NHS FIFE
Report to the Board on 26 August 2014
FINANCIAL POSITION TO 31 JULY 2014
1. INTRODUCTION
1.1 This report represents a full report on the financial position of the Board for the financial year 2014/15. The report covers the four month period to 31 July 2014 and is based on the Financial Framework which was approved by the Board at the Special Board meeting on 25 March 2014.
2. ALLOCATIONS FOR THE YEAR
2.1 Since the previous report to the Board, additional allocations from the Scottish Government Health & Social Care Directorate (SGHSCD) of £64.592m have been received. These additional allocations were all anticipated and are mostly included in the Board’s Financial Framework. The additional allocations comprise of £0.380m of recurring funding, £61.641m of earmarked recurring funding and £2.571m of non-recurring funding.
2.2 The major additional allocations received include Primary Medical Services (£43.817m), eHealth Bundle (£4.639m), General Dental Services (£2.677m), Drug Treatment and Support Services (£2.560m), Effective Prevention Bundle (£2.103m), Primary Medical Services Bundle (£1.735m) and the Dental Services Bundle (£1.484m). All of these allocations had previously been anticipated and were included within the Boards Financial Framework. A full list of the additional allocations is shown in Appendix A.
2.3 In addition, the Board has also received miscellaneous income from other sources. Since the previous report to the Board an additional £1.429m has been received. The main additional sources of income are CNORIS payments (£0.698m), Non Discretionary Family Health Services (£0.450m) and SEAT recharges (£0.106m).
3. REVENUE EXPENDITURE TO DATE
3.1 The Revenue Resource Limit position for NHS Fife for the four months to 31 July 2014 is showing an overspend of £1.627m. This compares with an estimated overspend of £1.2m which was included in the Board’s Local Delivery Plan (LDP).
3.2 A summary of financial performance within the Acute Services Division, individual CHPs and Corporate Directorates is shown in the table on the following page. A chart showing the performance of the monthly outturn against the trajectory for the year as reported to the Scottish Government via the monthly Financial Performance Returns is also included.
3.3 All significant variances are considered at the individual CHP, Acute Services Division or Directorate meetings, where underlying reasons and appropriate remedies are agreed and monitored. Commentary on the key underlying issues for each area is set out in the remainder of section 3. Given the extent to which the overall position is driven by the financial performance within the Acute Services Division, the major component of the narrative focuses specifically on this area.
NHS Fife – Financial Position as at 31 July 2014
Division / CHP / Directorate / Allocation for Year / Budget for Period / Expenditure for Period / Variance / Variance£'000 / £'000 / £'000 / £'000 / %
Acute Services Division / 175,997 / 58,663 / 62,217 / 3,554 / 6.06%
Kirkcaldy and Levenmouth CHP / 67,507 / 22,405 / 22,630 / 225 / 1.00%
Glenrothes and N. E Fife CHP / 29,042 / 9,516 / 9,502 / (14) / -0.15%
Dunfermline and West Fife CHP / 42,956 / 14,391 / 14,294 / (97) / -0.67%
Estates and Facilities / 64,838 / 21,484 / 21,605 / 121 / 0.56%
Board Admin & Other Services / 35,051 / 10,994 / 10,758 / (236) / -2.15%
Prescribing / 72,570 / 24,004 / 23,872 / (132) / -0.55%
PMS / 47,791 / 15,906 / 15,880 / (26) / -0.16%
FHS / 39,239 / 13,112 / 13,112 / 0 / 0.00%
Non Fife & Other Providers / 97,542 / 32,775 / 32,823 / 48 / 0.15%
OHSAS / 4,502 / 1,684 / 1,696 / 12 / 0.71%
Depreciation / 21,441 / 8,594 / 8,594 / 0 / 0.00%
SGHSCD Funds for Impairments etc / 7,539 / 0 / 0 / 0 / 0.00%
Corporately Held Flexibility / Savings / 6,924 / 1,764 / 0 / (1,764) / -100.00%
Total Expenditure / 712,939 / 235,292 / 236,983 / 1,691 / 0.72%
Miscellaneous Income / (71,467) / (25,265) / (25,329) / (64) / 0.25%
Net Expenditure / 641,472 / 210,027 / 211,654 / 1,627 / 0.77%
Acute Services Division
3.4 The Acute Services Division is reporting an overspend of £3.554m for the first four months of the financial year. This is predominantly driven by staffing costs, with 77% of the overspend relating to pay expenditure. Bank nursing and medical locums continue to be the two single biggest issues and although both are linked in part to vacancy cover across the Division, the expenditure is in excess of the budget available.
3.5 Bank nursing is also being widely used to cover sickness and other leave, as well as observations within elderly medicine wards. Steps have been taken to improve the authorisation of bank and agency nursing which should help to improve the position from next month. The chart below provides an analysis of the position within the Clinical Directorates:
3.6 The key financial pressures within each of the clinical directorates are described below:
Planned Care Directorate
The Planned Care Directorate is £1.827m overspent at the end of July. This remains consistent with the trend for the year so far and is in line with the previous financial year, reflecting the use of medical locums (both senior and junior cover) within Women & Children’s services and Theatres & Anaesthetics; and ongoing use of the nurse bank to cover sickness and vacancies. In addition, expenditure on private sector capacity (purchase of healthcare) has continued, in order to address waiting times pressures.
Emergency Care Directorate
The Emergency Care Directorate is £2.063m overspent for the first four months of the year. The key drivers are the use of bank nursing and medical locums, as well as the use of surge capacity (ward 13) during April to July, with no associated funding source.
Ambulatory Care Directorate
The Ambulatory Care Directorate is £0.267m overspent at the end of July, which shows a slowing down of the trend to date. The costs associated with weekend Endoscopy sessions provided by Medinet are included within the Purchase of Healthcare costs in the chart above, as well as the cost of external reporting for radiology. The key cost pressure which continues within Ambulatory Care is within Health Records, where there are a number of unfunded posts and high use of the bank staff. This area is being considered as part of the Directorate’s financial recovery plan.
Other Acute Budgets
An element of general supplies funding continues to be reported centrally within the Division, pending further analysis of the position at a directorate level. It is likely that this will be released over the next few months, following discussion with the Director of Acute Services and individual Clinical Directorate General Managers.
Dunfermline and West Fife CHP
3.5 The Dunfermline and West Fife CHP continues to report a small underspend for the period to date (£97k). Close monitoring of the position will be required to determine the likelihood of this trend continuing through the current year, as it relates to vacancies which are currently being recruited to.
Kirkcaldy and Levenmouth CHP
3.6 The Kirkcaldy and Levenmouth CHP is reporting an overspend of £225k for the period to date. Additional funding of £0.95m was allocated to the CHP last month, to increase the Anti-TNF drugs budget within the Rheumatology Service. This reflects the level of actual expenditure in the previous financial year. However, activity and cost continue to grow and this requires further close monitoring and management action to maintain expenditure within the financial envelope available.
Glenrothes and North East Fife CHP
3.7 The Glenrothes and North East Fife CHP is reporting a small underspend for the period to date (£14k).
Board Admin and Other Services
3.8 An underspend of £236k is reported across Board Administration and other services for the period to date. The main drivers are vacancies in a number of corporate departments, most significantly within Finance and eHealth.
Prescribing
3.9 At the end of July, Prescribing Services shows an improvement from the previous month with a reported underspend of £132k.
Primary Medical Services
3.10 Primary Medical Services are underspent by £26k for the period to date. This is largely due to specific budgets held within the Board administered services, where expenditure is lower than expected.
Non Fife and Other Healthcare Providers
Service Level Agreements
3.11 At this early stage of the financial year, most agreements with other Health Boards have yet to be agreed. Based on previous years final activity an estimated overspend of £323k is shown.
UNPACs/OATs
3.12 Limited data is currently available for both UNPACS and OATS so an estimate based on the previous year’s information has been applied. UNPACS are assumed to have an underspend of £108k with an underspend position of £100k assumed for OATs.
Resource Transfers
3.13 The Resource Transfer agreements have been agreed with Fife Council and a breakeven position is shown.
Other Services
3.14 An underspend of £67k is shown as a result of refunds due from Fife Council for activity from the previous financial year.
OHSAS
3.15 A small overspend of £12k is reported for the period to date. Following a review of contract values and timelines, income and expenditure budgets have been adjusted accordingly. OHSAS is managed jointly between NHS Fife and NHS Tayside.
SGHSCD Funds for Impairments
3.16 Current estimates suggest that the Board will incur £8m on Property Impairments and £2m on Annually Managed Expenditure on Provisions. To date, Impairments of £2.4m have been recognised.
Corporately Held Flexibility / Savings
3.17 These show an underspend of £1.764m largely due to slippage on commitments and new allocations received.
Miscellaneous Income
3.18 A small over-recovery of £64k is shown for the first four months.
4. EFFICIENCY SAVINGS
4.1 The Board’s Financial Framework set out the need to deliver a total of £16.7m efficiency savings in year to meet the Efficient Government target of 3%. Of this, £6.006m was identified in the Financial Plan as a cash releasing target, and is required to support delivery of financial balance at the year-end.
4.2 At the end of July, plans to deliver against this target total £4.909m, with £1.708m achieved for the period. This is slightly behind the planned trajectory for the period. As yet, the overall financial position reported for the period does not reflect any shortfall in the delivery of cash efficiency savings. This will be re-examined as part of the month 5 reporting process. The chart below shows progress to date against trajectory.
5. RISKS
5.1 Although the approved Financial Plan seeks to address the most significant underlying cost pressures, as well as unavoidable new costs and approved developments, there are a number of financial risks which remain. These include:
· Financial exposure of the delivery of elective and unscheduled care capacity requirements for RTT and waiting times targets;
· Ongoing identification and delivery of robust management actions to address the financial performance issues within the Acute Division;
· Discussions with Fife Council on financial consequences of the mental health discharge programme and pressures within the community equipment store;
· Ongoing delivery of agreed recurrent efficiency schemes;
· Output from the National Nursing Manpower Tool.
6. RECOMMENDATION
6.1 The Board is asked to:
· note the financial position for the four month period to 31 July 2014.
CHRIS BOWRING
Director of Finance
26 August 2014