initial budgets and performance plans 2011 12 n.
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  1. INITIAL BUDGETS AND PERFORMANCE PLANS 2011/12 • PCT BOARD 13TH APRIL 2011 Jonathan Wise, Director of Finance & Performance

  2. Contents Introduction/Context • NHS Brent journey • 11/12 planning process Part 1 - 2011/12 Budgets/Finance Plan (Slides 6 - 53): • Medium Term Financial Strategy • Key Financial Assumptions • Budget Setting Process • Budget summary • Main Budget Changes • Acute • Non-acute • Primary Care • CSP Investments • Running Costs • Estates • QIPP Summary and Plan • Budget sign-off and in-year management • Risks and Contingency • Planning for 2012/13 onwards Part 2 – 2011/12 Performance Plans (Slides 54 - 67) : • Overview – health context • Performance Targets • 11/12 plans Part 3 – GP Delegation (Slides 68 - 84)

  3. National and NW London context National context • The national Operating Framework for 2011/12 was published in Dec 2010 and sets out the national framework for maintaining and improving quality and outcomes, together with the finance and business rules. • “The most significant challenge we face in 2011/12 is to maintain a grip on current performance and QIPP delivery, whilst simultaneously preparing and beginning to put in place the future system” (Sir David Nicholson, December 2010) NW London context • In December 2010, NW London finalised its four year Strategic Commissioning and QIPP (Quality, Innovation, Productivity and Prevention) Plan to 2014/15, including • Case for change • Use of benchmarking and case studies to set priorities • Development of models of care aligned to the settings in which they could be delivered • Review of the impact of the proposals on provider clinical and financial viability • Development of high level implementation plans • NW London issued its specific Commissioning Intentions for 2011/12 in January 2011

  4. Brent context

  5. 11/12 Planning Process Contract negotiations Nov - Mar 11 CSP Jan 10 10/11 Operating Plan Apr 10 Workshop Reviews with GP commissioners Jul - Oct 10 Joint development of 11/12 QIPP Nov - Mar 11 Budget setting process Nov– Mar 11

  6. Part 1 – 2011/12 BUDGETS/ FINANCE PLANS

  7. National context • Spending review settlement in October 2010 covering 11/12 – 14/15 – overall NHS spending to increase by 0.4% in real terms over the course of the Spending Review period • Allocations to PCTs for 11/12 (not beyond) confirmed in December 2010 • Key points: • Average increase in 11/12 allocations to PCTs = 3% • Brent = 2.6% • Of this, element is to be transferred to local authorities to support social care via a section 256 agreement • Net growth after this = Brent 2% (minimum level) • 2% of all PCTs resources will be held by SHAs, with PCTs being required to submit business cases to access the funding that demonstrate the non-recurrent nature of the proposed expenditure • PCT debt that has arisen pre 11/12 to be repaid by 2013/14 • Any debts/overspends in 11/12-12/13 become the responsibility of GP consortia • Revised weighted capitation formula published – now shows Brent 15% over target

  8. NW London context • Cluster (NW London) financial strategy agreed by Cluster Board 9 March 2011 • 4% QIPP (excluding running costs) target at sub-Cluster level • Financial support provided/received in 09/10 to be repaid in 2011/12 – 2012/13 (£5.3m owed by NHS Harrow to NHS Brent) • 2011/12 NW London Challenged Trust Board contributions/utilisation: • Brent contribution – 1% (provided in 10/11) plus £2.8m in 11/12 • Harrow utilisation - £20m support • Use of 2% non-recurrent resource • Harrow £5.3m assumed in initial plan • Balance to be agreed by NHS London /Sector in-year • Contribution from PCTs to London fund to support GP Pathfinder • £3.2m contribution from Brent and Harrow • £2 per head to be returned (est. £700k Brent, £450k Harrow)

  9. Medium Term Financial Strategy • Strategic plan (Jan 10) - set out a five year programme to deliver our vision of making a significant improvement to the health and wellbeing of the people of Brent • The Medium Term Financial Strategy (MTFS) embedded in the Strategic Plan set out the plan to maintain a sustainable financial position over the period to 2013/14. • The key points were: • do nothing scenario based on historic activity growth rates • £60m efficiency and disinvestment programme over 4 years • strong underlying position means we could aim to deliver this is 11/12 onwards but given the scale and complexity, plan to start delivery in 2010/11 • sustainable plan under all scenarios • non-recurrent investment to support implementation • downside allocation assumed for 11/12 onwards • We refreshed the MTFS projections as part of the CSP review/development of the QIPP in Summer/Autumn 2010 and confirmed that the MTFS projections remained valid

  10. Key Financial Assumptions 2011/12 The financial plan:- • Is consistent with 2011/12 Operating Framework and NHS London guidance, including the impact of : -Tariff changes for 2011/12 -11/12 allocations • Is consistent with NHS NWL financial strategy (JCPCT paper Feb 2011) • Includes an assessment of the outcome on acute and other contract negotiations where these have not yet been concluded • Excludes BCS as a provider as a result of transfer to ICO • Incorporates QIPP plans and Performance Improvement plans • Reflects an outturn based approach to budget setting, including acute contracts • Includes a financial risk assessment, risk mitigation plans and an in-year sub-Cluster contingency plan

  11. 2011/12 Budgets Budget Setting Process • The budget setting process has been conducted in accordance with good practice criteria (generated from a combination of Audit Commission recommendations and local additions):- • There has been an agreed budget preparation approach and timetable • The impact of prior year over/underspendings has been reflected in 2011/12 budgets • Operational and financial responsibilities are aligned • Budgets are linked to workforce and activity plans • Budgets are reconciled to the PCT’s cash plan for 2011/12 • Budgets are based on realistic assumptions for inflation and other cost pressures • Budgets include the full year effect of 2010/11 changes • Savings plans have been risk assessed • Investment plans will be subject to Business Case approval as appropriate • Budgets will be appropriately profiled across the financial year • Budgets will be supported by a rigorous sign-off and in-year management regime

  12. 2011/12 Budgets Overview • Initial budgets totalling £539.9m are summarised in the next slide • 2011/12 forecast allocation is £551.0m resulting in planned surplus of £11.1m (2%).

  13. 2011/12 Budget Summary • Detailed budgets and budget holders on schedule attached

  14. Main Budget Changes – Acute Contracts (1) • Baseline based on 2010/11 outturn adjusted for: • % population growth • Tariff changes – see slide 15 • Demand Management (Urgent Care Centre, STARRs, End of Life, Case Management) – see slide 16 • Sector Commissioning Intentions – see slide 17 • CQUIN continues at 1.5% – see slide 20 • Out of Sector contracts not finalised (risk assessment included in budget together with in-year risks)

  15. Main Budget Changes – Acute Contracts (2)Tariff changes 11/12 – national • Standard national contracts for acute and mental health now incorporating PCT provider arm services • Bespoke contract for the care homes sector now available • National tariff reduction of 1.5% (2.5% inflation less 4% efficiency) • Emergency readmissions within 30 days of discharge following an elective admission not to be charged. All other readmissions within 30 days subject to locally agreed thresholds • Some expansion in scope of tariff for 11/12, including changes to specialised services top ups and HRG4 for A&E • Marginal rate for emergency admissions above baseline maintained • CQUIN to remain at 1.5% (also extended to care homes)

  16. Main Budget Changes – Acute Contracts (3)Demand Management • Total = £6.4m

  17. Main Budget Changes – Acute Contracts (4)Sector Commissioning Intentions • Planned Procedures with a Threshold (PPwT) • In 2010/11 there has been a process to implement systems to better manage requests for and the contracting of PPwTs. Following work by the NW London Clinical Reference Group an extended list has been determined for inclusion in 2011/12 contracts. • The relevant HRGs have been removed from Trust baselines in their entirety. Unless one of the listed procedures has been explicitly approved using the specified process of approval it will not be funded. • Outpatient ratios • Outpatient first to follow up ratios have been revised and applied consistently to providers from April 1st 2011 to achieve progressive improvement by all providers • Day Case/Outpatient ratios • In addition to monitoring day case rates, the Sector is extending this to include procedures undertaken in outpatients leading to achievement of Best Practice ratios for the proportion of procedures carried out in an outpatient setting as opposed to a day case. This recognises that some procedures do need to be undertaken as a day case and incentivises the provision of care in less acute clinical settings where clinically appropriate.

  18. Main Budget Changes – Acute Contracts (5)Sector Commissioning Intentions • Emergency readmissions • The national guidance on this is clear and is spelt out in a letter from David Flory of the 18th February 2011 “there is no discretion about the use to which the savings from not paying for some emergency readmission, accruing within PCTs, should be put. SHAs will be asked to monitor the progress of PCTs in identifying and using this money to develop services to support patients in the 30 day period following discharge. This responsibility will pass, along with the funding, to the acute sector from 1 April 2012…” • Given the need to develop new services to tackle 30 day admissions and the time this will take a phased approach to this issue in NWL has been taken. The precise phasing is subject to agreement but the key impact is the overall in year potential loss of income to acute Trusts. In NWL this is set at 25% of the calculated readmissions value. • Funds will only be paid to Trusts on the basis that both commissioners and Trusts are developing joint plans to create new services aimed at improving services to support patients in the 30 day period post discharge. In the first quarter 100% of one quarter of the total annual calculated figure will be paid to Trusts subject to agreement by 1st July of the joint plan. Over the full year it is expected that Trusts will receive 75% of the annual calculated funding with 25% invested in out of hospital services. These percentages may be varied in year subject to both parties agreement but have been used in setting contract for 2011/12 • Quality metrics and consequence of breaches– within NWL the quality metrics included in acute contracts have been reviewed and financial consequences of breached of some metrics established. See next slide

  19. Main Budget Changes – Acute Contracts – Quality metrics and consequence of breaches(6) Note: also a number of quality metrics for which no consequence of breach

  20. CQUIN – ACUTE CONTRACTS 11/12 • CQUIN payments have been divided into two areas: • National incentive schemes • Regional /Local incentive schemes • National incentive scheme • These remain unchanged from 2010/11 and are: • VTE risk assessment on admission to hospital • Composite indicator on responsiveness to personal needs • London/Local incentive scheme for NWLH • Falls: the total number of falls within NWLHT will be reduced by 25% and the number of those falls resulting in harm to the patient will be reduced by 50%    • End of Life Care: the care of end of life patients referred to the specialist palliative care team will be improved through the local implementation of the Department of Health End Of Life Care Strategy’s quality standards. A locally developed and agreed improvement trajectory will be established. •  COPD Discharge Care Bundle (chronic obstructive pulmonary disease) 75% of patients who are admitted with an acute exacerbation of their COPD will be discharged with a completed discharge care bundle in the required format • Patients seen by a consultant within 12 hours of admission: 75% of patients admitted in an emergency, ether via A&E or directly from the community will be assessed by a consultant within 12 hours.

  21. Main Budget Changes – Other Acute Specialised Commissioning • Other Acute • Applying tariff deflator of 1.5% to Walk-In Centres, Non Contracted Activity and Sexual Health - reduction of £0.1m • Termination of the Clinicenta contract - reduction of £1.7m • Specialist Commissioning • Net cost pressures due to increases in activity of £1.3m of which the increase in NICU is £1.1m

  22. Main Budget Changes – non-acute • Mental Health • Specialist commissioning cost pressure (£0.6m) • Transfer of Learning Disability Community Team and Substance Misuse Project from BCS to CNWL (£1.2m) • Application of tariff deflator - reduction of £0.5m • Other contract reductions - reduction of £0.3m • Planned savings on CNWL contract • Learning Disability community teams – reduction of £0.3m • Rehabilitation bed reduction – reduction of £0.85m • Rationalisation of Teams – reduction of £0.5m • Contract rebasing between PCTs – reduction of £0.6m • Continuing Care • Application of tariff deflator - reduction of £0.4m • Decommissioning of Continuing Care Beds with CNWL – reduction of £169k • Savings with other providers due to repatriation and the transfer of Adults into the Older Adults service – reduction of £0.8m • Other • Social Care Allocation to Local Authority (£3.4m) • Savings on Women & Children small contracts - reduction of £0.1m • 2% efficiency on all contracts (£0.1m) • Drug & Alcohol Action Team • Increase in national Pooled Treatment funding (£0.7m)

  23. CQUIN - CNWL Regional: 40% allocation of CQUIN payment Local: 60% allocation of CQUIN payment

  24. Main Budget Changes – Primary care • Medical budget has an uplift of 0.5% (£0.22m) • Pharmacy contract budget remains the same as 2010/11 with 2% uplift to Pharmacy Global Sum element only (£0.1m) • Prescribing uplift 5% (£1.9m) • QIPP Savings • Prescribing (£0.9m) • GMS (£0.8m)

  25. Main Budget Changes – ICO and Community Services • Contract with BCS adjusted to reflect service transfers, commissioning intentions for 11/12 and QIPP savings for 11/12. • Service transfers from BCS • Brent Rehabilitation Service (£1.1m) to NWLH as part of STARRS service • Peel Road transfer (£0.85m) to Local Authority • Community team for Learning Disabilities (£0.77m) to CNWL • Substance Misuse Project – (£0.47m) to CNWL • QIPP savings – £0.9m – subject to in-year review

  26. CQUIN – BCS (ICO) • To follow

  27. Main Budget Changes – CSP Investments

  28. Main Budget Changes – Corporate/Running costs (1) • National Operating Framework 2011/12 • Running cost = any cost incurred that is not a direct payment for the provision of healthcare or healthcare related services • By 2014/15 the overall running costs of the new NHS structure, compared to the running costs of the current NHS structure, will decrease by one third • Expectation that GP Consortia will spend between £25 - £35 per head on running costs by 2014/15 • Brent and Harrow staffing structures designed to fit within above indicative envelope – approximately £30/head • In budgeting for 11/12, assumed split of costs for corporate functions calculated at 62% (Brent) and 38% (Harrow) • Figures (see next slide) exclude additional non-recurrent support from Sector for QIPP delivery

  29. Main Budget Changes – Corporate/Running costs (2)

  30. Main Budget Changes – Corporate/Running costs (3)

  31. Main Budget Changes - Estates • Budget transfer of Estate responsibilities from BCS, including 31 staff • FYE of Chalkhill & Hillside incorporated • Loss of income from NWLH at Willesden (£0.4m) • Creation of revenue maintenance budget (£0.3m) • Inflation - £0.3m • Savings - £0.1m

  32. QIPP summary • Detailed QIPP plans set out on next slides • QIPP plan prepared prior to contract finalisation and are therefore subject to initial contract agreement and then delivery • Summary of Brent and Harrow’s position below: • Note: above excludes additional in-year savings – un-quantified for Brent, £2m for Harrow • Cluster wide risk assessment applied pre-contract finalisation. Post contract finalisation, QIPP plans have a higher risk profile

  33. QIPP Plans (1)

  34. QIPP Plans (2)

  35. QIPP monthly delivery expectations

  36. QIPP Savings by category and provider Provider impacts: • Acute – £5.8m • Community – £1.1m • Mental health – £3.3m • Primary care – £1.7m • Other - £2.0m £13.9m

  37. QIPP Savings by category and risk assessment Risked: • 100% £6.5m • 90% £5.3m • 60% £2.0m • 30% £0.1m £13.9m

  38. Capital • In 2011/12 PCT’s no longer have delegated responsibility for capital projects. All new capital projects must be approved by the SHA; • Initial capital resource limit (CRL) of £375k has been granted for fire and health and safety works.

  39. 2011/12 Budgets Sign-off and in-year management The 11/12 budgets sign-off and in-year management process will be consistent across Brent and Harrow as follows: Date • SBS implemented across Brent and Harrow • Financial risk management plan agreed by Board (see slides 40–47) • Governance and reporting structure agreed by Board (see slide 48) • Budgetary responsibilities will be documented and signed off by all budget holders • New financial management support arrangements to Boroughs/ GPs in place • Budget holder refresher training provided (including finance guide for managers) • A development programme for finance managers will be in place 1/4 14/4 14/4 30/4 30/4 31/5 30/6

  40. In-year Financial Risk assessment

  41. Risk area: In- year acute over-performance – in Sector

  42. Risk area: In- year acute over-performance – out of Sector

  43. Risk area: Demand management – QIPP (1)

  44. Risk area: Demand management – QIPP (2)

  45. Risk area: Other QIPP delivery

  46. Risk area: In-year cost pressures

  47. Risk area: Further in-year savings

  48. In year financial management Governance and reporting structure Board GP Commissioning Executive Finance Quality & Performance Committee Audit Committee Review monthly financial position of budgets (indicative and devolved) including GP consortia performance Reviews overall financial position focussing on key variance, risks and medium term planning Reviews overall financial management system of internal control and Board Assurance Framework Receives: • Mthly Finance & Activity report • Mthly QIPP/Performance dashboard • Qtly MTFS update Receives: • Mthly Finance & Activity report • Mthly QIPP/Performance dashboard • Qtly MTFS update Receives: • Internal & external audit reports • Qtly Finance reports in annual account format • Board Assurance Framework In addition to the above : • QIPP Performance monitored by Project Boards • Mthly Finance reports to all practices

  49. QIPP Monitoring Process GP Commissioning Executive QIPP performance dashboard Cluster PMO Summary of actual vs planned Project boards Project Highlight report Sub-Cluster PMO (Strategy & QIPP) Clinical RO Milestone plans Senior RO Risk log Financial tracking Activity tracking • Each project has a highlight report which contains the key project management elements to deliver a successful project. • The highlight reports are used within the project boards to update on progress. • The highlight reports are collated on a fortnightly basis and summarised into a QIPP performance dashboard. • The dashboard is reported to our GP Commissioning Executive and to the cluster programme management office.

  50. Contingency plans • Brent has surplus plan, low QIPP but significant risks to delivery • Harrow has break-even plan, high QIPP including additional in-year savings plan, with potential £5m gap • To enable plan sign off by the PCT Board, Sector and NHS London, Brent has identified non-recurrent £5m in-year contingency, sourced from: • 0.5% contingency reserve (£2.7m) • CNWL rebasing (£0.4m) • Emergency readmissions benefit (£0.5m) • Non-elective thresholds (£1.4m) • This will be held by Brent and only released in-year (none, part or all) subject to: • Brent able to achieve its control total • Peer review of Harrow to provide assurance that all measures being taken • Harrow delivery of 11/12 QIPP and additional in-year savings plan • Harrow has developed plans for 12/13 to enable repayment • As part of reaching this agreement, the Cluster will be asked to: • prioritise Brent’s use of non-recurrent funding to enable continuation of local GP incentive scheme at £3 and support Brent’s plans for referral management and pathway development • help find a solution to Kingsbury and Kilburn premises issues • confirm no financial support will be required for NWLH • support the accelerated development of GP Commissioning in Brent including the release of the £2 per head to support GP Commissioning development locally • confirm that Brent’s surplus in 11/12 will be carried forward to 12/13