Annual Financial Plan 2018/19. April 2018

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Janis Kelley
5 years ago
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1 Annual Financial Plan April

2 Progress to date Assumptions Bridge from 2017/18 to Draft I&E Summary CIPs Cash Capital plan Risks Contents 2

3 Progress from Draft March plan to final submission The Trust had a 4th challenge session on 10th April final with the Clinical Care Groups to review the current cost improvement plans and start to generate ideas to close the gap Contract variations (CVs) were signed with all CCGs by the national deadline. Conclude Mental Health Investment Standards discussion Agreement has been reached with the commissioners for the CHC service in the medium term and a transition plan is being discussed for the service No CV has been signed for NHSE Opportunities from the STP Productivity work stream and the Model Hospital have been analysed. Projects now need to be set up to take forward these opportunities. This will include the Care Hours Per Patient Day (CHPPD) The final plan at a high level sets out how the 1.829m deficit control total set by NHSI and assumes that the 6,181m Agency cap is achieved. The plan currently has a gap of 6.6m to ensure delivery of the control total 3

4 Assumptions Income Block contract values as per the 2 year contract have been included for patient care income Any other income contracts have remained static unless known otherwise Risk share includes a reduction of 0.3m of which was built into the base contract ( 1m mitigated) 2% CQUIN has been included assuming full delivery, 0.5% CQUIN risk reserve has been included in the baseline funding with no costs attached Pay Establishments have been set in conjunction with budget holders and managers All vacancies have been fully funded in the budget and only removed when supported by a CIP with a QIA Headroom has been included at 21% for rostered services Non Pay A cost of 1.2m for PICU beds (private placements) has been included in budgets Contingency has been included at 1% as per national guidance which is 1.8m Inflation 1% Pay (may change pending national agreement and funding which will also affect the apprenticeship levy) 2.1% Non Pay and 3.6% Drugs 6.9% CNST reduction following the notification of the premium for form the NHS Litigation Authority 4

Key points to note are: Vacancies there are some areas in the Trust who have underspent non recurrently which has supported the delivery of the 2017/18 control total.

5 Bridge from 2017/18 to Commentary: This highlights the movement from 2017/18 control total of 2.8m deficit to the control total of 1.8m. Key points to note are: Vacancies there are some areas in the Trust who have underspent non recurrently which has supported the delivery of the 2017/18 control total. These posts are still required and have therefore been included within the 18/19 baseline. Full year impact of the EIP service in order to be compliant with the commissioning contract. This had not previously been included in planning. Full delivery of the 4% CIP and additional programmes to be identified to deliver the gap to control total (see Opportunities slide) 5

6 Summary I&E Statement of Comprehensive Income (SoCI) 2017/18 Outturn Budget close the gap' Control total delivery Income Income from Activities (166,831) (170,649) (170,649) Other Operating Income (10,323) (10,047) (10,047) Total Income (177,154) (180,696) 0 (180,696) Expenditure Substantive 118, ,784 (3,551) 126,233 Bank 11,131 5,318 5,318 Locum Agency 6,924 6,181 6,181 Total Pay 137, ,621 (3,551) 138,070 Clinical supplies 1,792 1,672 1,672 Drugs 3,002 3,222 3,222 Other non pay 26,325 28,132 28,132 Total Non Pay 31,119 33, ,026 Total Expenditure 168, ,647 (3,551) 171,096 EBITDA (8,898) (6,049) (3,551) (9,600) Post EBITDA Depreciation 6,347 6,020 6,020 Interest Receivable/(Payab PDC Dividend 4,125 3,749 3,749 Contingent Rent ,321 11, ,429 Net Loss 3,423 5,380 (3,551) 1,829 Income from activities increases in line with the contract refresh position including the addition of the MBU during Pay costs increase and reflect incremental drift and 1% pay award. The FYE of EIP, the MBU service and outsourcing of services in E&F are included within the Care Group budgets The 4% CIP programme has been removed from the budgets using the relevant spend categories. Unidentified CIPs are phased from October 18 To close the gap ( 3.5m) the Trust will focus on delivery of operational productivity initiatives (Pathway redesign, CHPPD and back office) 6

7 CIP Assurance and Oversight Process Executive Challenge meetings have been taking place with Care Groups since November with particular focus on demand and capacity constraints (cost pressures) and driving efficiencies Cost Improvement Plans have been driven by the Care Group/Support services with PMO and finance supporting to assess and quantify the impact Cost Improvement Plans Governance and Process agreed and implemented QIA CIP sessions have taken place Executive team QIA has been completed and all PIDs/QIAs signed off by the Medical Director and Director of Nursing Project Management and Oversight New Performance Framework implemented and Quality Performance reviews (QPRs) in place with Clinical Care Groups Trust CIP tracker in place, split by Care Group/Support Service and Work stream and STP category Monthly monitoring of CIP delivery as part of routine monthly reporting Executive led operational productivity programmes to be set up to deliver the pathway redesign programme, CHPPD and back office efficiency initiatives 7

8 CIPs by Care Group/Support Service Care Group/support service Target ( 000) Identified and costed ( 000) Ideas generated ( 000) Total Acute 1, Older People 1, , Forensic & Specialist 1, , Community Recovery 1, Chief Executive Chief Operating Officer Nursing Medical Finance Performance Capital Planning, Estates & Facilities IT Workforce and OD TOTAL 6,751 2,327 3,507 5, ,397 2,356 The target for is 6.8m which is 4% of budgets. The table above is based on the feedback from the challenge meetings including phasing. The plan assumes the target will be delivered 0 to be identified ( 000) Recurring Non- Recurring 8

9 Cash Position Cash remains a challenge during the year. A condition of the 2.3m loan in 2016/17 is to maintain a minimum balance of 1.1m at all times The high opening cash balance will be utilised by the release of creditors due in Q1 as a result of the capital receipt on the last working day of 2017/18 The capital funding not spent is the balance from the disposal of St Martins West required to fund future capital refurbishment schemes Temporary interim revenue loan required to manage the cash flow of the deficit recovery and the capital programme ahead of the Sale of St Martins West Plan m Opening balance 5.1 Deficit (1.83) Capital funding not spent 3.94 Reduced working capital including capital creditors (2.44) Closing balance 4.77 Cash movement in year (0.33) 9

10 Capital Plan The planned spend for is 10.2m which is dependant on the St Martins West disposal of c 5m The programme includes: 2.5m Willow Suite refurbishment 1.7m maintenance 2m St Martins inpatient reconfiguration - 1.2m IT m Mother and Baby Unit (MBU) The funding source for the capital programme is as follows: 4.4m depreciation (net of capital loan repayments) 1m proceeds of the 5m St Martins West disposal 1.35m new PDC for MBU 0.7m cash brought forward for schemes deferred from 2017/18 2.8m cash unused to support revenue deficit in 2017/18 The key points for this years capital plan are as follows: Boughton and Chartwell must be completed by August to enable the Willow Suite to decant in September Willow completion in December enabling works for Cramner closure to start in January The capital programme is predicated on the disposal of St Martins West 10

11 Risks Size of the financial challenge and current gap Culture change and approach to financial management and CIP delivery required in the organisation Urgent need to deliver recurrent CIPs on a sustainable basis Assumptions regarding the closure of Cramner and the sale of St Martins West (business case to be finalised and discussed at the May Trust Board) Pay award funding and impact including the resulting impact on apprenticeship levy 11

Approve X Ratify For Discuss For Information X

Approve X Ratify For Discuss For Information X NHS North Cumbria CCG Governing Body Agenda Item 5 April 2017 08 Financial Plan Purpose of the Report The purpose of the report is to provide the Governing Body with the CCG s Financial Plan for the next