Isle of Wight CCG Annual Report and Accounts 2016/2017

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1 Isle of Wight CCG Annual Report and Accounts 2016/2017

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3 Table of Contents PERFORMANCE REPORT OVERVIEW Statement from the Accountable Officer Isle of Wight NHS Clinical Commissioning Group Our Island a unique set of healthcare challenges Who we are and how we work What we do Our financial allocation Our objectives and critical success factors Key Transformation Programmes Health and Wellbeing Board Primary Care Performance Summary Performance Finance Risk management Stakeholder relationships and engagement Factors affecting future performance Finance & Performance Workforce PERFORMANCE ANALYSIS Financial Performance CCG Performance CCG Assurance Framework 2016/ NHS Constitution Targets and other Performance Metrics Quality Sustainability Report Reducing Inequality Other disclosures Going concern Accountability Report MEMBERS REPORT The Members and Membership Council The Governing Body Disclosure to Auditors Members interests Disclosure of personal data related incidents Emergency Preparedness, Resilience and Response (EPRR)... 40

4 6.7 Employee consultation Modern Slavery Act Statement of Accountable Officer Responsibility Governance Statement Introduction & Context Scope of Responsibility Governance arrangements and effectiveness The Membership Council The Governing Body The Clinical Executive The Quality and Patient Safety Committee (QPSC) The Audit Committee The Remuneration Committee Isle of Wight Primary Care Committee Compliance with the UK Corporate Governance Code Discharge of Statutory functions Risk Management arrangements and effectiveness Capacity to Handle Risk Risk Assessment Other Sources of Assurance Review of Economy, Efficiency & Effectiveness of the Use of Resources Delegation of Functions Business Critical Models Third party assurances Control Issues Counter Fraud Arrangements Head of Internal Audit Opinion Review of the Effectiveness of Governance, Risk Management & Internal Control REMUNERATION AND STAFF REPORT Remuneration report Senior Manager s Remuneration Staff report Employment Policies and Processes Social, Community and Human Rights issues... 70

5 List of Tables Table Title Page 1 Better Care Fund (BCF) Summary of budgets 16 2 Summary of budgets 25 3 Year end income and expenditure /17 QIPP Savings Programme 27 5 NHS Constitution - CCG Performance 33 6 Attendance at Membership Council 45 7 Attendance at Governing Body Meetings 47 8 Attendance at the Clinical Executive 48 9 Attendance at Quality and Patient Safety Committee Attendance at Audit Committee Attendance at Remuneration Committee Attendance at Joint Committee for Primary Care Internal audits Senior Manager Service contract details Senior manager salaries and allowances 2016/ Senior Manager Pension Benefits Pay Multiples Off-Payroll Engagements as of 31st March Assurance sought in relation to Income Tax & NI Obligations Senior Managers who are off-payroll engagements Employee benefits and staff numbers 69 List of Figures Fig Title Page 1 CCG investment in NHS services 2016/ My Life a Full Life model of care 14 3 CQC grading IW NHS Trust 19 4 Governing Body and sub-committee structure 45

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7 PERFORMANCE REPORT 1. OVERVIEW 1.1. Statement from the Accountable Officer Welcome to the Isle of Wight Clinical Commissioning Group (CCG) Annual Report and Accounts for financial year 2016/17. This report summarises the CCG financial and operational performance highlighting both the positive changes that we have made and outlining how we intend to progress the ongoing and complex problems we are facing. 2016/17 has been a very challenging year and the CCG has continued to tackle a range of performance and quality issues whilst also engaging in the most comprehensive transformational change programme experienced in the Island health system for many years. The CCG met all of its 2016/17 statutory financial duties across both programme and running costs. In order to achieve this position some difficult decisions have been made regarding the Urgent Care Service, Gluten Free Food provision and Procedures of limited Clinical Value. This will be vital to support an increasingly financially challenged position for next financial year. To achieved the required break-even position for 2017/18, the CCG will have to deliver savings of 12.9m (5.6%), which is almost four times the level of savings normally achieved by the CCG. In recognition of the CCG s significant financial risk of delivering a 5.6% savings (Quality, Innovation, Productivity and Prevention) programme in 2017/18, in the Annual Results Report, the CCG s External Auditors, Ernst and Young, has issued a qualified conclusion on reporting by exception in relation to Value for Money. There were no other qualifications given in the CCG s External Auditors 2016/17 Annual Results Report. One of the reasons for the CCG s significant savings target is that the NHS CCG Allocation Formula shows the Island as remaining 11.9% ( 22m) over its target allocation, which means the Island will receive minimal funding growth, until it reaches less than 5% distance from target, despite an increasingly elderly and dependent population and the financial challenges that are inherent in running health care services for a small island population. There have been continued performance issues with the Isle of Wight NHS Trust in 2016/17. Despite having a system resilience plan in place the Island health system remained under significant pressure. Improvement Plans failed to deliver the anticipated recovery in performance. Targets around Emergency and Urgent Care were missed this year including A&E 4 hour waits, the hospital reported 68 trolley waits over 12 hours, the Ambulance Service missed its response time targets and the hospital was at a high level of alert during autumn and early winter. Treatment waiting times also missed national targets, however the waiting list at the Trust has been reducing and cancer waiting times have improved. 8

8 The Care Quality Commission (CQC) has carried out several inspections of Isle of Wight Service providers over the last year. The Isle of Wight NHS Trust inspection took place November and CQC issued the Trust with a section 31 notice to urgently impose conditions on the Trust s registration in relation to mental health services. Further inspections of mental health services have been carried out. The full report was published 12 April 2017 where the Trust was rated as inadequate and CQC recommended the Trust be placed into special measures. In relation to the CQC s inspection of other Island healthcare providers, in March 2017 Earl Mountbatten Hospice was rated as Outstanding by CQC. During the year CQC inspected 12 of the 16 GP Practices and they were all rated as Good, the remaining 4 Practices were inspected last year and were also rated as Good. The CCG has completed its first year since receiving delegated Primary Care Commissioning from NHS England. The Isle of Wight Primary Care Committee chaired by the CCG s Independent Lay Member has overseen the delegation of primary care to the CCG. The CCG has engaged with the local community and GP Practices on a new primary care strategy and the final version will be published in June Health and care organisations across Hampshire and the Isle of Wight have been working together, as a Sustainability and Transformation Partnership, to agree how best to respond to the many opportunities and challenges facing the local health and care system around the need to empower people to stay well and to provide safe, high quality, consistent and affordable health and care to everyone. This has led to the production of the Hampshire and Isle of Wight Sustainability and Transformation (STP) plan. The My Life a Full Life programme is the mechanism that will locally deliver the STP and is a vital part of the longer term sustainability for Island health and care services working across not only statutory partners but also with local GPs and the voluntary and independent sectors. As part of the My Life a Full Life programme, an acute service re-design is underway and once the recommendations have been identified a public consultation will be carried out. It will consider how services should be delivered and whether there are more effective or efficient ways of achieving high quality sustainable services for patients. There is also a mental health service reconfiguration taking place and in phase one it will focus on dementia care, crisis care and recovery. There are unprecendented challenges ahead, however the transformation programme will enable the Health and Care system, together with wider partners, to determine the future of health and care services for Island residents. Helen Shields 25 May

9 2. Isle of Wight NHS Clinical Commissioning Group The Isle of Wight NHS Clinical Commissioning Group (CCG) was formed on the 1st April 2013 following the changes that took place in the NHS as a result of the Health & Social Care Act One of the key changes involved putting clinicians in charge of commissioning the healthcare services their local community needs for both Island residents and visitors. We work in partnership with colleagues from GP Practices, hospital and community services, social care, independent and the voluntary sectors to maintain and make real improvements to the health and wellbeing of every person on the Isle of Wight. This collaborative approach is key to addressing the unprecedented challenges we are facing as the demand for health services increases. By integrating services so they are more efficient, we will be able to deliver better value for local residents and ensure the sustainability of services Our Island a unique set of healthcare challenges The Isle of Wight is a wonderful place to live and work, but it also has distinct challenges for commissioning healthcare services. The Island has significant needs with nearly a quarter of its population aged 65 and over. As this number increases and residents live longer, more people will be living with longterm conditions (LTC). Currently it is estimated 45,000 (one in three) people locally have one or more LTC such as coronary heart disease, stroke and diabetes. There is also an increasing prevalence of dementia on the Island which will affect 21% of those aged over 65 by With around 16,000 people on the Island suffering common mental health problems there is a need to address the emotional wellbeing of residents. There is signficant economic disparity between areas on the Island which gives rise to corresponding inequalities in health and life expectancies. Commissioning services to meet these challenges places increasing demands on local services, whilst at the same time there is a requirement to improve quality and make efficiency savings to ensure services are sustainable in the long term Who we are and how we work In 2016/17 the CCG was made up of 16 GP practices supported by a team of commissioning staff. It is responsible for commissioning that is the planning, purchasing and monitoring - healthcare services for the Isle of Wight. At the centre of the CCG are four key bodies which are described in detail later in this report. The Membership Council, on which every Island GP practice has a nominated Practice 10

10 Representative and collectively holds to account and sets the strategic direction for the Governing Body; The Governing Body is responsible for overseeing the CCG s commissioning responsibilities and ensuring the group uses its resources effectively to provide quality services which meet the needs of Island residents; The Clinical Executive manages the day-to-day operations of the organisation, and is accountable to the Governing Body; Isle of Wight Primary Care Committee functions as a corporate decision-making body for the management of the delegated Primary Care functions and the exercise of the delegated powers. To ensure clinical input in every level of CCG work, the Island GP practices are clustered into three Locality Groups, each with a population of 30-50,000; North & East, West & Central and South Wight. These groups look at the health needs of their local communities and practices work collaboratively to improve primary care services. For more information about the various bodies and committees visit our website: we are What we do We commission services from NHS and independent and voluntary sector providers both on and off the Island. Our vision is to commission high quality, sustainable and integrated services. Together with our partners, we are developing person-centred, coordinated health and social care on the Isle of Wight. We work to maintain and improve the quality of services, to keep patients safe and ensure services can be delivered when and where people need them. We are integrating services to make efficient use of the resources that we have in order to meet the healthcare challenges we face as a community both now and in the future. With the Isle of Wight NHS Trust and Isle of Wight Council, and our partners in the voluntary and independent sectors we aim to put in place the support, information and advice needed to help people improve the way they look after their own health so they can lead longer, healthier and more independent lives. Our Constitution, Commissioning plans and other publications can be found on our website: Our financial allocation In 2016/17 the CCG received 239m for both healthcare programme and running costs, which included 2.8m (1.4%) of growth funding and 4.9m of non-recurrent national funding for My Life a Full Life, the Island s New Care Model (Vanguard) programme. In addition, for the first time the CCG s allocation included 19m for Primary Care Services, which the CCG 11

11 took delegated responsibility for from 2016/17. Within its allocation, the CCG is given an annual limit for running costs. For 2016/17 this was 3.1m ( per head of the Island s population) and c1.3% of the CCG s total allocation. The running cost allocation has reduced by c15% since the CCG was set up in To provide an overview of how the CCG uses its allocation, Figure 1 below shows its expenditure across the different types of healthcare services for 2016/17. Further details can be found in section 4.3. The CCG s two highest areas of spend were: Acute Services (hospital based physical health services) and Primary Care Services (GP practices and their prescribing of drugs). The Better Care Fund is a pool of community and mental health services which are managed by the CCG and Council s Joint Commissioning Board see section for further information. Running Costs 1% Other 3% Primary Care 23% Acute 45% Continuing Care 6% Better Care Fund 8% Community 6% Mental Health 8% Figure 1: CCG % spend in 2016/17 One of the CCG s biggest financial challenges is that its current funding allocation is 11.9% ( 22m) above the target set by the NHS CCG Allocation Formula. For 2016/17 onwards, this means that the CCG has been given a minimal level of growth funding in order to, over time, address this distance from target. The consequence of this is the requirement for the CCG to deliver a higher % of savings each year, as the small amount of growth funding received does not cover the impact of inflation and increased healthcare need Our objectives and critical success factors 12

12 The CCG Governing Body set four objectives for the organisation in 2016/17, which are detailed in the Governing Body Assurance Framework: To support system transformation and sustainability; To meet the finance, quality, commissioning and performance targets within the operating plan; To implement and deliver delegated commissioning of primary care; To evolve the culture and governance within the CCG to deliver transformation. Against each of the four objectives a number of critical success factors were set. An assessment of whether the organisation has met the critical success factors can be found in the performance analysis section of this report Key Transformation Programmes My Life a Full Life The CCG together with local health and social care partners has been developing a new care model aimed at improving health, wellbeing and care of our Island population, improving care and quality outcomes, delivering appropriate care at home and in the community and making health and wellbeing clinically and financially sustainable. This is known as the My Life a Full Life programme. Care on the Island has historically been heavily reliant on statutory services, which has limited the range of care available to Island residents, and based on forecast demand is no longer clinically or financially sustainable. Our new care model will mean that people will have much greater support from their community, family and friends, as it: Builds on assets and mobilises social capital to help reshape care delivery to meet peoples changing needs; Integrates services to improve quality and increase system efficiencies using technology; Is based in the community or at home; Is a significant shift to prevention and early intervention, self-help and care, with the aim of reducing health inequalities and the health and wellbeing gap; Reduces reliance on statutory services. Progress towards implementation of the My Life a Full Life Model of Care has continued through 2016/17 with national Vanguard (New Care Models) funding of 4.74m received to drive forward the Island-Wide Transformation Programme. 13

13 Figure 2: My Life a Full life model of care Progress includes: Establishing and embedding Care Navigators and Local Area Coordinators across the Island; Delivering End of Life training across partner organisations; Implementing a number of Primary Care projects to explore new ways of working across general practice; Progressing the the Whole Integrated Service Redesign (WISR) Programme implementation of best practice working eg implementing Ambulatory Care an Acute Service Redesign Programme; Implementing Integrated Locality Services to improve joint working across Health and Care Services; Supporting development of the GP Federation (all Island practices); Developing Island wide Local Estates Strategy; Engaging with Town and Parish Councils to support local joint working; Implementing case management of highest risk patients in practices using the Risk Stratification Tool Hampshire & Isle of Wight Sustainability & Transformation Plans Over the past eight months, health and care organisations across Hampshire and the Isle of Wight have been working together, as a Sustainability and Transformation Partnership to 14

14 agree how best to meet the many opportunities and challenges facing the local health and care system around the need to empower people to stay well and to provide safe, high quality, consistent and affordable health and care to everyone. The central role of the Sustainability and Transformation Plans (STP) has been to support the local place based plans such as My life a Full Life to achieve the changes that local people and local clinicians have told us they want. The plan does not replace or slow down local transformation programmes. Instead, the Hampshire and Isle of Wight health and care organisations, have come together to do the things that can be best achieved by working in partnership. While people in Hampshire and the Isle of Wight are generally living longer, many are also living with multiple long-term physical and mental health conditions. Too many people stay in hospital longer than they need to because of difficulties in getting the necessary support outside. There are increasing shortages in the number of doctors, nurses and other health workers needed, which the organisations are working in partnership to address. Providing the highest quality acute care for southern Hampshire and the Isle of Wight University Hospital Southampton NHS Foundation Trust, Portsmouth Hospitals NHS Trust, the Isle of Wight NHS Trust and Lymington Hospital are working together to deliver the highest quality safe and sustainable hospital services to people living in southern Hampshire and the Isle of Wight, with a particular focus on making sure that Isle of Wight residents have safe and sustainable healthcare services. Improving mental health services The four NHS trusts that provide mental health services in Hampshire and the Isle of Wight (Southern Health Foundation NHS Trust, Solent NHS Trust, Sussex Partnership Foundation NHS Trust and Isle of Wight NHS Trust) have formed an alliance with the health care planners, local authorities, third sector organisations and people who use services to improve the quality, capacity and access to mental health services in the area. This will mean that patients will have access to the same high quality care, wherever they live in the area, as close to home as possible and will be supported to live independently Better Care Fund The Better Care Fund (BCF) is a single pooled budget for local health and care services which has been created as a national requirement to drive greater integration of services, in relation to both commissioning and provision (delivery), to enable the NHS and local government to work more closely together around people and placing their well-being as the focus of health and care services. The BCF is an enabler for the My Life A Full Life Programme. As the fund and the relationship between the partners develops over time, there will be a focus on introducing new ways of working which will drive efficiency gains across the whole health and social care system. For 2016/17 the value of the budget was 31m, the break-down of which is shown in the 15

15 table below. It is important to note that the BCF is not new or additional money, but is a pooling of existing money to be used to support an integrated approach to health and social care support. Whilst the CCG and Isle of Wight Council were not able to reach agreement to sign a Section 75 agreement to formally pool the funds for 2016/17, BCF budgets were aligned. An independent Better Care Advisor has been working with the CCG and Council to develop the pooled fund for , and the CCG and Council has appointed a joint post to lead integrated commissioning. CCG Contribution Council Contribution Total MENTAL HEALTH SERVICES 1, ,668 LEARNING DISABILITY SERVICES 1,442 2,430 3,872 REHABILITATION & REABLEMENT 7,307 3,785 11,092 LOCALITY / COMMUNITY MODEL 7,658 2,782 10,440 CARERS SERVICES CARE ACT PREVENTION PROTECTION OF ADULT SOCIAL CARE ,711 TOTAL 20,142 11,189 31,332 Table 1: Better Care Fund Schemes 2016/17 The CCG and Council Joint Commissioning Board (JCB) oversees the BCF, including the financial, performance and risk aspects. The JCB reports and is accountable to the Health and Wellbeing Board. 2.7 Health and Wellbeing Board The Isle of Wight Health and Wellbeing Board (HWB) brings together key partners with a common vision, working to promote health and wellbeing, build resilient communities and reduce inequalities to improve the quality of life on the Isle of Wight. The health and wellbeing strategy sets out key local themes: Health inequalities are reducing so the gap in health life expectancy between the more wealthy and less well-off becomes smaller; 16

16 People feel supported to achieve their potential to live a full life regardless of age, disability or disease; Health and wellbeing are improving; Neighbourhoods are inclusive places where people are able to contribute to ensure they are healthy, safe, resilient and sustainable. The CCG Chair and Chief Officer are members of the Health and Wellbeing Board and in the last year the following items have been presented to the Board: Sustainability and Transformation plan; Primary Care Strategy; My Life a Full Life reports; Better Care Fund reports; Minutes of the Joint Commissioning Board; Updates on the Care Quality Commission Inspection. 2.8 Primary Care During 2016/17, the CCG developed a new strategy to support the development and transformation of primary medical care aligned to the wider My Life a Full Life programme, as part of the assumption of wider delegated powers for primary medical care. This will be implemented alongside the GP 5 Year Forward View over the next three to five years. Key aspects of this strategy include improving access to Primary Care, investing in and developing the workforce and implementing digital solutions alongside develoopment of locality working and Primary Care at scale. The CCG has continued to support workforce development in Primary Care, investing in 2016/17 over 300k in support of the development of new clinical staffing in primary care including the development of a new class of clinical pharmacists, a programme of work with Southampton University to develop Advanced Nurse Practitioners and a project to support the development of Musculoskeletal practitioners through the My Life a Full Life programme. 17

17 3 Performance Summary 3.1 Performance The CCG monitors a series of NHS Constitutional Targets that are set nationally. These primarily cover waiting periods for treatments and response times for emergency services. Performance across the system has been disappointing this year due to capacity pressures throughout the health and care system. Progress with major service change has started, however although small changes have been delivered, which improve care for patients, this has yet to deliver the fundamental system transformation required. A detailed analysis of the CCG s performance can be found in the Performance analysis section. A summary of performance against the key targets is shown below: Patients to start treatment within a maximum of 18 weeks from referral Achieved: 87.29% Target: 92% The Hospital was unable to ring fence beds for planned treatments due to problems with patient flow through the hospital and out into the community. The Trust has also had issues with recruiting senior staff for a number of specialisms impacting on the Trusts ability to meet demand. Patient choice has been promoted with the use of mainland providers as alternative sites for treatment. In comparison this was achieved rate was below a national average of 90%. Plans are in place to recover the target by March Patients admitted, transferred or discharged within 4 hours of arrival at A&E Achieved: 85.74% Target: 95% A&E services have continued to be affected by the problems of patient flow through the local hospital, combined with staffing issues and the complex conditions of patients presenting at A&E. A review was undertaken in February 17 from which an Action Plan to develop improvements are being planned. Revised trajectories were submitted in March 2017 modelled to achieving the national standard of 95% by March The national average was 89.99% in 2016/17. Max 62 day wait from urgent GP referral to first definitive treatment for cancer Achieved: 81.71% Target: 85% 3 of the 9 cancer targets consistently met the National target in 2016/17 with an overall achievement of 7 targets met at year end. The CCG continually monitors the reasons that patients did not receive treatment within 62 days. This is often as a result of complex treatment requirements, or capacity issues experienced at mainland hospitals or the result of patient choice, particularly at the earlier 2 Week referral point. Ambulance response Times (Category A, Red 1 within 8 minutes) Achieved: 63.16% Target:75% There are number of targets for ambulance. The service failed to meet the target for the 18

18 3.2 Quality most urgent calls due to capacity issues and consequential delays in handing patients over to the Emergency Department. Actions aim to improve patient flow and reduce handover delays at the Trust with the intention being to aid improvement to the response times achieved. Diagnostics, People should wait less than 6 weeks for tests Achieved: 99.48% Target: 99% Performance for diagnostic tests has been good for a number of years and the CCG has met its target again this year. The CCG continues to improve and strengthen assurance arrangements in respect of quality and safety of the services it commissions. The CCG sets quality metrics for all contractors through its contractual arrangements, collects intelligence on quality, safety and patient experience which is then used to inform its work programme. Details of the quality agenda can be found in the Performance Analysis section of this report. During 2016/17, our approach to improving quality across the healthcare system included: the alignment of quality strategic objectives through collaborative working with providers, partners and stakeholders; looking to transfer care from hospital to community settings closer to home, whilst maintaining sustainable hospital services for care that cannot be delivered elsewhere; and robust contract management arrangements. Care Quality Commission Inspection of Isle of Wight NHS Trust The Isle of Wight NHS Trust inspection took place November and Care Quality Commission issued the Trust with a section 31 notice to urgently impose conditions on the Trust s registration in relation to mental health services. Further inspections of mental health services was carried out. The full report was published 12 April 2017 where the Trust was rated as inadequate and CQC recommended the Trust be placed into special measures. Overall rating for the Trust Inadequate F i g u r e Are services at this trust effective? Inadequate Are services at this trust caring? Good Are services at this trust responsive? Inadequate Are services at this trust well-led? Inadequate Individual Services Mental Health Service Inadequate 3 Ambulance Service Inadequate Community Services Requires improvement Acute Services Requires improvement 19

19 Figure 3 IW NHS Trust CQC inspection grades NHS Improvement have appointed an Improvement Director to support the Trust. The Trust is required to produce an Improvement Plan by the end of May, which the CCG, NHS Improvement and NHS England will then monitor. The CCG has reflected on the Isle of Wight NHS Trust CQC report and will be strenghtening the quality monitoring of the Trust inlcuding more visits to the services provided by the Trust. In relation to the CQC s inspection of other Island healthcare providers, in March 2017 Earl Mountbatten Hospice was rated as Outstanding by CQC. During the year CQC inspected 12 of the 16 GP Practices and they were all rated as Good, the remaining 4 Practices were inspected last year and were also rated as Good. 3.3 Finance The CCG s financial plan and budget for 2016/17 was developed in line with the CCG s Strategy and Operational Plan and were approved by the Governing Body. As demonstrated in Note 23 of the annual accounts, for the reporting period, the CCG met all of its financial duties. At the start of 2016/17, under NHS England s new CCG Assurance Annual Assessment, the Isle of Wight CCG was rated as Requires Improvement. This is for a number of reasons, including that the financial plan was unable to deliver the nationally required 1% surplus (c 2m) and, in order to meet its planned break-even position, the CCG had to draw down its prior year surplus of 4.5m. As set out in the 2016/17 NHS Planning Guidance, CCGs were required to hold a 1% reserve uncommitted from the start of the year, created by setting aside the monies that CCGs were otherwise required to spend non-recurrently. This was intended to be released for investment in Five Year Forward View transformation priorities to the extent that evidence emerged of risks not arising or being effectively mitigated through other means. In the event, the national position across the provided sector has been such that NHS England has been unable to allow CCGs 1% non-recurrent monies to be spent. Therefore, to comply with this requirement, NHS Isle of Wight CCG has released its 1% reserve to the bottom line, resulting in an additional surplus for the year of 2.3m. This additional surplus will be carried forward for drawdown in future years. To achieve its financial position, the CCG delivered a Quality, Innovation, Productivity and Prevention (QIPP) savings programme of 6.5m (2.7%). Further details are in Section 5.1. Although the CCG achieved a break-even position for 2016/17, the CCG has an underlying deficit of 2.9m to be addressed in 2017/18. In recognition of the CCG s underlying financial deficit and the significant financial risk of delivering a 5.6% savings (QIPP) programme in 2017/18 as detailed in section 4.2, in the Annual Results Reports, the CCG s External Auditors, Ernst and Young, has issued a Qualified 20

20 conclusion on reporting by exception in relation to Value for Money. Further detail is in section 4.2. There were no other qualifications given in the CCG s External Auditors 2016/17 Annual Results Report. 3.3 Risk management The principle risks faced by the CCG are captured in the Governing Body Assurance Framework, which are linked to the strategic objectives of the CCG. At the end of this reporting period, the Governing Body had identified the following key risks: Workforce pressures Risks relate to the capacity and capability of the CCG s main service provider, the Isle of Wight NHS Trust to undertake quality improvements due to large numbers of vacancies and difficulties in recruitment. Funding Risks relating to the CCG s 11.9% ( 22m) distance from the NHS CCG Allocation Target, leading to reduced/no growth funding and higher savings targets. Performance Failure to meet key targets Accident & Emergency 4 hours, Ambulance and Referral to Treatment. Transformation Risks associated with STP and the engagement of all partners, the overall ambition may not meet the challenges of the system, delivery of the Acute Services redesign. 3.4 Stakeholder relationships and engagement Relationships with local stakeholders have been maintained with close working on the My Life a Full Life programme. The CCG works closely with HealthWatch, and they provide a representative on the Quality and Patient Safety Committee as well as the Joint Committee for Primary Care. The Governing Body meetings continue to be held in different locations across the Island seeking to engage with as many people as possible and raising the profile of the CCG and its role locally. Although the numbers of the public who attend these meetings are low, those that do report that they find the meetings welcoming and easy to access. During 2016/17, the Isle of Wight (IW) Clinical Commissioning Group (CCG) has undertaken several public engagement activities on a variety of healthcare topics with the aim of redesigning services which are sustainable within the challenging healthcare budget. A variety of methods have been used based on input from a multitude of stakeholders in the statutory and voluntary sectors to gain valuable feedback from the public. Online and paper surveys were conducted and face to face meetings including public forums in District Parishes, public meetings and presenting during formal, regularly held meetings with health professionals and the public. Topics have included : Gluten-free foods on prescription getting people s views on stopping the provision of 21

21 gluten free foods on the NHS for people with coeliac disease (Wight Bread Service); NHS Wheelchair Service provision gathering people s views on prioritising wheelchairs for those who need them full-time; NHS Rehabilitation service redesign to consider moving the rehabilitation beds from the hospital into the community; Primary Care Strategy development of a strategy for the delivery of primary care services in the community; Emergency Care Service, Walk-in Service Access - people s views were sought on the impact of not having an Urgent Care Service during the day time (8:30 am to 18:30 pm) when GP surgeries are open. The CCG took part in the CCG 360 stakeholder survey and the results have shown a marked deterioration in 2016/17. While the CCG was seen as the system leader and stakeholders felt they knew CCG plans and were happy to raise concerns with the organisation, the stakeholder feedback also identified a fall in overall level of engagement, a deterioration in the position with respect to reduced level of confidence in the CCG s ability to deliver changes and it being unable to influence plans. The CCG with its Membership is developing plans to address issues raised. 22

22 4 Factors affecting future performance 4.1 Finance & Performance For 2017/18 the CCG has received an allocation of 233m. As explained in Section 2.4. Under NHS England s CCG funding formula, the CCG s core services allocation for 2017/18 is 11.9% ( 22m) above target, which means that until the % falls to below 5%, the CCG will receive minimum growth funding each year. For 2017/18 the CCG has therefore only received growth funding of 0.3m (0.2%). The CCG is actively working with the NHS England national allocations team to understand and address the causes of the Island s significant distance from target allocation. Although the CCG will start 2017/18 with a brought forward surplus of 2.3m, NHS England has advised that this surplus will not be available in the near future for the CCG to drawdown. The CCG s two year financial plan delivers a break-even position for 2017/18 and a 1m surplus (0.5%) for 2018/19. This is the first year in which CCG control totals have been allocated at Sustainability and Transformation Partnership (STP) level by NHS England. The NHS England Local Area Team (Wessex) has worked with the Hampshire and Isle of Wight (H&IW) STP CCGs to agree control totals within that envelope. STPs have been required to submit local financial plans showing how the organisations within their system will achieve financial balance within the available resources. The CCG s control totals for both 2017/18 and 2018/19 meet the STP control total requirements. In order to deliver the financial plan, the Quality, Innovation, Productivity and Prevention (QIPP) savings target for 2017/18 is 12.9m (5.6%). This is almost four times the level of savings historically delivered by the CCG. To recognise the risk around the delivery of the QIPP schemes relating to the Isle of Wight NHS Trust, a risk-share has been agreed for schemes to the value of 10.3m, with the CCG initially applying 6m (c60%) of the savings to the contract. The remaining 4.3m (c40%) of savings will be applied to the Trust s contract once further confidence in delivery has been secured. As stated in section 3, in recognition of the CCG s significant financial risk of delivering a 5.6% savings (QIPP) programme in 2017/18, in the Annual Results Report, the CCG s External Auditors, Ernst and Young, has issued a Qualified conclusion on reporting by exception in relation to Value for Money, as follows. The CCG reported a surplus of 2.3m in its financial statements for the year ending 31 March 2017, but with an underlying decifit of 2.9m. Achieving this outturn surplus relied on the return of a 4.5m prior year surplus; this non-recurrent funding will not be available in the future. The CCG has not yet succeeded in addressing the underlying deficit in its budget through putting appropriate arrangements in place to fully achieve its 12.9m recurrent QIPP target for 2017/18. 23

23 This issue is evidence of weakness in proper arrangements for planning finance effectively to support the sustainable delivery of strategic priorities and maintain statutory functions. For the CCG to achieve a financially sustainable position will require transformational change across both health and social care. As in both 2015/16 and 2016/17, for 2017/18 the Island s New Care Model (Vanguard) programme, My Life a Full Life, will receive national, nonrecurrent funding to support this transformation. The indicative value of this investment is 3.3m. Under the new national Sustainability and Transformation Partnership (STP) arrangements, the Isle of Wight is a Local Delivery System (LDS) within the Hampshire and Isle of Wight STP. The CCG, Isle of Wight NHS Trust and Isle of Wight Council are the members of the LDS. A Single Change Plan is being developed, which reflects each organisation s strategic objectives and incorporates both My Life a Full Life and the recommendations from the Trust s recent Care Quality Commission (CQC) inspection report, to deliver the service improvements and transformations required for high quality, sustainable health and social care services. In addition to meeting the national strategic (Five Year Forward View), financial and constitutional requirements, the CCG s 2017/18 Financial Plan supports delivery of the Isle of Wight LDS Single Change Plan. Any cost pressures/overspending areas for 2016/17 have been taken into account in the financial planning for 2017/18. The CCG s over-arching investment strategy has been and will continue to be, to move investment away from the acute/hospital setting, into community and primary care services. This is in line with the Island s My Life a Full Life, Health, Care and Wellbeing Strategy of reducing/avoiding hospital admissions through enhanced support in community and primary care settings and bringing health and care closer to home. To illustrate how the CCG s spending plans support its strategic objectives table 2 below provides an overview of the 2017/18 budgets. 24

24 2017/18 Summary of budgets Budget '000 Allocation 233,278 Spend Acute 109,087 Mental Health 18,957 Community 9,195 Better Care Fund 19,099 Children's 2,177 Continuing Care 14,704 Primary Care 52,851 Other Programme Staff Costs/ Project Costs 810 Contingency 1,167 Vanguard (non-recurring allocation) 1% Risk Reserve 2,266 Total 4,243 Running Costs 2,965 Total Application of funds 233,278 Surplus 0 Table 2: Summary of budgets 4.2 Workforce The Island has an ongoing challenge with the recruitment and retention of sufficient qualified staff to meet the needs of the local population. This is particularly acute in nursing across all sectors and in relation to General Practice where a number of practices are carrying multiple GP vacancies. While workforce redesign can mitigate the impact of this workforce shortage to some extent, it remains a risk for the NHS and affects the way in which the CCG can commission services. 25

25 5 PERFORMANCE ANALYSIS 5.1 Financial Performance Table 3: Year end (Month 12) March 2017 Income and Expenditure Position A summary of the key variances to the 2016/17 financial plan is as follows:- Mainland contract expenditure was 0.8m higher than plan due to both elective (planned) and non-elective (emergency) activity; The Continuing Healthcare (CHC) budget overspent by 1.9m mainly due to an increase in the number and complexity of continuing healthcare patients and an increase in 1:1 care within the nursing homes. CHC is an area of focus within the CCG s 2017/18 Quality, Innovation, Productivity and Prevention (QIPP) programme, to ensure that value for money is being achieved; Prescribing budgets under-achieved the savings target by 0.8m, due to capacity issues caused by vacancies within the Medicines Management Team, which are now recruited to; 26

26 Isle of Wight NHS Trust contract was 2.1m lower than plan due to elective (planned) activity being significantly below contracted levels; reimbursement of payment for community and mental health services due to a reduction in actual cost; Delegated Primary Care underspent by 0.4m due to lower premises, locum and Primary Medical Services (PMS) contract costs. To meet the planned break-even position, the CCG planned to achieve a c 6m (2.5%) Quality, Innovation, Productivity and Prevention (QIPP) savings programme. During 2016/17 the CCG had support from a Turnaround Director, which resulted in an increased target of 7.1m. The actual savings delivered for 2016/17 was 6.5m (2.7%). A summary of the schemes delivered is provided below. Delivery Plan Grouper Planned QIPP 000 Actual QIPP 000 Variance 000 Procedure of limited clinical effectiveness (207) Urgent Care Centre Continuing Healthcare (33) Medicines Management 1,673 1,157 (516) review of thresholds Turn-around Investment review Mental Health Staff vacancies Community Health Services vacancies Other (18) Investment review 1,643 1, Reduce Running costs Total 7,147 6,538 (609) Table 4: Summary of 2016/17 QIPP savings schemes year-end position In relation to cash, at the year end, the CCG had a ledger balance of 123k and physical cash balance of 127k. In accordance with NHS England cash management policy CCG s were allowed to retain up to 1.25% of their March cash drawdown, which equated to 213k for the Isle of Wight CCG. The CCG did not have any capital allocation or expenditure. 27

27 5.2 CCG Performance As part of the Governing Body Assurance Framework (GBAF), the Governing Body set critical success factors against which the organisation monitors its progress. The following table offers Governing Body s assessment of progress against these factors: Objective 1: To support system transformation and sustainability Critical Success Factor To complete the My Life full Life work programme for 2016/17 Achieved The vanguard funding has been released and the CCG has received 16/17 funding. The project management office is now integrated with the IW NHS Trust and three project managers have been recruited. New governance arrangements will mainstream the MLFL programme. To complete the agreed Whole Integrated Systems Review (WISR) programme and meet agreed timescales To integrate the commissioning function with the local authority in accordance with the agreed plan Not achieved Partially achieved The WISR business case was developed and submitted as part of the NHS England stage 1 assurance process. Further work was required on the models of care and a revised business case is being produced which will not be complete until summer 2017 following further work on acute services redesign. The joint post of assistant director of integrated commissioning has been appointed. A new Director of Social Services has been appointed by the Local Authority but with recent changes to the leadership of the IW Council this critical success factor will not be fully achieved this year but will be achieved in 17/18. Clear priorities across the system need to be agreed. To agree the Sustainability Transformation Plan (STP) across Wessex including: a) the local estates strategy and b) the Digital Road Map Partially achieved The Sustainability Transformation Plan (STP) across Wessex has been agreed by most organisations with the exception of the IW Council. The Plan has been approved by Governing Body and the local estates strategy and digital road map are in place. To deliver the case for an "Island Premium" Partially achieved The cost based review programme at the IW NHS Trust was suspended during the year but it is now being implemented as part of the turnaround process. This will provide the evidence for the case for an Island premium. The CCG has reviewed the national allocation formula and identified a number of areas where the Island seems to be disadvantaged. The Chief Finance Officer met with the national allocations team and agreed that the CCG will work with the National Team in advance of the national CCG allocations formula being refreshed. 28

28 Objective 2: To meet the finance, quality, commissioning and performance targets within the operating plan Critical Success Factor To meet the "must do" performance trajectories including developing an action plan to improve services for people with learning disability To achieve finance balance in 2016/17 meeting statutory responsibilities including delivery of QIPP targets To develop a robust financial plan for 17/18 To develop a plan to improve quality and safeguarding in commissioned services To achieve the quality indicators in the contracting schedules throughout the year To deliver the agreed system resilience plan Not achieved Achieved Partially achieved Not achieved N/A Partially achieved The key performance targets and trajectories have not been achieved in year. A task and finish group will be looking at Delayed Transfers of Care (DTOC), market positon and incentives to increase capacity. A turnaround programme has been established overseen by a new Turnaround Board. The QIPP programme was reviewed and strengthened during the year to focus on the key schemes for delivery. The IW NHS Trust has underperformed against the contract this year which has offset in-year cost pressures such as continuing health care and will enable the CCG to achieve its planned breakeven year end position. The level of QIPP savings required to achieve financial balance in 17/18 is 3-4 times the usual savings level achieved. Approximately 4m (33%) of savings plans are medium to high risk as they rely on system transformation. Mitigating actions are being put in place. There is a capacity and capability issue within the IOW NHS Trust to deliver and sustain quality improvements in commissioned services. The CQC inspection in November identified a series of quality issues including issuing a section 31 enforcement notice for mental health services. This was followed up by a further inspection in January. The formal CQC report was published 12 April The Governing Body agreed to combine this with the critical success factor (above) at the September meeting The system resilience plan was agreed and delivery of the plan has been a challenge due in part to workforce capacity. A revised A&E recovery plan was agreed in October and much of the plan has been delivered but this has failed to deliver any material improvements in performance. There has been considerable pressure over the winter period with several black alerts and a number of 12 hour breaches. 29

29 Objective 3: To implement and deliver delegated commissioning of primary care Critical Success Factor To publish a strategy for primary care Achieved The Primary Care Strategy has been published and approved by Governing Body and Primary Care Committee. To manage the budget in year and achieve finance balance within the delegated budget Achieved The processes supporting the delegated budget are in place and there has been review of standing orders and Standing Financial Instructions to incorporate the delegation. The delegated budget is projected to be in surplus at year end. Financial reporting is in place and being reviewed to provide more comprehensive information. To agree a quality framework for primary care To agree a performance dashboard and report Not achieved Partially achieved Quality is a standing item on the Primary Care Committee and Primary Care Operational Group (PCOG) agenda and a quality dashboard has been agreed however the framework requires a significant level of data collection and this has not been agreed with the GP Practices. While Primary Care Operational Group has agreed a performance dashboard there is an issue with the capacity to maintain the dashboard and work is ongoing with GP Practices to provide the necessary data. Objective 4: To evolve the culture and governance within the CCG to deliver transformation Critical Success Factor To embed the My Life a Full Life behavioural framework within the CCG by the end of the financial year Not achieved The CCG Constitution has been amended and approved by NHS England. A system HR lead was appointed to oversee the change programme. However a decision was made not to change the behaviours enshrined in the CCG constitution at this point because the new framework is focused on provider issues rather than Commissioning ones. To create and deliver an organisational development (OD) plan building on the CCG OD Strategy and including system leadership development Not achieved A system HR lead has been appointed to oversee the change programme and MLFL is leading the project however less progress has been made this year than anticipated. 30

30 To develop an outcome framework to support new contract, payment and pricing models To complete a review of the structure and governance of the CCG Not achieved Partially achieved There is a lack of capability and capacity within the CCG to develop robust outcome based commissioning framework during the year and develop new payment and pricing mechanisms. The HIOW STP has established a Commissioning Board and this Board will be developing a framework to support the new contract models. The Membership has been included in the discussions about governance of the CCG including how to improve communication and strengthen the locality meetings. There is a MLFL Board in place and the HIOW STP has established a Commissioning Board to improve the governance arrangements. Regular reports are submitted to Clinical Executive and Governing Body. It is anticipated that further changes to the structure and governance of the CCG will be needed in the future. Implement the stakeholder strategy Partially achieved There is a WISR stakeholder strategy in place and public engagement has taken place around individual service changes and the primary care strategy. There is a review of service provision currently being undertaken to create additional capacity to improve the process, however the strategy still requires a substantial refresh in order to embed learning and processes within the organisation. 5.3 CCG Assurance Framework 2016/17 A new CCG Assurance framework was introduced for 2016/17 which focusses around 4 key facets of our functions which are better health, better care, sustainability and leadership. There are 42 indicators, 17 of which are linked to the 6 clinical priorities of Mental Health, Dementia, Learning Disability, Cancer, Diabetes and Maternity. The indicators and ratings are updated at various stages of the year but final ratings for 2016/17 will not be published until around June At the time of publishing the annual report, ratings concerning up to Qtr2 was available. Key areas of note include: Leadership Probity and Corporate Governance and Staff Engagement indicators are positive. Effective working relationships across the system need to be improved. Sustainability In year financial performance and establishment of key enabling transformation plans such as the Digital Roadmaps met expectations. However current digital interactions between primary care and secondary care are behind expectations. 31

31 Clinical Priorities Dementia - Rated as Top Performing The indicators relate to diagnosis targets. Diabetes - Rated as Needs Improvement The indicator for treatment targets was good but poor in education. The education service has now been introduced. Learning Disability - Rated as Needs Improvement The CCG benchmark above average in numbers of inpatients registered. Cancer - Rated as Needs Improvement Indicators for early diagnosis are good but treatment within 62 days missed national targets. Mental Health - Rated as Performing Well Based on IAPT Recovery and Early Intervention in psychosis. Maternity - Needs Improvement Similar to most CCGS on 3 indicators but poor in respect of the number of mothers smoking whilst pregnant. The full and latest indicator ratings can be found on the MY NHS Website. 5.4 NHS Constitution Targets and other Performance Metrics During 2016/17 performance against constitutional targets was compromised predominantly by capacity pressures and patient flow issues throughout the health and care system. The CCG met 8 of the 15 national NHS Constitution Key Standards. Key problem areas were the 18 week referral to treatment (RTT) target, A&E 4 hour waits and Ambulance response times. Robust monitoring and detailed reporting applies to all constitutional targets and in 2016/17 a Systems Resilience Group was established with agreed trajectories intended to lead to a recovery of National targets across a range of key indicators including A&E 4 hour waits and RTT 18 week targets. The group was a collaborative process between key representatives from the CCG and Isle of Wight NHS Trust with regular reporting of performance and discussion around actions to gain improvement. During 2016/17 the IOW NHS Trust has failed to deliver its contracted activity levels for planned elective treatments both for inpatients and day cases. This was predominantly due to the inability to ring fence beds for planned treatments because of problems with patient flow through the hospital and out into the community. This has had consequences for the 18 week RTT constitutional target. 32

32 NB: All rates are as at the end of March 2017 and exhibit the YTD position up to and including February Table 5: NHS Constitution achievement 2016/17 The CCG has actively promoted increased activity at mainland trusts and the independent sector to help alleviate the pressures on the IOW waiting list. Outsourcing from the existing IOW NHS Trust waiting list has had limited success however, by actively promoting choice through targeted media campaigns to the public and primary care, there has been an increasing number of direct referrals to local mainland independent sector providers by island GP s. In addition action plans were developed to support patient flow and non-elective impact on waiting lists, together with improved booking efficiencies and theatre utilisation. Accordingly there has been a drop in the number of new referrals to the IOW NHS Trust. The CCG has determined the activity and trend information available to understand the activity demand levels at the IOW NHS Trust and mainland providers for 2016/17. Throughout the next year we will continue to actively promote patient choice and demand plans have been developed with all our major providers to ensure sufficient activity levels are commissioned, including ongoing commissioning of mainland independent sector capacity. 33