Central and North West NHS Foundation Trust

Council of Governors

Finance Update

4th December 2014

  1. The Trust’s financial position after 7 months is a deficit of £4.4m. This is deterioration from the quarter 2 position, reported to Monitor of £0.9m.
  1. The significant adverse movement in October was due in part to the recognition that not all the funding requested to support the continued running of the Butterworth would be forth-coming (£0.4m). This is still be challenged. Plus the continued rate of overspend due to not delivering the savings to match income reductions.
  1. The Trust Board has approved a draft recovery plan that looks to deliver up to £9.6m of savings/income and if fully delivered would yield a surplus of £2.2m at year-end against an original plan of £5.7m
  1. The single largest factor in the adverse performance is the failure to reduce costs relating to the Commissioners Quality, Innovation, Productivity and Prevention Schemes (QIPP) over the last two years. The Trust has made savings in 2014/15 of £16.7m (4%), equivalent to the national efficiency target, but has not delivered £12.7m of QIPP schemes that have resulted in funding coming out of the Trust’s income.
  1. The trust signed the contract for North West London Mental health contracts on 28th October (30% of trust income). The delay had been around trying to secure as favourable deal as possible from commissioners. The principle was that although there were reductions these would be mitigated in year with non-recurrent payments to support the Trust. The most significant element of this was £2.5m to manage the transformation. Contract discussions are already underway for 2015/16 and the Chief executive and Finance Director have been meeting senior staff from the CCGs around what levels of funding the Trust requires for next year.
  1. The Trust has therefore run a deficit for the whole of 2014/15 and this has had a detrimental impact on the cash balances, however at the end of the month the balance was £11.4m compared with a planned figure of £10.1m. This is largely due to slippage in capital

Finance Report 7 months to 31st October 2014

Mth 7 Actual / Full year / Mth 7
£m / Budget / Actual / Variance / Plan / Forecast / Variance
Activity income / 224.98 / 233.53 / 8.55 / 385.69 / 404.46 / 18.77
Education, Training & Research / 11.89 / 9.32 / (2.57) / 20.38 / 16.97 / (3.41)
Other Income / 10.99 / 12.94 / 1.94 / 18.85 / 21.34 / 2.49
Operating Income / 247.87 / 255.79 / 7.92 / 424.92 / 442.76 / 17.84
Pay Expenditure / (173.67) / (182.49) / (8.82) / (296.74) / (308.58) / (11.84)
Non-Pay Expenditure / (62.41) / (66.15) / (3.74) / (105.10) / (111.68) / (6.57)
Operating Expenditure / (236.09) / (248.64) / (12.56) / (401.84) / (420.25) / (18.41)
EBITDA / 11.78 / 7.14 / (4.64) / 23.07 / 22.51 / (0.57)
EBITDA % / 4.75% / 2.79% / -41% / 5.43% / 5.08% / -6%
Depreciation / (4.97) / (4.90) / 0.07 / (8.52) / (8.50) / 0.02
Interest income / 0.06 / 0.00 / 0.00 / 0.10 / 0.00 / (0.10)
Restructuring costs / (1.66) / (2.65) / (0.99) / (2.85) / (4.55) / (1.70)
Impairment / 0.00 / 0.00 / 0.00 / 0.00 / 0.00 / 0.00
Dividends, interest, and other / (3.56) / (3.97) / (0.41) / (6.10) / (6.80) / (0.70)
Retained Surplus exc restructure / 3.31 / (1.72) / (5.04) / 8.56 / 7.20 / (1.35)
I&E Surplus as per Monitor % / 2.01% / 0.36% / -81.94% / 2.68% / 2.65% / -1%
(exc restructuring & disposal)
Surplus / 1.65 / (4.37) / (6.02) / 5.70 / 2.65 / (3.05)