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Finance Report Month 9 2010-11

Finance Report Month 9 2010-11. Jonathan Wise, Director of Finance & Performance. NHS BRENT FINANCE REPORT 10/11 - CONTENTS. Summary [Slides 3-7] Year to Date Position [Slides 8-26] Forecast Outturn Position [Slides 27-35] Appendices Detailed finance schedules [Slides 36-45]. 2. 2.

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Finance Report Month 9 2010-11

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  1. Finance ReportMonth 9 2010-11 Jonathan Wise, Director of Finance & Performance

  2. NHS BRENT FINANCE REPORT 10/11 - CONTENTS • Summary [Slides 3-7] • Year to Date Position [Slides 8-26] • Forecast Outturn Position [Slides 27-35] • Appendices • Detailed finance schedules [Slides 36-45] 2 2

  3. SECTION 1 – SUMMARY 3 3

  4. FINANCIAL PERFORMANCE SUMMARY (1) YTD FOT From Last Month Improving No Change Worsening • Statutory duties • Underspend against revenue resource limit • Achievement of capital resource limit • Underspend against cash limit • Achievement of public sector payment policy • Achievement of Operating plan surplus within SHA defined tolerances • Underlying recurrent position • Management Cost target • BCS full cost recovery • BCS achievement of plan • Achievement of 10/11 Savings plan Achievement of 10/11 Demand Man. plans G G G G G G A G G G G G R R R R R R A A 4 4 R R

  5. FINANCIAL PERFORMANCE SUMMARY (2) At month 9 the year-to-date position is a £0.4m favourable variance against budget. The main elements of this position are underspends within Joint Working (£0.7m), Other Acute (£1.6m), Corporate budgets (£1.5m), Estates (£0.2m), the CSP/Performance budget (£3.6m), Investment / Reserves (£5.7m), Contingency (£0.5m) offset by overspends on Acute contracts (£5.5m), Primary care (£0.3m), BCS (£0.9m) and the pressure year-to date from the contribution to the NW London sector position (£4.1m) and a 10/11 advance on 11/12 Challenged Trust Board contribution (£2.6m). The overall forecast outturn position at month 9 is break-even against a plan of £17.2m surplus. There are forecast underspends in Joint Working (£1.6m), Other Acute (£2.0m), Corporate budgets (£2.0m), CSP/Performance (£3.6m), Balance Sheet review (£2.5m), Allocations (£0.5m), Contingency (£0.2m), the benefit from the year-end settlement with NWLHT (£3.4m) and slippage on Investments / Reserves (£7.2m) offset by forecast overspends on Acute contracts (£9.1m), Primary Care (£1.1m), BCS (£0.9m) and the pressure from the contribution to the NW London sector position (£5.4m) and the 10/11 advance on 11/12 Challenged Trust Board contribution (£6.5m). The forecast outturn movement is from a £0.2m surplus against plan at month 8 to break-even at month 9. The main movements have been increases in underspends on Investments/Reserves (£2.3m), CSP (£0.3m) and the release of contingency (£0.2m), netted-off by an increased contribution to the 11/12 Challenged Trust Board contribution of £3.0m. 5 5

  6. RISKS & OPPORTUNITIES TO FORECAST OUTTURN POSITION (1) There are a number of significant variables that could impact on the forecast outturn set out in the table below. These issues are being actively monitored on a monthly basis by EMT. 6

  7. RISKS & OPPORTUNITIES TO FORECAST OUTTURN POSITION (2) During the last few months the balance has shifted towards a reduction in the level of risk. There are now three green-rated risks, four amber-rated risks and no red-rated risks. 7

  8. SECTION 2 – YEAR TO DATE POSITION 8 8

  9. OVERVIEW OF BUDGET POSITION AT MONTH 9 • The £1.5m increase in issued budgets relates to £0.7m pass-through payments to NWLHT, £0.5m revenue funding regarding Peel Road, £0.2m Smoking Pharmacy Performance Bond and £0.1m funding for Clinical Directors. • Of the £0.5m reduction in Investments & Reserves, £0.3m was transferred to issued budgets and £0.2m was reduced from the allocation for London-wide recharges. • An additional £1m funding has been anticipated towards 10/11 severance costs. 9 9

  10. SUMMARY OF YEAR TO DATE VARIANCES Explanations for the main variances are included on the following slide. 10

  11. SUMMARY OF YEAR TO DATE VARIANCES Acute contracts(£5.5m) unfavourable– Currently 11 out of the 22 acute contracts are showing overspends based upon month 8 data. There are overspends reported at NWLHT £2.6m, Imperial £1.4m, Royal Brompton £1.1m, Royal Free £0.4m, St Georges £0.2m, Barnet & Chase Farm £0.1m, Moorfields Eye £0.1m and Chelsea and Westminster £0.2m. There are underspends at Barts £0.3m, RNOH £0.2m and Guys £0.1m. Our experience is that it is likely that these underspends will reduce over the coming months. Other Acute (£1.6m) favourable – The suspension of the Clinicenta contract has resulted in a £1.4m underspend to date, High Cost Drugs is underspent by £0.3m, Non-contracted activity is underspent by £0.2m and cost per case overspent by £0.3m. Joint working(£0.7m) favourable – Underspends on Continuing Care (£0.3m), Children and Families (£0.3m), End of Life £0.3m,Mental Health (£0.3m) and overspend on Learning Disability (£0.5m). Primary Care(£0.3m) unfavourable – There is an overspend on primary care prescribing (based upon 7 months of data) of £0.4m and an overspend against medical contracts (£0.3m). Other Primary Care Services (Dental, Pharmacy and Ophthalmic) under spend by £0.4m. Corporate costs(£1.5m) favourable – There are underspends on all directorates, Public Health (£0.3m), Primary Care (£0.4m), CEO (£0.2m), Strategic Commissioning (£0.3m) and Finance & Performance (£0.3m). Estates (£0.2m) favourable – Due to a refund on business rates and an underspend on minor works. CSP/Performance(£3.6m) favourable – There is slippage on Primary Care Commissioning schemes (£2m), Public Health Schemes (£1m)and Strategic Commissioning schemes (£0.6m). BCS (£0.9m) unfavourable – Due to non-achievement of CIP savings targets. 11 11

  12. PBC PRESCRIBING POSITION AT MONTH 8 Key : Overspend (), Underspend + The prescribing position includes a risk pool budget of £330k. Prescribing budgets are overspent by £160k(1%) to the end of November 10 and are forecast to be overspent by £232k (0.6%) by year-end 2010/11. The forecast outturn has Increased by £29k since October. N.B. Prescribing information is received from the PPA after month-end financial reports are finalised and therefore there may be a difference between the latest position year-to date shown above and the position shown in the Month 8 report. 12

  13. ACUTE CONTRACT POSITION – MONTH 8 (1) The forecast outturn builds in seasonality, slippage on achievement on STARRS and UCC demand management schemes and assumes that there is no improvement in the forecast outturn underspend position reported for Barts, Ealing, Guys and RNOH beyond the position reported at Month 9. The NWLHT outturn position is shown before the application of a cap on over-performance of £1.25m, agreed with the Trust. 13

  14. ACUTE CONTRACT POSITION – MONTH 8 - NWLH (2) Bottom-line £2,280k 3.1% over (M7 £1,861k 2.9% over) PbR £1,442k over 3% Of which: Elective £331k over 3% Non–elective non-emergency £420k over 8% Outpatients £949k over 8% A&E £23k over 0% Non-elective £281k under 1% Non-PbR £839k over 5% Of which: Direct Access £662k over 16% High Cost Drugs £292k over 17% Non-elective £78k over 27% Outpatients £257k over 13% Critical care £99k over 2% Elective Day Cases £277k under 15% HASU/Stroke £298k under 32% 14

  15. Bottom-line £1,247k 2.8% over (M8 £934 2% over ) PbR £343k over 1.5% Of which: Non-elective £547k over 5% Outpatients £200k over 4% Elective £544k under 10% Non-PbR £905k over 4.1% Of which: Adult critical care £87k over 3% Outpatients £140k over 8% Direct Access £50k over 9% High Cost Drugs £590k over 7% Of which: Renal £337k 6% over Drug-Anti TNF £142k 4% over Neonatal £112k 25% over ACUTE CONTRACT POSITION – MONTH 8 - IMPERIAL (3) 15

  16. Chelsea & Westminster £196k 8.2% over Paediatric High Dependency Unit £46k 429% over Non Elective Excess Bed Days £44k 57% over PbR Elective £58k 13% over Royal Brompton £971k 43% over Intensive Unit £237k 107% over NEL PAG £79k 68% over PAT £141k 49% over PbR Non-elective £29k 15% over PbR Elective inpatients £318k 43% over Non-PbR Inpatients £121k 89% Royal Free £381k 4%over Non-elective Excess Bed days £153k 141% over Critical Care £295k 64% over Therapies £56k 44 % under Chronic Hepatitis Disease £43k 27% under Barnet & Chase Farm £118k 4% over PbR Non-Elective £137k 27% under Elective £98k 23% over NELNE £52k 17% over Non-PbR SCBU £21k 81% over Elderly Rehab £22k 147% Chemotherapy £17k 164%over ACUTE CONTRACT POSITION – MONTH 8 – OTHER TRUSTS (4) 16

  17. ACUTE CONTRACT POSITION - MONTH 8 (5) The overspend of £4,922k at month 8 is analysed as follows: It should be noted that the benefit from the marginal rate adjustment is transferred to the SHA towards a London-risk pooling scheme. Therefore the gross YTD overspend for the PCT is £4.9m + £1.1m = £6.0m. The variances above are based upon November planned activity being eighth-twelfths of the 10/11 annual activity (based upon forecast 09/10 outturn adjusted for population growth and trend growth) and not adjusted for seasonality. For this reason the above do not match the variances shown in the following acute activity graphs which compare activity on a seasonal basis (slides 18-22). 17

  18. ACUTE ACTIVITY ANALYSIS (1) - OUTPATIENTS Against the comparative period of April- November 09 , there is an increase in activity of 0.8%. Figures include Outpatient Procedures. 18

  19. ACUTE ACTIVITY ANALYSIS (2) - ELECTIVE Against the comparative period of April- November 09, there is a decrease in activity of 1.7% N.B.- Figures include Day cases 19

  20. ACUTE ACTIVITY ANALYSIS (3) – NON-ELECTIVE For the comparative period of April – November 09, there is an increase in activity of 6.4% 20

  21. ACUTE ACTIVITY ANALYSIS (4) - MATERNITY Against the comparative period of April – November ’09, there is an increase in activity of 11.9%. 21

  22. ACUTE ACTIVITY ANALYSIS (5) - BIRTHS Against the comparative period of April – November ’09, there is an increase in activity of 7.7%. 22

  23. CLAIMS MANAGEMENT • Further to the year-end settlement agreed with NWLHT, the potential further benefit through claims management is dependent upon the level of success from the £4.3m of issues not yet resolved with Other Trusts. • The NHS Brent share of the Specialist Commissioning accepted claims amounts to a year to date saving of £50k. • NHS Brent has also had the following success with its own claims management covering months 1-6 on Non-Contracted Activities (£139k), Walk-in Centres contracts (£31k) and Cost per Case contracts (£10k). 23

  24. BALANCE SHEET FOR 9 MONTHS ENDING 31st DECEMBER 2010 24

  25. BETTER PAYMENT PRACTICE CODE (BPPC) The target is to achieve 95% in all categories. This is being achieved in consolidated position in three out of the four categories. In the category where the target is not being achieved the performance is close to target. The target on NHS invoices for BCS has deteriorated compared to last month. This month only 13% invoices (£) were paid within the target period. This is due to 5 invoices totalling to £425k, which were not approved within the target period. 25

  26. CASH POSITION £’000 Month 9 Actual drawings are in line with the Revised Plan. 26

  27. SECTION 3 – FORECAST OUTTURN POSITION 27 27

  28. SUMMARY FORECAST OUTTURN The plan is for a £17.2m surplus. (1) At the request of NHS London and NWL Sector at M7 we have submitted a FIMS return which reports a forecast a break-even position against plan, pending further discussions Explanations for the main variances are included on the following slide. 28 28

  29. SUMMARY FORECAST OUTTURN Acute contracts (£9.1m) unfavourable – Adjusting for seasonality, slippage in demand management schemes and for underspends at some Trusts currently which are unlikely to continue across the remainder of the financial year, we are forecasting an overspend of £9.1m by year-end (3.9%). Other Acute (£2.0m) favourable – Forecast under spend of £1.9m on the Clinicenta contract, £0.2m on UCC Budgets and a forecast overspend of £0.1m on Specialist consortia-led commissioning. Joint working (£1.6m) favourable– Forecast underspends on End of Life £0.4m, Continuing Care £0.3m, Children and families budget £0.5m, £0.6m on Investments, £0.3m Mental Health and a forecast overspend of £0.6m on Learning Disabilities. Primary Care (£1.1m) unfavourable- There are overspends forecast on prescribing £0.2m, Community Trusts £0.1m and on medical contracts of £0.8m due to anticipated non-achievement of PMS and enhanced services savings targets. Corporate costs (£2.0m) favourable– Break-even or underspends are forecast in line with measures taken to achieve 10/11 management cost reductions. CSP/Performance (£3.6m) favourable-All schemes have been reviewed. The main underspends are on Public Health schemes £1.0m including Smoking Cessation £0.9m, Primary Care schemes £2.0m and Strategic Commissioning Schemes £0.6m. BCS (£0.9m) unfavourable – BCS reporting a deficit of £0.6m against a planned £0.3m (1%) surplus. Balance Sheet (£2.5m) favourable – A review of prior year balances has concluded that there is a benefit of £2.5m. Year-end settlement with NWLHT (£3.4m) favourable – This is the benefit derived from the difference between the forecast outturn position based upon the M8 figures and the agreed year-end settlement. Allocation adjustments (£0.5m) favourable – Forecast value of allocations received not required to be released into budgets Contingency (£0.2m) favourable – Release of contingency reserve In-year plan(£5.5m) unfavourable– this relates to the savings target required to fund the contribution to the NWL sector position of £5.5m. 10/11 advance on 11/12 CTB sector contribution (£6.5m) unfavourable – An opportunity has been taken to fund this in advance. A further £3.0m has been agreed at M9. Investment / Reserves (£7.2m) favourable – see following slide. 29 29

  30. INVESTMENT & RESERVES • The table above identifies where the underspend of £7.2m has been identified. 30

  31. SAVINGS PROGRAMME (1) ( ) Overspend, +Underspend 31 31

  32. SAVINGS PROGRAMME (2) ( ) Overspend, +Underspend There is a forecast £3.3m shortfall against the savings plan of £11.7m at Month 9. At Month 8 the shortfall was reported as £3.1m. The £0.2m net deterioration is due to updated estimate of UCC set up costs £0.1k and list validation savings £0.1k. 32 32

  33. MANAGEMENT COSTS (1) The table above shows that there is a requirement to save 67% of our 10/11 budgeted management costs by the end of March 2013. NHS London have brought forward the requirement to achieve the 12/13 target and PCTs in London are now required to plan to achieve the original 12/13 target by the end of March 2012. 33 33

  34. MANAGEMENT COSTS (2) – 10/11 AND 11/12 PLANS NHS Brent There has been further clarification from NWL Sector on the application of the management costs guidance, particularly in relation to FHS services, and also information from CSL on the percentage of their costs which fall within management cost. As a result, the forecast achievement against the management cost savings target has improved and is as follows: Saving through freezing vacancies and ceasing interim cover: £1.74m (included in forecast outturn) Target £2.27m Shortfall £0.53m Reclassification of spend – CSL and FHS services (£0.35m) Forecast shortfall at Month 9 £0.18m The restructuring of posts taking place in the last quarter of the year will not lead to any material in-year saving, it will ensure the PCT achieves the 11/12 savings targets. Potential redundancy costs arising from the restructuring (estimated at £1.5m-£2.5m) will not impact the management costs target but may need to be accounted for in 10/11. It is anticipated that funding will be made available to cover 10/11 severance costs. The 11/12 operating framework has signalled a move away from the separation of management and corporate costs, and has indicated that PCTs will be expected to monitor “running costs” instead. The guidance and accompanying targets for this have yet to be issued. 34

  35. MANAGEMENT COSTS (3) – 10/11 PLAN B) BCS Plans to address the target 15% reduction of £0.75m in 10/11 are as follows: Reduction in WTE management posts £0.12m Reduction in interim spend £0.08m Reduction in management consultancy spend (non-recurrent in 09/10) £0.20m Corporate saving / back office functions £0.35m Total £0.75m This plan has been signed off by the BCS Board and is on course to be delivered. 35

  36. APPENDIX A – FINANCIAL SCHEDULES 36 36

  37. SUMMARY OPERATING COST STATEMENTFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  38. COMMISSIONING OF HEALTHCAREFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  39. COMMISSIONING OF HEALTHCAREFOR 9 MONTHS ENDING DECEMBER 2010

  40. COMMISSIONING OF HEALTHCAREFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  41. PRIMARY CARE SERVICESFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  42. PRIMARY CARE SERVICESFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  43. PCT CORPORATE COSTSFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  44. PCT CSP & PERFORMANCEFOR 9 MONTHS ENDING 31ST DECEMBER 2010

  45. PCT CSP & PERFORMANCE FOR 9 MONTHS ENDING 31ST DECEMBER 2010

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