FINANCIAL
PERFORMANCE
REPORT
2008-09Month 6
(to Sept 30th2008)
Mid Year Review
1Month 6 Position and Year End Projections (Mid Year Review)
1.1The financialpositionfor the NPHSattheendof September 2008is £18koverspent, and the projected outturn is break even. Both are summarised in the following table.
NPHS 2008/09 Month 6 Financial Position and Projected Outturn
2008/09 Budget £000s / Year to Date Budget £000s / Year to Date Actual £000s / Year to Date Variance £000s / Projected Outturn £000s / Projected Variance £000sSTAFF EXPENDITURE
Central (incl. vacancy target) / 2,134 / 1,067 / 1,325 / 258 / 2,666 / 532
LPHTs / Regional Teams / 8,638 / 4,293 / 4,036 / -257 / 8,050 / -588
Governance Teams / 1,666 / 833 / 833 / 0 / 1,583 / -83
Health Information Teams / 1,153 / 576 / 527 / -49 / 1,043 / -110
Health & Social Care Quality / 851 / 425 / 357 / -68 / 711 / -140
Health Protection / 14,717 / 7,258 / 7,299 / 41 / 14,956 / 239
Grants / SSW / 3,387 / 1,505 / 1,520 / 15 / 3,387 / 0
TOTAL STAFF EXP / 32,546 / 15,957 / 15,897 / -60 / 32,396 / -150
NON STAFF EXP
Corporate / Central / 701 / 221 / 377 / 156 / 800 / 99
LPHTs / Regional Teams / 1,412 / 676 / 561 / -115 / 1,467 / 55
Governance Teams / 91 / 45 / 51 / 6 / 100 / 9
Health Information Teams / 122 / 61 / 36 / -25 / 109 / -13
Health & Social Care Quality / 30 / 15 / 11 / -4 / 30 / 0
Health Protection / 5,759 / 2,762 / 2,963 / 201 / 6,048 / 289
Grants / SSW / 1,194 / 453 / 465 / 12 / 1,194 / 0
TOTAL NON STAFF EXP / 9,309 / 4,233 / 4,464 / 231 / 9,748 / 439
TOTAL EXPENDITURE / 41,855 / 20,190 / 20,361 / 171 / 42,144 / 289
INCOME
Central Income (inc SpR Inc) / -16,455 / -8,228 / -8,217 / 11 / -16,390 / 65
Other Inc (inc Secondments) / -970 / -411 / -415 / -4 / -913 / 57
Health Protection Income / -20,906 / -10,325 / -10,472 / -147 / -21,318 / -412
Grants / SSW / -4,780 / -2,369 / -2,382 / -13 / -4,779 / 1
TOTAL INCOME / -43,111 / -21,333 / -21,486 / -153 / -43,400 / -289
NET EXPENDITURE / -1,256 / -1,143 / -1,125 / 18 / -1,256 / 0
2Variance Analysis
2.1StaffVariance(Year to Date underspend £60k/ Projected underspend £150k)
To date, there have been staff turnover savings of £576k made against a year to date savings target of £516k, resulting in a net underspend on staff expenditure of £60k. Further staff savings of £606k are anticipated in the second half of the year, bringing the total forecast for staff turnover savings to £1,182k, which is a projected underspend of £150k against the budgeted turnover target of £1,032k.
A significant amount of the turnover savings in 2008/09 is non recurring slippage on key consultant posts (£450k). All but one of these posts have now been filled, therefore the turnover savings are anticipated to be lower in 2009/10.
2.2NonStaffVariance(YTD overspend £231k/ Projected overspend £439k)
The YTDoverspendis primarily aresultof an higher than budgeted expenditure on Microbiology laboratory consumables and media (£204k) andan overspend within the corporate team budget on legal fees, including fees for E-coli work
The projected overspend at year end of £439k is made up of:
- Microbiology consumables (due to new tests and increased workload) - £290k overspent (to be partially offset by additional income – see 2.3)
- Increased accommodation costs as a result of higher than anticipated utility bills(over 100% increase in some cases) and additional rental costs- £60k overspent
- Legal fees (including E-coli) - £75k
2.3IncomeVariance (YTD over-recovery £153k / Projected over-recovery £289k)
The YTD and projected over-recoveryonincomeis aresultofhigherthananticipatedincomewithintheMicrobiologylaboratories, including £190k workload over contract income from the host NHS Trusts. NHS Trusts are due to be asked to confirm their expenditure assumptions based on the Month 6 activity reports to be issued by the laboratories.
This is offset by an under-recovery on Specialist Trainee (SpT) income from the Deanery as result of a reduced level of reimbursement for SpTs assimilated onto A4C pay bands.
3.Assumptions for Mid Year Review
That microbiology non staff expenditure on consumables and media for months 7-12 will be as forecasted, which for some laboratories, is significantly lower than for months 1-6. The higher than expected consumable expenditure in the early months of the year included bulk purchases for new tests (eg Chlamydia testing).Close monitoring of the non staff expenditure will continue in order to detect any variation at the earliest stage.
That the average activity level of the microbiology laboratories for the whole year will be equal to level in quarter one. Should the activity increase, additional income may be recovered whereas should the activity reduce, then income and also consumable expenditure will reduce.
That any remaining agenda for change assimilation costs, including for any additional cost of the Jenkins review, will be equal to the amount held in reserve.
That expenditure on legal fees and other unexpected expenditure will not exceed the provision for contingency.
That expenditure on capital charges will equal the forecasted expenditure, which is currently included at the budgeted level.
That any effect on the figures from the adoption of the new IFRS accounting standards (eg accounting for annual leave) will be minimal.
4.Summary
4.1Although the NPHS is projecting a breakeven position for 2008/09, there are substantial pressures as a result of legal costs;increased utility cost and increased testing costs within the Microbiology laboratories.
The above cost pressures have been covered in 2008/09 by a particularly high level of non recurring slippage on vacant consultant posts and management action such as freezing or delaying the refilling ofvacant poststo further increase staff turnover savings and also maximising income generation.
Version: Final / Date: 22/10/08 / Status: FinalAuthor: Tamira Rolls / Page:1of 4