MEETING: Haringey Clinical Commissioning Group Governing Body Meeting

DATE: Thursday, 15 March 2018 TITLE: Finance Report as at 31st January 2018 LEAD DIRECTOR/ MANAGER:

Simon Goodwin Chief Finance Officer

AUTHOR: Scott Hunn, Head of Finance Anthony Browne, Deputy CFO

CONTACT DETAILS: 020 3688 2727

Scott.Hunn@nhs.net

SUMMARY:

Financial performance at the end of January 2018 (Month 10) can be summarised as

follows:

The CCG is forecasting a year-end deficit of £6.3m against the control total of £0.16m surplus. This is an adverse movement of £6.3m on the Month 9

reported position.

The £6.3m deficit forecast can be split as follows: A £2.3m increase in cost pressures in Month 10

The realisation of £4m worth of unmitigated cost pressures previously reported monthly to the Governing Body as a high risk item (see section 6)

The £2.3m in-month movement is due to the impact of No Cheaper Stock (NCSO) prescribing items now required to be reported in the position (previously NHS England required these to be reported in risks), increased Continuing Care costs and an increase in acute costs as a result of an error in

the marginal rate calculation. This is partly offset by an overall reduction in the acute forecast at Month 10.

The reported position of £6.3m incorporates £1.6m worth of available

mitigations that are used to partly reduce the CCG’s underlying pressure of £7.9m. The position includes pressures from the loss of Category M margin and pressures from NCSO drug costs. Further detail on the CCG’s underlying position, risks and mitigations detailed in section 6 of this report

Overall Acute contracting is forecasting a £4.5m pressure at year end. The North Middlesex (NMUH) is forecasting a £0.8m overspend at year-end, an adverse movement of £0.8m from month 9. The CCG’s other major acute

Appendix 5.1

provider, Whittington Health, is forecast to overspend by £0.2m which is a favourable movement of £0.2m from the previous month. There is a notable

£0.8m pressure in the UCLH contract.

Out of sector contracts are not protected by marginal rates and currently

forecast a cumulative overspend of £2.7m at year-end.

Non-Acute services are forecasting a £3.1m overspend at year end, which is consistent with month 9. Although there is no overall net movement from last

month it should be noted that the Continuing Healthcare budget reports an overspend of £3.8m, which is an adverse movement of £0.8m from month 9. The £0.5m underspend against Primary Care Delegated Co-Commissioning reflects the net impact of North Central London risk share arrangements in

place for 17/18 only.

A number of risks remain which are detailed further in Section 6 of this paper including:

o Increasing costs against acute contracts particularly within outpatients,

elective and the risk of further pressure during winter in A&E and Non-Elective services. Note that growth is already included in reported acute

numbers and should further costs materialise they will be offset by the application of the marginal rate for the in-sector contracts;

o The QIPP risk relating to the CCG and STP’s ability to deliver local and STP level QIPP with the requirement to deliver 24% of QIPP in the last two

months of the year; o Further unplanned increases in Continuing Healthcare activity and costs;

o No CCG reserves to meet activity and cost increases over and above contract values (although in-sector trusts are protected to a degree by marginal rate contracts).

Overall QIPP performance has been reported as slipping by £2.3m against the £7.6m 2017/18 target. Pressures are mainly a result of STP planned care and care closer to home QIPP slippage.

The CCG is continuing to focus on financial recovery planning in order to mitigate pressures in these areas. 2018/19 financial balance is expected to be addressed by the increase to the CCG’s resource limit and the next year’s QIPP programme (see section 6 and 7).

NHS England have now issued further guidance on the 2018/18 planning process. An update as to how this impacts the CCG and the QIPP gap for next year is reflected in section 7 of this report.

This report contributes to: Delivering high quality, efficient services within the

resources available.

Prior consideration by Committees and other partners: None specific

Patient & Public Involvement (PPI): None specific

Equality Impact Assessment: None specific

Risks: This report is one element used to monitor the Clinical Commissioning

Group’s financial performance in terms of adherence to core statutory duties.

RECOMMENDED ACTION:

The Governing Body is asked to:

CONSIDER the financial position for Haringey Clinical Commissioning

Group at the end of January 2018.

NOTE the latest 2018/19 Operating Plan guidance and draft financial

modelling set out in this report

Haringey Clinical Commissioning Group Finance Report: 1 April 2017 to 31 January 2018 (Month 10)

1. INTRODUCTION

1.1 This paper presents to the Governing Body, the financial position for the period to 31 January 2018. 2. EXECUTIVE SUMMARY

2.1 Month 10 Financial performance can be summarised as follows:

Budget Actual

£'000 £'000 £'000 £'000 £'000

Resource Allocation - 335,468 - 335,468 - - 403,983 -

Acute Contracts (In and Out of Sector) 186,592 189,733 3,141 226,486 3,059

Other Acute 14,197 15,414 1,217 18,495 1,458

Acute Commissioning 200,789 205,147 4,358 244,981 4,517

Mental Health 33,350 33,726 376 40,482 462

Continuing Care 16,665 19,845 3,179 23,813 3,815

Community Services 13,376 12,298 1,078- 14,669 1,382-

Primary Care Prescribing 24,793 25,311 518 30,373 622

Primary Care 964 1,052 89 1,247 91

PRC Delegated Co-Commissioning 32,706 32,256 449- 40,598 538-

Primary Care 111 & OOH Integrated Care 1,354 1,524 170 1,829 204

Programme Corporate Cost 4,626 4,452 174- 5,202 206-

Non-Acute Commissioning 127,833 130,464 2,631 158,213 3,068

Running Costs 5,168 5,167 0- 6,363 0

0.5% Contingency & 1% Non-Recurrent Reserve 1,469 1,469 - 1,762 -

Demand Reserve 75 1,058- 1,133- 1,147- 1,238-

(Surplus) / Deficit 134- 5,722 5,856 6,189 6,348

YTDFOT Variance 

Variance 

2.2 At the end of January 2018, the CCG is £5.9m from its planned position, and forecast to overspend by £6.3m at year end.

2.3 The deterioration in the CCGs position is from a £2.3m increase in cost

pressures in Month 10 and the realisation of £4m worth of unmitigated cost pressures which had been reported monthly to the Governing Body as a high risk item (see section 6).

2.4 The £2.3m in-month movement is due to the impact of No Cheaper Stock

(NCSO) prescribing items now required to be reported in the position

(previously NHS England required these to be reported in risks), increased Continuing Care costs and an increase in acute costs as a result of an error in the marginal rate calculation. This is partly offset by an overall reduction in the acute forecast at Month 10.

2.5 The reported position of £6.3m incorporates £1.6m worth of available

mitigations that are used to partly reduce the CCG’s underlying pressure of £7.9m. The position includes pressures from the loss of Category M margin and

pressures from NCSO drug costs. Further detail on the CCG’s underlying position, risks and mitigations detailed in section 6 of this report

2.6 The most significant points to note include:

In-Sector over performance at North Middlesex (£0.8m), Whittington Health

(£0.2m), UCLH (£0.8m) and Royal Free London (£0.5m) which is partially offset by under-performance at Moorfields (£0.3m) and RNOH (£0.2m).

Month 10 reporting has seen an improvement of £0.4m in acute services from the previous month. This movement is after the application of estimated levels of QIPP delivery and marginal rates within contracts. There is an adverse movement seen with North Middlesex. (£0.8m) and Barts (£0.1m). Offsetting

these pressures are forecast favourable movements reflected in the contracts with Whittington Health (£0.2m), Royal Free London (£0.4m), UCLH (£0.3m) and Homerton (£0.1m).

Out of Sector performance is showing a £2.7m pressure with contracts not benefitting from the marginal rates that are in place for in-sector contracts. The main areas of over-performance are summarised as follows:

o Homerton – (£0.4m) adverse forecast outturn o Guy’s – (£0.3m) adverse forecast outturn o Imperial College – (£0.4m) adverse forecast outturn o Highgate – (£0.8m) adverse forecast outturn

Across the ‘Point of Delivery (PoD)’ the CCG are reporting material forecast outturn variances within the following services:

o A&E - £0.9m adverse (pressure against Whittington Health and North Middlesex)

o Outpatients - £3.5m adverse (pressure against Whittington Health, North Middlesex and Royal Free London)

o Critical Care - £2.7m favourable (underspends against North Middlesex and Whittington Health)

o Diagnostic Imaging - £1.4m favourable (underspends against North Middlesex and Whittington Health)

o Maternity - £1.0m favourable (underspends against North Middlesex and Whittington Health)

o Elective – £0.6m favourable (underspends against North Middlesex Royal Free London and Moorfields)

Non-Acute services are forecasting a £3.1m overspend at year end. The pressure is within continuing healthcare (£3.8m) and prescribing (£0.6m). This is offset by underspends in Community Services (£1.4m) and Primary Care

Delegated Co-commissioning (£0.5m). The latter reflects the financial impact of North Central London Delegated Primary Care risk share arrangements which are in place for 2017/18 only.

Continuing Healthcare services are forecasting a £3.8m pressure above, this

represents an increase of £0.8m from month 9. The CCG’s risks and opportunities return also lists a further potential £0.6m risk above the reported position. The over-performance is due to a combination of increased activity

and the costs of individual packages.

Overall QIPP performance has been reported as slipping by £2.3m against the £7.6m 2017/18 target. There is slippage against full year targets within planned

care schemes (Community Dermatology, T&O and Neurology) and Care Closer to Home.

Running costs are being delivered to plan and therefore within the £6.4m CCG

allocation.

3. ACUTE ACTIVITY FINANCIAL PEFORMANCE

Budget Actual Variance Budget Forecast Variance

£'000 £'000 £'000 % £'000 £'000 £'000 %

In Sector Agreements

Whittington Health 69,927 70,171 244 0% 83,757 83,910 154 0%

North Middlesex 64,007 64,791 784 1% 76,570 77,374 803 1%

Royal Free London 16,913 17,482 569 3% 20,245 20,727 482 2%

University College London Hospitals 17,245 17,933 688 4% 20,655 21,446 792 4%

Moorfields Eye Hospital 3,622 3,352 271- -7% 4,347 4,040 307- -7%

Royal National Orthopaedic Hospital 837 660 177- -21% 1,004 788 216- -21%

Great Ormond Street 428 513 86 20% 513 606 93 18%

In Sector Total 172,979 174,902 1,923 1% 207,091 208,892 1,801 1%

Out of Sector Agreements

Bart's and The London 4,885 4,954 69 1% 5,862 5,920 59 1%

Homerton 4,244 4,634 390 9% 5,092 5,473 381 7%

Guy's and St Thomas' 1,510 1,814 304 20% 1,812 2,138 326 18%

Imperial College 942 1,244 301 32% 1,130 1,486 356 31%

Chelsea and Westminster 433 509 76 17% 520 608 88 17%

Royal Brompton and Harefield 196 368 172 88% 235 414 179 76%

Kings College 413 332 80- -19% 495 398 97- -20%

The North West London 443 416 27- -6% 532 498 35- -6%

The Royal Marsden 134 154 20 15% 161 183 22 13%

St George's Healthcare 247 203 44- -18% 297 232 65- -22%

Barking Havering & Redbridge 167 203 36 22% 200 243 43 21%

Out of Sector Total 13,613 14,831 1,218 9% 16,336 17,594 1,258 8%

Other Acute

SLA Exclusions 772 488 284- -37% 927 586 340- -37%

Acute LAS 8,235 8,274 39 0% 9,882 9,929 47 0%

Acute private providers 1,475 2,740 1,265 86% 1,770 3,286 1,516 86%

Non Contracted Activity 2,260 2,457 197 9% 2,712 2,948 236 9%

Winter Pressures 1,455 1,455 0 0% 1,746 1,746 0 0%

Other Acute Total 14,197 15,414 1,217 9% 17,037 18,495 1,458 9%

Acute Total 200,789 205,147 4,358 2% 240,463 244,981 4,517 2%

FOTYTD

3.1. The Whittington Health contract is operating under a Payments by Results

(PbR) arrangement for acute services (£55.0m) and a block for community services (£28.8m). The total contract value in 17/18 is £83.8m with system resilience funding (£0.2m) reported outside of this. The contract is forecasting over-performance of

£0.2m at year-end. 3.2. Forecast over-performance within this contract is reported within outpatients (£1.7m), A&E (£0.6m) and Drugs and Devices (£0.2m). This is offset by under-spends

in Critical Care (£2.1m), Diagnostic Imaging (£0.4m) and Maternity (£0.6m).

3.3. The North Middlesex contract is forecast to over-spend by £0.8m. Forecast

over-performance on this contract is reported within A&E (£0.4m) and Outpatients

(£0.6m). This is offset by under-spends in Critical Care (£0.9m), Diagnostic Imaging (£0.7m), Maternity (£0.7m) and Elective activity (£0.5m).

3.4. The Royal Free is projecting an over-performance of £0.5m for the year against

the agreed contract of £20.2m. Over-performance is reported within outpatients

(£0.9m) and Critical Care (£0.2m). This is offset by under-spends in non-elective (£0.4m) and diagnostic imaging (£0.2m). 3.5. The unmitigated UCLH contract is forecast to overspend by £0.8m over-spend

for the year. The main pressure at the Trust has been reported in Maternity (£0.1m), drugs and devices (£0.1m) and non-elective (£0.2m). 3.6. Out of Sector contracts are forecast to overspend by £1.3m at year end. The

material over-performance is reported at Homerton (£0.4m), Guys (£0.3m) Imperial (£0.4m) and Royal Brompton (£0.2m). 3.7. Acute Point of Delivery (PoD) Forecast variance analysis (£)

UCLHWhittington

HealthNorth Mid

Royal Free

London Moorfields

Barts and

London

All other

providersTotal

A&E -25,029 636,227 449,087 29,067 -97,702 -9,957 -40,048 941,645

Critical Care 114,324 -2,084,861 -942,245 179,761 0 38,951 12,587 -2,681,483

Diagnostic Imaging -119,544 -362,210 -704,126 -153,610 5,938 -23,149 -4,590 -1,361,292

Drugs and Devices 149,243 244,685 81,268 37,984 38,411 77,894 24,368 653,852

Elective -30,439 -24,443 -537,318 -119,047 -248,884 36,752 366,723 -556,656

Maternity 121,383 -583,692 -676,152 -37,798 0 50,283 150,716 -975,259

Non-Elective 166,895 153,616 288,881 -418,101 -925 -390,130 307,114 107,350

Other 666,492 444,085 2,228,180 65,450 -83,967 140,095 -13,237 3,447,098

Outpatients -251,755 1,730,094 615,804 898,014 80,337 138,168 272,848 3,483,510

791,570 153,502 803,379 481,721 -306,794 58,906 1,076,481 3,058,765

3.8. The main areas of PoD cost pressure are within A&E, outpatients and Drugs and Devices.

3.9. Whittington and North Middlesex are reporting a pressure in A&E, this is driven by a combination of increased cost and activity. Non-Elective activity is above plan at Whittington Health, North Middlesex and UCLH, which is mitigated by under-spends

with Royal Free London and Barts. 3.10. The PoD analysis highlights that Outpatient activity is accruing at North Middlesex (£0.6m above plan), Whittington Health (£1.7m above plan) and Royal Free

London (£0.9m above plan). Elective activity is forecast to under-perform by £0.6m however there is a risk that activity may increase during the last two months of the financial year.

3.11. Maternity activity is forecast to under-spend by £1.0m at year-end. This is largely due to reduced levels of activity at the Whittington Health and North Middlesex. 3.12. Critical care activity has decreased in total during 2017/18 with the material

underspends reported at Whittington Health and North Middlesex which is partially offset by an overspend at Royal Free London and UCLH.

3.13. Whittington Health, North Middlesex, ULCH and Barts are reporting overspends against Drugs and Devices. Diagnostic Imagining is forecasted to under-spend by

£1.4m for the year. Mostly due to reduced levels of activity at the Whittington Health

and North Middlesex. This is offset by increased activity with In-Health (£0.5m pressure).

3.14. The ‘Other’ category is used to capture CQUIN, QIPP productivity and other financial adjustments. A breakdown of spend in this POD can be found in Appendix A.

4. NON-ACUTE

Budget Actual

£'000 £'000 £'000 £'000 £'000

Mental Health 33,350 33,726 376 40,482 462

Continuing Care 16,665 19,845 3,179 23,813 3,815

Community Services 13,376 12,298 1,078- 14,669 1,382-

Primary Care Prescribing 24,793 25,311 518 30,373 622

Primary Care 964 1,052 89 1,247 91

PRC Delegated Co-Commissioning 32,706 32,256 449- 40,598 538-

Primary Care 111 & OOH Integrated Care 1,354 1,524 170 1,829 204

Non-Acute Commissioning 123,207 126,012 2,805 153,011 3,274

Programme Corporate Cost 4,626 4,452 174- 5,202 206-

Non Acute Total 127,833 130,464 2,631 158,213 3,068

YTDFOT Variance 

Variance 

4.1. Non-Acute services are forecasting a £3.1m overspend at year end, which is consistent with month 9. Although there is no overall net movement from last month it

should be noted that the Continuing Healthcare budget reports an overspend of £3.8m, which is an adverse movement of £0.8m from month 9 reporting. 4.2. There are compensating favourable movements in the budgets for Community

Services (£0.5m) and Primary Care Delegated Co-Commissioning (£0.5m). The £0.5m underspend against Primary Care Delegated Co-Commissioning reflects the net impact of North Central London risk share arrangements in place during 2017/18 only.

4.3. The Continuing Health Care position represents the major risk for the CCG alongside acute contracting. This area has seen material level of growth in recent months as a result of are forecasting a £3.8m pressure above plan.

4.4. The CHC budget continues to witness significant cost pressures with a significant swing in M10 forecast outturn position due to a combination of increased patient numbers and care package costs. The increased patient numbers are largely a result of acute and mental health activity within Continuing Care.

4.5. In addition to high cost care package reviews the CCG has secured additional nursing capacity to clear the backlog of reviews. Both these initiatives are expected to result in longer term savings for the CCG. Actions to develop a QIPP and joint savings

plan with the local authority has started aimed at identifying schemes for 2018/19. Wider than this NCL is conducting a strategic review of CHC services which will look at all aspects of delivery and incorporate market management.

4.6. At month 10 prescribing expenditure reports a pressure of £0.6m. This is due to the impact of ‘No Cheaper Stock Available’ (supply shortages and the consequential increased costs) which amounts to £1.5m. The CCG is also impacted by the loss of

Category M marginal rate benefit to NHS England which amounts to £0.3m in 2017/18. NHS England have been working to address both of these issues with clarification expected shortly as to how these pressures will be accounted for at year-end.

4.7. Services provided by organisations where we do not have a contract are driving the overspend in Mental Health. There are additional pressures in Locked Rehab and Learning Disability Transforming Care which are being addressed at a local and North Central London level in conjunction with Local Authority and NHS England colleagues.

5. QIPP PROGRAMME DELIVERY 2017/18

5.1. A summary of the CCG’s QIPP position at Month 10 reporting is shown below. These figures are reported within the overall CCG financial position:

Year to Date QIPP (£m) Full Year QIPP (£m)

Planned Actual Variance Planned Actual Variance

5.7 3.9 1.8 7.6 5.3 2.3

5.2. Full Year QIPP performance as at Month 10 has been reported as slipping by £2.3m against the £7.6m 2017/18 target. There is slippage in the year to date position

of (£1.8m), with no further deterioration expected this year. 5.3. The £2.3m under-performance against full targets is mainly a result of STP QIPP slippage within planned care schemes (Community Dermatology, T&O and

Neurology) and Care Closer to Home. 5.4. The following risks still apply to QIPP reporting:

o The 2017/18 QIPP is profiled on the assumption that 24% of savings accrue in the last two months of the year and investment / enabling work must be completed or underway in order for this to deliver at plan.

o There are a number of schemes that have slipped or are unlikely to meet required QIPP targets that are being reassessed to understand if they should now be revised/replaced. This forms part of the QIPP recovery work.

o QIPP recovery continues with 18/19 schemes beginning in quarter 4 17/18 where possible to ensure to rectify any impact on Haringey’s underlying position. The CCG also has financial management plan in place to address in-year and future year financial pressures.

5.5. Finance have highlighted a further £0.6m above the reported forecast risk

based on information available which takes a more narrow view on the delivery of QIPP in 17/18 (see section 6 below).

6. FORECAST, RISKS AND OPPORTUNITIES

6.1. At the end of Month 10, Haringey CCG is reporting a forecast deficit of £6.3m against the in-year target of a £0.16m surplus.

6.2. The Month 10 reported position of £6.3m incorporates £1.6m worth of available non-recurrent mitigations that are used to partly reduce the CCG’s underlying pressure of £7.9m. The £6.3m position includes pressures from the loss of Category M margin and pressures from NCSO drug costs (see appendix B).

6.3. The deterioration in the CCGs position is from a £2.3m increase in cost pressures in Month 10 and the realisation of £4m worth of unmitigated cost pressures which had been reported to the Governing Body as a high risk item. The table below

sets out at summary level the £2.3m movement in the forecast outturn reported at Month 9 vs Month 10.

6.4. The £2.3m in-month movement is due to the impact of No Cheaper Stock (NCSO) prescribing items now required to be reported in the position (previously NHS England required these to be reported in risks), increased Continuing Care costs and an increase in acute costs as a result of an error in the marginal rate calculation. This

is partly offset by an overall reduction in the acute forecast at Month 10. 6.5. At Month 10 it would not be prudent to assume further mitigations beyond those already identified will be available to close off the current gap to control total. The

figure of £4m is the underlying pressure the CCG requires to meet its control total, this being consistent with that previously reported Finance and Performance committee and the Governing Body.

6.6. In order for the Governing Body to understand the areas of budgetary pressure within the CCG’s gift the table below models the underlying position accounting for national pressures in prescribing. NHS England have been working to address both of these issues with clarification expected shortly as to how these pressures will be

accounted for at year-end. The underlying deficit excluding these items which are outside the CCG’s control is £4.5m (see appendix B for further detail). Haringey CCG Underlying Deficit £m Comments M10 Reported Position 6.3

less NHSE Cat M Margin (0.3) Loss of Category M drugs cost margin

In-month material movements (Month 10 reporting) £m

Acute - Impact of changes to Marginal Rate 0.9

Net Reduction in Acute Costs (Month 9 vs. Month 10 reporting) (0.9)

Increase in Continuing Care Costs (Month 9 vs. Month 10 reporting) 0.8

NCSO Prescribing Costs (previously reported as 'above forecast' risks) 1.5

Total adverse movement in Forecast Outturn 2.3

Existing reported gap in CCG mitigating items to control financial pressures 4.0

M10 Reported Position 6.3

NCSO Impact (1.5) No cheaper stock impact 2017/18

Revised Underlying Deficit 4.5

6.7. It is expected that by year end in addition to the items in the table above the CCG be required to release its 0.5% Non-Recurrent reserve which was required to be held

uncommitted by NHS England throughout 2017/18. This will have the impact of improving the financial position of the CCG by £1.8m however NHSE are likely to exclude this from their view of the CCG’s financial performance in 2017/18.

6.8. NHS England have confirmed that any financial over-performance will impact upon the CCG’s historic surplus or deficit. Business rules require CCGs to have a 1% historic surplus in place with Haringey CCG presently holding a historic surplus of £3.6m or 1% (this surplus is due to the release of the 1% Non-recurrent allocation in

2016/17). The Governing Body will be advised of the final impact to the historic surplus once treatment of the NCSO, Cat M marginal rate and 0.5% Non-recurrent reserve are confirmed by NHS England.

Further Risks above the Month 10 Reported Position

6.9. The Finance Team continue to work with commissioning colleagues to identify further, albeit more remote, risks above the reported position at Month 10. As

expected these risks have greatly reduced from previous reporting as we approach the end of the financial year. These risks are reported back to NHS England via the monthly ‘Non-ISFE’ financial reporting return.

6.10. The Month 10 position has been revised to reflect risks that have now been realised. The assessment of the Finance Team has identified a further £2.8m risk over and above the forecast position. The table below reflects an assessment of risks and opportunities that may impact on the CCGs financial position further.

Assessment of Risks & Mitigations as at Month10

Full Value Probability

Adjusted

Value

Risks £m % £m

Acute Contract over-performance of 7% at a marginal rate of 50% (Jan18 - Mar18) 2.03 75% 1.5

Under delivery of STP/QIPP at a marginal rate of 50% in last 3 months of the year. 1.13 50% 0.6

Increased in year CHC activity 1.00 60% 0.6

Prescribing - NCSO Cost Pressure M10-M12 0.00 100% 0.0

Increased activity at private providers and out of area mental health providers 0.24 50% 0.1

Total Risk 4.4 2.8

Mitigations

Contingency 0.0 0% 0.0

Funding set aside for investments in STP interventions. 0.0 0% 0.0

Total Mitigations 0.0 0.0

Net Risk/(Mitigation) 4.4 2.8

6.11. The main risks to the achievement of the CCGs control total is further acute over-performance during the latter part of the year, under-delivery of STP interventions and increased non-acute activity and expenditure. As previously reported the CCG does not have any significant mitigations if these risks materialise and would need to identify mitigating actions to cover emerging cost pressures.

7. 2018/19 FINANCIAL PLANNING UPDATE

3.1. NHS England have now issued updated 2018/19 planning guidance alongside a timetable for Operating Plan completion. As a separate report is to be presented to the Governing Body with respect to Performance and Activity targets this section will

summarise finance headlines and changes to 2018/19 allocations. Relevant timetable deadlines are included within the Performance Operating Plan paper. Allocations

7.1. Resources for CCGs increased by a total of £1.4bn principally to fund realistic levels of emergency activity in plans, elective activity to target waiting lists and investments in key areas such as Mental Health, Cancer Services and Primary Care.

7.2. The CCG will realise the benefit of these increases via the following changes in the planning guidance:

o The planning requirement for CCGs to underspend 0.5% of allocations is lifted for 18/19 realising a benefit of £1.8m for Haringey. This is not an actual

increase in allocation for the CCG but allows more flexibility as the CCG is not obligated to plan for the funding as a reserve.

o An extra £3m added to Haringey’s 2018/19 allocations (£600m nationally

across CCGs) which is likely required to address new targets within acute

o The Introduction of new £400m Commissioner Sustainability Fund (Note

that London CCGs will not a benefit from this scheme in 2018/19).

o Other adjustments such as demographic increases, HRG4+ acute tariff increase

and other recurrent items such as Market Rent budgets to pass-through to providers

7.3. Haringey CCG’s revised allocations are set out below:

7.4. The NHS already has two-year contracts and improvement priorities set for the period 2017/19, the 2018/19 will be a refresh of plans already prepared. NHS England

have advised of the following:

Allocation published in Jan16

Adjusted published allocation

Additional funding

Other Non- Recurrent allocations

Final 2018/19

allocation

Final % growth

Final per capita

allocation

£000 £000 £000 £000 £000 % £

Programme 361,024 361,883 3,010 307 365,200 3.32% 1,139

Delegated Primary Care

42,921 42,921 42,921 4.34% 134

Running Cost 6,398 6,398 6,398 0.55% 20

Total 410,343 411,202 3,010 307 414,519

o The requirement to hold the remaining 0.5% Non-Recurrent reserve

uncommitted is lifted with the CCG now able to invest this in any way it sees

fit. As mentioned in paragraph 7.3 this again is not an actual increase in allocation for the CCG but allows more flexibility.

o CCG’s should assume that the current high cost prices of drugs linked to

NCSO issues will not continue in to 2018/19. In addition to this Category M

generic drugs clawback will not continue in 2018/19. There will therefore be a benefit to CCGs in 18/19.

o There will be no additional winter funding in 2018/19 and Haringey will be

required to maintain its £1.7m funding for existing winter / systems resilience schemes. A winter demand and capacity plan is required for assurance purposes across commissioner and provider organisations.

o STPs should also take steps to resource their own ‘infrastructure’.

Although these should be mainly drawn from their constituent organisations, NHS England will be making a further non-recurrent allocation within each STP

to support its leadership in 2018/19 on the same basis as 2017/18.

o Each CCG must meet the Mental Health Investment Standard (MHIS) by

which their 2018/19 investment in mental health rises at a faster rate than their

overall programme funding. CCGs’ auditors will be required to validate their 2018/19 year-end position on meeting the MHIS. NHS England have advised that NCL meeting the MHIS cumulatively across all 5 CCGs will also be acceptable.

3.2. The CCG has begun incorporating the new guidance in to its draft operating plan. A difference in assumptions on the cost and level of Acute activity plus the amount of QIPP applicable is likely to result in differences between CCG and Trust

contract values in 2018/19 plans. This gap between commissioner and providers will need to be closed off before final submission of 2018/19 plans on the 30th April 2018.

7.5. The Month 10 financial planning bridge is summarised below:

2018/19 Month 10 Financial Planning Bridge (Draft) Best Most Likely Worst

£m £m £m

17/18 Forecast Outturn surplus/(deficit) (6.19) (6.19) (8.99)

Less non-recurrent funding & NR reserves (7.27) (7.27) (7.97)

Less Non-Recurrent Spend 8.70 8.70 8.70

Exit 17/18 recurrent forecast outturn surplus/(deficit) (4.76) (4.76) (8.26)

Add allocation growth 13.41 13.41 13.41

Less 18/19 cost growth (8.90) (10.68) (12.46)

Less Primary Care 18/19 Growth (1.79) (1.79) (1.79)

Add 18/19 QIPP 12.46 12.14 8.90

Less 18/19 QIPP Investment (1.47) (1.47) (2.00)

Less 18/19 inflation (4.39) (4.39) (4.47)

18/19 Recurrent Costs (2.00) (2.00) (2.00)

18/19 recurrent forecast outturn surplus/(deficit) 2.56 0.47 (8.67)

18/19 non-recurrent costs (1.76) (1.76) (1.76)

18/19 in year forecast outturn surplus/(deficit) 0.80 (1.29) (10.43)

Provisional QIPP Estimate for 2018/19 11.66 13.44 19.32

QIPP as a % of recurrent allocation 2018/19 2.81% 3.24% 4.67%

3.3. The table above models various outturns in 2017/18 based on current reported figures and risks above the forecast position. 2018/19 figures model investment, growth and business rules (best 2.5%, mid 3%, worst 3.5%) against the 18/19

allocation. The overall QIPP target is subject to ongoing modelling of 18/19 by CCG finance teams however estimates at present are approx. 3.24% (£13.4m). 3.4. The CCG is likely to be required to demonstrate a level of QIPP savings closer to

an overall 4% net target which is closer to savings programmes across other NCL CCGs. This equates to £16.5m worth of savings next year, a £3.1m increase on the QIPP identified in the table above.

8. CONCLUSION

8.1. At the end of January 2018, the CCG is reporting a £6.3m deficit against its in-

year target surplus of £0.2m.

8.2. The overspend against Continuing Healthcare is an area of significant concern and requires close monitoring to control the drivers of the overspend and to identify

potential areas for efficiencies both in 2017/18 and next financial year.

8.3. Risks still remain above the reported position with the most significant being, the current slippage of QIPP schemes, the aforementioned Continuing Care pressures

and the over-performance against acute contracts. These risks are expected to reduce as we approach the end of the financial year.

8.4. The Governing Body is asked to:

CONSIDER the financial position for Haringey Clinical Commissioning

Group at the end of January 2018.

NOTE the latest 2018/19 Operating Plan guidance and financial modelling

set out in this report

Appendix A: Haringey CCG Acute ‘Other POD’ Summary

Adjustment Description UCLHWhittingt

on HealthNorth Mid

Royal Free

London Moorfields

Barts and

LondonOther Total

QIPP 0 203,716 203,716

Readmissions 288,688 243,999 532,687

Unspecified 40,000 40,000

System Plan Adjustment (85,878) 70,827 (15,051)

HEMS (152,726) (152,726)

Devices (54,837) (54,837)

Pass Through Costs (207,404) (207,404)

CQUIN 0 (284,405) (284,405)

Emergency Threshold Reduction 294,288 294,288

Paediatric Insulin Pumps 1,876,769 1,876,769

Provider Submitted Adjustment 492,815 0 492,815

Virtual Ward (526,000) (526,000)

Patient Transport (75,326) (75,326)

Claims & Challenges 33,655 (80,913) 496,145 824,736 1,273,623

Marginal Rate 33,972 196,247 0 230,219

Neonatal Critical Care Spells 34,272 34,272

Supplementary Payments - Transitional Care 55,072 55,072

Productivity Metrics - 16/17 69,809 69,809

Other (200,000) 66,331 0 0 (122,080) (223,751) 139,077 (340,424)

Total (250,433) 1,721,472 374,801 1,223,233 81,636 157,311 139,077 3,447,098

The items above are areas that do not fit in to more specific Points of Delivery as part of Acute Trust Reporting

The largest areas of spend are in Paediatric Insulin Pumps and Claims and Challenges

The CCG has requested further work from CSU colleagues to map this to relevant Points of Delivery when available

Appendix B: Haringey CCG Month 10 Financial Reporting Bridge

• Note: Haringey M10 reported position does not account for any return of Cat M margin or NCSO adjustment

• If these adjustments are made to the reported position the net residual gap to the control total is £4.5m

Appendix C: 2018/19 Planning Guidance Key Financial Considerations (1 of 2)

Description of Planning Item Key Metric/Output

Commissioner Control Totals

CCGs to plan against existing 18/19 control totals - NHS England to notify any amendments to CTs as a result of the CSF.

Overspending CCGs should improve in-year financial performance by at least 1% of RRL, and those with longer standing

and/or larger cumulative deficits will be given a more accelerated recovery trajectory. All CCGs will be expected to achieve

a minimum of financial balance with zero deficits, following deployment of any CSF allocations.

Commissioner Sustainability

Fund

Where a CCG is unable to operate within its recurrent allocation for 2018/19 it will be required to commit to a credible plan,

agreed and aligned at STP level, to deliver a stretching but realistic deficit control total set by NHS England and it will then

qualify to access the Commissioner Sustainability Fund provided it delivers its financial control total. All CCGs will be

expected to achieve a minimum of financial balance with zero deficits, following deployment of any CSF allocations. Full

details on the operation of the CSF will be published shortly - however, note that London is not a beneficiary of CSF in

18/19.

Provider Sustainability Fund

30% of total Provider SF linked to A&E performance. Providers need to achieve A&E performance in 2018/19 that is the

better of either 90% or the equivalent quarter for 2017/18. Provider Boards must confirm acceptance of org control total.

Non-acceptance of CTs will trigger action under the Single Oversight Framework. Providers who accept their control totals

and so have access to the Provider Sustainability Fund for 2018/19 are exempt from contractual performance sanctions, as

per NHS Standard Contract. Neither providers nor commissioners should include the impact of contractual sanctions in their

plans, whether or not the provider has accepted its control total. Providers who accept control totals (and associated

conditions) will also be eligible to be considered for any discretionary capital allocations.

Emergency Care and Referral to

Treatment Times

A&E standard -expectation that aggregate performance against the four-hour A&E standard is above 90% for the month of

September 2018, that the majority of providers are achieving the 95% standard for the month of March 2019, and that the

NHS returns to 95% overall performance within the course of 2019. .CCGS and Providers expected to demonstrate

reductions in levels of DTOCs with partners to 3.5% of beds overall. Also expected to focus on LoS - particularly 'super-

stranded patients. Community service providers eligible for local incentive schemes to reinvest savings into expanded

Community services. Total of £210m of CCG Quality Premium funding contingent on moderating demand for emergency

care - metric is level of growth in NEL activity compared to agreed plan.

RTT/Elective

RTT - commissioners and providers should plan on the basis that their RTT waiting list will be no higher in March 2019 than in

March 2018. The planning assumption for England as a whole is for 4.9% growth in total outpatient attendances (4.0% per

working day) and up to 3.6% growth in elective admissions (2.7% per working day). It is also assumed that GP referrals will

increase by 0.8% (i.e. no change per working day). Nationally the number of elective waiters should not increase above

levels as at 30th November. Numbers of patients waiting more than 52 weeks to be halved by March 2019.

Integrated Care SystemsThe NHS is now using ‘Integrated Care System’ as a collective term for both devolved health and care systems and for those

areas previously designated as ‘shadow accountable care systems’.

Appendix C: 2018/19 Planning Guidance Key Financial Considerations (2 of 2)

Capital & EstatesThe 2017 Autumn Budget provided an extra £354 million of public capital in 2018/19. The approval of additional STP capital

will be contingent on the STP having a compelling estates and capital plan - with planned disposals where appropriate.

National TariffThe two-year National Tariff Payment System remains unchanged for next year. The next round of interventions eligible for

direct reimbursement through the Innovation and Technology Payments, a programme designed to incentivise take-up of

the latest innovations across the NHS, will be published by 31 March.

Efficiency AssumptionsLocal systems are expected to continue to implement the priority efficiency programmes within the 10 Point Efficiency

Plan.

NHS Pay Further guidance to be published in due course. Assumptions on the impact of any changes to NHS pay beyond the 2017-19

published assumptions should be excluded from 2018/19 plans. Provider 18/19 workforce plans to be used as basis for pay

modelling

Community Pharmacy CCGs will receive the remaining period of temporary benefit from changes made to Category M generic drug prices

designed to recover excess community pharmacy margin from previous years (i.e. the Cat M clawback will not continue

beyond 2017/18).

Contract Variations Contract variations should be agreed and signed by no later than 23 March 2018. Where commissioners and providers fail to

reach timely agreement the dispute resolution process in the contract should be followed. Starting with escalated

negotiation, the process then moves into mediation. The Dispute Resolution guidance will be published shortly.

CQUIN and Quality Premium

NHS England will publish an update to the 2017/19 CQUIN guidance shortly. The 0.5% risk reserve CQUIN will be withdrawn

and added to the engagement CQUIN which will increase as a result to 1%. A total of £210 million of CCG Quality Premium

incentive funding will be contingent on performance on moderating demand for emergency care. The principal metric for

this purpose will be the level of growth in non-elective activity compared to the agreed plan.

ActivityThe allocations for 2018/19 allow for 2.3% growth in non-elective admissions and ambulance activity and 1.1% growth in

A&E attendances. This is in aggregate for England and reflects recent trends, but activity growth patterns to be reflected in

plans will in practice vary by commissioner and provider.

Winter PlanningNo additional winter funding in 2018/19. Winter Plans should be embedded and will be assured as part of Operating Plans.

Guidance following.

5YFV PrioritiesThe NHS already has two-year priorities, set out in last year’s Planning Guidance and the March 2017 publication of the Next

Steps on the NHS Five Year Forward View. The Planning Guidance Annex confirms the deliverables for 2018/19.