Agenda Heading / 2. Items for discussion
Enclosure / 113/11
Date of Meeting / 27 September 2011
Title of report / Month 4 Finance report headlines
Recommendation / NOTE the month 4 Finance report headlines outlined
Executive summary
The Cluster is now responsible for preparing the monthly Finance report for the Care Trust Board. The monthly position is discussed and agreed between the cluster and the BSU before finalisation. The month 4 report was prepared by cluster and the contents were not discussed with the BSU, although would have been informed by the discussion on the position. This brief report provides headlines for the Clinical Cabinet in respect of the financial position as reported at month 4. However, it should be read in conjunction with the full Month 4 Cluster Finance report (Appendix 1). It is hoped that for future months, Cluster will provide separate reports for each individual BSU. For ease of reference for month 4, in addition to the highlights provided, Bexley specific areas have been highlighted in the Cluster report.
Organisational implications
Financial / The Care Trust has been requested to plan for £2,245k surplus in 2011/12. To achieve this position identified QIPP has to be delivered, unidentified QIPP needs to be reduced to zero, SLAs need to be agreed within the current financial envelopes and over-performance must be kept at a minimum. However, as a result of substantial over-performance on acute SLAs, Bexley Care Trust is reporting breakeven forecast outturn (FOT) for 2011/12 at the end of month 4.
Equality and Diversity / n/a
Risk (governance and/or clinical) / There is a risk that Bexley Care Trust will not achieve the required control total set by NHS London.
Patient impact / n/a
NHS constitution / n/a
Which objective does this paper support? / Insert Tick (ü)
Improve choice and access to integrated health services for Bexley patients
Reduce the level of health inequalities across Bexley
Improve care for patients with long term conditions & increase the range of services offered within the community
Improving the health & wellbeing for people in Bexley
Maximizing the opportunities of joint working (APoH, JSNA, Wellness agenda etc)
Using our resources in the most efficient & effective manner (organisational & financial) / ü
Report Author / Theresa Osborne
Date / 14th September 2011
Contact Details /
0208 298 6238
Executive sponsor / Theresa Osborne
Bexley Care Trust
Month 4 Finance report headlines
1. Introduction
The Cluster is now responsible for preparing the monthly Finance report for the Care Trust Board. The monthly position is discussed and agreed between the cluster and the BSU before finalisation. The month 4 report was prepared by cluster and the contents were not discussed with the BSU, although would have been informed by the discussion on the position. This brief report provides headlines for the Clinical Cabinet in respect of the financial position as reported at month 4. However, it should be read in conjunction with the full Month 4 Cluster Finance report (Appendix 1). It is hoped that for future months, Cluster will provide separate reports for each individual BSU. For ease of reference for month 4, in addition to the highlights provided, Bexley specific areas have been highlighted in the Cluster report.
2. Main points to note
1) Bexley Care Trust was reported as being breakeven at month 4 against a breakeven plan. To meet this position, assumptions were made by cluster on the level of challenges to data and activity likely to be successful (80%). Additionally, four months of the contingency and SLA reserve was factored into the position. Appendix D/1 of the Cluster report gives more detail of the position.
2) The month 4 position is based on the latest available information. Although information was more robust at month 4 on which to base forecasts, acute data was based on month 3 unvalidated flex information which is driven by ‘SUS’ systems and timetables. Prescribing data is based on month 2 reports.
3) At month 4 and forecast outturn, the Care Trust is reporting over-performance on all of its main acute providers, offset by underspends in other acute providers. The month 4 reported overspend on acute SLAs is £834k with a FOT overspend of £3,882k. No detailed information is provided in respect to the SLA with Dartford & Gravesham NHS Trust.
4) Bexley Care Trust reported a forecast outturn of £239k surplus for month 4, against its £2,245k surplus. The budgets managed locally are expected to breakeven. However, the budgeted surplus is now being used to offset expected acute SLA over-performance and expected overspends on Non-Contracted activity, which are both managed by cluster.
5) It is important to note that the FOT position already includes an expected return of £5,989k from the 2% non-recurrent topslice. Furthermore, the surplus was previously reduced by £1,800k in lieu of the balance of historic deficit to be repaid.
6) Of the £6,814k 2% non-recurrent topslice, held by NHS London, £5,989k is expected to be returned as a contribution towards the affects of arbitration on the SLHT SLA, and £290k has been requested to pay for project costs for the Healthcare Campus. The uncommitted balance is £535k. 40% of the 2% of all other South East London PCTs is being retained by the cluster.
7) The Bexley FOT position will result in the cluster failing to meet its control total. Consequently, options to flex individual PCT positions are being explored.
8) Achievement of the 2011/12 control total is reliant on a number of factors:
i. Agreement of the outstanding acute SLAs within the financial envelopes previously notified by cluster. It should be noted that SLHT are still querying the SLA provisions.
ii. Control of acute activity to prevent over-performance by:
a. GP referrals (use of PMC)
b. Data validation and challenges
c. Appropriate performance management of KPIs, implementation of emergency readmission guidance.
iii. Delivery of identified QIPP schemes;
iv. Identification of new CIPs / QIPP to close the unidentified QIPP gap.
v. Managing all other budgets to prevent overspends and apply corrective action if necessary.
9) Bexley QIPP for month 3 is shown as over-performing with £5,716k savings achieved against plan of £1,809k. This is because of the achievement of significant unidentified QIPP in the first four months against a plan which has this phased later in the year. Cluster is liaising with NHS London to see whether the plan phasing can be changed for month 5. At month 4, QIPP scheme actuals were reported as achieving plan. Monitoring information of these schemes should improve as the year progresses. However, a substantial proportion of Bexley’s schemes is reliant on the monitoring of acute contracts, responsibility for which rests with cluster in this financial year.
10) The main risks to the position are as previously stated but are primarily:
i. Negotiation and over-performance of acute SLAs;
ii. Delivery of QIPP and identification of further schemes;
iii. Extensive use by Bexley residents of acute provision outside of contracted areas – Non contracted activity;
iv. Unpredictability of Continuing care and retrospective reviews;
v. Cost pressures from other areas of government;
vi. Unidentified cost pressures at the time of planning, e.g. PTS and enteral feeds;
vii. Independent Funding requests if not scrutinised before approval.
11) The financial services hosting arrangement for Bexley Care Trust (and therefore the BSU) will transfer from Oxleas to Shared Business Services with effect from 1st October 2011. This will cause further work for Bexley BSU staff but it is hoped will improve financial reporting.
12) Bexley Care Trust is performing well against the 95% BPPC target, with 98.4% of invoices by value and 99.8% of invoices by count paid within 30 days.
1
3. Recommendation
BCCC members are asked to NOTE the month 4 headlines outlined above.
Theresa Osborne
Chief Financial Officer
Bexley BSU
14th September 2011
0208 298 6238
1
NHS South East London Cluster
FINANCE REPORT – MONTH 4
1. Introduction
1.1. This report sets out the 2011/12 financial position for each of the PCTs in the NHS South East London Cluster as at month 4 and the year end forecast. The report also sets out the position on contracts with Trusts, QIPP savings initiatives and PCT financial management targets and duties. Summary positions for each PCT are attached at Appendix D.
2. Profiling and Assumptions
2.1. The month 4 year to date position is based on the latest available financial monitoring information but it remains the case in some areas that available information is not yet reliable enough to produce robust year end forecasts. For example, PPA information from which primary care prescribing and community pharmacy positions are informed is only available for two months and the information available from the PPA has a clear “health warning” on its completeness and utility for forecasting purposes.
2.2. In other areas a considerable amount of work has been undertaken to improve the validity and accuracy of year to date and forecast positions. Notably, cluster and BSU budgets are now reconciled and forecasts are now based on seasonal profiling. Analysis has shown that this would have been by far the most accurate methodology in previous years.
2.3. Acute positions are driven by data provided via the national SUS system. Information is therefore subject to national timetable limitations. As at the time of this report, month 2 data is frozen and validated whereas month 3 remains flex. Month 4 information is not yet available. Given the level of outstanding data challenges, it is likely that these positions will move as the data becomes more robust.
2.4. The Cluster Finance team are liaising with Shared Business Services to transfer the financial services hosting arrangements for Bexley and Greenwich PCTs from Oxleas NHS Trust to Shared Business Services from 1st October 2011. This will result in an automated and systematic financial reporting cycle based on a common coding structure and will significantly improve the timeliness and quality of financial reporting.
3. Headline Financial Performance
3.1. The high level forecast based on Month 3 flex date is that the cluster will not achieve its planned outturn due to an under-delivery of planned surpluses at Bexley Care Trust. Lewisham is not achieving its planned target year to date but it is expected to recover this position by year end. Both PCTs are forecast to remain in surplus in 2011/12. The key drivers for the adverse variance forecast are acute expenditure and failure to achieve all QIPP savings.
3.2. The table below summarises the financial performance year to date and the forecast outturn by PCT.
Table 1: Headline Financial Performance
Bexley / Bromley / Greenwich / Lambeth / Lewisham / Southwark / Total SEL cluster£'000 / £'000 / £'000 / £'000 / £'000 / £'000 / £'000
Year to Date Expenditure Position
Total Budget / 117,153 / 165,471 / 155,710 / 219,405 / 178,258 / 178,361 / 1,014,358
Total Expenditure / 117,153 / 164,173 / 154,166 / 214,898 / 177,256 / 176,360 / 1,004,006
Total (Over)/ Underspend / 0 / 1,298 / 1,543 / 4,507 / 1,002 / 2,001 / 10,352
0.0% / 0.8% / 1.0% / 2.1% / 0.6% / 1.1% / 1.0%
Planned Year to Date Surplus / 0 / 1,298 / 1,516 / 4,507 / 1,792 / 2,001 / 11,116
Variance against planned Surplus / 0 / 0 / 27 / 0 / (790) / 0 / (763)
Forecast Year End Expenditure Position
Total Budget / 344,483 / 501,808 / 479,757 / 652,467 / 549,777 / 536,259 / 3,064,551
Total Expenditure / 344,244 / 495,815 / 475,145 / 645,862 / 544,402 / 530,402 / 3,035,871
Total (Over)/ Underspend / 239 / 5,993 / 4,612 / 6,605 / 5,375 / 5,857 / 28,680
0.1% / 1.2% / 1.0% / 1.0% / 1.0% / 1.1% / 0.9%
Planned Full Year Surplus / 2,245 / 5,993 / 4,612 / 6,605 / 5,375 / 5,857 / 30,687
Forecast variance against planned Surplus / (2,006) / 0 / 0 / 0 / 0 / 0 / (2,006)
Year to Date QIPP savings initiatives
Planned QIPP Savings / 1,809 / 2,829 / 3,650 / 3,964 / 3,485 / 3,715 / 19,452
Actual/ Forecast Savings / 5,716 / 2,927 / 3,586 / 3,398 / 3,009 / 3,307 / 21,943
QIPP Savings (Over)/ Underspend / 3,907 / 98 / (64) / (566) / (476) / (408) / 2,491
Forecast Year end QIPP savings initiatives
Planned QIPP Savings / 10,203 / 8,995 / 14,840 / 13,626 / 12,329 / 13,913 / 73,906
Actual/ Forecast Savings / 10,203 / 8,995 / 14,840 / 11,199 / 10,434 / 11,741 / 67,411
QIPP Savings (Over)/ Underspend / 0 / 0 / 0 / (2,428) / (1,896) / (2,172) / (6,495)
3.3. As at month 4 budgets are under spent by £10.352m across South East London compared to a planned surplus of £11.116m – an adverse variance of £763K. It should be noted that all PCTs have profiled the delivery of their planned surpluses through the year and that this differs by PCT. As at month 4 all PCTs are meeting their planned surpluses with the exception of Lewisham. The Bexley profile is to be at breakeven at Month 4, therefore Bexley YTD is in line with plan.