Paper Finance Report. Month 9 (December 2015)

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1 Paper 16.0 Finance Report Month 9 (December 2015)

2 Finance Report Month 9 (December 2015) Index Slide Executive Summary 2 Summary Financial Position 3 Key Variances 5 Reserves 7 Risks and Opportunities 8 Quality, Innovation, Productivity 9 and Prevention Balance Sheet and Cash 10 Run Rate into

3 million Financial Position Month 9 ytd and forecast are now showing an improvement against 15/16 plans of 0.5m and 1m respectively. Acute provider expenditure is showing a net 9.3m (3.8%) over spend against agreed contract values. Pressures are also being seen in non-acute areas (e.g. Continuing Care, integrated equipment, Central London Community Healthcare) and estates. The overspends have been substantially offset by unrequired 14/15 balances ( 3.9m), use of surplus reserves ( 5m), Quality Premium ( 0.4m) and release of Better Care Fund ( 0.9m) uncommitted budget. Reserves have also been reduced to 1.5m (releasing 0.5m) having assessed that risks to the forecast have reduced. Revenue Resource Limit (Income Allocation) Resource limit at month 9 is 440.8m which incorporates the 11m reduction for cumulative deficit bought forward from previous years. CCG received additional allocations in month for Quality Premium ( 0.4m) and Liaison Psychiatry ( 0.1m). Summary QIPP Position QIPP schemes are reported as delivering 12m (improvement of 0.3m) against forecast plan. The 2.7m slippage against acute and estate schemes is currently supported by non-recurrent measures. Reserves Original plans set aside a general reserve of 4.4m (1%) against acute and other service pressures. This had increased to 9.4m (+ 5m), reflecting surplus budget provision as contracts and budgets were finalised. To offset overspending in acute contracts, the 5m additional reserves had been released in earlier months. Of the original 4.4m, 1.7m has been set aside for additional investment in patient care, 0.7m utilised to mitigate the estates overspend and 0.5m released given the reduced risks. The CCG still retains 1.5m to manage further risks to year end. Executive Summary 0 ( 1) ( 2) ( 3) ( 4) ( 5) Cumulative Position (incl. 11m deficit bought forward from previous years) April May June July Aug Sept Oct Nov Dec Jan Feb Mar Planned cumulative Actual cumulative Forecast Corporate Costs Overall corporate costs are underspending by 1.2m. Estates overspend is offset by slippage on QIPP re-provision costs, Quality Premium resource and prior year benefits. Running Cost Allowance (RCA) RCA is expected to be achieved however headroom has been released to offset continued use of interims to year end. Balance Sheet and Cash Balance sheet and cash position have no issues of concern 2

4 Summary- Full Year Forecast Recurrent Variance Non- Recurrent Variance YTD Full Year Bud Actual Var Var Bud FOT Var Var m m m % m m m % Revenue Resource Limit less prior year deficit /16 Resource Net Acute Forecast (8.5) (4.7)% (10.4) (4.3)% Net Non Acute Forecast % % Net Corp Forecast % % Reserves % % Total Recurrent Movement (3.3) (1.0)% (2.9) (0.7)% Acute Spend (RTT) NCL Risk Pool CHC Legacy Prior Year Accruals 0.0 (3.8) (3.9) Total Non-Recurrent Movement % % Total Expenditure % % Reported Surplus / (Deficit) (3.0) (2.5) % (4.0) (3.0) % Prior year adjustment (7.3) (7.3) - - (11.0) (11.0) - - In Year Suprlus / (Deficit) % % Both YTD and forecast are now showing better than planned position. Forecast is showing pressure in acute service expenditure, especially around Non Elective admissions and QIPP slippage. 5m surplus reserves, over and above original plan, have been released to offset the above pressures. Of the original planned reserves ( 4.4m), FPQ agreed additional investments totalling 1.7m and a further 0.7m has been released to support estates pressures. Of the remaining 2m, 0.5m was assessed as no longer required. Consequently 1.5m is still available to manage future pressures and unexpected events. 3

5 Key Issues and Movements from Month 8 Reported Forecast. Issues Data Quality Reporting issues with Royal Free London seen previously had been improving in recent months. However, RFL merged its reporting system on 29 th October which led to some unexpected and as yet unexplained activity movements. Reported costs at RFL are up on previous months for the second month running. An Information Breech Notice has been issued to the Trust and the CSU is working on gaining a better understanding of the position. Month 9 RFL reporting therefore includes a degree of estimation and uncertainty. For prudence, the 1.3m increase (+ 3m over last two months) has been reflected in the month 9 reports pending further validation. The CSU, in conjunction with CCG, continue to adjust the Trust s submitted SLAM reported activity/costs for elements not yet reflected in the SLAM data. Adjustments are based on best estimates of the likely impact. Examples would be an assessment of penalties and success rate of outstanding challenges. RTT any additional RTT activity at RFL is included in the SLAM data provided but has been removed and set against the CCG s specific RTT budget pending agreement of a contract variation. This has now been signed. Any RTT elsewhere is shown against the respective providers contract position. All remaining reserves have been assumed to be required and fully committed in the forecast outturn. Material changes compared to Month 8 report Royal Free London the issues mentioned above gave rise to an unexpected 1.3m deterioration in the previous forecast position. For prudence, the full cost has been reflected in the month 9 reports pending further validation of the data. Prescribing 6 months PPA data has been received which continues to show a reducing level of expenditure. An element of the underspend has now been reflected in the forecast position. However prescribing forecast is subject to material fluctuations through changes to profiled spend and national pricing adjustments which usually occur around month 10 reporting. QIPP forecast has improved by 0.3m ( 0.9m in last two months) and hence requires less non-recurrent support to the CCG s overall position. The improvement has assisted in offsetting the deteriorating position in the acute contracts. Further prior year benefits ( 0.4m) have been secured and are reflected in the reported position and also contribute to offsetting the acute contract position. Reserves: Risks to the forecast position are considered to have reduced from previous months. Consequently, 0.5m has been released to improve the forecast. Resilience: delays in some schemes has resulted in an underspend ( 0.4m) being anticipated by year-end. 4

6 NCAs SLA Exclusions Winter Pressures UCLH Moorfields Barts Royal Free London - RF Site Royal Free London - BCF Site '000 2,000 1,000 0 (1,000) (2,000) (3,000) (4,000) (5,000) (6,000) Acute - Key Variances Acute Key variances from Plan Royal Free London :-Due to data quality issues the M8 data submission has been formally rejected and an information breach notice letter issued. As a consequence, the previous months forecast has been used as the basis of the M9 reporting. The main areas of assessed risk continue to be over performance in Critical Care, Elective and Non Elective activity. Moorfields, a small increase in high cost drugs has increased the forecast over spend at M9. The main drivers of the activity over performance continue to be in Day cases and Out patient procedures. Critical care over performance at BARTs has reduced by 28k at M9. The total over performance arises from higher activity than planned in critical care and non elective activity. Underspend in SLA Exclusions is due to release of anticipated prior year costs no longer payable. NCAs:- the under spend is from lower volume of invoices and an unexpected prior year benefit for TB Service. Resilience (Winter) Pressures: some slippage on schemes is being seen ( 0.4m). 5

7 '000s Community Services Community Services Other: The surplus arises from uncommitted Better Care Fund ( 0.8m FOT) released to cover the planned acute non elective reduction not being met. 0.4m (FOT) relates to a prior year benefit from finalising CLCH CQUIN. Continuing Care The YTD cost pressure of 0.9m is shown to slowdown slightly by year-end to 1m overspent. The number of End of Life care clients is expected to reduce during the last 3 months of the year. This is offset by prior year surplus of 0.3m (FOT). Mental Health Learning Disabilities: There are now six high cost placements, compared to eight at the start of the year, resulting in the reported surplus. No significant change from Month 8 reported position. Mental Health NCA & Other: Surplus is mainly due to uncommitted 1516 MH investment 0.4m. No Significant variances to report in all other areas of mental health. Non-Acute - Key Variances 1,500 1, (500) (1,000) Non-Acute Key variances from plan Primary Care Prescribing: Forecast provided by PPA is reporting a surplus that is similar level to month 8 reported position. Month 9 report includes 50% of the underperformance shared with practices as per QIPP agreement. 6

4m) Reserves & In Year Benefits Key Remaining

6m) in forecast 1.2m 5m 2.7m 5m 1.5m 0.3m 1.7m 1.

1m Released into Forecast Outturn Committed into

Additional reserves from contract finalisations

4,999 Original Reserves Overspend on Estates and

Scheme for Non-Elective Admissions 271 Prior year

8 Original 4.4m Reserves plus additional risk mitigation ( 15.4m) Reserves & In Year Benefits Key Remaining mitigations ( 3.8m) and utilized ( 11.6m) in forecast 1.2m 5m 2.7m 5m 1.5m 0.3m 1.7m 1.4m 1.2m 3.9m (prev month 3m) 2.1m Released into Forecast Outturn Committed into Forecast Outturn Reserves and Provision released into Forecast Outturn 3.9m 0.9m Description Reason Released to Forecast I&E '000 Additional reserves from contract finalisations Released against increased run rates etc. 4,999 Original Reserves Overspend on Estates and General release 1,151 Investment from Reserves BCF Scheme for Non-Elective Admissions 271 Prior year accruals (general) Release of 14/15 accruals no longer required 3,910 QIPP re-provision costs Slippage on QIPP re-provision 1,232 Balance of Uncommitted Reserves/Provisions 11,563 7

9 Risks Risks & Opportunities to Forecast Opportunities The remaining significant risks and anticipated likelihood of materialising that are as yet not reflected in the financial forecast are: Risks % m Run rates on acute contracts outstrip the planning assumptions including impact of RTT and BEH Clinical Strategy on patient flows and contract activity may not be as anticipated. Volatility across some high cost areas e.g. critical care Potential opportunities and likelihood that they may materialise in mitigating risks and not yet reflected in the financial forecast are: Opportunities % m Reserves held against activity pressures and unforeseen expenditure General unanticipated expenditure across various lines e.g. high cost placements and continuing care, community equipment etc Prior Year accruals:- 3.9m secured so far, potential further benefit from reconciliation of 14/15 year end data and CQUIN achieved Prescribing fluctuations in PPA profiling and hence changing forecast predictions General underspends:- across various areas (QIPP reprovision, slippage on in-year investments) QIPP further slippage on schemes QIPP improved delivery as year progresses Total Risks 2.7 Total Opportunities 2.8 Previous risks around Primary Care Co-commissioning, Better Care Fund non-delivery of non-elective admissions target and estates are now reflected in the forecast position and are currently not considered as further risks. As more prior year benefits are secured, opportunity for further benefits reduces. Latest assessment of investments suggests some further slippage may be occurring. 8

10 Summary QIPP Position Month 9 - Year to Date Full Year 2015/16 Plan Actual Variance Recurrent Plan Forecast Variance % % Acute Royal Free 3,066 1,911-1, % 1,911 4,087 2,598-1, % Barnet and Chase Farm 3,378 2, % 2,891 4,504 3, % University College London % 582 1, % Other 546 1, % 1, , % Sub-total 7,764 6,562-1, % 6,562 10,123 8,598-1, % Non-Acute CLCH % % BEH MHT % % Primary Care Prescribing 1,228 1, % 1,589 1,140 1, % CHC and High Cost Placements % % Other % % Sub-total 2,632 2, % 2,487 3,022 2, % Corporate Estates % 571 1, % Other % % Sub-total % 571 1, % Total 11,268 9,619-1, % 9,619 14,645 11,958-2, % Non Recurrent Savings 1,650 2,687 Grand Total 11,268 11, % 9,619 14,645 14, % Forecast at 12m is a 0.3m improvement on month 8. Primarily due to re-provision budget considered no longer required. Primary Care Prescribing scheme is delivering impressive results overall. An incentive scheme is in place to reward participating practices delivering required savings. Estates and Corporate has begun to slip year to date as the planned drive to increase utilisation of Westgate House has not been achieved. Higher than expected CHP charges for Finchley Memorial Hospital has resulted in a significant slippage on Estates QIPP. This has led to a substantial forecast variance. Acute outpatients and elective care schemes are delivering at planned levels. The Referral Management Service continues to be a vital tool enabling the CCG to deliver efficiencies by managing demand for acute secondary care. The overall slippage on QIPP is being supported by non-recurrent savings of 1.7m YTD and Forecast of 2.7m. 9

11 Cash & Balance Sheet Barnet CCG Cash position and forecast Year To Date Forecast Position as at 31st December 2015 Month 9 Full Year RECEIPTS Balance bfwd NHSE Drawdown (Inc Supplementary) 283, ,413 Other - Inc VAT 4,834 5,284 CHC Risk Pool 2,030 2,707 NHSBSA Prescribing 37,102 50,725 TOTAL 327, ,272 PAYMENTS Creditors 284, ,157 Salaries & Wages - Inc Tax & NI 3,406 4,540 CHC Risk Pool 2,030 2,707 NHSBSA Prescribing 37,102 50,725 TOTAL 327, ,129 BALANCE CFWD The Maximum Cash Drawdown (MCD) for 2015/16 is currently confirmed as 444.9m. The CCG has met its cash target, of less than 1.25% of the cash drawdown remaining in the bank for November. Barnet CCG Statement of Financial Position Actual Actual Actual Actual Forecast Position as at 31st December /15 Qtr 1 Qtr 2 Qtr 3 Qtr 4 NET ASSETS Debtors 5,567 5,786 5,409 7,010 5,678 Cash 18 5,476 (2,650) Trade and Other Payables (41,770) (48,613) (50,500) (50,290) (41,948) TOTAL ASSETS EMPLOYED (36,185) (37,351) (47,741) (43,019) (36,170) Debtors have increase recently due to invoices being raised for Q1 & Q2 recharges and slow payment by LB Barnet. This is being followed up. Trade and other payables continue to be higher than planned as some in-year monthly SLA contract payments are being part-paid or withheld pending validation and resolution of contract notices. Estates invoices are also held at present. Creditor balances will reduce once these issues are resolved. 10

12 millions Run Rate into Next Year (2016/17) Plan (in-year) Summary In-year movements m reported in year improvement 8.1 Remove NR aspects in year end forecast Initial in year 16/ in year plan was 7m surplus Forecast is 8m (+ 1m) surplus but surplus supported by one-off benefits offsetting other pressures such as increased activity costs and non-achievement of QIPP. Rolling over spending would give an estimated 4.8m in-year surplus 11

Paper Finance Report. Month 11 (February 2016)

Paper Finance Report. Month 11 (February 2016) Paper 12.0 Finance Report Month 11 (February 2016) Finance Report Month 11 (February 2016) Index Slide Executive Summary 2 Summary Financial Position 3 Key Variances 5 Reserves 7 Risks and Opportunities