Sustainability and Transformation Fund Year-End Process and Notification of Incentive and Bonus Funds
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1 Sustainability and Transformation Fund Year-End Process and Notification of Incentive and Bonus Funds March 2018
2 We support providers to give patients safe, high quality, compassionate care within local health systems that are financially sustainable.
3 1. Introduction 1.1 This paper provides details of the year end accounting process for the Sustainability and Transformation Fund (STF) and the notification of Incentive and Bonus values. 2. Timetable for collection of information and calculation of STF 2.1 NHS Improvement will collect the key (finance) data from providers on 17 April 2018 in advance of draft accounts. This information will be validated on 18 and 19 April 2018 and combined with the published March 2018 A&E performance. STF will be calculated and providers formally notified by letters sent to chief executives and directors of finance by on 20 April NHS Improvement will also issue a fixer to populate these values into templates alongside this letter which will be issued on the same day. 2.2 The calculation of indicative STF will be the full value (Core / Incentive / Bonus). Providers must have accurately assessed their adjusted financial performance, both including and excluding STF, in order for NHS Improvement to calculate the indicative values accurately. The A&E performance element will be calculated based on the March 2018 A&E performance data which is published on 12 April The STF value supplied by NHS Improvement will need to be included in the draft accounts submitted by providers on midday 24 April These figures will be validated against those populated by the fixer. The STF information will also be supplied to NHS England to help inform the agreement of balance process and providers should ensure they include the values as detailed by NHS Improvement. 2.4 Providers will need to formally notify NHS Improvement of any changes to the figures supplied at key data as this will impact on the calculation of STF. Please send details to the sector reporting mail box nhsi.sector.reporting@nhs.net NHS Improvement does not expect any movement in reported performance between formal notification of key data and submission of draft accounts. As in any year, movements between draft and final accounts must be managed and NHS Improvement expects providers to have sufficiently accurate draft accounts so to not require adjustments as a result of the audit process. 2.5 NHS Improvement must be notified as soon as possible of any changes that will affect providers performance against their control total (CT), with the final deadline being midday 15 May Where this results in a provider not being entitled to STF income, these funds will be returned to the bonus pot and may be subject to further redistribution. Providers will be notified directly of any changes through redistribution. 2.6 It is important to recognise that the process above describes the recording of estimates for STF; the actual payment will not be finally agreed and paid until after the final accounts are complete and submitted at the end of May
4 The final process for agreeing and making payment will be formally notified at a later date. Table 1: Detailed timetable Tuesday 17 April (midday) Wednesday / Thursday 18/19 April Friday 20 April (COP) Tuesday 24 April (midday) Tuesday 15 May (midday) Key data received from providers (local assessment of STF excluding bonus) NHS Improvement review key data Indicative STF (full including bonus) notified to providers Draft accounts submitted including notified STF Final date to notify changes to CT performance 3. Calculation of STF Incentive and Bonus Funds 3.1 The funds available to distribute through the incentive and bonus schemes will be the value of all unallocated and unearned STF. 3.2 It is recognised that including the incentive and bonus will result in a circular effect on the Public Dividend Calculation (PDC) calculation. It has been agreed by the Department of Health and Social Care that these elements can be excluded from the calculation of the dividend, for both opening and closing relevant net assets. The adjustment lines should be used in the calculation of the PDC dividend in the PFR return. Finance Incentive Scheme ( for ) 3.3 Providers will receive a pound for pound ( for ) incentive for any agreed achievement above their control total (CT). There are some items that are excluded from the over achievement; these items will be adjusted out before the calculation of the for incentive. The PFR return will currently adjust for the following item: Underspends resulting from additional discretionary payments from commissioners or zero sum accounting adjustments between commissioners and providers. 2
5 Bonus Scheme 3.4 The total bonus pot will be the remaining balance available after payments relating to the core STF entitlement and finance incentive fund ( for ) has been calculated. 3.5 For providers within an Accountable Care System (ACS) the bonus will be paid where the ACS delivers or exceeds its system control total. 3.6 For all other providers, the bonus will be paid if they deliver their individual control total, weighted to reward providers that exceed their control total and committed to the improvement earlier in the financial year via their reported forecast position in the monthly financial monitoring returns. 3
6 Contact us: NHS Improvement Wellington House, Waterloo Road, London, SE1 8UG This publication can be made available in a number of other formats on request.
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