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St Georges + Quality healthcareAnnual accounts for the year ended 31 March 2005
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Contents
2 Directors statements
5 Auditors report to the
members of the board
5 Foreword
6 Income and expenditure
account
7 Balance sheet
8 Statement of recognised
gains and losses
9 Cash flow statement
10 Notes to the accounts
Directors statements
Statement of the Chief Executives responsibilities as the
Accountable Officer of the TrustThe Secretary of State has directed that the Chief Executive should be the Accountable
Officer to the Trust. The relevant responsibilities of Accountable Officers, including their
responsibility for the propriety and regularity of the public finances for which they are
answerable, and for the keeping of proper records, are set out in the Accountable
Officers' Memorandum issued by the Department of Health.
To the best of my knowledge and belief, I have properly discharged the responsibilities set
out in my letter of appointment as an accountable officer.
Peter HomaChief Executive Date: 14th July 2005
Statement of directors responsibilities in respect of the
accounts
The directors are required under the National Health Services Act 1977 to prepare
accounts for each financial year. The Secretary of State, with the approval of the
Treasury, directs that these accounts give a true and fair view of the state of affairs of the
trust and of the income and expenditure of the trust for that period. In preparing those
accounts, the directors are required to:
apply on a consistent basis accounting policies laid down by the Secretary of State
with the approval of the Treasury
make judgements and estimates which are reasonable and prudent
state whether applicable accounting standards have been followed, subject to anymaterial departures disclosed and explained in the accounts.
The directors are responsible for keeping proper accounting records which disclose with
reasonable accuracy at any time the financial position of the trust and to enable them to
ensure that the accounts comply with requirements outlined in the above mentioned
direction of the Secretary of State. They are also responsible for safeguarding the assets
of the trust and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors confirm to the best of their knowledge and belief they have complied with
the above requirements in preparing the accounts.
By order of the Board
Peter Homa Colin Gentile
Chief Executive Date: 14th July 2005 Director of Finance Date:14th July 2005
St. George's Healthcare NHS Trust - Annual Accounts 2004/05
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3
STATEMENT ON INTERNAL CONTROL 2004/05
1 Scope of responsibility
The Trust Board is accountable for the organisations internal
control systems. As Accountable Officer and Chief Executive ofthis Board, I have responsibility for maintaining a sound system of
internal control that supports the achievement of the organi-
sations policies, aims and objectives. I am also personally
responsible for safeguarding the public funds and the organi-
sations assets, as set out in the Accountable Officer
Memorandum.
Accountability for Risk Management is set out in the Trusts Risk
Management Strategy, where Executive responsibilities for specific
areas of risk are identified.
Improving patient care is an endeavour that the Trust achieves by
working closely with partner organisations and the South-West
London Health Authority. A number of mechanisms are used for
partnership work including the Wandsworth Overview & ScrutinyCommittee, Patient and Public Involvement activities, the
Bolingbroke Steering Group, Workforce Confederation, Service
Level Agreement negotiations with local Primary Care Trusts (PCTs)
and the Financial Recovery Board.
2 The purpose of the system of internal control
The system of internal control is designed to manage or mitigate
risk and improve patient care and safety. The system of internal
control is based on an ongoing process designed to:
identify and prioritise the risks to the achievement of theorganisations policies, aims and objectives; and
evaluate the probability and potential impact of those risks
being realised, and to manage them efficiently, effectively andeconomically.
The system of internal control has been in place in St Georges
Healthcare NHS Trust for the year ended 31 March 2005 and
embedded up to the date of approval of the annual report and
accounts.
3 Capacity to handle risk
The Trust is committed to providing high quality services in a safe
and secure environment. As Chief Executive I have overall respon-
sibility for all risk management and ensuring that the organisa-
tional structure and resource is in place to ensure this occurs.
Senior leadership in this process is delegated through the
Directors and operationalised through the Directorates, Service
Delivery Units (SDUs) and committee structures.
This system provides a central steer whilst supporting local
ownership in managing and controlling risks to which the Trust
may be exposed.
Through the Directorates and SDUs the Trust has systems in place
to identify risks, assess their impact and devise strategies to
manage and evaluate them. Risk management training and
education are available for all Trust staff, relevant to their grade
and situation. Expert guidance and facilitation support this
function.
Actions taken to reduce risks are regularly monitored, reported
and trends analysed, at SDU, Directorate, Corporate Committee
and Trust Board level. Evaluation of their effectiveness and theimplementation of recommendations from external assurance
assessments promote both organisational and individual learning
and the dissemination of good practice within the Trust.
St. George's Healthcare NHS Trust - Annual Accounts 2004/05
4 The risk and control framework
The key elements of the Trusts Risk Management Strategy are to
manage and control identified risks, whether clinical, non-clinical
or financial, appropriately. This is achieved through a sound
organisational framework, which promotes early identification ofrisk, the co-ordination of risk management activity, the provision
of a safe environment for staff and patients, and the effective use
of financial resources. It ensures staff are aware of their roles and
responsibilities and outlines the structures and processes through
which risk is assessed, controlled and managed.
Risks are identified through feedback from many sources, such as,
formal risk assessments, incident reporting, audit data, complaints,
legal claims, patient and public feedback, stakeholder/partnership
feedback and internal/external assessments.
Risks are evaluated using a recognised risk assessment tool, which
assesses the impact and likelihood of the risk occurring using a
scoring system. This score feeds into the decision-making process
about whether a risk is considered acceptable or unacceptable.When a risk is accepted control measures are put into place.
Unaccepted risks are tolerated and monitored, not disregarded.
The level of control required is informed by the risk score, the risk
is then prioritised and a designated person is responsible for
reviewing, reporting, reassessing and monitoring the effectiveness
of the controls.
Risk management is embedded within the organisation through
the Corporate, Directorate and SDU structures and the reporting
and feedback mechanisms in place. Systems are in place to ensure
that the necessary risk assessments are carried out, risk registers
are maintained, risk plans approved, control measures
implemented and monitored, and action plans are reported,
reviewed and monitored. The Corporate Governance directorate,which includes Risk Management, support staff and disseminate
good practice across the organisation. Involvement in risk
management activities is also included within the Trusts objective
setting and individual performance review of staff and the organi-
sations business planning process.
The Trusts Assurance Framework, based on the Trusts objectives
and ratified by the Trust Board, is a high-level document based on
structured and on-going assessment of the key risks to the Trust
achieving its objectives and the controls and assurances
mechanisms in place to manage them. The objectives are robust
and cover all the organisations functions. Material risks, which
form part of the Principal Risk Register, have also been linked to
the Assurance Framework, as have details of sources of availableassurances. Action Plans, which are regularly reviewed by the Risk
Management Committee, are in place and regular reports are
made to the Trust Board and the Audit Committee.
Key stakeholders are involved in the management of risks via
patient and public involvement activities, patient surveys, public
Board meetings, the Patient Forum and the local Overview and
Scrutiny Committee.
Assessment of the Assurance Framework has identified some
weaknesses and gaps in control and assurances in relation to
some of the potential risks identified. These are being addressed
through the Trusts Assurance Framework Action Plan, covering
patient related issues of focus, safety, clinical effectiveness, service
access and the environment as well as the organisational issues of
human resources, governance, performance and finance.
Additional actions include:
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Directors statements (continued)
Clinical issues
A working group will develop internal measures to assess
progress in relation to dignity, privacy, consent and confidentiality.
Communication and provision of information to patients willbe improved through the provision of a dedicated patient
information centre and ensuring links to staff objectives and
appraisals.
Child protection arrangements will be strengthened byimplementation and monitoring of part 8 inquiry recommen-
dations.
Patient outcomes will be further improved through clinicalaudit and clinical outcome measurement linked to the leadership
programmes for medical staff and the appraisal processes.
Care management across organisational boundaries will beimproved through an audit programme (agreed jointly by SouthWest London Chief Executives and Audit Committees), of long
term medical conditions, audits of discharge documentation and
care pathways and establishment of a lead Consultant in this
area.
Cross-organisational projects will have risk registers monitoredand managed by the Trust Executive Group.
Waiting times for Consultant-to-Consultant referrals will beimproved through a Consultant review panel and joint referral
protocols with PCTs.
Estates
A prioritised action plan to be developed and progress reportspresented regularly to the Trust Board. Immediate Fire Safetyissues at Bolingbroke Hospital addressed but outstanding issues to
be taken forward.
Cleanliness issues are being implemented through theMatrons Charter, involvement of the patients and public in
monitoring standards and regular reports to the Trust Board.
Public Health
Public support for strategic change will be managed through across-organisational Programme Board, a lead Director and a
comprehensive communication and involvement strategy.
Human Resources
The Agenda For Change and Improving Working LivesProject Boards are monitoring and overseeing the Electronic StaffRecord system project.
Governance
Outstanding governance issues will be addressed by thedevelopment of an Integrated Governance Plan and other
initiatives outlined above.
Finance
With the support of the Department of Health and StrategicHealth Authority, the Trust has engaged external consultants to
assist in the development of a financial turnaround plan to set out
how the Trust will achieve financial balance.
St. George's Healthcare NHS Trust - Annual Accounts 2004/05
Information
Providing high quality accessible information to our patientsand public in general is important to the Trust. Recent
developments include the publication of descriptive mortality on
our intranet pages, and the availability of approved patientinformation leaflets in over three hundred different areas of
healthcare.
An Information Governance action plan is also beingdeveloped. Information Governance Self Assessment will be
completed and a remedial action plan will be implemented.
5 Review of effectiveness
As Accountable Officer, I have responsibility for reviewing the
effectiveness of the system of internal control. My review is
informed in a number of ways. The Head of Internal Audit
provides me with an opinion on the overall arrangements for
gaining assurance through the Assurance Framework and on the
controls reviewed as part of the internal audit work. Directors andmanagers within the organisation who have responsibility for the
development and maintenance of the system of internal control
provide me with assurance. The Assurance Framework itself
provides evidence of the effectiveness of the controls used to
manage the risks to the organisation achieving its principal
objectives and these are regularly reviewed.
My review is also informed by external and internal audit reports,
clinical audit reports, reports from external assessments such as
Clinical Negligence Scheme for Trusts (CNST) level 2 accreditation,
Patient Environmental Action Team (PEAT), patient surveys, Royal
College reports, staff surveys, Quality Assurance Agency Report,
Improving Working Lives reports and Price Waterhouse Cooper
reviews.I have been advised on the implications of the result of my review
of the effectiveness of the system of internal control by: the Risk
Management Department, Directors Team, Trust Executive Group,
Risk Management Committee, Audit Committee, Clinical
Governance Committee and the Trust Board.
Action to ensure the continuous improvement of the internal
control system is in place. The Board has been engaged in the
development and continuous review of the Assurance Framework.
It has been scrutinised by the Audit Committee and I have taken
into account the Head of Internal Audit Opinion on the system of
internal control.
Significant Control IssuesThe Trust incurred a significant deficit on income and expenditure
in 2004/05. With the support of the Department of Health and
the Strategic Health Authority, the Trust has engaged external
consultants to assist in the development of a financial turnaround
plan to set out how the Trust will achieve financial balance.
Progress will be carefully monitored to ensure achievement of
agreed targets.
Peter Homa
Chief Executive Date: 14th July 2005
(on behalf of the Board)
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Auditors report Foreword to the accounts
These accounts for the year ended 31
March 2005 have been prepared by the
St George's Healthcare NHS Trust under
section 98(2) of the National Health
Service Act 1977 (as amended by
section 24(2), schedule 2 of the National
Health Service and Community Care Act
1990) in the form which the Secretary
of State has, with the approval of the
Treasury, directed.
St. George's Healthcare NHS Trust - Annual Accounts 2004/05
Independent Auditors Report to Directors of
the Board of St Georges Healthcare NHS TrustI have audited the financial statements on pages 2 to 31 which have
been prepared in accordance with the accounting policies relevant to
the National Health Service as set out on pages 10 to 13.
This report is made solely to the Board of St George's Healthcare
NHS Trust in accordance with Part II of the Audit Commission Act
1998 and for no other purpose, as set out in paragraph 54 of the
Statement of Responsibilities of Auditors and of Audited Bodies,
prepared by the Audit Commission.
Respective Responsibilities of Directorsand Auditors
As described on page 2 the Directors are responsible for the
preparation of the financial statements in accordance with
directions issued by the Secretary of State. My responsibilities, as
independent auditor, are established by statute, the Code of Audit
Practice issued by the Audit Commission and my professions
ethical guidance.
I report to you my opinion as to whether the financial statements
give a true and fair view of the state of affairs of the Trust and its
income and expenditure for the year, in accordance with the
accounting policies directed by the Secretary of State as being
relevant to the National Health Service in England.
I review whether the directors statement on internal control
reflects compliance with the Department of Healths guidance
The Statement on Internal Control 2003/2004 issued on 15
September 2003 and further guidance issued on 5 April 2005.I report if it does not meet the requirements specified by the
Department of Health or if the statement is misleading or
inconsistent with other information I am aware of from my audit
of the financial statements. I am not required to consider, nor
have I considered, whether the directors statement on internal
control covers all risks and controls. I am also not required to
form an opinion on the effectiveness of the Trusts corporate
governance procedures or its risk and control procedures. My
review was not performed for any purpose connected with any
specific transaction and should not be relied upon for any such
purpose.
Basis of audit opinion
I conducted my audit in accordance with the Audit Commission
Act 1998 and the Code of Audit Practice issued by the Audit
Commission, which requires compliance with relevant auditing
standards issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant
estimates and judgements made by the Directors in the
preparation of the financial statements, and of whether the
accounting policies are appropriate to the Trust's circumstances,
consistently applied and adequately disclosed.
I planned and performed my audit so as to obtain all the
information and explanations which I considered necessary in
order to provide me with sufficient evidence to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity or
error. In forming my opinion I also evaluated the overall adequacy
of the presentation of information in the financial statements.
Opinion
In my opinion the financial statements give a true and fair view of
the state of affairs of St George's Healthcare NHS Trust as at 31
March 2005 and of its income and expenditure for the year then
ended in accordance with the accounting policies directed by theSecretary of State as being relevant to the National Health Service
in England.
Certificate
I certify that I have completed the audit of the accounts in
accordance with the requirements of the Audit Commission Act
1998 and the Code of Audit Practice issued by the Audit
Commission.
Susan Exton (District Auditor)
Audit Commission, First Floor, Millbank Tower, Millbank, London,
SW1P 4HQ
Date: 14th July 2005
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for the year ended 31 March 2005 2004/05 2003/04
NOTE 000 000
Income from activities 3 260,935 244,682
Other operating income 4 72,597 72,359
Operating expenses 5-7 (349,182) (312,181)
__________ __________
OPERATING SURPLUS/(DEFICIT) (15,650) 4,860
Cost of fundamental reorganisation/restructuring 0 0
Profit (loss) on disposal of fixed assets 8 (460) (123)
__________ __________SURPLUS/(DEFICIT) BEFORE INTEREST (16,110) 4,737
Interest receivable 422 456
Interest payable 9 (2) 0
Other finance costs - unwinding of discount (58) (58)
Other finance costs - change in discount rate on provisions 0 0
__________ __________
SURPLUS/(DEFICIT) FOR THE FINANCIAL YEAR (15,748) 5,135
Public Dividend Capital dividends payable (5,908) (5,785)
__________ __________RETAINED SURPLUS/(DEFICIT) FOR THE YEAR (21,656) (650)
__________ __________
The notes on pages 10 to 31 form part of these accounts.
All income and expenditure is derived from continuing operations.
000
RETAINED SURPLUS/(DEFICIT) FOR THE YEAR - (21,656)Financial support included in retained surplus/ (deficit) for the year -
NHS Bank 0
Financial support included in returned surplus/(deficit) for the year -
Internally generated 0__________
RETAINED SURPLUS/(DEFICIT) FOR THE YEAR
EXCLUDING FINANCIAL SUPPORT (21,656)
__________
Income and expenditure account
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as at 31 March 2005 31 March 2005 31 March 2004
NOTE 000 000
FIXED ASSETS
Intangible assets 10 627 814
Tangible assets 11 250,225 192,560
Investments 14.1 0 0
__________ __________250,852 193,374
CURRENT ASSETS
Stocks and work in progress 12 4,331 4,273
Debtors 13 37,226 32,566
Investments 14.2 0 0
Cash at bank and in hand 18.3 68 68
__________ _________41,625 36,907
CREDITORS: Amounts falling due within one year 15 (61,558) (45,369)
__________ _________NET CURRENT ASSETS/(LIABILITIES) (19,933) (8,462)
__________ _________
TOTAL ASSETS LESS CURRENT LIABILITIES 230,919 184,912
CREDITORS: Amounts falling due after more thanone year 15 0 0
PROVISIONS FOR LIABILITIES AND CHARGES 16 (5,338) (3,908)
__________ _________TOTAL ASSETS EMPLOYED 225,581 181,004
__________ _________FINANCED BY:
TAXPAYERS EQUITY
Public dividend capital 22 116,688 104,771
Revaluation reserve 17 103,729 50,123
Donated asset reserve 17 15,789 14,368
Government grant reserve 17 854 816Other reserves 17 1,150 1,150
Income and expenditure reserve 17 (12,629) 9,776
__________ __________TOTAL TAXPAYERS EQUITY 225,581 181,004
__________ __________
Peter Homa
Chief Executive Date: 14th July 2005
Balance sheet
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for the year ended 31 March 2005 2004/05 2003/04
000 000
Surplus/(deficit) for the financial year before dividend payments (15,748) 5,135
Fixed asset impairment losses 0 0
Unrealised surplus/(deficit) on fixed asset revaluations/indexation 54,758 13,578
Increases in the donated asset and government grant reserve due to 1,188 1,956receipt of donated and government grant financed assets
Reductions in the donated asset and government grant reserve due to
the depreciation, impairment and disposal of donated and (1,630) (1,301)government grant financed assets
Additions/(reductions) in "other reserves" 0 0
__________ __________
Total recognised gains and losses for the financial year 38,568 19,368
Prior period adjustment 0 0
__________ __________
Total gains and losses recognised in the financial year 38,568 19,368__________ __________
Statement of total recognised gains and losses
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for the year ended 31 March 2005 2004/05 2003/04
NOTE 000 000
OPERATING ACTIVITIES
Net cash inflow(outflow) from operating activities 18.1 4,126 18,679
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE:
Interest received 371 426
Interest paid (2) 0
Interest element of finance leases 0 0
__________ __________
Net cash inflow/(outflow) from returns oninvestments and servicing of finance 369 426
CAPITAL EXPENDITURE
(Payments) to acquire tangible fixed assets (10,265) (14,409)
Receipts from sale of tangible fixed assets 0 3,663
(Payments) to aquire intangible assets (239) (206)
Receipts from sale of intangible assets 0 0
(Payments to acquire)/receipts from sale of fixed asset investments 0 0
__________ __________Net cash inflow (outflow) from capital expenditure (10,504) (10,952)
DIVIDENDS PAID (5,908) (5,785)
Net cash inflow/(outflow) before management of (11,917) 2,368
liquid resources and financing __________ __________
MANAGEMENT OF LIQUID RESOURCES
Purchase of current asset investments 0 0
Sale of current asset investments 0 0
Net cash inflow (outflow) from management of liquid resources 0 0
__________ __________Net cash inflow (outflow) before financing (11,917) 2,368
__________ __________FINANCING
Public dividend capital received 22,917 0Public dividend capital repaid (not previously accrued) (11,000) (2,363)
Public dividend capital repaid (accrued in prior period) 0 0
Loans received 0 0
Loans repaid 0 0
Other capital receipts 0 0
Capital element of finance lease rental payments 0 0
Cash transferred (to)/from other NHS bodies 0 0
__________ __________Net cash inflow (outflow) from financing 11,917 (2,363)
__________ __________Increase (decrease) in cash 0 5
__________ __________
Cash flow statement
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1. Accounting PoliciesThe Secretary of State for Health has directed that the financial
statements of NHS trusts shall meet the accounting requirements
of the NHS trusts Manual for Accounts which shall be agreed
with HM Treasury. Consequently, the following financial
statements have been prepared in accordance with the 2004/05
NHS Trusts Manual for Accounts issued by the Department of
Health. The accounting policies contained in that manual follow
UK generally accepted accounting practice for companies (UK
GAAP) and HM Treasury's Resource Accounting Manual to the
extent that they are meaningful and appropriate to the NHS, as
determined by HM Treasury, which is advised by the Financial
Reporting Advisory Board. The accounting policies have beenapplied consistently in dealing with items considered material in
relation to the accounts.
1.1 Accounting convention
These accounts have been prepared under the historical cost
convention modified to account for the revaluation of fixed
assets at their value to the business by reference to their current
costs. NHS Trusts are not required to provide a reconciliation
between current cost and historical cost surpluses and deficits.
1.2 Acquisitions and discontinued operations
Activities are considered to be 'acquired' only if they are acquired
from outside the public sector. Activities are considered to be
'discontinued' only if they cease entirely. They are not considered
to be 'discontinued' if they transfer from one public sector body
to another.
1.3 Income Recognition
Income is accounted for applying the accruals convention. The
main source of income for the Trust is from commissioners in
respect of healthcare services provided under local agreements.
Income is recognised in the period in which services are provided.
Where income is received for a specific activity which is to be
delivered in the following financial year, that income is deferred.
1.4 Intangible fixed assets
Intangible assets are capitalised when they are capable of being
used in a Trust's activities for more than one year; they can be
valued; and they have a cost of at least 5,000.
Intangible fixed assets held for operational use are valued at
historical cost and are depreciated over the estimated life of the
asset on a straight line basis, except capitalised Research and
Development which is revalued using an appropriate index
figure. The carrying value of intangible assets is reviewed for
impairment at the end of the first full year following acquisition
and in other periods if events or changes in circumstances
indicate the carrying value may not be recoverable.
Purchased computer software licences are capitalised asintangible fixed assets where expenditure of at least 5,000 is
incurred. They are amortised over the shorter of the term of the
licence and their useful economic lives.
1.5 Tangible fixed assets
Capitalisation
Tangible assets are capitalised if they are capable of being
used for a period which exceeds one year:
- individually have a cost of at least 5,000; or
- collectively have a cost of at least 5,000 and individually
have a cost of more than 250, where the assets are functionally
interdependent, they had broadly simultaneous purchase dates,
are anticipated to have simultaneous disposal dates and are
under single managerial control; or
- form part of the initial equipping and setting-up cost of a
new building, ward or unit irrespective of their individual or
collective cost.
Expenditure on digital hearing aids in the year ended 31 March
2004 (but not in earlier years) was treated as capital expenditue,
in accordance with the amendment to the Capital Accounting
Manual issued in July 2003, giving rise to an increase in fixed
assets regardless of the cost of the individual hearing aids.
Subsequent purchases of digital hearing aids are capitalised only
when the total value is greater than 5,000. Where small
numbers of appliances are purchased the costs are expensed as
incurred.
Valuation
Tangible fixed assets are stated at the lower of replacement cost
and recoverable amount. On initial recognition they are
measured at cost (for leased assets, fair value) including any
costs such as installation directly attributable to bringing them
into working condition. They are restated to current value each
year. The carrying values of tangible fixed assets are reviewed for
impairment in periods if events or changes in circumstances
indicate the carrying value may not be recoverable.
All land and buildings are restated to current value using profes-
sional valuations in accordance with FRS15 every five years and
in the intervening years by the use of indices. The buildings
index is based on the All in Tender Price Index published by the
Building Cost Information Service (BCIS). The land index is based
on the residential building land values reported in the Property
Market Report published by the Valuation Office.
Professional valuations are carried out by the District Valuers of
the Inland Revenue Government Department. The valuations
are carried out in accordance with the Royal Institute of
Chartered Surveyors (RICS) Appraisal and Valuation Manual
insofar as these terms are consistent with the agreed
requirements of the Department of Health and HM Treasury. In
accordance with the requirements of the Department of Health,
the last asset valuations were undertaken in 2004 as at the
prospective valuation date of 1 April 2005 and were applied on
the 31 March 2005.
The valuations are carried out primarily on the basis of
Depreciated Replacement Cost for specialised operational property
and Existing Use Value for non-specialised operational property.The value of land for existing use purposes is assessed at Existing
Use Value. For non-operational properties including surplus land,
Notes to the Accounts
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the valuations are carried out at Open Market Value.
Additional alternative Open Market Value figures have only been
supplied for operational assets once they have been taken out of
operational use and subsequently disposed of.
All adjustments arising from indexation and five-yearly revalu-
ations are taken to the Revaluation Reserve. All impairments
resulting from price changes are charged to the Statement of
Total Recognised Gains and Losses. Falls in value when newly
constructed assets are brought into use are also charged there.
These falls in value result from the adoption of ideal conditions
as the basis for depreciated replacement cost valuations.
Assets in the course of construction are valued at current cost
using the indices as for land and buildings, as above. These
assets include any existing land or buildings under the control of
a contractor.
Residual interests in off-balance sheet Private Finance Initiative
properties are included in tangible fixed assets as 'assets underconstruction and payments on account' where the PFI contract
specifies the amount, or nil value at which the assets will be
transferred to the Trust at the end of the contract. The residual
interest is built up, on an actuarial basis, during the life of the
contract by capitalising part of the unitary charge so that at the
end of the contract the balance sheet value of the residual value
plus the specified amount equal the expected fair value of the
residual asset at the end of the contract. The estimated fair
value of the asset on reversion is determined by the District
Valuer based on Department of Health guidance. The District
Valuer should provide an estimate of the anticipated fair value of
the assets on the same basis as the District Valuer values the NHS
Trust's estate.
Operational equipment other than IT equipment, which is
considered to have nil inflation, is valued at net current
replacement cost through annual uplift by the change in the
value of the GDP deflator. Equipment surplus to requirements is
valued at net recoverable amount.
Depreciation, amortisation and impairments
Tangible fixed assets are depreciated at rates calculated to write
them down to estimated residual value on a straight-line basis
over their estimated useful lives. No depreciation is provided on
freehold land and assets surplus to requirements.
Assets in the course of construction and residual interests in off-
balance sheet PFI contract assets are not depreciated until theasset is brought into use or reverts to the Trust, respectively.
Buildings, installations and fittings are depreciated on their
current value over the estimated remaining life of the asset as
advised by the District Valuer. Leaseholds are depreciated over
the primary lease term.
Equipment is depreciated on current cost evenly over the
estimated life of the asset.
Impairment losses resulting from short-term changes in price
that are considered to be recoverable in the longer term are
taken in full to the revaluation reserve. These include
impairments resulting from the revaluation of fixed assets from
their cost to their value in existing use when they becomeoperational. This may lead to a negative revaluation reserve in
certain instances.
Where the useful economic life of an asset is reduced from that
initially estimated due to the revaluation of an asset for sale,
depreciation is charged to bring the value of the asset to its
value at the point of sale.
Where, under Financial Reporting Standard 11, a fixed assetimpairment is charged to the Income and Expenditure Account,
offsetting income may be paid by the Trust's main commissioner
using funding provided by the NHS Bank.
1.6 Donated fixed assets
Donated fixed assets are capitalised at their current value on
receipt and this value is credited to the Donated Asset Reserve.
Donated fixed assets are valued and depreciated as described
above for purchased assets. Gains and losses on revaluations are
also taken to the Donated Asset Reserve and, each year, an
amount equal to the depreciation charge on the asset is released
from the Donated Asset Reserve to the Income and Expenditure
account. Similarly, any impairment on donated assets charged tothe Income and Expenditure Account is matched by a transfer
from the Donated Asset Reserve. On sale of donated assets, the
value of the sale proceeds is transferred from the Donated Asset
Reserve to the Income and Expenditure Reserve.
1.7 Government Grants
Government grants are grants from government bodies other
than funds from NHS bodies or funds awarded by Parliamentary
Vote. The government grants reserve is maintained at a level
equal to the net book value of the assets which it has financed.
1.8 Private Finance Initiative (PFI) transactions
The NHS follows HM Treasury's Technical Note 1 (Revised) "How
to Account for PFI transactions" which provides definitive
guidance for the application of the FRS 5 Amendment and the
guidance 'Land and Buildings in PFI schemes Version 2.
PFI schemes under which the PFI operator receives an
annual payment from the Trust for the services provided
by the PFI operator.
Where the balance of the risks and rewards of ownership of the
PFI property are borne by the PFI operator, the PFI obligations are
recorded as an operating expense. Where the trust has
contributed assets, a prepayment for their fair value is recognised
and amortised over the life of the PFI contract by charge to the
Income and Expenditure Account. Where, at the end of the PFIcontract, a property reverts to the Trust, the difference between
the expected fair value of the residual on reversion and any
agreed payment on reversion is built up over the life of the
contract by capitalising part of the unitary charge each year, as a
tangible fixed asset.
Where the balance of risks and rewards of ownership of the PFI
property are borne by the trust, it is recognised as a fixed asset
along with the liability to pay for it which is accounted for as a
finance lease. Contract payments are apportioned between an
imputed finance lease charge and a service charge.
1.9 Stocks and work-in-progress
Stocks and work-in-progress are valued at the lower of cost and
net realisable value. This is considered to be a reasonable
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approximation to current cost due to the high turnover of stocks.
Work-in-progress comprises goods in intermediate stages of
production. Partially completed contracts for patient services
are not accounted for as work-in-progress.
1.10 Research and development
Expenditure on research is not capitalised. Expenditure on
development is capitalised if it meets the following criteria:
- there is a clearly defined project;
- the related expenditure is separately identifiable;
- the outcome of the project has been assessed with
reasonable certainty as to:
- its technical feasibility;
- its resulting in a product or service which will eventually be
brought into use;
- adequate resources exist, or are reasonably expected to be
available to enable the project to be completed and to
provide any consequential increases in working capital.
Expenditure so deferred is limited to the value of future benefits
expected and is amortised through the income and expenditure
account on a systematic basis over the period expected to
benefit from the project. It is revalued on the basis of current
cost. The amortisation charge is calculated on the same basis as
used for depreciation i.e. on a quarterly basis. Expenditure
which does not meet the criteria for capitalisation is treated as
an operating cost in the year in which it is incurred. NHS Trusts
are unable to disclose the total amount of research and
development expenditure charged in the income and
expenditure account because some research and development
activity cannot be separated from patient care activity.
Fixed assets acquired for use in research and development are
amortised over the life of the associated project.
1.11 Provisions
The Trust provides for legal or constructive obligations that are of
uncertain timing or amount at the balance sheet date on the
basis of the best estimate of the expenditure required to settle
the obligation. Where the effect of the time value of money is
material, the estimated risk-adjusted cash flows are discounted
using the Treasury's discount rate of 3.5% in real terms.
Clinical negligence costs
The NHS Litigation Authority (NHSLA) operates a risk pooling
scheme under which the NHS Trust pays an annual contribution
to the NHSLA which in return settles all clinical negligence
claims. Although the NHSLA is administratively responsible for
all clinical negligence cases the legal liability remains with the
Trust. The total value of clinical negligence provisions carried by
the NHSLA on behalf of the Trust is disclosed at note 16.
Since financial responsibility for clinical negligence cases
transferred to the NHSLA at 1 April 2002, the only charge to
operating expenditure in relation to clinical negligence in
2004/05 relates to the Trust's contribution to the Clinical
Negligence Scheme for Trusts.
Non-clinical risk pooling
The Trust participates in the Property Expenses Scheme and the
Liabilities to Third Parties Scheme. Both are risk pooling schemes
under which the Trust pays an annual contribution to the NHS
Litigation Authority and, in return, receives assistance with thecosts of claims arising. The annual membership contributions,
and any excesses payable in respect of particular claims are
charged to operating expenses as and when they become due.
1.12 Pension costs
Past and present employees are covered by the provisions of the
NHS Pensions Scheme. The Scheme is an unfunded, defined
benefit scheme that covers NHS employers, General Practices and
other bodies, allowed under the direction of the Secretary of
State, in England and Wales. As a consequence it is not possible
for the Strategic Health Authority to identify its share of the
underlying scheme assets and liabilities. Therefore the scheme is
accounted for as a defined contribution scheme and the cost ofthe scheme is equal to the contributions payable to the scheme
for the accounting period. The total employer contribution
payable in 2004-05 was 18,179,075 (2003-04 8,251,473).
The Scheme is subject to a full valuation by the Government
Actuary every four years which is followed by a review of the
employer contribution rates. The last valuation took place as at
31 March 2003 and has yet to be finalised. The last published
valuation covered the period 1 April 1994 to 31 March 1999.
Between valuations the Government Actuary provides an update
of the scheme liabilities on an annual basis. The latest
assessment of the liabilities of the Scheme is contained in the
Scheme Actuary report, which forms part of the NHS Pension
Scheme (England and Wales) Resource Account, publishedannually. These accounts can be viewed on the NHS Pensions
Agency website at www.nhspa.gov.uk. Copies can also be
obtained from The Stationery Office.
The conclusion of the 1999 valuation was that the scheme
continues to operate on a sound financial basis and the notional
surplus of the scheme is 1.1 billion. It was recommended that
employers' contributions remain at 7% of pensionable pay until
31 March 2003 and then be increased to 14% of pensionable
pay with effect from 1 April 2003. On advice from the actuary
the contribution may be varied from time to time to reflect
changes in the scheme's liabilities. Employees pay contributions
of 6% (manual staff 5%) of their pensionable pay.
NHS bodies are directed by the Secretary of State to charge
employers pension costs contributions to operating expenses as
and when they become due. Until 2002-03 HM Treasury paid
the Retail Price Indexation costs of the NHS Pension scheme
direct but as part of the Spending Review Settlement, these costs
have been devolved in full. For 2003-04 the additional funding
was retained as a Central Budget by the Department of Health
and was paid direct to the NHS Pensions Agency and the
employers' contribution remained at 7%. From 2004-05 this
funding was devolved in full to NHS Pension Scheme employers
and the employers' contribution rate rose to 14%.
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The scheme is a "final salary" scheme. Annual pensions are
normally based on 1/80th of the best of the last 3 years
pensionable pay for each year of service. A lump sum normally
equivalent to 3 years pension is payable on retirement. Annual
increases are applied to pension payments at rates defined by
the Pensions (Increase) Act 1971, and are based on changes in
retail prices in the twelve months ending 30 September in the
previous calendar year. On death, a pension of 50% of the
member's pension is normally payable to the surviving spouse.
Early payment of a pension, with enhancement, is available to
members of the Scheme who are permanently incapable of
fulfilling their duties effectively through illness or infirmity.
Additional pension liabilities arising from early retirement are not
funded by the scheme except where the retirement is due to ill-
health. For early retirements not funded by the scheme, the full
amount of the liability for the additional costs is charged to the
Operating Cost Statement account at the time the Authority
commits itself to the retirement, regardless of the method of
payment.
A death gratuity of twice final years pensionable pay for death in
service, and up to five times their annual pension for death after
retirement, less pensions already paid, subject to a maximum
amount equal to twice the member's final years pensionable pay
less their retirement lump sum for those who die after retirement
is payable.
The Scheme provides the opportunity to members to increase
their benefits through money purchase Additional Voluntary
Contributions (AVCs) provided by an approved panel of life
companies. Under the arrangement the employee/member can
make contributions to enhance an employee's pension benefits.
The benefits payable relate directly to the value of theinvestments made.
1.13 Liquid resources
Deposits and other investments that are readily convertible into
known amounts of cash at or close to their carrying amounts are
treated as liquid resources in the cashflow statement. The Trust
does not hold any investments with maturity dates exceeding
one year from the date of purchase.
1.14 Value Added Tax
Most of the activities of the Trust are outside the scope of VAT
and, in general, output tax does not apply and input tax on
purchases is not recoverable. Irrecoverable VAT is charged to the
relevant expenditure category or included in the capitalised
purchase cost of fixed assets. Where output tax is charged or
input VAT is recoverable, the amounts are stated net of VAT.
1.15 Foreign Exchange
Transactions that are denominated in a foreign currency are
translated into sterling at the exchange rate ruling on the dates
of the transactions. Resulting exchange gains and losses are
taken to the Income and Expenditure account.
1.16 Third Party Assets
Assets belonging to third parties (such as money held on behalf
of Patients) are not recognised in the accounts since the Trust
has no beneficial interest in them. Details of third party assets
are given in Note 28 to the accounts.
1.17 Leases
Where substantially all risks and rewards of ownership of a
leased asset are borne by the NHS Trust, the asset is recorded as
a tangible fixed asset and a debt is recorded to the lessor of the
minimum lease payments discounted by the interest rate implicit
in the lease. The interest element of the finance lease payment is
charged to the Income and Expenditure Account over the period
of the lease at a constant rate in relation to the balance
outstanding. Other leases are regarded as operating leases and
the rentals are charged to the Income and Expenditure Account
on a straight-line basis over the term of the lease.
1.18 Public Dividend Capital (PDC)
and PDC Dividend
Public Dividend Capital represents the outstanding public debt of
an NHS Trust. At any time the Secretary of State can issue new
PDC to, and require repayments of PDC from, the NHS Trust.
A charge, reflecting the forecast cost of capital utilised by the
NHS Trust, is paid over as public dividend capital dividend. The
charge is calculated at the real rate set by HM Treasury (currently
3.5%) on the forecast average carrying amount of all assets less
liabilities, except for donated assets and cash with the Office of
the Paymaster General. The average carrying amount of assets is
calculated as a simple average of opening and closing relevantnet assets. For 2004-05 the average carrying amount of assets is
calculated before the national revaluation figures are applied on
31 March 2005. A note to the accounts discloses the rate that
the dividend represents as a percentage of the actual average
carrying amount of assets less liabilities in the year.
1.19 Losses and Special Payments
Losses and Special Payments are charged to the relevant
functional headings on a cash basis, including losses which
would have been made good through insurance cover had NHS
Trusts not been bearing their own risks (with insurance premiums
then being included as normal revenue expenditure).
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2. Segmental analysisThis note is not applicable for St George's Healthcare NHS Trust as the organisation does not have more than one business segment.
3. Income from activities2004/05 2003/04
000 000
Strategic Health Authorities 625 1
NHS Trusts 9 880
Primary Care Trusts* 256,032 240,153
Foundation Trusts 196 0
Local Authorities 28 0
Department of Health 745 0
NHS Other 167 0
Non NHS:
- Private Patients 2,027 1,516- Overseas patients (non-reciprocal) 382 0
- Road Traffic Act 679 1,614
- Other 45 518
__________ __________260,935 244,682
__________ __________
Road Traffic Act income is subject to a provision for doubtful debts to reflect expected rates of collection.
4. Other operating income2004/05 2003/04
000 000
Patient transport services 0 0
Education, training and research 49,602 44,295
Charitable and other contributions to expenditure 525 463
Transfers from donated asset reserve 1,581 1,255
Transfers from government grant reserve 49 46
Non-patient care services to other bodies 3,079 2,529
Other income 17,761 23,771
__________ __________72,597 72,359
__________ __________
Included in 'Other Income' is 4,451,872 relating to the Central Office for Research Ethics Committee (2003/04: 3,208,000).
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5. Operating expenses
5.1 Operating expenses comprise: 2004/05 2003/04
000 000
Services from other NHS Trusts 2,591 2,292
Services from other NHS bodies 8,898 8,768
Services from Foundation Trusts 329 0
Purchase of healthcare from non NHS bodies 330 0
Directors' costs 1,212 883
Staff costs 224,049 194,030
Supplies and services
- clinical 57,808 53,408
- general 8,964 7,870
Establishment 3,929 3,969
Transport 2,772 2,635
Premises 20,452 16,694
Bad debts 160 620
Depreciation and amortisation 11,375 11,584Fixed asset impairments and reversals 0 259
Audit fees 118 55
Other auditor's remuneration 114 101
Clinical negligence 5,000 2,479
Other 1,081 6,534
__________ __________349,182 312,181
__________ __________
5.2 Operating leases
5.2/1 Operating expenses include: 2004/05 2003/04
000 000
Hire of plant and machinery 1,962 1,901
Other operating lease rentals 17 20
__________ __________1,979 1,921
__________ __________
5.2/2 Annual commitments under non - cancellable operating leases are:
Land and buildings Other leases
2004/05 2003/04 2004/05 2003/04
000 000 000 000
Operating leases which expire:
Within 1 year 0 0 240 238
Between 1 and 5 years 0 0 981 1,121
After 5 years 0 0 900 2,825
________ ________ ________ ________0 0 2,121 4,184
________ ________ ________ ________
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5.3 Salary and Pension Entitlements of Senior Managers
A) Remuneration 2004/05 2003/04
Name and Title Salary Other Benefits Salary Other Benefits
(bands ofRemuneration in Kind
(bands ofRemuneration in kind
5000) (bands of (Rounded to the 5000) (bands of (Rounded to the
5000) nearest 100) 5000) nearest 100)
000 000 100 000 000 100
Mr Peter Homa, Chief Executive Director 155-160 0-5 0 50-55 0-5 0
Mr Colin Gentile, Director of Finance (from June 2004) 95-100 0-5 0
Mr Kevin Harbottle, Acting Director of Finance (to May 2004) 70-75 0-5 0 75-80 0-5 0
Mrs Marie Grant, Deputy Chief Executive 110-115 0-5 0 90-95 0-5 0
Dr Geraldine Walters, Director of Nursing (from May 2004) 85-90 0-5 0
Ms Sue Cooper, Director of Nursing (to May 2004) 60-65 0-5 0
Mr Christopher Streather, Medical Director 140-145 0-5 0
Mr Mike Bailey, Medical Director 100-105 0-5 0
Miss Patricia Hamilton, Medical Director 205-210 0-5 0
Mr Colin Watts, Director of Human Resources 85-90 0-5 0 75-80 0-5 0
Mrs Janet Hunter, Director of Modernisation (to August 2004) 25-30 0-5 0 75-80 0-5 0
Mrs Karen Castille-Wardle, Director of Service Improvement 20-25 0-5 0
(from January 2005)Mr Neal Deans, Director of Facilities (from January 2005) 15-20 0-5 0
NON EXECUTIVE DIRECTORS
Mrs Naz Coker,Chairman 20-25 0-5 0 5-10 0-5 0
Professor Sean Hilton, Non-Executive Director 5-10 0-5 0 5-10 0-5 0
Ms Diane Mark, Non-Executive Director 5-10 0-5 0 5-10 0-5 0
Ms Valerie Moore, Non Executive Director (from August 2004) 0-5 0-5 0
Ms Valerie Vaughan - Dick, Non Executive Director 5-10 0-5 0 5-10 0-5 0
Mr David Knowles, Non Executive Director (to July 2004) 0-5 0-5 0 5-10 0-5 0
Mr Michael Rappolt, Non Executive Director (from August 2004) 0-5 0-5 0
B) Pension Benefits
Name and Title Real increase Total accrued Cash Equivalent Cash Equivalent Real Increase Employersin pension and pension and Transfer Value Transfer Value in Cash Equivalent Contribution to
related lump sum related lump sum at 31 March 2005 at 31 March 2004 Transfer Value Stakeholder
at age 60 at age 60 Pension(bands of 2500) (bands of 5000) (To nearest 100)
000 000 000 000 000 100
Mr Peter Homa, Chief Executive Director (from December 2003) 125-127.5 185-190 646 200 441 0
Mr Colin Gentile, Director of Finance (from June 2004) 17.5-20 115-120 395 304 82 0
Mr Kevin Harbottle, Acting Director of Finance (to May 2004) 0-2.5 75-80 241 239 5 0
Mrs Marie Grant, Deputy Chief Executive 30-32.5 175-180 722 57 135 0
Dr Geraldine Walters, Director of Nursing (from May 2004) 10-12.5 90-95 333 292 34 0
Ms Sue Cooper, Director of Nursing (to May 2004) 0-2.5 60-65 262 266 0 0
Mr Christopher Streather, Medical Director 17.5-20 80-85 258 193 60 0
Miss Patricia Hamilton, Clinical Director 12.5-15 185-190 780 690 70 0
Mr Colin Watts, Director of Human Resources 10.0-12.5 135-140 623 539 69 0
Mrs Janet Hunter, Director of Modernisation (to August 2004) 5-7.5 50-55 192 164 23 0
Mrs Karen Castille-Wardle, Director of Service Improvement 12.5-15 105-110 369 314 47 0
(from January 2005)
As Non-Executive members do not receive pensionable remuneration, there will be no entries in respect of pensions for Non-Executive members.
A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular
point in time. The benefits valued are the member's accrued benefits and any contingent spouse's pension payable from the scheme. A CETV is a
payment made by a pension scheme, or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves
a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has
accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which the disclosure applies.
The CETV figures, and from 2004-05 the other pension details, include the value of any pension benefits in another scheme or arrangement which the
individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their
purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed
by the Institute and Faculty of Actuaries.
Real Increase in CETV - This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to
inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses
common market valuation factors for the start and end of the period.
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6. Staff costs and numbers
6.1 Staff costs 2004/05 Permanently 2003/04Total Employed Other Total
000 000 000 000
Salaries and wages 192,334 171,401 20,933 173,450
Social Security Costs 14,590 14,590 0 12,986
Employer contributions to NHSPA 18,179 18,179 0 8,293
Other pension costs 134 134 0 162
__________ __________ __________ __________225,237 204,304 20,933 194,891
__________ __________ __________ __________
The cost of staff capitalised during the year 2004/05 was 188,851 (303,649 in 2003/04)
6.2 Average number of persons employed
2004/05 Permanently
Total Employed Other 2003/04
Number Number Number Number
Medical and dental 718 663 55 691
Ambulance staff 0 0 0 0
Administration and estates 1,433 1,183 250 1,421
Healthcare assistants & other support staff 192 192 0 204
Nursing, midwifery & health visiting staff 2,243 1,828 415 2,092
Nursing, midwifery & health visiting learners 8 8 0 9
Scientific, therapeutic and technical staff 1,203 1,103 100 1,143
Social care staff 0 0 0 0
Other 0 0 0 0
_____ _____ _____ _____
Total 5,797 4,977 820 5,560
_______ _______ _______ _______
6.3 Employee benefits 2004/05 2003/04
000 000
__________ _________
0 0
__________ __________
6.4 Management costs 2004/05 2003/04
000 000
Management costs 13,846 10,528
Income 333,532 316,716
6.5 Retirements due to ill-health
During 2004/05 (prior year 2003/04) there were 12 (4) early retirements from the trust agreed on the grounds of ill-health. The
estimated additional pension liabilities of these ill-health retirements will be 549,244 (169,064). These retirements represented 1.95
per 1,000 active scheme members. The cost of these ill-health retirements will be borne by the NHS Pensions Agency.
17
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7. Better Payment Practice Code
7.1 Better Payment Practice Code - measure of compliance
Number 000
Total bills paid in the year 102,583 138,542
Total bills paid within target 81,680 114,772
Percentage of bills paid within target 80% 83%
The Better Payment Practice Code requires the Trust to aim to pay all valid non-NHS invoices by the due date or within 30 days of
receipt of goods or a valid invoice, whichever is later.
7.2 The Late Payment of Commercial Debts (Interest) Act 1998
2004/05 2003/04
000 000
Amounts included within Interest Payable (Note 9) arising from claims
made under this legislation 2 0
Compensation paid to cover debt recovery costs under this legislation 0 0
8. Profit (Loss) on Disposal of Fixed AssetsProfit/loss on the disposal of fixed assets is made up as follows:
2004/05 2003/04
000 000
Profit on disposal of fixed assets investments 0 0
Loss on disposal of fixed assets investments 0 0
Profit on disposal of intangible fixed assets 0 0
Loss on disposal of intangible fixed assets (17) 0
Profits on disposal of land and buildings 0 0
Loss on disposal of land and buildings (311) 0
Profits on disposal of plant and equipment 0 0
Loss on disposal of plant and equipment (132) (123)
__________ __________(460) (123)
__________ __________
9. Interest Payable2004/05 2003/04
000 000
Finance leases 0 0
Other 2 0
__________ __________2 0
__________ __________
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10. Intangible Fixed Assets
Software Licenses & Patents Development Total
Licences trademarks Expenditure
000 000 000 000 000
Gross cost at 1 April 2004 1,036 0 0 2,518 3,554
Indexation 0 0 0 39 39
Impairments 0 0 0 0 0
Reclassifications 0 0 0 0 0
Other revaluation 0 0 0 0 0
Additions - purchased 227 0 0 0 227
Additions - donated 12 0 0 0 12
Additions - government granted 0 0 0 0 0
Disposals (17) 0 0 0 (17)
________________________________________________
Gross cost at 31 March 2005 1,258 0 0 2,557 3,815
________________________________________________
Accumulated amortisation at 1 April 2004 476 0 0 2,264 2,740
Indexation 0 0 0 34 34
Impairments 0 0 0 0 0
Reversal of impairments 0 0 0 0 0
Reclassifications 0 0 0 0 0
Other revaluation 0 0 0 0 0
Provided during the year 155 0 0 259 414
Disposals 0 0 0 0 0
________________________________________________
Accumulated amortisation at 31 March 2005 631 0 0 2,557 3,188
________________________________________________
Net book value
- Purchased at 1 April 2004 552 0 0 254 806
- Donated at 1 April 2004 8 0 0 0 8
- Government granted at 1 April 2004 0 0 0 0 0
________________________________________________
- Total at 1 April 2004 560 0 0 254 814
- Purchased at 31 March 2005 611 0 0 0 611
- Donated at 31 March 2005 16 0 0 0 16
- Government granted at 31 March 2005 0 0 0 0 0
________________________________________________
- Total at 31 March 2005 627 0 0 0 627
________________________________________________
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11. Tangible Fixed Assets
11.1 Tangible fixed assets at the balance sheet date comprise the following elements:
Land Buildings Dwellings Assets under Plant & Transport Information Furniture Total
excluding construction Machinery Equipment Technology & fittingsdwellings and payments
on account*
000 000 000 000 000 000 000 000 000
Cost or valuation at 1 April 2004 52,911 101,957 5,900 7,314 49,771 141 6,286 4,977 229,257
Additions - purchased 0 6,350 0 3,630 2,322 0 384 455 13,141
Additions - donated 0 844 0 158 129 0 20 18 1,169
Additions government granted 0 0 0 8 0 0 0 0 8
Impairments 0 0 0 0 0 0 0 0 0
Reclassifications 0 5,917 0 (6,038) 60 1 0 60 0
Indexation 3,933 8,074 467 551 1,190 3 0 107 14,325
Other in year revaluation 0 0 0 0 0 0 0 0 0
Disposals 0 (1,115) 0 (131) (9) (23) (41) 0 (1,319)
National Revaluation Exercise 38,824 (3,207) 5,626 0 0 0 0 0 41,243
______________________________________________________________ At 31 March 2005 95,668 118,820 11,993 5,492 53,463 122 6,649 5,617 297,824
______________________________________________________________
Depreciation at 1 April 2004 0 0 0 0 30,685 131 4,197 1,684 36,697
Provided during the year 0 6,807 236 0 3,065 3 525 325 10,961
Impairments 0 0 0 0 0 0 0 0 0
Reversal of Impairments 0 0 0 0 0 0 0 0 0
Reclassifications 0 0 0 0 0 0 0 0 0
Indexation 0 0 0 0 777 3 0 36 816
Other in year revaluation 0 0 0 0 0 0 0 0 0
Disposals 0 (804) 0 0 (8) (22) (41) 0 (875)______________________________________________________________
Depreciation 0 6,003 236 0 34,519 115 4,681 2,045 47,599
at 31 March 2005 ______________________________________________________________
Net book value
- Purchased at 1 April 2004 52,911 93,016 5,900 7,107 13,347 10 2,069 3,027 177,387
- Donated at 1 April 2004 0 8,151 0 207 5,739 0 20 240 14,357
- Government Granted at 1 April 2004 0 790 0 0 0 0 0 26 816______________________________________________________________
Total at 31 March 2004 52,911 101,957 5,900 7,314 19,086 10 2,089 3,293 192,560______________________________________________________________
Net book value
- Purchased at 31 March 2005 95,668 101,673 11,757 5,326 13,928 7 1,930 3,311 233,600
- Donated at 31 March 2005 0 10,324 0 158 5,016 0 38 236 15,772
- Government Granted at 31 March 2005 0 820 0 8 0 0 0 25 853______________________________________________________________
Total at 31 March 2005 95,668 112,817 11,757 5,492 18,944 7 1,968 3,572 250,225______________________________________________________________*Residual interests of off balance sheet PFI schemes should be recorded here. If the amount is material a disclosure should be made stating what the figure represents.
Of the totals at 31 March 2005, nil related to land valued at open market value and nil related to buildings valued at open market value
and nil related to dwellings valued at open market value.
The net book value of assets held under finance leases and hire purchase contracts at the balance sheet date are as follows:
Land Buildings Dwellings Assets under Plant & Transport Information Furniture Totalexcluding construction Machinery Equipment Technology & fittingsdwellings and payments
on account
000 000 000 000 000 000 000 000 000
At 31 March 2005 0 0 0 0 0 0 0 0 0
At 31 March 2004 0 0 0 0 0 0 0 0 0
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The total amount of depreciation charged to the income and expenditure in respect of assets held under finance leases and
hire purchase contracts:Land Buildings Dwellings Assets under Plant & Transport Information Furniture Total
excluding construction Machinery Equipment Technology & fittings
dwellings and payments
on account
000 000 000 000 000 000 000 000 000
Depreciation 31 March 2005 0 0 0 0 0 0 0 0 0
Depreciation 31 March 2004 0 0 0 0 0 0 0 0 0
11.2 The net book value of land, buildings and dwellings at 31 March 2005 comprises:
31 March 2005 31 March 2004
000 000
Freehold 220,242 160,768
Long leasehold 0 0
Short leasehold 0 0
__________ __________
Total 220,242 160,768
__________ __________
12. Stocks and Work in Progress31 March 2005 31 March 2004
000 000
Raw materials and consumables 0 0
Work-in-progress 0 0
Finished goods 4,331 4,273
__________ __________
4,331 4,273
__________ __________
13. Debtors31 March 2005 31 March 2004
000 000
Amounts falling due within one year:
NHS debtors 18,326 17,244
Provision for irrecoverable debts (3,178) (3,370)
Other prepayments and accrued income 1,775 2,160
Other debtors 20,186 12,935
__________ __________
Sub total 37,109 28,969
Amounts falling due after more than one year:
NHS debtors 117 154
Provision for irrecoverable debts 0 0
Other prepayments and accrued income 0 0
Other debtors 0 3,443
__________ __________
Sub total 117 3597
__________ __________
Total 37,226 32,566
__________ __________
NHS Debtors include 116,398 prepaid pension contributions at 31 March 2005 (154,078 at 31 March 2004)
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14. Investments14.1 Fixed asset investments
Description Description Other Total
000 000 000 000
Balance at 1 April 2004 0 0 0 0
Additions 0 0 0 0
Disposals 0 0 0 0
Revaluations 0 0 0 0
__________ __________ __________ __________
Balance at 31 March 2005 0 0 0 0
__________ __________ __________ __________
14.2 Current asset investmentsDescription Description Other Total
000 000 000 000
Balance at 1 April 2004 0 0 0 0
Additions 0 0 0 0Disposals 0 0 0 0
Revaluations 0 0 0 0
__________ __________ __________ __________
Balance at 31 March 2005 0 0 0 0
__________ __________ __________ __________
15. Creditors
15.1 Creditors at the balance sheet date are made up of:
31 March 2005 31 March 2004
000 000
Amounts falling due within one year:
Bank overdrafts 0 0
Current instalments due on loans 0 0
Interest payable 0 0
Payments received on account 821 446
NHS creditors 17,759 10751
Non - NHS trade creditors - revenue - other 8,865 11,165
Non - NHS trade creditors - capital 3,965 5,258
Tax and social security costs 7,478 4,464
Obligations under finance leases and hire purchase contracts 0 0
Other creditors 12,932 6,525
Accruals and deferred income 9,738 6,760
__________ __________
Sub total 61,558 45,369
__________ __________
Amounts falling due after more than one year:
Long - term loans 0 0
Obligations under finance leases and hire purchase contracts 0 0
NHS creditors 0 0
Other 0 0
Sub total 0 0
__________ __________
Total 61,558 45,369
__________ __________
Other creditors include;
6,824,475 outstanding pensions contributions at 31 March 2005 (31 March 2004 1,359,075).
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15.2 Loans (and other long-term financial liabilities) Total31 March 2005 31 March 2004
Amounts falling due: 000 000
In one year or less 0 0
Between one and two years 0 0
Between two and five years 0 0
Over five years 0 0__________ __________
Total 0 0__________ __________
Total31 March 2005 31 March 2004
000 000Wholly repayable within five years 0 0
Wholly repayable after five years, not by instalments 0 0
Wholly or partially repayable after five years, by instalments 0 0__________ __________
Total 0 0__________ __________
Loans [and long-term financial liabilities] Value 31 March 2004wholly or partially repayable after five years: Interest rate outstanding 000
% 000Terms of payment
15.3 Finance lease obligations 31 March 2005 31 March 2004Payable: 000 000
Within one year 0 0
Between one and five years 0 0
After five years 0 0__________ __________
0 0
Less finance charges allocated to future periods 0 0__________ __________
0 0
__________ __________
15.4 Finance Lease CommitmentsSt George's Healthcare NHS Trust has not entered into any finance leases.
16. Provisions for liabilities and chargesPensions Pensions Legal Restruct- Other Total
relating to relating to claims uringsformer directors other staff
000 000 000 000 000 000
At 1 April 2004 0 1,651 288 0 1,969 3,908
Arising during the year 0 0 130 0 3,589 3,719
Utilised during the year 0 (121) (111) 0 (1,893) (2,125)
Reversed unused 0 (16) (130) 0 (76) (222)
Unwinding of discount 0 58 0 0 0 58________ ________ ________ ________ ________ ________
At 31 March 2005 0 1,572 177 0 3,589 5,338________ ________ ________ ________ ________ ________
Expected timing of cashflows:
Within 1 year 0 121 177 0 3,589 3,887
Between one and five years 0 418 0 0 0 418
After five years 0 1,033 0 0 0 1,033
Provision for Pension costs is calculating using information provided by the NHS Pensions Agency.Provision for Legal Claims has been
calculated using figures and estimated probability supplied by both the NHS Litigation Authority and the Trust's solicitor.
'Other' includes; (a) provision for probable additional non-medical pay expenditure to 31 March 2005 as a result of Agenda for Change
NHS pay reform (3,206,000) and; (b) provision for additional medical pay expenditure to 31 March 2005 in respect of new consultant
contracts (383,000)
8,354,581 is included in the provisions of the NHS Litigation Authority at 31/3/2005 in respect of clinical negligence liabilities of the
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17. Movements on ReservesMovements on reserves in the year comprised the following:
Revaluation Donated Government Other Income and Total
reserve Asset Grant reserves Expenditurereserve reserve reserve
000 000 000 000 000 000
At 1 April 2004 as previously stated 50,123 14,368 816 1,150 9,776 76,233
Prior Period Adjustments 0 0 0 0 0 0
At 1 April 2004 as restated 50,123 14,368 816 1,150 9,776 76,233
Transfer from the income and expenditure account (21,656) (21,656)
Fixed asset impairments 0 0 0 0
Surplus on other revaluations
/indexation of fixed assets 52,857 1,822 79 54,758
Transfer of realised profits (losses)
to the Income and Expenditure reserve 749 0 0 (749) 0
Receipt of donated/government granted assets 1,180 8 1,188
Transfers to the Income and Expenditure Account
for depreciation, impairment, and disposal of
donated/government granted assets (1,581) (49) (1,630)
Other transfers between reserves 0 0 0 0 0 0
Reserves eliminated on dissolution 0 0 0 0 0 0
________ ________ ________ ________ ________ ________
At 31 March 2005 103,729 15,789 854 1,150 (12,629) 108,893
________ ________ ________ ________ ________ ________
18. Notes to the Cash Flow Statement
18.1 Reconciliation of operating surplus to net cash flow from operating activities:
2004/05 2003/04
000 000
Total operating surplus (deficit) (15,650) 4,860
Depreciation and amortisation charge 11,375 11,584
Fixed asset impairments and reversals 0 259
Transfer from donated asset reserve (1,581) (1,255)Transfer from the government grant reserve (49) (46)
(Increase)/decrease in stocks (58) (836)
(Increase)/decrease in debtors (8,753) (5,210)
Increase/(decrease) in creditors 17,470 7,414
Increase/(decrease) in provisions 1,372 1,909
__________ __________
Net cash inflow/(outflow) from operating activities before restructuring costs 4,126 18,679
Payments in respect of fundamental reorganisation/restructuring 0 0
__________ __________
Net cash inflow from operating activities 4,126 18,679
__________ __________
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18.2 Reconciliation of net cash flow to movement in net debt
2004/05 2003/04
000 000
Increase/(decrease) in cash in the period 0 5
Cash inflow from new debt 0 0
Cash outflow from debt repaid and finance lease capital payments 0 0
Cash (inflow)/outflow from (decrease)/increase in liquid resources 0 0
__________ __________
Change in net debt resulting from cashflows 0 5
Non - cash changes in debt 0 0
Net debt at 1 April 2004 68 63
__________ __________
Net debt at 31 March 2005 68 68
__________ __________
18.3 Analysis of changes in net debt At 1 Cash Transferred Cash Non - cash At 31April (to)/from other changes in changes in March
2004 NHS bodies year year 2005
000 000 000 000 000
OPG cash at bank 0 0 0 0
Commercial cash at bank and in hand 68 0 0 68
Bank overdrafts 0 0 0 0
Debt due within one year 0 0 0 0
Debt due after one year 0 0 0 0 0
Finance leases 0 0 0 0 0
Current asset investments 0 0 0 0 0
__________ __________ __________ __________ __________
68 0 0 0 68
__________ __________ __________ __________ __________
19. Capital Commitments
Commitments under capital expenditure contracts at the balance sheet date were 6,172,512 (31 March 2004 9,058,173)
20. Post Balance Sheet Events
From 1 April 2005 HM Treasury changed the discount rate used in calculating provisions from 3.5% to 2.2%. This change will result
in an increase in our provisions of 20,436 which will be charged to the Income and Expenditure account in 2005-06. National
funding of NHS commissioners will be increased by the total estimated effect to offset this charge.
21. Contingencies 2004/05 2003/04000 000
Gross Value (85) 48
Amounts recoverable (if any) 0 0
__________ __________
Net contingent liability (85) 48
__________ __________
The above reflects the member contingent liability as notified by the NHS Litigation Authority relating to claims receivedand logged at the NHSLA as at 31 March 2005.
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22. Movements in Public Dividend Capital 2004/05 2003/04000 000
Public Dividend Capital as at 1 April 2004 104,771 107,134
New Public Dividend Capital received (including transfers from dissolved NHS Trusts) 11,917 0
Public Dividend Capital repaid in year 0 (2,363)Public Dividend Capital repayable (creditor) 0 0
Public Dividend Capital written off 0 0
Public Dividend Capital transferred to Foundation Trust 0
Other movements in Public Dividend Capital in year 0 0
__________ __________
Public Dividend Capital as at 31 March 2005 116,688 104,771
__________ __________
23. Financial Performance Targets
23.1 Breakeven performance
The Trust's breakeven performance for 2004/2005 is as follows:
1997/98 1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04 2004/05
000 000 000 000 000 000 000 000
Turnover 174,908 186,975 205,968 223,195 251,017 286,483 317,041 333,532
Retained surplus/(deficit) for the year 550 (418) (5,753) 0 613 4,280 (650) (21,656)
Adjustment for: 0
Timing/non-cash impacting distortions
- Use of pre - 1.4.97 surpluses
[FDL(97)24 Agreements] 0 0 0 0 0 0 0 0
- 1999/2000 Prior Period Adjustment
(relating to 1997/98, 1998/99) 0 0
- 2000/01 Prior Period Adjustment(relating to 1997/98, 1998/99 and 1999/2000) (40) 7 (529)
- 2001/02 Prior Period Adjustment
(relating to 1997/98, 1998/99, 1999/2000 and 2000/01) 0 0 0 0
- 2002/03 Prior Period Adjustment
(relating to 1997/98, 1998/99, 1999/2000, 2000/01
and 2001/02) 0 0 0 0 0
- 2003/04 Prior Period Adjustment
(relating to 1997/98, 1998/99, 1999/2000, 2000/01,
2001/02 and 2002/03) 0 0 0 0 0 0
- 2004/05 Prior Period Adjustment
(relating to 1997/98, 1998/99, 1999/2000, 2000/01,
2001/02, 2002/03 and 2003/04) 0 0 0 0 0 0 0
Break-even in-year position 510 (411) (6,282) 0 613 4,280 (650) (21,656)
Break-even cumulative position 510 99 (6,183) (6,183) (5,570) (1,290) (1,940) (23,596)
Materiality test: -
- Break-even in-year position 0.3% -0.2% -3.0% 0.0% 0.2% 1.5% -0.2% -6.5%
- Break-even cumulative position 0.3% 0.1% -3.0% -2.8% -2.2% -0.5% -0.6% -7.1%
The Trust is developing, with the assistance of the Strategic Health Authority, a financial strategy to achieve recurring balance
on Income and Expenditure.
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24. Related Party Transactions
St. George's Healthcare NHS Trust is a body corporate established by order of the Secretary of State for Health.
The Department of Health is regarded as the ultimate controlling party. During the year St. George's Healthcare NHS Trust received monies
amounting to 10,438,454 from the Department of Health. This relates to grants for training, teaching and research. As at 31 March
2005 the Trust accounts included a debtor balance of 1,390,502 and a 314,842 creditor balance with the Department of Health.
The Trust also received 104,352,000 from its main commissioners Wandsworth Primary Care Trust; 54,598,000 from Sutton & Merton
PCT and 18,917,867 from Croydon PCT. This related to contract income for patient services. As at 31 March 2005 the Trust accounts
included debtor balances with Wandsworth Primary Care Trust 7,946,022; Sutton & Merton Primary Care Trust 1,119,470 and
Croydon Primary Care Trust 1,234,927. The Trust accounts included creditor balances with Wandsworth Primary Care Trust 6,956,923;
Sutton & Merton Primary Care Trust 1,042,439 and Croydon Primary Care Trust 11,807.
In addition, the Trust received 38,424,568 from the South West London Workforce Development Confederation. As at 31 March
2005 the Trust accounts included a debtor balance of 177,861 and a creditor balance of 500.
A non-executive director of the Trust Board, Diane Mark is a trustee of the Charitable Foundation. During 2004/05 the Charitable
Foundation raised charges to the Trust totalling 540,908, and the Trust incurred capital and revenue expenditure to be funded by the
Charitable Foundation amounting to 3,692,246. As at 31 March 2005 the Trust accounts included a debtor balance of 3,650,434
and a creditor balance of 20,469 with the Charitable Foundation.
23.2 Capital cost absorption rate
The Trust is required to absorb the cost of capital at a rate of 3.5% of average relevant net assets. The rate is calculated as the
percentage that dividends paid on public dividend capital, totalling 5,908,000, bears to the average relevant net assets of
183,193,000, that is 3.2%.
23.3 External financing
The Trust is given an external financing limit which it is permitted to undershoot.
2004/05 2003/04
000 000 000
External financing limit 11,917 (2,363)
Cash flow financing 11,917 (2,368)
Finance leases taken out in the year 0 0Other capital receipts 0 0
________External financing requirement 11,917 (2,368)
________ ________
Undershoot (overshoot)* 0 5________ ________
23.4 Capital Resource Limit
The Trust is given a Capital Resource Limit which it is not permitted to overspend
2004/05 2003/04
000 000