BUDGET SETTING PRINCIPLES

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1 MEETING DATE: 11 December 2014 AGENDA ITEM NUMBER: Item 7.2 AUTHOR: JOB TITLE: DEPARTMENT: Therese Paskell Chief Finance Officer & Business Support CCG REPORT TO THE CLINICAL COMMISSIONING GROUP GOVERNING BODY BUDGET SETTING PRINCIPLES PURPOSE/ACTION REQUIRED: CONSULTATION AND/OR INVOLVEMENT PROCESS: FREEDOM OF INFORMATION: Approval Engine room 4th December 2014 Is this document releasable under FOI at this time? Public 1. PURPOSE OF THE REPORT: To agree the budget setting principles and timetable for 2015/16 2. STRATEGIC OBJECTIVES SUPPORTED BY THIS REPORT: Continue to improve the quality of services Reduce unwarranted variations in services Deliver the best outcomes for every patient Improve patient eperience Reduce the inequalities gap in North Lincolnshire 3. ASSURANCES TO THE CLINICAL COMMISSIONING GROUP Gives the CCG assurance that processes are in place to meet the requirement of the CCGs constitution to agree budgets by 31 st March. 4. IMPACT ON RISK ASSURANCE FRAMEWORK: Yes No Key Financial risks are outlined in the CCGs BAF.

2 5. IMPACT ON THE ENVIRONMENT SUSTAINABILITY: Yes No 6. LEGAL IMPLICATIONS: Yes No 7. RESOURCE IMPLICATIONS: Yes No Will identify envelopes and budgets for the CCG for 15/ EQUALITY IMPACT ASSESSMENT: Yes No X This is not a policy/procedure or guidance. 9. PROPOSED PUBLIC & PATIENT INVOLVEMENT AND COMMUNICATIONS: The paper was discussed at Engine Room on 4 th December Principles for practice budgets will be discussed at Jan s COM 10. RECOMMENDATIONS: Yes No The CCG is asked to: - Approve the budget setting principles and timescales for 2015/16

3 NHS NORTH LINCOLNSHIRE CCG BUDGET SETTING PRINCIPLES AND METHODOLOGY 2014/15 1) INTRODUCTION 1.1 In accordance with the CCG Constitution CCG budgets for 2013/14 need to be agreed and approved by the CCG by 1 April This paper sets out the principles, methodology and framework to be applied in setting the budgets. 1.2 Budget principles and methodology reflect those from last year, with some improvements. 1.3 The 15/16 Financial Plan is being updated, and will provide financial envelopes for budgets net year. 1.4 Budget principles for individual Practices within the CCG are not within the scope of this paper, but will be discussed at Engine Room and COM in January. 1.5 Updated financial policies underpinning the CCGs Constitution and budgetary control framework were agreed by the Audit Group in October. 2) PRINCIPLES 2.1 The following principles will be applied when setting the CCG s budgets for 2015/16: (a) (b) (c) (d) All budgets will be thoroughly reviewed in the light of in year performance and the Finance Plan to demonstrate that the CCG can meet its statutory duties. All areas will have financial envelopes established which are affordable and within which the level of service can be provided. This may mean that services are reviewed to ensure affordability. The funding envelopes will be determined by the Financial Plan. No underspent budgets from 2014/15 can be carried forward into 2015/16 financial year due to accounting rules. Where applicable, some budgets will be determined by the value of ring fenced allocations received by the CCG. 1

4 (e) Non Programme budgets will be set within the CCGs Running Cost Allowance and subject to running costs guidance. Budgets will be based on agreed CCG structures, clinical input and services not provided by CSU. The CSU budget will be set in negotiation with them on how they will meet the running costs savings target set. 3) METHODOLOGY 3.1 The CCGs budgets will reflect the CCGs allocation and Running Cost Allowance, the Finance Plan and any new allocations in year to the CCG. 3.2 Pay budgets will be reviewed against actual staff costs and changes made subject to this remaining within the total pay budget and running costs for the CCG. 3.3 Once the non-programme budgets have been calculated, if there is still a gap between the budgeted costs for 2015/16 and the Finance Plan, there may still need to be an individual QIPP saving to balance back to the Running Cost Allowance and achieve this statutory financial duty. 3.4 Budget meetings are being arranged with budget holders and CSU colleagues preparing the budget book. 3.5 The results of the individual budget reviews will be consolidated and reviewed by the CCG Engine Room. In March the Engine Room will subsequently agree summary budgets in light of these proposals and the principles contained within this paper. 4) TIMETABLE 4.1 The timetable for the completion of this work is set out at Appendi 1. It is imperative that this is adhered to for the CCG to have budgets available for the 1 April Support will be provided from staff within the CCGs Finance and Business Support team as well as the CSU as per the attached. 4.3 Risks to the delivery to this deadline include CSU staff vacancies and capacity. A pragmatic approach will be taken, risks assessed and contingency arrangements put in place should difficulties arise. 5) RECOMMENDATION 5.1 The CCG Engine Room and Governing Body are asked to approve the process outlined for budget setting for 2015/16. THERESE PASKELL CHIEF FINANCIAL OFFICER AND BUSINESS SUPPORT Nov 2014

5 DRAFT BUDGET SETTING TIMETABLE 2015/16 : VERSION 2 MAIN TASK LEAD (S) START END PAPERS SENT MEETING DATE 1) REVIEW OF EXISTING BUDGETS NS & Team Monday 3rd Nov Monday 1st Dec - - 2) BUDGET SETTING PRINCIPLES /TIMETABLE TP Thursday 27th Nov Thursday 27th Nov Engine Room 4th Dec (AS PART OF BUSINESS PLANNING) Thursday 4th Dec Gov Body 11th Dec 3) IDENTIFICATION OF COST PRESSURES, INVESTMENTS, QIPP OPPORTUNITIES NS & KR Monday 3rd Nov Tuesday 13th Jan Thursday 15th Jan Engine Room 22nd Jan 4) REFRESH OF FINANCE PLAN (AND 2015/16 IN PARTICULAR) Tuesday 20th Jan Thursday 22nd Jan Gov Body 29th Jan A) For impact of 2014/15 NLAG FT negotiations BL Monday 1st Dec Thursday 4th Dec 5th Dec/11th Dec Eecs 8 Dec/ER 18 Dec B) For revised CCG allocations/planning guidance BL Thursday 18th Dec Wednesday 30th Dec 2nd/ 8th Jan Eecs 5 Jan/ER 15 Jan C) For New Cost Pressure, Investment & Savings Plans (discussed, updated) BL/NS Tuesday 20th Jan 22nd Jan/30th Jan GB 29th Jan/ER 5th Feb D) For Contract Modelling / Tariff Changes - for signed contracts 20/02/2015 BL/KP/EM Tuesday 10th Feb 12th Feb (GB private) ER 19th Feb (BL to attend) E) For Contract Negotiation Changes BL/KP/EM Tuesday 24th Feb Thurs 26th Feb Engine Room 5th Mar 5) DISEMMINATE INITIAL PLAN REFRESH - WITH INITIAL BUDGET ENVELOPES BL Wednesday 22nd Dec 6) GP BUDGET PRINCIPLES PAPER/PRESENTATION TP/BL/NS/JC Tuesday 5th Jan Thurs 7th Jan Engine Room 15th Jan Thurs 15th Jan CoM 22nd Jan 7) SIGN OFF DRAFT FINANCE PLAN TP/BL Tues 24th Feb/10 Mar 26th Feb/12th Mar ER 5th/19th Mar CoM Thurs 26th Mar 8) FIRST PLAN SUBMISSION TO NHS ENGLAND TP/BL TBC from Friday 13 Mar 9) COMPLETION OF DETAILED BUDGET WORKINGS 1st draft NS & Team Monday 2nd Feb 2nd draft Friday 13th Feb 10) RECONCILIATION OF BUDGETS TO FINANCE PLAN ENVELOPE BL / NS on-going Tuesday 17th Feb 11) CONFIRM & CHALLENGE/SIGN OFF MEETING - BUDGET HOLDERS & FINANCE ALL Tuesday 17th Feb Friday 20th Feb Friday 20th Feb F&P Grp Tue 24th Feb 12) PRODUCTION OF BUDGET BOOK NS & Team Friday 27th Feb 13) APPROVAL OF CCG SUMMARY ANNUAL BUDGET TP/BL Thurs 26th Feb Eecs Mon 1st Mar Thurs 5th Mar Gov Body 12th Mar 14) PRODUCTION OF BUDGET BOOK INCLUDING GP PRACTICE BUDGETS NS & Team & JC Friday 6th Mar Friday 6th Mar PMs Tues 10th Mar Thursday 12th Mar Eng Rm Thurs 19th Mar 15) APPROVAL OF PRACTICE BUDGETS CoM Thurs 26th Mar 16) BUDGET HOLDER & BUDGET MANAGER SIGN OFF OF BUDGET BOOK PAGES WITH CFO ALL Thursday 19th Mar Eecs Mon 16 Mar 17) AUTHORISATION MATRIX UPDATED TO AGREE TO FINALISED BUDGET BOOK NS & Team Wednesday 18th Mar Eecs Mon 23rd Mar 18) BUDGETS UPLOADED & RECONCILED TO CONTROL TOTAL ON ISFE SYSTEM NS & Team From Weds 3rd April per AT timetable 19) APPROVAL OF FINAL FINANCE PLAN TP/BL s.t. national guidance 31st March Thurs 2nd April Gov Body 9th April 20) SUBMISSION OF FINAL FINANCE PLAN TO NHS ENGLAND TP/BL TBC 21) MONTHLY UPDATE OF ELECTRONIC AUTHORISATION MATRIX & BUDGET BOOK NS & Team Monthly On-going

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