Commercial Trading Unit Surplus / (Deficit) - discounting internal sales 360 (10) (369) 1,835 (1,139) (2,974) 4,747 958 (3,789) 2,624 (3,763)
Commercial Trading Units
In Month Year to Date Full Year
Budget Actual Variance Forecast VarianceBudget Actual Variance Budget
Prior Year YTD
Actual Variance
Income: Income is £0.5M behind plan in month and adverse year to date by £3.7M. Income is forecast to end the year below plan by £5.7M.
Expenditure Expenditure is £0.1M favourable in month and £0.5M favourable year to date. Expenditure is forecast to end the year £1.6M favourable to plan.
Overall Position Breakeven position in the month is an improvement on the year to date deficit position of £1.1M. Position is forecast to recover to a surplus position and deliver a
year end surplus of £1.0M but this is £3.8M below plan, after adjustment for internal sales.
13
ORIGINAL BUDGET
YTD EXP COMMIT-MENTS
TOTAL BALANCE
MEH Charity - Humphrey Fields Analyser 354 348 - 348 6 Backlog Maintenance 806 582 222 804 2 Ealing Clinic Space Expansion 638 491 115 606 31 Ocular Service Expansion 323 222 101 323 0 Croydon Equipment 1,544 1,084 377 1,460 84 Backlog 2014-15 1,490 214 182 396 1,094 Office Reconfiguration 153 153 - 153 - Spectralis 173 173 - 173 - Microsoft Licencing 153 153 - 153 0 Open Eyes 1,000 581 - 581 419 Darent Valley Equipment 889 60 508 568 321 Theatre Upgrade 1,828 - 524 524 1,304 PP- OCT 108 106 - 106 2 Major ongoing projects 9,460 4,166 2,030 6,196 3,264 Other projects 5,882 1,040 793 1,834 4,048 Overall total projects 15,342 5,207 2,823 8,030 7,312
Capital Expenditure
Standing Note on risk management
Moorfields’ capital projects are susceptible to two types of risk, managed through CPOG:
“control risk”, i.e. the risk that, for any given level of difficulty or uncertainty in a project, it will run to time and budget and is mitigated by MEH employing project management and risk control techniques.
“inherent risk” that the given level of risk or uncertainty can be a significant unknown even once a project is commissioned. The mitigation of inherent risk is the willingness to recast, scrap or replace the original project in the light of significant new information.
Scheme Budget Commentary
2014/15 Actual
Significant expenditure items in-year were:
Croydon Equipment (£1.1M) equipping the newly-opened satellite site.
OpenEyes (£0.6M) as part of the ongoing development of the software and associated technical infrastructure.
Backlog Maintenance (£0.8Macross two projects) addressing the ongoing need to keep Trust property in good order.
Overall YTD expenditure was £5.2M.
All of the figures on this page exclude the impact of a significant recent property purchase, which will be described in further detail in the private section of the Board report, for reasons of commercial and contractual confidentiality.
Commitments
Orders that have been raised and invoices received by the end of September 2014 but not yet paid total £2.8M. This is primarily due to timing rather than underlying issues with the projects themselves.
14
Cash Flo
Debt Service Cover Sep 14/15(P06)
Jun 14/15(P03)
Mar 13/14(P12)
Dec 13/14(P09)
PDC dividend expense (1.0) (0.5) (1.9) (1.5)Interest Expense on Non-commercial borrowings
(0.1) 0.0 (0.2) (0.1)
(1.1) (0.5) (6.9) (1.9)
Surplus 3.4 (0.3) 9.3 6.5add back Interest Expense 0.1 0.0 0.2 0.1add back PDC Expense 1.0 0.5 1.9 1.5add back Depreciation 3.5 1.8 6.1 4.4Revenue available for Debt Service
8.0 2.0 17.5 12.6
Debt Service (1.1) (0.5) (6.9) (1.9)Debt Service Cover metric 7.1 3.9 2.5 6.7Debt Service Cover rating 4 4 4 4
Liquidity Sep 14/15(P06)
Jun 14/15(P03)
Mar 13/14(P12)
Dec 13/14(P09)
Current liabilities (27.2) (30.3) (32.3) (29.7)Current assets 36.4 40.3 44.1 42.4Inventory 3.5 3.7 3.5 3.7Cash for CoS liquidity purposes 5.7 6.3 8.3 9.0
Operating Expenses within EBITDA, Total
(87.5) (42.8) (157.3) (113.6)
Liquidity metric 11.7 13.3 19.0 21.5Liquidity rating 4 4 4 4
Continuity of Service Risk Rating
4 4 4 4
Continuity of Service Risk Rating (CoSRR)
Continuity of Services Rating From 1st October 2013 the Trust started to be measured against the continuity of services risk rating (CoSRR), replacing the financial risk rating (FRR). This has two measures focussed on ability to service debt and liquidity.
‘Debt Service Cover’ measures the Trust’s ability to ensure it can service its debt obligations. At present the Trust does not have any debt to service, although this will change as Oriel-related activities progress.
A ratio of > 2.5 results in the highest possible rating of 4, which the Trust has maintained since the measure began.
‘Liquidity’ compares the net assets and liabilities which could theoretically be liquidated (converted to cash) and compares them to operating expenses, the result being expressed as a number of days’ equivalent availability.
A negative number of days’ availability arises when the current liabilities of the Trust are greater than the cash-convertible assets. This indicates a risk that the Trust may not have sufficient cash to meet its obligations if all of its liabilities become due at once.
For this reason a metric showing a positive number of days received the highest possible rating of 4, with ascending risk as the metric decrease past zero.
The Trust has maintained a rating of 4 since the measure began.
Overall Rating
The Trust has maintained a combined rating of 4 since the measure began. The timing and value of certain investments may affect the liquidity measure, but under current plans all measures are expected to stay at 4 for the remainder of the year.
15
Balance Sheet
Balance Sheet
BALANCE SHEET Act Act Act Act
30 Sep2014
30 Jun2014
13/14 Year End
12/13 Year End
£M £M £M £MFIXED ASSETSTangible Donated 13.7 13.5 13.7 13.1Tangible Purchased 87.1 67.3 65.8 62.6Intangible Donated 0.0 0.0 0.0 0.0Intangible Purchased 3.5 3.0 2.8 1.2
104.3 83.9 82.3 76.9
CURRENT ASSETSStocks & Work in Progress 3.5 3.7 3.5 3.2Debtors 12.7 16.8 14.2 10.7
Prepayments 3.5 2.1 2.1 2.1Cash & Cash Equivalents 16.9 17.8 24.3 20.6
36.6 40.3 44.1 36.6
CREDITORS : Amounts due < 1 yr (25.8) (28.7) (30.0) (27.1)
NET CURRENT ASSETS 10.8 11.6 14.0 9.5
TOTAL ASSETS LESS CURRENT LIABILITIES 115.1 95.5 96.4 86.4
LOANS : Amounts falling due > 1 yr (15.8) 0.0 0.0 (4.3)
CREDITORS: Amounts due > 1 yr (0.6) (0.5) (0.5) (0.4)PROVISIONS FOR LIABILITIES AND CHARGES
(1.3) (1.3) (2.2) (0.8)
TOTAL ASSETS EMPLOYED 97.3 93.7 93.7 80.9
FINANCED BY:
TAXPAYERS' EQUITYPublic dividend capital 32.0 32.0 32.0 31.3Income and expenditure reserve 59.0 55.4 55.4 45.9Revaluation reserve 6.3 6.3 6.3 3.7TOTAL TAXPAYERS EQUITY 97.3 93.7 93.7 80.9
Commentary
Capital: The Trust acquired a building using loan finance in September. “Normal” expenditure of £5.2M in Q2 (incl £1.0M for Croydon equipment) and £2.8M of committed expenditure. The Q2 plan was £5.9M including £3.2M for St George’s and City Road injection facilities, neither of which have commenced; See Capital Expenditure sheet for further explanations.
Stock: Decrease of £0.2M in Q2. 38% of total inventory is held by M Pharm (constant at £1.4M in Q2), 18% by Pharmacy (£0.5 M decrease to £0.6M in Q2) and 23% by Theatres (£0.3M increase to £0.8M in Q2).
Debtors: See debtors section.
Cash: £0.9M decrease in Q2 and £17.4M decrease in September. The monthly fall was due to a recent substantial property purchase, funded by a loan received in August 2014. The quarterly fall was due to further property and capital-related payments, offset by improving debtor collections.
Creditors: Decrease of £3M in Q2, primarily due to £3M Cooksey funding release.
Loans: £16.5M loan taken in Q2 14/16, of which £15.8m is due in more than 1 year. Further loans are expected as Oriel-related transactions progress.
Provisions: 'Other' closing balance 2013/14 refers to provisions for staff-related payments, historic taxation, and Board-approved charitable support. Staff payment made in May 2014 and provision released.
PDC: £0.75M addition in 2013/14 re OpenEyes funding. Further £0.35M expected in 2014/15.
Income & Expenditure: Reflects surplus.
Revaluation Reserve: No change in land and buildings revaluations since 2013/14 year end. Situation under review with respect to Oriel planning.
16
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Actu
al 1
3/14
YE
April
201
4 ac
tual
May
201
4 ac
tual
June
201
4 ac
tual
July
201
4 ac
tual
Aug 2
014
actu
al
Sept
201
4 ac
tual
03 O
ct 1
4
10 O
ct 1
4
17 O
ct 1
4
24 O
ct 1
4
31 O
ct 1
4
07 N
ov 1
4
14 N
ov 1
4
21 N
ov 1
4
28 N
ov 1
4
05 D
ec 1
4
12 D
ec 1
4
19 D
ec 1
4
26 D
ec 1
4
02 Ja
n 15
09 Ja
n 15
16 Ja
n 15
23 Ja
n 15
30 Ja
n 15
06 Fe
b 15
13 Fe
b 15
20 Fe
b 15
27 Fe
b 15
06 M
ar 1
5
13 M
ar 1
5
20 M
ar 1
5
27 M
ar 1
5
03 A
pr 1
5
Current forecastReceipt of loan funding with associated expenditure for property purchase in the following week.
Spikes around the middle of each month as £9M+ of SLA income is received.
Q4 Plan £23.5MForecast £15.9M(£7.6M adverse)
1: additional asset acquisition costs 2: forecast commercial under-performance
Q3 Plan £21.0MForecast £20.9M.Additional property purchase costs and Pharma losses offset by timing of other capital expenditure.
Cash Flow
17
Debtors Management and Credit Control
Please note: Values shown in the above tables are for the stated types of debt only. Additional items comprise overall debt for the Trust, including provisions and accruals.
Monthly highlights
Legacy PCT debts finally settled and all balances closed in Q2.
Significant decrease in total overdue debts in Q2. Contract debts down £3.1M to £5.4M due to strong collections, and Sundry debts down £1.1M to £1.1M due to a £1.5M receipt from Bedford Hospital in respect of historic debts.
Informed by three key NEL CCGs that overdue invoices have been authorised for payment. Follow-up underway to ensure that this happens, including £1.1M notified for the mid-October payment run.
Type of Debt Total Total Sep 14 Jun 14 Jun 14 Jun 14 % Var % Var % Var
Overdue Current Total Overdue Current Total Overdue Current TotalWelsh Debts only 1,191 13 1,204 1,155 15 1,170 3.0% (17.2%) 2.8%NHS Service Income 4,190 2,898 7,088 7,397 6,282 13,679 (76.5%) (116.8%) (93.0%)Total Contract Debts 5,381 2,911 8,292 8,477 6,298 14,775 (57.5%) (116.3%) (78.2%)Private Patients 3,585 840 4,425 3,770 911 4,681 (5.2%) (8.5%) (5.8%)Pharmacy Sales 301 350 651 266 386 652 11.6% (10.5%) (0.2%)Sundry Debtors 1,123 424 1,547 2,263 1,271 3,534 (101.5%) (199.7%) (128.4%)TOTAL 10,390 4,525 14,915 14,776 8,865 23,641 (42.2%) (95.9%) (58.5%)
Type of Debt 6 Mths + 5 Mths 4 Mths 3 Mths 2 Mths 1 Mth Total Total Sep 14
Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Overdue Current TotalWelsh Debts only 1,155 0 0 15 21 0 1,191 13 1,204NHS Service Income 2,007 31 192 1,023 794 143 4,190 2,898 7,088Total Contract Debts 3,162 31 192 1,038 815 143 5,381 2,911 8,292Private Patients 2,318 182 161 241 281 402 3,585 840 4,425Pharmacy Sales 0 0 106 24 52 119 301 350 651Sundry Debtors 428 35 44 145 306 165 1,123 424 1,547TOTAL 5,908 248 503 1,448 1,454 829 10,390 4,525 14,915
Prior quarter £k 6222 776 198 4,831 445 2,304 14,776 8,865 23,641Change - £k (314) (528) 305 (3,383) 1,009 (1,475) (4,386) (4,340) (8,726)Change - % (5.0%) (68.0%) 154.0% (70.0%) 226.7% (64.0%) (29.7%) (49.0%) (36.9%)
18
Overdue CCG debts
NEL, NWL and SWL CCGs and London Specialist Commissioning collectively account for £2.8M (52%) of overdue contract debts, significantly down from £6.2M (73%) at Q1.
NEL had an overdue balance of £1.8M as at Q2, of which £1.5M related to 2013/14; £1.1M is expected in the mid-October payment run.
NWL has an overdue balance of £0.8M as at Q2, of which £0.2M related to 2013/14 and continues to be actively pursued.
NCA (Non-Contract Activity) debt includes Kent & Sussex Area CCGs with £0.3M overdue as at Q2, of which £0.2M related to 2013/14. As is the case with all NCA debts, an individual targeted approach is made for each debtor.
Overdue Sundry debts
Overdue sundry debts decreased by 23% in September. This was due to £1.5M received from Bedford Hospital in respect of overdue debts and months 4 & 5 performance invoices.
Legacy PCT debts
Final agreement was reached to settle outstanding PCT debts (prior to 2013/14) in June, and the final outstanding credit note was issued during Q2. The legacy PCT debtor balance is therefore nil.
A note on collection and overdue contract debts
Standard NHS payment terms are 30 days from the invoice date. SLA payments are mostly made on the 15th of each month and, once set up, tend to run smoothly. Delays in payment occur when data is delayed or disputed, or queries arise which require investigation. Significant effort goes into preventing these situations, but overdue contract debts are inevitable to some degree.
5,381
3,585301
1,123
4,525
Overdue Debts
Total Contract Debts
Private Patients
Pharmacy Sales
Sundry Debtors
Current
9,070
279695
2,486
2,269
972
4,5256 Mths +
5 Mths
4 Mths
3 Mths
2 Mths
1 Mth
Current
