NHS SOUTH WARWICKSHIRE CLINICAL COMMISSIONING GROUP ANNUAL REPORT 2016/17

Transcription

1 NHS SOUTH WARWICKSHIRE CLINICAL COMMISSIONING GROUP ANNUAL REPORT 2016/17

2 CONTENTS Section 1 Performance Report Summary and Overview Purpose and Activity Performance Analysis Sustainable Development Improving Quality Patient and Public Engagement Reducing Inequalities Improving the Health and Wellbeing of our Local Population 2 Accountability Report Members Report Governing Body and Director Profiles Statement of Accountable Officer s Responsibilities Annual Governance Statement Remuneration and Staff Report Page Number Appendix 1 - Audit Report Appendix 2 - Financial Statements 2 P a g e

3 Performance Report - Statutory Declaration I certify that the CCG has complied with the statutory duties laid down in the National Health Service Act 2006 (as amended). Signed: Gillian Entwistle Chief Officer (Accountable Officer) 30 May P a g e

4 Performance Overview Summary of Performance As an ambitious, forward-thinking organisation, NHS South Warwickshire Clinical Commissioning Group (CCG) continues to strive to improve the health and wellbeing of its local population. The purpose of this 2016/17 annual report is to provide an opportunity to demonstrate the tremendous amount of work we have completed and strategic objectives achieved from April 2016 to March 2017, through our on-going work with partner organisations across the local Health and Social Care economy. South Warwickshire is an area of significant population growth and this, combined with our ageing population continues to put pressure on health and social care services. More people are likely to suffer from long term physical and mental health problems but we are confident, through the redesign of local health services, that we can continue to improve the health and wellbeing of our local population, increasing life expectancy and reducing health inequalities for local people. During 2016/17 we have embedded the key objectives of our updated Strategic Plan for within the Coventry and Warwickshire System Transformation Plan and our commissioning work is now geared to delivering these priority projects, within an increasingly challenging financial environment for the NHS. Our plans on Stroke care, Child and Adolescent Mental Health services and Out of Hospital care are progressing well, and we recognised the need for out of hospital care to provide the bedrock of health services in south Warwickshire given the focus of the NHS Five Year Forward View on preventative and community based care. Our Commissioning Intentions for 2017/18 set out how we aim to deliver our ambitions for south Warwickshire and our Assurance Framework sets out the key risks aligned to our corporate objectives. As year two of Primary Care (GP) commissioning delegation from NHS England (NHSE) ends we have achieved significant success in our future plans to develop primary care in south Warwickshire. We have published a Primary Care Estates Strategy and have approved business cases for new primary care centres in Wellesbourne and Warwick town centre, as well as several general practice estates improvement schemes. We have attracted funding of 1.3m from the national Estates and Technology Transformation Fund, which is aimed at improving IT, telephony and estates infrastructure in order to achieve better efficiency, productivity and sustainability of general practice. Our quality and performance framework for primary care is now established and we anticipate all our general practices will have had Care Quality Commission inspections by the end of March We are a top performer nationally in respect of CQC rated good and outstanding practices. In the hospital sector we continue to be a top performer nationally in relation to our work with South Warwickshire NHS Foundation Trust on urgent care and remain one of the few areas in the country to maintain our A&E 4 hour wait performance during a difficult winter. Our performance generally as a CCG is good and we continue to make good progress on areas of on-going challenge, such as cancer waiting time targets and C difficile rates. Our partnership work on the latter has recently been recognised by NHS England as best practice. The CCG continues to work in a very challenging financial environment and our Quality, Innovation, Productivity and Prevention (QIPP) target was at a significant level at 4% of our budget. That said we achieved this target and all of our statutory duties, as well as our NHSE control total surplus of 3.3m (1%), in 2016/17. 4 P a g e

5 Going Concern Our annual accounts have been prepared on the going concern basis. Public sector bodies are assumed to be going concerns where the continuation of the provision of a service in the future is anticipated, as evidenced by inclusion of financial provision for that service in published documents. The following is clear evidence that the CCG meets the requirements as set out in section 4.13 of the Department of Health Manual of Accounts: The CCG was established on 1 April 2013 as a separate statutory body. The CCG has an agreed Constitution which it is operating to for the governance of its activities. The CCG has been allocated funds from NHS England for the following financial years 2017/18 and 2018/19. The CCG has been allocated indicative allocations to 2020/21. The CCG is allocated a cash drawdown which is based on the cash requirements of the CCG. After making enquires, the directors have a reasonable expectation that the CCG has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt a going concern basis in preparing the accounts. The challenges for 2017/18 are greater still but, with the support of our 35 member practices, committed staff and strong local partnerships, we remain confident that we can continue to achieve and drive improvements in health services for our local population. Thank you to our partner organisations, patients and members of the public who have contributed to the work that we do, and of course to our staff and GP member practices for your dedication in contributing to achieving this year s many successes. We are looking forward to continuing to work with you all in 2017/18 as we continue to strive to achieve our vision of Better Health for Everyone. Gillian Entwistle, Chief Officer Dr David Spraggett, Chair Who we are: purpose and activity We were established under the Health and Social Care Act 2012 as a statutory body, with the function of commissioning local health services. 5 P a g e

6 We are a membership organisation made up of 35 member GP practices and in we had a budget of 358 million covering a population of just under 281,000 people across a geographical area that includes the Warwick and Stratford-upon-Avon districts. to make sure that in the next four years we will continue to develop successful and effective partnerships with our communities, patients and partners to reduce health inequalities and deliver improvements in health for local people within the resources available. Our office, Westgate House in central Warwick, is leased from NHS Property Services. Our organisation is led by GPs and nurses supported by other professionals. We work together with patients, communities and GP practices in your area to make sure that the right NHS services are in place to support people and help improve their health and wellbeing. Our mission is 6 P a g e

7 A Commissioning Organisation We are one of three CCGs in Coventry and Warwickshire, responsible for planning and funding healthcare on behalf of local people, along with NHS Warwickshire North CCG and NHS Coventry and Rugby CCG. The three CCGs in the area operate a collaborative approach towards commissioning. Our commissioning covers many health and care services including: planned hospital care; urgent and emergency care; rehabilitation; maternity; general community health services; mental health; and learning disability services. The majority of our services are commissioned from large local NHS Trusts, such as NHS South Warwickshire Foundation Trust ( SWFT, for acute and community services), and Coventry and Warwickshire Partnership Trust ( CWPT, for mental health and learning disability services). In April 2015 we took on delegated commissioning of primary care (GP services only). During 2016/17 we have worked hard to embed this activity and, in particular, to develop our strategic approach to primary care development in the context of the NHS GP Five Year Forward View. We do not however commission other primary care services such as dental care, pharmacy or optometry (opticians). This is done by NHS England through their local team, referred to as NHS England West Midlands. They also have the responsibility for commissioning specialised services such as organ transplantation, specialist cardiac services and specialist mental health services. Our partners in Warwickshire County Council have responsibility for commissioning public health services, including health visiting, school nursing and drug and alcohol services. We work in partnership with our patients, communities and GP member practices, education providers, and voluntary and community organisations, to continually improve quality of care, to address health inequalities and to support people to stay healthier for longer. Assurance on how well we are doing To help NHS England (NHSE), patients and the public identify how well CCGs are performing in their roles as the commissioners of local health services the CCG is assessed against a national Assurance Framework. We are accountable to our local population as well as to NHSE for planning and ensuring delivery of comprehensive and high quality care that meets the needs of our local community. The Assurance Framework supports us to deliver this, helping us to transform local services and improve outcomes for all our patients. We have regular assurance meetings with NHS England to assess how we are performing and we are able to discuss further developments or support required. The CCG is awaiting the results of the latest NHSE assessment and these will be published when available. 360 o Feedback for Results from the annual 360 o survey play an important part in assurance for CCG performance results are: Overall Engagement: The results show that we are effectively engaging with our stakeholders and our commitment to this is appreciated. 75% of responders felt we had engaged with them. What is also encouraging is that we have seen retained an 81% response level of people who felt they had a good working relationship with the CCG. Commissioning Services: Our stakeholders remain confident regarding our commissioning capability with the majority agreeing that we involved the right people, have a clear rationale for our decisions, are able to commission high quality services for our population, act on the views of patients and the public and effectively communicates about how the CCG has acted on what it is told. 7 P a g e

8 Leadership: Our stakeholders are confident in the CCG team and feel that we are effective at communicating our decisions with them. There is strong support for the overall leadership with the majority of stakeholders stating that we were clear and visible. There has been an increase in confidence around the CCG leadership s ability to deliver its plans and priorities, to deliver continued quality improvements and improved outcomes for patients. Interestingly, clinical leadership is very well regarded by member practices where it is recognised as being clear and visible. Monitoring and reviewing services: The vast majority of stakeholders have a degree of confidence in our ability to monitor the quality of services that we commission. We are seen as an open, accessible organisation with which concerns about quality can be raised. Plans and priorities: There is a high level of understanding and support for our priorities amongst stakeholders. The report shows responders reported that they have been effectively communicated with regarding plans and priorities. Tackling local health issues We are an active member of the Warwickshire Health and Wellbeing Board and have worked with partners in the development of the Warwickshire Health and Wellbeing Strategy. Our shared vision is: Warwickshire will be in the best 20% in the UK for all major health and social care indicators; The educational attainment of children in Warwickshire will be consistently improved in our most deprived areas no school will demonstrate more than 20% variance from the best in examination outcomes (GCSEs etc) by 2018; All the local councils will be Healthy Councils which champion health and wellbeing in its widest sense with a focus on Marmot s top six objectives and our local priorities; All partners will actively role model health and wellbeing; Adults and children will have early access to high standard mental health and wellbeing services that are community based and close to home; Investment in preventative health and social care will be prioritised and underpin commissioning strategies; Statutory services will be much more integrated, in particular, innovative joint primary, secondary and social care teams that work together in the interests of the public s health rather than the interests of the organisations who employ them. Building on the priorities that have been identified through the Joint Strategic Needs Assessment (JSNA), the Health and Wellbeing Board has identified three priority areas that will deliver the vision. The priority areas are: Mobilising communities to develop and sustain their independence, health and wellbeing; Improving access to services; Public Services Working Together. Our Vision and Aims The CCG s Strategic Plan sets out our plans for health improvement, describing our strategic priorities and key work programmes. The Plan details how we will fulfil our responsibilities set out in the NHS Constitution, deliver system performance and address the three priorities identified in the NHS Five Year Forward View ( the 5YFV ), referred to as the Triple Aim; better health and reduced health inequalities, transformed quality of care delivery and sustainable finances. Our vision for commissioning healthcare for the people of south Warwickshire is to build relationships with patients and our communities to improve health, transform care and make the best use of resources. Regionally across Coventry and Warwickshire, there is a consistent and shared vision with the two other local 8 P a g e

9 CCGs (NHS Coventry and Rugby CCG and NHS Warwickshire North CCG) for a person centred system. This vision has been in place since We have identified four key cornerstones for our plan which have been tested with our stakeholders and made available for our population to comment and feedback on. Work programmes are identified within each cornerstone, with an underpinning focus on delivering safe and effective services today. Our Strategic Plan was presented to the Warwickshire Health and Wellbeing Board in October 2015 and, as a consequence, we have confirmation that the Plan meets the requirements of the Board and supports the delivery of the priorities identified in the Warwickshire Health and Wellbeing Strategy for the period P a g e

10 The CCG continues to be engaged in the production of a range of Joint Strategic Needs Assessments (JSNAs), which inform the Health and Wellbeing Strategy for Warwickshire. And there is clear evidence that the JSNAs are used to help shape the CCG Commissioning Intentions and delivery of the Health and Wellbeing Strategy priorities." Councillor Izzi Seccombe, Leader of Warwickshire County Council. The Strategic Plan was also the subject of extensive engagement with our Member Practices, local population and key stakeholder partners. Its messages have been re-enforced through subsequent strategic documents (Annual Business Plan, Commissioning Intentions) all of which we have engaged on using the channels and approaches described in Section 10 of our Operating Plan. At this point in time, we feel confident to say that our Strategic Plan is deeply owned by both the CCG and its partners in the local health and care system. Coventry and Warwickshire Sustainability and Transformation System Plan In December 2015, following the publication of our Strategic Plan, NHS Shared Planning Guidance was published for the period 2016/17 to 2020/21 (Delivering the Forward View: NHS planning guidance 2016/ /21). This Guidance outlined a new approach to help ensure that health and care services are built around the needs of local populations. To do this, every health and care system in England was tasked to produce a multi-year Sustainability and Transformation Plan ( System Plan ), showing how local services will evolve and become sustainable over the next five years ultimately delivering the 5YFV Triple Aim of better health, better patient care and improved NHS efficiency. The 5YFV Triple Aim is the term used to describe the three emerging gaps in the provision of healthcare across England which are being driven by a range of factors, including changing demographics, socio-economic trends, workforce challenges, provider sustainability and organisational working. The Triple Aim underpins both our Strategic Plan and the System Plan, creating a golden thread between the two documents, and, in turn, our Operating Plan and Commissioning Intentions. At both a CCG and a System Plan level, the marker of our success will be to deliver the 5YFV Triple Aim by 2020/21. The reasons for the need to close the three gaps are: 1. The health and wellbeing gap: if prevention does not become more widespread then recent progress in healthy life expectancies will stop, health inequalities will widen and our ability to pay for beneficial new treatments will be put aside by the need to spend billions of pounds on avoidable illness. 10 P a g e

11 2. The care and quality gap: unless we change the way in which care is delivered, use technology for our benefit and drive down variations in quality and safety of care, then patients changing needs will go unmet, people will be harmed who should have been cured and unacceptable variations in outcomes will persist. 3. The funding and efficiency gap: if we fail to match reasonable funding levels through innovation in how we deliver care, the result will be worse services, fewer staff and restrictions on new treatments. Closing these gaps will require innovation and change in the provision of healthcare throughout the country. These changes mean that we need to take a longer view to consider the possible futures on offer and the choices that we face. The CCG sits within the Coventry and Warwickshire System Plan footprint; a footprint which is consistent with the geography for the existing Joint Strategic Plan Transformational Change: Transforming Lives. There is already a strong history of partnership working at a strategic and operational level between the three CCGs, two local Authorities and four NHS Providers who make up the Coventry and Warwickshire footprint. Through focused collaborative working, the process of developing and implementing the System Plan offers a significant opportunity to strengthen local relationships further and to reach clear decisions on the actions required to design and deliver transformative, systembased solutions. Many of these solutions will address priorities and challenges that have already been recognised in strategic plans at individual organisation level and they will enable care to be improved across the footprint through the implementation of identified transformation work-streams. The System Plan acknowledges that we must maintain momentum on or accelerate transformation projects that have come out of existing strategic plans. A number of these projects are now incorporated within the System Plan, including the Out of Hospital programme, which we are leading on. New Models of Care To meet the changing needs of patients, capitalise on the opportunities presented by new technologies and treatments, and to unleash system efficiencies more widely, our system must be underpinned by the appropriate service delivery models. We therefore intend to learn from the major new care models being created and tested across England through the Vanguard programme as part of the Five Year Forward View. The underlying logic of many of these new models of care is that by focusing on prevention and redesigning care, it is possible to improve health and wellbeing, achieve better quality, reduce avoidable hospital admissions and elective activity, and unlock more efficient ways of delivering care. The emerging core components of a model of care include: A population health and care model focused on proactive and preventative care tailored around the needs of the individual; Empowering patients and local people to support each other and themselves in their health and care; Multi-disciplinary health care professionals working within a system that has accountability for the delivery of health and care services for their population; Contracting and payment systems that incentivise and enable the delivery of services for the population health. The CCG sees its vision and priorities as being entirely complimentary to the vision and priorities for Coventry and Warwickshire. An ethos of integration and collaboration flows through our Strategic Plan, recognising the compelling case to improve the degree of co-ordination and integration between organisations at both the point of planning and delivering services. By working collaboratively 11 P a g e

12 across Coventry and Warwickshire over the period of our Operating Plan, we will bring together our thinking, planning, resources and capabilities. We will act as an integrated system that is jointly accountable for health, quality and spend in our care system. Our Operating Plan for 2017/18 and 2018/19 not only progresses our own Strategic Plan, but also starts to lay the building blocks for a simplified Coventry and Warwickshire system. Challenges and Opportunities The challenges facing our local health and care system in the coming two years are considerable. Commissioners and Providers face increasing challenges to meet rising demand, whilst at the same time reducing health inequalities and improving outcomes, quality and patient experience. Critically, the work to meet these challenges will be set within the following financial context based on forecast demand, the total financial challenge facing the Coventry and Warwickshire health and care system by 2020/21 is forecast to be 267m if we take no action. Providers and Commissioners have identified recurrent efficiency savings of 141m. Analysis of the opportunities developed within the key work-streams has identified potential savings of 66m towards the financial challenge. These financial benefits are not driven by service cuts but instead relate to service integrations, better utilisation of the health and care assets and improved efficiency within and across organisations. The system is also expected to receive 63m strategic transitional funding in 2020/21 to support transformation. A key challenge for the CCG and its local Providers will be to deliver service transformation in line with expectations during the coming two year period. In addition to the financial pressure and constraints faced by the CCG and the wider system, a review of the Warwickshire Joint Strategic Needs Assessment ( JSNA ) highlights a number of key non-financial issues and challenges which the CCG must consider. Work programmes across the four cornerstones of the CCG s Strategic Plan address these priorities: A growing population JSNA Priorities Our population is expected to grow by 9.8% between now and 2035, with the Warwick and Stratford-on-Avon District Local Plans setting a combined housing requirement of circa. 31,000 new dwellings. By 2035 the growth of our populations aged 65 plus and 85 plus will be significantly higher than that of both Coventry and Warwickshire and England. An ageing population Our population is ageing and more people are living for longer with long term medical conditions. South Warwickshire currently has approximately 7,900 people aged over 85. This group is expected to grow by 17.7% by 2021 and by 130.4% by During the same period the over 65 group is expected to grow by 9.6% and 43.1% respectively. Mental Wellbeing Of people aged between living in south Warwickshire, there are an estimated 22,000 people with a common mental health problem. Long term limiting illnesses In 2011 nearly 16,000 south Warwickshire residents reported that they had long term limiting illnesses that limited their activities a lot. This is projected to increase to over 27,000 by 2037, with the greatest percentage increase projected to occur in Stratford-upon-Avon (82%). Dementia One in three people aged over 65 will develop dementia. NHS England has set an 12 P a g e

13 ambitious target to see two-thirds (66%) of people with dementia identified and given appropriate support. Carers The growth of the elderly population will result in a rise in the number of unpaid carers. In 2011 there were an estimated 27,000 unpaid carers in south Warwickshire, of whom 5,000 provided 50 plus hours of care a week. By 2020, nationally 10.6 million people will take on a new caring role for a disabled, older or seriously ill relative or friend. It is estimated that the number of older people in need of care and support will outstrip the number of working age family member able to provide it by as early as Learning Disability The total number of people with a learning disability in Warwickshire is estimated to be 8,933, with the largest number (2,216 estimated) living in Warwick District. The number of people with a learning disability is predicted to rise with the largest increase (18% from 2013 to 2021) being in the over 65 group. Children and young people The health and wellbeing of children in South Warwickshire is generally good and above the England average. However, we know that vulnerable young people particularly Looked after Children, those with a safeguarding referral and those requiring support from mental health services, need to be prioritised. Ensuring that these children receive the support that they require as soon as possible, will increase their chances of achieving their potential in education and establishing effective relationships with family, friends and the wider community. While acknowledging the challenges that we will face in the coming two years, we enter this period with confidence and a strong sense of purpose, recognising the strengths that we hold as an organisation and as a system: We are part of a high performing system; Feedback from the CCG 360º stakeholder survey demonstrates that we are a well-respected and trusted partner in the local health and care system; We have a track record of leading and delivering strategic projects across the Coventry and Warwickshire care economy; Through the Out of Hospital Programme, we are working with other local commissioning organisations on a major transformation project at scale. The Programme provides a unique and timely opportunity to put in place arrangements that deliver our aspiration to develop more collaborative commissioning arrangements through the Operating Plan period; Our governance processes for delivering transformational change allow us to move with pace and grip; Our Strategic Plan enables us to be focused and single minded about what we want to achieve in the coming 2 years; Engagement is hard wired into the way we work meaning that we can be confident that our Strategic Plan, and the work programmes that flow from it, are understood and supported by both our population and stakeholder partners; Having accepted delegated responsibility for primary care commissioning at the earliest opportunity (April 2015), we are already working with our Member Practices and GP Federation to transform primary care for the future; o Local implementation of the General Practice Development Programme commenced in October 2016; o Through our work to develop an Outline 13 P a g e

14 Primary Care Estates Strategy, localities of circa 30,000 to 50,000 populations are emerging and we are engaging with our practices on these footprints to appraise future service delivery models; o We are currently conducting 2 significant pieces of engagement with the public and the primary care workforce to gauge perceptions and preferences in relation to various elements of potential new primary care service delivery models and to inform the development of our future primary care workforce strategy. 14 P a g e

15 Key Issues and Risks The following key issues and risks have been included in the CCG s Assurance Framework during 2016/17. The Assurance Framework is presented and discussed at every Governing Body meeting and is under-pinned by an operational risk register, discussed at every Executive Team and Clinical Quality and Governance Committee meeting. The Audit Committee also has oversight of the Assurance Framework. All risks were effectively managed during the year and details of the risks are given in the Annual Governance Statement in the Accountability section of this report. - Failure to achieve the 2016/17 Financial Plan and achieve a 1% surplus, and failure to deliver the QIPP target: In line with NHS England s (NHSE) planning requirements, the CCG s control total for 2016/17 was 1% of the organisation s total resource allocation, i.e. a 3.3m surplus. - The current QIPP Plan includes a high value for acute based QIPPs requiring provider engagement/support: During 2016/17 the CCG has been rigorous with its contract monitoring of the SWFT contract in order to ensure delivery of the transactional acute QIPP schemes to plan. - The Arden & GEM commissioning support services do not deliver business critical functions as per the Service Level Agreement: The CCG buys in commissioning support services from Arden & GEM Commissioning Support Unit via a service level agreement (SLA). - Transforming Care: Governance across 7 entities and the inability to move money around the system to reflect new delivery models compromises the discharge of individuals from hospital: The national Transforming Care Programme (TCP), focused on people with learning disability and/or autism, with behaviour that challenges, originated from quality concerns at Winterborne View hospital. Performance Summary Our overall performance as a CCG is good and, throughout the year, we have continued to make progress with our key secondary care providers and in primary care on areas of on-going challenge. A detailed performance summary and explanation, covering financial, activity and quality information, is contained in the next section of the report, together with an analysis of how performance is measured and monitored. 15 P a g e

16 Performance Analysis Financial Performance Indicators CCGs have a number of financial duties under the National Health Service Act 2016 (as amended). The CCG s allocation and performance against key financial indicators can be found in notes on page 24 of the annual accounts and are summarised in the table overleaf which shows that the CCG met all of its financial statutory duties. The CCG has signed up to the Prompt Payment Code and became an approved signatory to the code on 4th March In addition the CCG should comply with the Better Payment Practice Code, which requires the payment of all invoices within 30 days or agreed contract terms. This was achieved between 97.31% and 99.55% of the time. NHS Act Target Performance Duty Section Duty 000s 000s Achieved? 223H(1)* Expenditure not to exceed income 373, ,173 Achieved 223I(2) 223I(3) 223J(1) 223J(2) 223J(3) Capital resource use does not exceed the amount specified in Directions Revenue resource use does not exceed the amount specified in Directions Capital resource use on specified matter(s) does not exceed the amount specified in Directions Revenue resource use on specified matter(s) does not exceed the amount specified in Directions Revenue administration resource use does not exceed the amount specified in Directions Better Payment Practice Code: Suppliers to be paid within 30 days of receipt of goods or valid invoices (whichever is later): Achieved 369, ,961 Achieved N/A N/A N/A N/A N/A N/A 5,837 5,229 Achieved - Non-NHS by number 95.00% 97.31% Achieved - Non-NHS by value 95.00% 98.16% Achieved - NHS by number 95.00% 97.47% Achieved - NHS by value 95.00% 99.55% Achieved Investment and resource plans were targeted at delivering our strategic aims focused on having the greatest impact on the health and wellbeing of the population of south Warwickshire. In order to fund this significant investment a number of ambitious quality, innovation, productivity and prevention (QIPP) savings or cost avoidance schemes were identified to deliver a target of 13.9m. The CCG achieved this target. 16 P a g e

17 The chart below shows how the CCG s resources have been spent during 2016/17. Further details of the CCG s financial performance are shown in the annual accounts for the financial year ending 31 March The Governing Body is responsible for maintaining a sound system of internal control that supports the achievement of the CCG s policies, aims and objectives. This is detailed further within the Governance Statement. 17 P a g e

18 External Audit The CCG s external auditor is Ernst and Young LLP. The cost of the statutory audit and services work performed by the auditor in respect of the reporting period was 52,500 plus VAT. The CCG undertakes a qualitative exercise in evaluating potential providers of non-audit services in accordance with the Corporate Governance Framework (Standing Financial Instructions- tendering and Contract Procedure section 59). There were no non audit services undertaken by Ernst and Young LLP during the reporting period. Achieving Targets The NHS Constitution Key Performance Indicators are designed to give assurance that CCGs are delivering quality outcomes for patients, both locally and as part of the national standards, as well as being the basis for assessing that we are continuously improving. Achievements are indicated through RAG ratings. It simply uses the Red, Amber and Green indicators of a traffic light visually to highlight the status of each performance indicator. The following table sets out the CCG s position on the expected rights and pledges from the NHS Constitution and includes nationally set targets. The CCG performed above the NHS Constitution operational standard target for 19 of the 23 indicators. The table below shows performance against the key targets: Target A&E (4 hour waits - 95%) Referral to Treatment (RTT) - 92% Cancer 2 weeks 93% 31 days - 96% 62 days - 85% Improving Access to Psychological Therapies (IAPT) Access - 15% Recovery 50% Dementia Diagnosis % 2 week waits: 94.9% 2 week breast symptoms: 95.9% CCG Performance South Warwickshire NHS Foundation Trust: 95.5% Incomplete Pathway: 92.2% 31 days from diagnosis to treatment: 98.3% Access Rate: 15.0% projected year end position 62 days from urgent GP referral to treatment: 80.6% Recovery Rate: 57.5% projected year end position 60.9% as at February 16 How we performed The CCG continues to perform very well on the key performance indicators including Cancer 2 week access times from GP referral to first appointment and A&E 4 hour waits. We continue to face a number of performance challenges and are committed to working with the relevant providers to deliver improvement in these services. 18 P a g e

19 The CCG performance monitoring framework includes measurement and assessment of a wide range of national and local targets, key performance indicators and supporting measures on a weekly or monthly basis as required. When a performance concern is noted we work with the relevant service providers to address any issues as they arise through informal and formal contractual means. Recovery Action Plans are agreed which include performance trajectories to return performance to the required standard; these plans are formally monitored through the contracting processes. The CCG currently has recovery action plans in place with South Warwickshire Foundation Trust for Cancer 62 day waits and Referral to Treatment times. The Mixed Sex Accommodation standard is also being closely monitored as there was an isolated episode of 10 cases at Coventry and Warwickshire Partnership NHS Trust in June 2016 which has not reoccurred in the months following the breach. Improvement and Assessment Framework The CCG Improvement and Assessment Framework (IAF) was introduced in 2016/17 and aims to draw together NHS Constitution and other core performance and finance indicators, outcome goals (from the Outcomes Framework) and transformational challenges. MyNHS is a transparency web tool that enables comparison on a range of outcomes at both national and regional level and has been developed by NHS England, Health & Social Care Information Service, Care Quality Commission and Public Health England. The CCG uses this tool to provide a snapshot of published data to drive improvements in the quality of care. Data for the indicators within the framework varies with regards to data availability, time periods and frequency. This is reported to the CCG s Performance Committee on a quarterly basis but is monitored monthly with the data refreshed in line with published data availability. This framework also provides the basis for the Assurance Review between the CCG and NHS England. Maternity was highlighted as the area requiring the greatest need for improvement. The CCG has worked with its main acute provider to ensure actions have been taken to improve patient involvement in decisions around their care. All actions are complete and the CCG is expecting to see an increase in patient satisfaction in the results of the 2016 survey. During 2017/18 the CCG is taking the following steps to improve performance: Benchmarking against other CCGs in order to reduce unwarranted variation; Increase awareness of the IAF and the indicators e.g. participating in the National Diabetes Audit; Clinical input is being sought into the indicators where the CCG performs less favourably; and Investigating alternative data flows to show the most up-to-date position for the IAF indicators, so the CCG can take action in a timelier manner. Quality Premium The Quality Premium is an additional payment that the CCG can achieve for delivering improvements in the quality of the services it commissions, delivering associated improvements in health outcomes and reducing inequalities, achieving key national NHS Constitution targets and achieving its statutory duty to deliver financial balance. Local assessment of our performance based on the latest available data indicates that the CCG could currently expect to achieve a payment of 835k for 2016/17 performance, which is a significant improvement since 2015/16. In 2016/17 the CCG has delivered improvements in the quality of care highlighted in the in the following areas: 19 P a g e

20 Measure Cancers diagnosed at an early stage E-Referrals GP Patient Survey Antibiotic Prescribing in Primary Care Local Priority 1: 62 day cancer Local Priority 2: Maternal smoking at delivery Local Priority 3: Dementia Diagnosis Measure achieved (forecast based on latest data) Yes No Yes Yes No Yes No The CCG continues to work with the relevant providers and key stakeholders to improve the areas where the improvement measure has yet to be delivered. The CCG also works closely with Warwickshire County Council and its partners to improve and monitor the Better Care Fund initiatives and metrics across the health and social care system. The locally and nationally defined metrics include non-elective activity, delayed transfers of care, people feeling supported to manage their long-term condition, carer reported quality of life, admissions to residential care and re-ablement. The Warwickshire Cares Better Together Board, which meets every six weeks, monitors the progress against these metrics and implementation of the related initiatives to drive forward improvements across the system. Activity The CCG has seen an increase in most types of hospital activity as shown in the table below: Point of Delivery 2015/ /17 (Forecast) % Increase from 2015/16 GP Referrals 58,577 57, % A&E Attendances 76,432 79, % Electives (Planned Admissions) 32,275 33, % Non-Electives (Emergency Admissions) 23,734 25, % First Outpatient Attendances 80,162 85, % It can be seen that there has been an increase in A&E attendances and emergency admissions. The CCG works closely with Public Health, GPs, West Midlands Ambulance Service, NHS111, community health teams and the hospitals to effectively manage all parts of the system to reduce these unplanned attendances and admissions and has put in place a number of services that aim to keep patients out of hospital and being cared for at home. Although referrals from GPs have reduced since 2015/16 overall outpatient and planned attendances have increased; this is due to increased activity at South Warwickshire Foundation Trust, University Hospitals of Coventry and Warwickshire NHS Trust and Worcestershire Acute Hospitals delivering additional activity to ensure delivery of the 18 week Referral to Treatment Time. 20 P a g e

21 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Response Rate % Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Response Rate % Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Friends and Family Test The NHS friends and family test is an important opportunity for patients to provide feedback on the care and treatment received and to improve services. It is based on a single question: 'How likely are you to recommend our ward/a&e department to friends and family if they needed similar care or treatment?' The NHS England statistical publications highlight the percentage of respondents that would recommend/would not recommend the service. Details of the local acute hospital figures for response rates and the percentages of patients recommending and not-recommending the service are shown below Response Rate for A&E Despite the volatility in the response rates, patient satisfaction remains high and similar to the national average. The survey continues to be promoted by SWFT to increase patient participation. 15% 10% 5% 0% 100% 95% 90% 85% 80% 75% FFT A&E Score % Not Recommend GEH SWFT UHCW NHSE FFT A&E Score % Recommend GEH SWFT UHCW NHSE Month GEH SWFT UHCW England Response Rate for Inpatients A&E SWFT recommend care is lower for 2016/17 than 2015/16 however is above NHS England average A&E SWFT not recommend care is higher for 2016/17 than 2015/16 and remains below NHS England average FFT Inpatient % Score Recommend Month GEH SWFT UHCW England A&E SWFT response rate is lower during 2016/17 compared with 2015/16 100% 95% 90% 85% 80% 75% Inpatient SWFT response rate is higher for 2016/17 than in 2015/16 GEH SWFT UHCW NHSE 21 P a g e

22 % of Workforce who responded Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 6% 5% 4% 3% 2% 1% 0% FFT Inpatient % Score Not Recommend GEH SWFT UHCW NHSE The Q2 2015/16 and 2016/17 Staff FFT results at SWFT have remained above the NHS England (NHSE) average for recommending work and recommending care and also below the NHS England national average for not recommending work or care. CWPT saw an improvement in the results in all areas in 2016/17 compared to 2015/16, although all areas performed less well than the NHS England national average. Inpatient SWFT recommend care is similar for 2016/17 compared to 2015/16 and in line with NHS England average FFT Staff Survey Q2 2015/16 and Q2 2016/17 Response Rates 40% 20% Inpatient SWFT not recommend care is similar for 2016/17 compared to 2015/16 and below the NHS England average Staff Friends and Family Test (FFT) Quarter 2 (Q2) Results The Staff FFT questions asked were: how likely are you to recommend your organisation to your friends and family as a place to work and how likely are you to recommend your organisation to your friends and family if they need care or treatment? FFT Q2 2015/16 Staff Results 0% Staff FFT Q2 response rates at SWFT improved in 2016/17 from Q2 2015/16 and were above the NHS England national average. CWPT saw a fall in response rate in 2016/17, although remaining above the NHS England national average. Primary Care GEH CWPT SWFT UHCW England % of Workforce who responded Q2 2015/16 % of Workforce who responded Q2 2016/17 100% 80% 60% 40% 20% 0% 100% 80% 60% 40% 20% 0% GEH CWPT SWFT UHCW England Recommend Care Not recommend Care Recommend Work Not recommend Work FFT Q2 2016/17 Staff Results GEH CWPT SWFT UHCW England GP Patient Survey results were published in July Results showed that 90.5% of respondents registered with a GP practice in south Warwickshire rated their GP practice as good or very good. This compares to a rate of 85.2% for England overall. 92% of patients attending a GP practice in south Warwickshire who responded to Friends and Family Survey said that they would recommend their GP practice. This compares to an average rate of 89% for England overall. Recommend Care Recommend Work Not recommend Care Not recommend Work 22 P a g e

23 Sustainable Development The CCG remains committed to the principles of sustainable development and continues to seek to integrate these principles into its daily operations. All staff members within our organisation are reminded to consider the environmental impact of what they do whether that be by thinking twice before printing documents, using recycling facilities available within the office or considering alternative options for travel to meetings. The trend noted in our last Annual Report towards increasing use of remote communication in place of face to face meetings has continued in 2016/17. All staff are encouraged to take responsibility for energy consumption and carbon reduction via internal communication (including the weekly team meeting), with suggestions such as printing in black and white versus colour being highlighted. To further support behavioural change a number of positive initiatives that promote healthy living have been implemented during 2016/17 (for example, lunch time group walking events). At a strategic level, the CCG is currently working on three major pieces of work which include a focus on sustainability. The first is the production of a Primary Care Estates Strategy ensuring that we have an estate portfolio which is able to meet the needs of the growing population of south Warwickshire is a key strategic aim for the CCG. The portfolio needs to be modern and efficient, as well as being suitably located to match the main areas of population growth in south Warwickshire. Sustainable development is, and will remain, an important consideration for the CCG when commissioning new GP premises developments or agreeing support for GP premises improvements. The CCG encourages compliance with Health Building Notes ( s/health-building-notes-core-elements), which provide best practice guidance on the design and planning of new healthcare buildings and on the adaptation/extension of existing facilities, including on the main issues relating to sustainability and energy efficiency that should be addressed throughout a building s life. Relevant development schemes will be required to use the BREEAM Healthcare methodology to demonstrate that they are built with sustainability in mind. The second piece of work is our Out of Hospital programme, which looks to provide integrated services that wrap around the needs of our most complex patients. The Out of Hospital programme is a major component of the Coventry and Warwickshire System Plan, the vision of which is a sustainable people centric system, in which our population are enabled to stay well, empowered to selfcare, and receive the right treatment in the right setting when they need it. Finally, in partnership with our Member Practices, we have begun to shape a plan (Transforming General Practice Together), which addresses the future sustainability of general practice. Transforming General Practice Together describes our plan to develop and implement a new model of primary care in south Warwickshire. In line with the General Practice Forward View, more effective use of technology will be one of the key characteristics of the new model. During 2016/17 the CCG has been successful in securing investment from the national Estates and Technology Transformation Fund to support two major technology schemes, including a telehealth scheme which will support people living with long-term conditions to self-care in their own homes, thereby reducing the need for both our workforce and service users to travel. The implementation phase of these projects will commence in 2017/18. We continue to recognise that the area where the CCG can have most impact on sustainability lies in how we commission services, especially with our major providers. There is a requirement in the NHS Standard Contract (Service Conditions SC18 Sustainable Development) that requires all providers to take reasonable steps to minimise their adverse impact upon the environment and further demonstrate their progress on 23 P a g e

24 climate change adaption, mitigation and sustainable development, including performance against carbon reduction management plans. In south Warwickshire each of our major providers has their own Sustainable Development Management Plan the two Trusts have provided a summary of their progress against these plans in their latest annual reports. South Warwickshire NHS Foundation Trust s Annual Report for 2015/16 ( highlights a range of sustainability projects planned for 2016/17. Coventry and Warwickshire Partnership NHS Trust also has a strong plan in place; further details can be found via the Annual Report for 2015/16 ( 24 P a g e

25 Improving Quality South Warwickshire NHS Foundation Trust (SWFT) The CCG is the Lead Commissioner for SWFT and uses a systematic approach to monitor the quality of the services it commissions from SWFT. Monitoring mechanisms include: maintenance of a quality dashboard detailing key performance indicators; serious incident monitoring and assurance; announced and unannounced quality visits; CQUIN (Commissioning for Quality and Innovation) scheme, which financially rewards the Trust for improved patient care; Clinical Quality Review Group meetings to discuss exceptions and improvements. Coventry and Warwickshire Partnership Trust (CWPT) NHS Coventry and Rugby Clinical Commissioning Group is the Lead Commissioner for CWPT. The CCG is a member of the CWPT Clinical Quality Review Group and during 2016 also held a number of Quality Liaison Meetings with the Trust where south Warwickshire specific quality related issues were discussed. Primary Care A Primary Medical Care Contract Management and Quality Improvement Framework ( the CCG Framework ) has been implemented by the CCG since the delegation of primary care (GP) contracting in The framework incorporates both quality improvement and contractual performance processes. Information from the NHS England Primary Care Dashboard and the NHS South Warwickshire CCG Primary Medical Care Dashboard is triangulated with intelligence from other sources and actions are determined for individual practices in line with the CCG Framework. Care Homes During 2016 the CCG worked in partnership with Warwickshire County Council and neighbouring CCGs to develop a joint outcomes-based service specification for care homes and completed a joint procurement exercise. The CCG continues to work closely with its local health and social care partners to monitor the quality of care provided by care homes. Monitoring methods include a Quality Performance Return, Key Performance Indicators, quality visits and review of local intelligence information. Warwickshire has an established escalation process via a Service Escalation Panel to agree and take action when issues in relation to the quality of care are identified. Membership of the panel includes Warwickshire County Council, the Coventry and Warwickshire CCGs, Safeguarding and the Care Quality Commission. Improvements to Quality during 2016/17 Examples of the quality improvement activities undertaken by the CCG quality team during 2016/17 included: Agreement with SWFT of the process for Clinical Harm Reviews and Root Cause Analysis (RCA) investigations for patients who have incurred lengthy cancer treatment waits. Detailed desk top reviews have been undertaken to improve understanding of specific quality issues, for example staffing levels at SWFT. An in-depth Quality Review Visit to SWFT Maternity Services has been undertaken. Quarterly training sessions and a quarterly newsletter for care home link nurses to disseminate information on the prevention and management of infections related to key organisms. A revised cleaning schedule, based on national cleaning standards promoted as a marker of good practice, was produced by a local care home and presented to 25 P a g e

26 other care home providers at a link champions study day. A modified version is being shared locally with the permission of the home to assist other homes in achieving improved compliance with cleaning standards. A Care Home Infection and Prevention and Control (IPC) manual has been launched, containing reference information regarding infection prevention, outbreak management and identification and management of infections related to key organisms. Partnership work between SWFT, Warwickshire County Council and neighbouring CCGs to deliver React to Red pressure ulcer prevention training for care homes. Development of a model Safeguarding Policy for use in Primary Care. Facilitated Practice Nurse education across a number of topic areas during the year including: o Clinical pathology and microbiology testing; o Antibiotics prescribing; o Infection control; o Paediatric dermatology; o Cancer survivorship; o Hypertension; o Identification and management of Learning Disability; o Diabetic patient education. Supportive visits to GP practices across south Warwickshire in relation to infection prevention and control; all practices visited received a written report and detailed recommendations along with timely education to support improvements. A health economy-wide Clostridium Difficile Infection (CDI) Reduction Strategy was developed and a CDI Strategy Group established to drive forward actions focused on reducing CDI rates across the health economy for 2016/17 and beyond, as well as improving outcomes for clients/patients who acquire CDI. All cases of CDI, regardless of where they are acquired, are now subject to a RCA process. In partnership with SWFT, the launch of an evidence-based Wound Care Formulary to be used across all community services, including primary care, district nursing and care homes. Improvement in the management of care for patients with Atrial Fibrillation, which is potentially a pre-cursor to strokes. Outcomes include: Improved identification and management of sepsis in the acute hospital setting. Significantly increased flu vaccination rates for staff working at SWFT. A reduction in the number and severity of pressure ulcers in care homes. Enhanced infection prevention and control in care homes, better supporting the maintenance of bed capacity in care homes and the acute hospital over the winter period and the management of patients with infectious diseases in the care home setting rather than in hospital. Reduced antibiotic prescribing in both hospital and community settings. Enhanced and better value wound management through the use of evidence-based products. Enhanced management of patients with Atrial Fibrillation. 26 P a g e

27 Patient Safety Threshold Oct-15 Nov-15 Dec-15 Oct-16 Nov-16 Dec-16 Safety Thermometer % Harm Free Care n/a 95.95% 96.20% 95.49% 96.58% 95.42% 97.28% Never Events VTE Risk Assessment 95% 98% 98% 98% 97% 97% 97.0% Duty of Candour Compliance 100% 100% 100% 100% 100% 100% 100% Sepsis Screening A&E 90% 95% 90% 94% 99% 97% 94% MRSA Screening (Elective & Emergency) 95% 95.70% 95.60% 95.89% 97.5% 97.5% 96.8% MRSA Number of Cases reported for SWFT C Difficile Number of Cases Reported Actual SWFT (Post 48 hrs). This represents every patient with CDI at SWFT not just SWCCG patients. QUALITY DASHBOARD Q3 2015/16 & Q3 2016/17 Tolerance (6) for full year Q Month Q Month /16 SWFT C Difficile cases: Of the 21 cases subjected to RCA, 3 cases were found to be avoidable with lapses in care. Therefore no financial penalty was incurred. The CCG acquired 88 cases against a trajectory of 60 for 2015/ /17 SWFT C Difficile cases: 12 cases have been reported year to date against a tolerance of 6 cases. 3 cases were found to be avoidable with lapses in care. The CCG have acquired 74 cases year to date against a trajectory of 60 Clinical Outcomes at SWFT Oct-15 Nov-15 Dec-15 Oct-16 Nov-16 Dec-16 SHMI RAMI SHMI at SWFT is within the expected range. RAMI at SWFT remains consistently lower than its peer. Complaints at SWFT Q3 2015/16 Q3 2016/17 Total number of complaints received n/a CQC SWFT CQC Inspections 2016/17 CQC Rating Requires Improvement (Published August 2016) CQC CWPT CQC Rating Area Are services safe? Are services effective? Are services caring? Are services responsive? Are services well-led? Rating Requires improvement Requires improvement SWCCG GP Practices Requires Improvement (Published July 2016) Number of Practices inspected Outstanding Good Good Requires improvement Requires improvement We are working with these organisations to address the improvements required and hope to see the benefits of this partnership in the coming months. 27 P a g e

28 Patient and Public Involvement and Engagement The CCG is committed to putting patients, carers and the wider public at the heart of everything that we do and to understanding what matters the most to them. Patient and public engagement and communications are, and will remain, priorities for us. Our engagement approaches target the whole population, including less often heard groups. We want local people to have genuine involvement in our decisions to transform and improve services and we recognise that it is only by listening and having a conversation with the people who use services that we will be able to commission quality health services for our population at the right time and in the right place. We remain focused on creating opportunities for patients, the public and our stakeholder partners to engage with us. Engagement with our stakeholders, especially patients and the public is a legislative requirement and statutory duty of the CCG (Section 14Z2 of the Health and Social Care Act 2012). We will continue to provide a range of opportunities for individual and collective engagement and we will ensure that our communications and engagement approaches are effective in both informing and listening. been reviewed from a public and patient communications and engagement perspective. A locally developed Engagement Assessment Tool is used to ensure a consistent approach. There will be occasions when engagement with patients, the public and stakeholders will suffice; however, there will also be circumstances where we will need to undertake a full consultation. The circumstances that will trigger a full consultation are not set out in statute or guidance. The CCG will use the test in section 244 of the NHS Act 2006 (together with the Local Authority (Public Health, Health and Wellbeing Boards and Health Scrutiny) Regulations 2013) to assess whether a requirement to consult is triggered. The CCG has a duty to inform both the local regional team for NHS England and the Health Overview and Scrutiny Committee ( HOSC ) before a consultation is launched. As appropriate, and in line with the emerging Communications and Engagement Strategy for the Coventry and Warwickshire System Plan, engagement activities during the Operating Plan period will take an integrated approach. To ensure that our local population is engaged and involved appropriately in our planned work programme for the coming two years, a Communications and Engagement Plan has been developed to align with the Operating Plan. In progressing individual projects and work programmes, the CCG maintains a robust approach to public involvement and engagement. In line with our QIPP Operational Pipeline Policy all Project Leads are required to consider engagement requirements. One of the functions of our Gateway Group is to assure the CCG that projects, whether they are at scoping, business case, implementation or evaluation phase, have 28 P a g e

29 Reducing Inequalities The Warwickshire Health and Wellbeing Board is a forum for councillors, commissioners (including CCGs) and communities to work together with other partners to improve the health and wellbeing of our local population and reduce health inequalities. The Health and Wellbeing Board is the local leader on tackling health inequalities. Among its key responsibilities is the production of the local Joint Strategic Needs Assessment ( JSNA ). By drawing on both hard data (i.e. statistics) and soft data (i.e. the views of local people and service data), the JSNA highlights who Warwickshire s priority groups are in relation to health and social care need. The JSNA aims to establish a shared, evidence-based consensus on the key local priorities across health and social care. It is used to develop both the Warwickshire Health and Wellbeing Strategy and the strategic plans of local CCGs. We have been able to clearly demonstrate how our Strategic Plan, Commissioning Intentions and our Annual Business Plan align with the priorities of the Joint Strategic Needs Assessment (JSNA) and Health and Wellbeing Strategy and that there is clear support for our Strategic Plan from the Health and Wellbeing Board. We have been heavily involved in the process of producing both the Warwickshire JSNA and Health and Wellbeing Strategy; a process which was led by the Director of Public Health and the Strategic Director for the People Group for Warwickshire County Council. Working relationships between the CCG and Warwickshire County Council are very close on a day-to-day basis and will continue to be formally recognised through the following mechanisms through the Operating Plan period: The Director of Public Health and Strategic Director of the People Group (Senior Responsible Officer for the Health and Wellbeing Board) members of the CCG Governing Body; The Director of Public Health presents the JSNA and Annual Report to the Governing Body and Members Council; The Chair of the CCG is a member of the Health and Wellbeing Board; The Chief Officer of the CCG is a member of two Health and Wellbeing Board sub-committees (The Executive Board and the Commissioning Board) The Head of Planning and Policy is a member of the JSNA Programme Board. The CCG has in place an Equality and Diversity policy which is publically available on the website together with The CCG s Equality and Diversity Objectives for The Equality Delivery System ( EDS2 ) report published in January 2017 The Equality and Diversity Report for These documents demonstrate how we comply with our duties under section 148 of the Equality Act 2010 (the public sector equality duty) and section 14T of the Health and Social Care Act 2012 and that we work in ways which ensure that equality and inclusion are embedded in to all of our functions and activities. Equality Act 2010 The Equality Act has two broad aspects. Firstly, it prohibits discrimination, harassment and victimisation against people with one or more of the following protected characteristics: Age; Disability; Gender reassignment; Pregnancy and maternity; Race; Religion or belief; Sex; Sexual orientation; Marriage or civil partnership. In addition, the Public Sector Equality Duty (PSED) places an obligation on public 29 P a g e

30 bodies including the CCG to be proactive in improving equality for people with one or more protected characteristics. It aims to help public authorities avoid discriminatory practices and integrate equality into core business. The PSED has a general duty and specific duties. The general duty is the main part of the legislation with the specific duties supporting public bodies to demonstrate performance and compliance. Our response to the Equality Act We are committed to making sure that equality and inclusion is a priority when planning and commissioning local healthcare, and tackling inequalities is one of our key priorities. To help us do this, we work closely with local communities to understand their needs and how best to commission the most appropriate services to meet those needs. Equality training All CCG staff members have participated in mandatory equality and inclusion training through an e-learning module. During 2016/17 our Governing Body undertook a facilitated interactive training session to ensure that members collectively and individually understand the CCG s duties in this area and the implications of the PSED for people commissioning health services. Equality Delivery System The Equality Act requires the CCG to annually publish information which demonstrates the progress that it has made in maintaining compliance with the Act annually. In order to fulfil this duty the CCG has implemented the NHS Equality Delivery System (EDS2), a system designed to support us in our commissioning role and our providers of services to deliver better outcomes for the local population and better working environments for staff which are personal, fair and inclusive. An update on the progress of the EDS2 has been made during 2016/17 and can be found on our website. Equality Objectives During 2016/17 the CCG refreshed its Equality Objectives. The new Objectives were published in January 2017 and are formulated from the organisation s vision and values. The Objectives are: I N S IGHT Establishing a robust evidence base to inform commissioning To collect the right data to ensure that we commission effectively for the population of south Warwickshire I N S P I R E Developing our leadership, capacity, competency and culture I N T E G R A T E Reducing health inequalities and improving access You should expect to receive the most appropriate care no matter who you are I N V O L V E Embedding public involvement in commissioning Senior leadership to support and empower our staff to proactively embed equality and public engagement To involve our local community, including groups that we do not hear from often, in shaping services 30 P a g e

31 Updates on the progress the CCG has made to achieve its Equality Objectives and meet its duties continue to be reported to the Clinical Quality and Governance Committee. Policies The CCG utilises NHS Jobs in carrying out its recruitment activities. Information is gathered on six key protected characteristics which is collated and reviewed annually to ensure that recruitment practices for the CCG are fair and equitable. The CCG further demonstrates evidence of due regard by embedding equality consideration in the decision making processes of the Governing Body and its committees. Equality, inclusion and human rights obligations Given that the CCG employs a small number staff it is exempt from publishing employee demographic information. However, the CCG regularly reviews its workforce composition to ensure its organisational development plans are appropriate and that all staff, irrespective of protected characteristics, are treated fairly. 31 P a g e

32 Improving the Health and Wellbeing of our Local Population Much of our work which started in 2016/17 will remain ongoing into 2017/18 and beyond as we look to develop and deliver the transformational change laid out in our Strategic Plan - Translating our 2020 vision into reality, the 2016/17 Annual Business Plan and the 2017/19 2 Year Operating Plan (all documents are available on the CCG website ( -Us/Publications-and-Policies) Out of Hospital Maintaining independence and preventing unnecessary admission into hospital will be one of the fundamental goals of delivering effective care out of hospital. In order to achieve this across Coventry and Warwickshire we have established an Out of Hospital Programme. Through this programme of transformation, the three local CCGs and two councils will deliver the following benefits: A healthier population who are empowered to self-care and who receive the right treatment in the right setting when they need it. Effective demand management reducing pressure on the system. Improved care and quality when services do need to be provided. A financially sustainable health and social care system. A collaborative of providers has been meeting and has developed a service design model. This has followed a great deal of engagement with the public and this will continue. Fit for Frailty Our aim is to continue to improve care for local patients, using the best practice evidence and a local developed programme. Following the success of last year s Over 75 s scheme and best practice evidence from the British Geriatric Society, July saw the launch of the Fit for Frailty programme across all 35 GP practices in south Warwickshire. The programme comprises of three key components: Prevention and early intervention Supporting those with frailty Managing our most poorly patients. All of these components are supported by foundation projects including training and education for all involved, ensuring accurate and timely reporting and the core principle of effective care planning with the patients and where applicable their families and/or carers. Transforming Care for people with Learning Disabilities The last 12 months have seen commissioners from across Coventry, Warwickshire and Solihull working together to establish a local service that supports people with learning disabilities to move out of institutions and live in their local communities Coventry and Warwickshire Partnership NHS Trust has established an Intensive Community Support Team that supports people in their community and this has meant together we have been able to reduce the number of inpatient beds. By strengthening the support available in the community, promoting prevention and offering early intervention we aspire to improve the quality of life for some of the most vulnerable members of our society. The outcome has been very positive and this project will continue over 2017 and 2018 as we continue to look to support more and more people to live in their community of choice. Stroke Improving Stroke services for Coventry and Warwickshire patients is a priority for us. Our Governing Body approved the Improving Stroke Outcomes for Coventry and Warwickshire Business Case following public engagement and a consultation process has been designed in anticipation of NHS England approval. 32 P a g e

33 The business case is our response to the regional approach for improving stroke services. We are implementing the Midlands and East Stroke Service Specification which will ensure stroke services are fully integrated with an end to end pathway for pre hospital, assessment, treatment, rehabilitation, and long term care. Mental Health In terms of adult mental health we are delighted to report that the CCG continues to invest in this area and the following initiatives have been put in place for 2016/17: Adult Mental Health Acute Team - The CCG has invested an additional 200,000 per annum to increase the operating hours for this vital team who provide an invaluable service for people with mental health crisis. Primary Care Mental Health Workers - July 2016 saw the launch of a new service being piloted in both Croft and Waterside Medical Centres which sees Rethink Primary Care mental health workers being located within general practice. Cofunded by the CCG, Rethink, Warwickshire County Council Public Health and the practices themselves the service looks to provide people with one to one early intervention and support. Adult Neurodevelopment Service - December 2016 saw the launch of the new Adult Neurodevelopmental Service in 8 practices. Following this successful pilot this has now being rolled out across all 35 practices in south Warwickshire. This much needed service will provide diagnosis, therapy and interventions for patients with suspected Autism Spectrum Disorder (ASD) with or without Attention Deficit Hyperactivity Disorder (ADHD). Dementia Diagnosis - We are piloting a new Dementia Diagnosis service that is based in general practice. Eight practices are currently running this new service in which, together with the support of the Coventry and Warwickshire Partnership Trust (CWPT) and Age UK, they are diagnosing and treating people with dementia. Child and Adolescent Mental Health Services (CAMHS) - redesign and transformation Children s and Adolescent Mental Health Services (CAMHS) across Warwickshire will benefit from a redesign that is being led by a joint group of commissioners and stakeholders including Coventry and Warwickshire CCGs, local authorities, public health, and parents. A Redesign Project Board was established and has overseen a comprehensive coproduction process between all stakeholders which has led to the development of a new outcomes framework for children and young people s mental health service for Warwickshire and Coventry. The process was led by Young Minds who engaged with young people and their families. Over 750 young people, parents, carers, and professionals who either provide or refer into CAMHS contributed to the development of the new outcomes framework. Investing in the local community - Joint Healthy South Warwickshire Funding Award 2016 Public Health Warwickshire has coordinated a joint funding opportunity aimed at community and voluntary sector organisations in South Warwickshire. Public Health Warwickshire, South Warwickshire CCG, Warwick and Stratford District Councils have made 80,000 available for the community and voluntary sector to bid against to deliver projects tackling: Unhealthy lifestyle behaviours including (but not limited to) smoking and excessive alcohol consumption. Obesity and obesity related long term conditions e.g. increase healthy eating and/or physical activity Utilisation of outdoor space for exercise/health. Unplanned hospital admissions and supporting people to stay happy, healthy and well in their homes. 33 P a g e

34 Social Isolation people reporting they have as much contact as they would like. Self-reported mental wellbeing using Warwick and Edinburgh Mental Wellbeing Scale. 34 P a g e

35 Accountability Report - Statutory Declaration As Accountable Officer I confirm that, to the best of my knowledge and belief, I have properly discharged the responsibilities set out under the National Health Service Act 2006 (as amended), Managing Public Money and in my Clinical Commissioning Group Accountable Officer Appointment Letter. I also confirm that: as far as I am aware, there is no relevant audit information of which the CCG s auditors are unaware and that, as Accountable Officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the CCG s auditors are aware of that information; the annual report and accounts as a whole is fair, balanced and understandable; and I take personal responsibility for the annual report and accounts and the judgments required for determining that it is fair, balanced and understandable. Signed: Gillian Entwistle Chief Officer (Accountable Officer) 30 May P a g e

36 Corporate Governance Report Members Report Member Practices The following GP practices were members of NHS South Warwickshire CCG at 31 March 2017: Abbey Medical Centre Alcester Health Centre Arden Medical Centre The Arrow Surgery Avonside Health Centre Bidford Surgery Bridge House Medical Centre Budbrooke Medical Centre Cape Road Surgery Castle Medical Centre Clarendon Lodge Surgery Croft Medical Centre Cubbington Road Surgery Fenny Compton Surgery Harbury Surgery Hastings House Surgery Henley-in-Arden Medical Centre Kineton Surgery Lapworth Surgery Lisle Court Medical Centre Meon Medical Centre The New Dispensary Pool Medical Centre Priory Medical Centre Rother House Surgery Sherbourne Medical Centre Shipston Medical Centre Southam Surgery Spa Medical Centre St Wulfstan Surgery Tanworth Surgery Trinity Court Surgery Warwick Gates Medical Centre Waterside Medical Centre Whitnash Surgery Members Council Our Members Council is part of our formal governance structure and comprises a representative from each GP practice to ensure all GP practice views are heard. The group meets on a bi-monthly basis to hold the Governing Body, Leadership Team and Executive to account and to help determine the strategic direction of the CCG. The Members Council has specific responsibility to approve the following documents: Commissioning Strategy and Annual Business Plan; Annual Commissioning Intentions CCG Budget Members Engagement Strategy Annual Report Procurement Strategy In addition the Members Council is responsible for overseeing any amendments to the constitution and any change of CCG name. The Governing Body Our Governing Body, which meets regularly in public, comprises a diverse range of skills and experience and brings together clinicians, lay representatives and management staff. At the end of 2016/17 the Governing Body comprised 9 male and 5 female representatives as follows: Dr David Spraggett, CCG Chair Dr Richard Lambert, Assistant Clinical Chair Rodney Pitts, Lay Member for Governance and Audit and Deputy Chair Robin Verso, Lay Member Generalist Lay Member, Patient and Public Involvement (currently vacant, Laura Fulcher held this post until 31 August 2016) Dr Adrian Parsons GP Dr Ian Allwood GP Dr Sukhi Dhesi GP Dr Jill Crowfoot GP Dr Karen Clarke GP Elaine Strachan-Hall Registered Nurse Gillian Entwistle Chief Officer Paul Sheldon Chief Finance Officer (Liz Flavell-Smith (nee Murray) was Acting Chief Finance Officer from 01 May 2016 to 31 December 2016 and 36 P a g e

37 Paul Jarvis was Chief Finance Officer from 01 April 2016 to 15 May 2016.) Dr John Linnane, Director of Public Health (Warwickshire County Council co-optee) John Dixon Director of People Services (Warwickshire County Council co-optee) 37 P a g e

38 Governing Body and Director Profiles Dr David Spraggett Gillian Entwistle Dr Richard Lambert CCG role: Chair (April 2013 present) Additional roles: GP Principal, trainer for GP registrars, educational supervisor for GP Specialist Training Previous employment: Warwickshire Health Authority, South Warwickshire PCT, NHS Warwickshire, GMC associate for performance assessment and fitness to practice CCG role: Chief Officer (Accountable Officer) (April 2013 present) Previous employment: Coventry and Warwickshire NHS Cluster, NHS Warwickshire, Solihull Health Authority, Redditch & Bromsgrove PCT, Worcestershire PCT, Derbyshire Royal Infirmary, University Hospitals Nottingham CCG role: Assistant Clinical Chair (April 2013 present) CCG lead for: Strategy, prescribing, child health Additional roles: GP, Honorary Clinical Lecturer at Warwick University. Previous employment: South Warwickshire Primary Care Group, Warwickshire PCT Paul Sheldon Dr Ian Allwood Dr Adrian Parsons CCG role: Chief Finance Officer (from 1 January 2017-present) Previous employment: Redditch and Bromsgrove CCG and Wyre Forest CCG, Sandwell and West Birmingham CCG, Black Country NHS Cluster, Sandwell PCT, Sandwell Health Authority Paul Jarvis CCG role: Chief Finance Officer (01 April 15 May 2016) Liz Flavell-Smith (nee Murray) CCG role: Acting Chief Finance Officer (1 May 31 December 2016) CCG role: Member Practice Representative (April 2013 present) CCG lead for: End of life, elderly/frailty, acute care, continuing healthcare, IT Additional roles: GP, Endoscopist Previous employment: South Warwickshire Primary Care Group, Warwickshire PCT CCG role: Member Practice Representative (April 2013 present) Additional roles: GP, Governor of South Warwickshire NHS Foundation Trust, LMC member CCG lead for: Elective care, NHS111, out-of-hours care, primary care quality improvement, individual cases Previous employment: South Warwickshire NHS Foundation Trust 38 P a g e

39 Governing Body and Director Profiles Dr Karen Clarke Dr Jill Crowfoot Dr Sukhi Dhesi CCG role: Member Practice Representative (May 2013 present) CCG lead for: Heart failure, research Additional roles: GP Previous employment: Stratford GP out-of-hours CCG role: Member Practice Representative (April 2014 present) Additional roles: GP CCG role: Member Practice Representative (April 2013 present) CCG lead for:, Patient engagement, dementia, mental health, maternity, long term conditions, Caldicott Guardian (Mar 2014 present) Additional roles: GP, Out of Hours GP in Coventry Elaine Strachan-Hall Rodney Pitts Robin Verso CCG role: Registered Nurse (April 2013 present) CCG lead for: Clinical Quality and Governance Committee, equality and diversity Additional roles: Interim NHS Nurse Manager Previous employment: Nurse Director at a number of acute and teaching hospitals CCG role: Lay Member for Audit and Governance (April 2013 present) CCG lead for: Audit Committee, Performance Committee Additional roles: Principal of accountancy practice Previous employment: Deloitte, Chair of Asra Housing Group, Chair of Solihull Health Authority, Non-Executive Director of Warwickshire PCT, Member of Court at University of Birmingham CCG role: Lay Member Generalist (April 2015 present) CCG lead for: Primary Care Commissioning Committee Previous employment: Economist and Accountant in the public and private sectors; Management Consultancy; Deputy Treasurer and Director at Coventry City Council; Chair Warwickshire Probation Trust 39 P a g e

40 Governing Body and Director Profiles Laura Fulcher Dr John Linnane John Dixon CCG role: Lay Member for Public and Patient Engagement (April 2014 August 2016) CCG lead for: Patient and Public Participation Group Previous employment: Teaching English in South Warwickshire Schools. CCG role: Co-opted Director of Public Health (April 2013 present) CCG lead for: Advisor on health and wellbeing, health inequalities Additional roles: Director of Public Health at Warwickshire County Council, Health and Wellbeing Board, regional advisor for the Faculty of Public Health CCG Role: Co-opted Director of Social Services (January present) Additional roles: Strategic Director for People Group of Services at Warwickshire County Council, Chair, In Control Partnership, Chair, Age UK West Sussex, Trustee, Aldingbourne Trust, West Sussex, Director, Eden Health and Social Care Alison Walshe Anna Hargrave Alison Scott CCG role: Director of Quality and Governance (Executive Nurse) (April 2013 present) Previous employment: Coventry and Warwickshire PCT Cluster, Redditch and Bromsgrove PCT, NHS Coventry, Sandwell Health Authority CCG role: Director of Strategy and Engagement (April 2013 present) Previous employment: NHS Warwickshire, KPMG, NHS Institute for Innovation and Improvement, Nottinghamshire County Council CCG role: Director of Performance and Contracting (April 2016 present) Previous employment: Fylde and Wyre CCG, Central Lancashire PCT, Preston PCT, North West Health Authority, Lancashire Teaching Hospitals NHS Trust 40 P a g e

41 Committees The following committees have been in place throughout 2016/17: Audit Committee: The Committee is comprised of the following members: Rodney Pitts, Lay Member for Governance and Audit and Deputy Chair Robin Verso, Lay Member Generalist Dr Adrian Parsons GP Dr Ian Allwood GP Performance Committee: The Committee is comprised of the following members: Rodney Pitts, Lay Member for Governance and Audit and Deputy Chair Dr David Spraggett, CCG Chair Dr Richard Lambert, Assistant Clinical Chair Gillian Entwistle Chief Officer Alison Walshe Director of Quality and Governance (Executive Nurse) Paul Sheldon Chief Finance Officer (previously Liz Flavell-Smith (nee Murray) and Paul Jarvis) Anna Hargrave Director of Strategy and Engagement Robin Verso, Lay Member Generalist from mid-november 2016 Laura Fulcher, Lay Member for Public and Patient Engagement to 31 August 2016 Dr Gareth Rowland GP Associate Clinical Quality and Governance Committee: The Committee is comprised of the following members: Elaine Strachan-Hall Registered Nurse Dr Richard Lambert, Assistant Clinical Chair Dr Sukhi Dhesi GP Dr Karen Clarke GP Lay Member for Public and Patient Engagement position vacant (Laura Fulcher until 31 August 2016) Secondary Care Doctor position vacant Dr John Linnane, Director of Public Health (Warwickshire County Council co-optee) Alison Walshe Director of Quality and Governance (Executive Nurse) Anna Hargrave Director of Strategy and Engagement Robin Verso, Lay member Generalist to mid-november 2016 Dr Kim Panting GP Associate Primary Care Commissioning Committee: The Committee is comprised of the following members: Robin Verso, Lay Member Generalist Dr David Spraggett, CCG Chair Dr Ian Allwood GP Dr Richard Lambert, Assistant Clinical Chair Rodney Pitts, Lay Member for Governance and Audit and Deputy Chair Gillian Entwistle Chief Officer Paul Sheldon Chief Finance Officer (previously Liz Flavell-Smith (nee Murray)) Alison Walshe Director of Quality and Governance (Executive Nurse) Anna Hargrave Director of Strategy and Engagement Remuneration Committee: For members please see the Remuneration Report on page 60. Further details of the work, membership and attendance of all committees are detailed in the Annual Governance Statement on page 45. Conflicts of interest A conflict of interest occurs: Where an individual s ability to exercise judgement or act in one role is or could be impaired or otherwise influenced by his/her involvement in another role/relationship. The individual does not need to exploit his/her position or obtain an actual benefit, financial or otherwise; Where there is a potential for competing interests and/or a perception of impaired judgement or undue influence. 41 P a g e

42 Conflicts can arise from: Indirect financial interest; Non-financial interest i.e., kudos/reputation Professional/personal relationships with others; Conflicts of loyalty may also arise e.g., in respect of an organisation of which the individual is a member or has an affiliation. We will ensure that all member practices and all individuals who hold positions of authority or who can make or influence decisions are in a position whereby: It is clear to everyone from the outset that they have this interest through the Public Register of Interest; Systems and processes ensure that at any time in discussions or proceedings where an individual feels that their interest maybe relevant, they have a mechanism for declaring this so that any comments they make are fully understood by all others to be within that context Declaration of Interest. Where this conflict could have a material interest on any decision or process, the individual will play no part in influencing or making the relevant decision. This will be absolutely essential in instances where the individual or interest they represent may derive financial gain from the decision. Declared interests are recorded in the CCG Register of Interests which is available on the website. Personal Data Related Incidents There were no personal data related incidents during the financial year. Modern Slavery Act South Warwickshire CCG fully supports the Government s objectives to eradicate modern slavery and human trafficking but does not meet the requirements for producing an annual Slavery and Human Trafficking Statement as set out in the Modern Slavery Act P a g e

43 Declaration Each individual who is a member of the CCG at the time the Members Report is approved confirms: so far as the member is aware, there is no relevant audit information of which the CCG s auditor is unaware that would be relevant for the purposes of their audit report the member has taken all the steps that they ought to have taken in order to make him or herself aware of any relevant audit information and to establish that the CCG s auditor is aware of it. 43 P a g e

44 Corporate Governance - Statement of Accountable Officer s Responsibilities The National Health Service Act 2006 (as amended) states that each Clinical Commissioning Group shall have an Accountable Officer and that Officer shall be appointed by the NHS Commissioning Board (NHS England). NHS England has appointed the Chief Officer to be the Accountable Officer of South Warwickshire CCG. The responsibilities of an Accountable Officer are set out under the National Health Service Act 2006 (as amended), Managing Public Money and in the Clinical Commissioning Group Accountable Officer Appointment Letter. They include responsibilities for: the propriety and regularity of the public finances for which the Accountable Officer is answerable, keeping proper accounting records (which disclose with reasonable accuracy at any time the financial position of the Clinical Commissioning Group and enable them to ensure that the accounts comply with the requirements of the Accounts Direction), for safeguarding the CCG s assets (and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities), the relevant responsibilities of Accounting Officers under Managing Public Money, ensuring the CCG exercises its functions effectively, efficiently and economically (in accordance with Section 14Q of the National Health Service Act 2006 (as amended)) and with a view to securing continuous improvement in the quality of services (in accordance with Section 14R of the National Health Service Act 2006 (as amended)), ensuring the CCG complies with its financial duties under Sections 223H to 223J of the National Health Service Act 2006 (as amended). Under the National Health Service Act 2006 (as amended), NHS England has directed each CCG to prepare for each financial year financial statements in the form and on the basis set out in the Accounts Direction. The financial statements are prepared on an accruals basis and must give a true and fair view of the state of affairs of the CCG and of its net expenditure, changes in taxpayers equity and cash flows for the financial year. In preparing the financial statements, the Accountable Officer is required to comply with the requirements of the Group Accounting Manual issued by the Department of Health, and in particular to: Observe the Accounts Direction issued by NHS England, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis; Make judgements and estimates on a reasonable basis; State whether applicable accounting standards as set out in the Group Accounting Manual issued by the Department of Health have been followed, and disclose and explain any material departures in the financial statements; and Prepare the financial statements on a going concern basis. 44 P a g e

45 Annual Governance Statement Introduction and Context The CCG was licenced from 1 April 2013 under provisions enacted in the Health & Social Care Act 2012, which amended the National Health Service Act As at 01 April 2015, the CCG was licenced without conditions. Scope of Responsibility As Accountable Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the CCG s policies, aims and objectives, whilst safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Managing Public Money. I also acknowledge my responsibilities as set out in my CCG Accountable Officer Appointment Letter. I am responsible for ensuring that the CCG is administered prudently and economically and that resources are applied efficiently and effectively, safeguarding financial propriety and regularity. Compliance with the UK Corporate Governance Code We are not required to comply with the UK Corporate Governance Code. However, we have reported on our Corporate Governance arrangements by drawing upon best practice available, include those aspects of the UK Corporate Governance Code we consider to be relevant to the CCG and best practice. This Governance Statement is intended to demonstrate how the CCG had regard to the principles set out in the Code considered appropriate for CCGs for the financial year ended 31 March The Clinical Commissioning Group Governance Framework The National Health Service Act 2006 (as amended), at paragraph 14L(2)(b) states: The main function of the governing body is to ensure that the group has made appropriate arrangements for ensuring that it complies with such generally accepted principles of good governance as are relevant to it. The Constitution, including Standing Orders, Prime Financial Policies and Scheme of Reservation and Delegation, has been reviewed throughout the year to ensure they accurately reflect the governance context in which the CCG operates. The amendments made to the Constitution have not fundamentally altered the way the CCG operates nor meets its statutory duties, however have enabled the CCG to ensure it works effectively and meets the requirements of its members. The Governing Body consists of a Chair who is one of seven GPs who are elected by Members to the Governing Body, Accountable Officer, Chief Finance Officer, Registered Nurse, Secondary Care Consultant (currently vacant) and three Lay Members (one current vacancy). The Governing Body also co-opts Warwickshire County Council s Director of Public Health and Director of People Services. GP Governing Body Members and Lay Members are appointed for variable terms to provide stability to the Governing Body and their appointment can be terminated by either the Member or the CCG. Governing Body Members remuneration is detailed in the Remuneration and Staff Report. The Governing Body meets regularly in public. The Governing Body is responsible for the overall management and performance of the CCG and approves its long term objectives and strategy. While day-to-day management is delegated to the Accountable Officer, there is a formal schedule of Matters Reserved for the Board within the CCG Constitution. This provides a framework for the Governing Body and Members to oversee the CCG s business. The Scheme of Reservation and Delegation clearly outlines the breakdown of responsibilities reserved by members, and those delegated to the Governing 45 P a g e

46 Body, its committees and other senior managers within the CCG. The Governing Body Members bring a range of skills and experience to their role on the Governing Body to ensure the balance, completeness and appropriateness of the discussions and determinations. The Governing Body is supported in fulfilling its duties by a number of Committees that have been formally established and given delegated authority to act on its behalf. The subcommittee arrangements have been regularly reviewed and all changes to Committee remit or terms of reference have been incorporated within our Constitution and approved by the Governing Body and NHS England. Each Committee receives a regular set of reports, as outlined within their terms of reference, and minutes are provided to the Governing Body after each meeting. Governing Body committees include: Audit Committee provides the Governing Body with an independent and objective view of the CCG s financial systems, financial information and compliance with laws, regulations and directions governing the CCG. Remuneration Committee reviews all aspects of remuneration and contractual issues for the Accountable Officer and Very Senior Managers, Governing Body GPs and Lay Members, redundancy/early retirement proposals for all staff and payments to independent contractors for CCG work. Clinical Quality and Governance Committee undertakes a key role in respect of monitoring all aspects of quality and patient safety across primary and secondary care including Safeguarding of adults and children. The committee also reviews IG Toolkit compliance, emergency planning and business continuity issues, health and safety, and compliance with equalities legislation. Performance Committee undertakes a key role in respect of reviewing reports on financial monitoring and key performance indicators. Performance Committee makes recommendations on financial and quality performance (including NHS Constitution targets) and supports work on the transformation and integration of health and social care services across South Warwickshire through reviewing the delivery of QIPP programmes. Primary Care Commissioning Committee - responsible for, inter alia, making collective decisions on the review, planning and procurement of primary care services under delegated authority from NHS England. The relationship between the Members, the Governing Body and its Committees is shown through the Committee structure below. 46 P a g e

47 Name Position Governing Body (includes 2 Extraordinary meetings) Dr David Spraggett Paul Jarvis* Liz Flavell- Smith** Paul Sheldon*** Gillian Entwistle Alison Walshe Anna Hargrave Dr Richard Lambert Dr Adrian Parsons Dr Ian Allwood Dr Sukhi Dhesi Dr Jill Crowfoot Dr Karen Clarke Elaine Strachan Hall Rodney Pitts Laura Fulcher**** Chair of Governing Body Chief Finance Officer Acting/Deputy Chief Finance Officer Chief Finance Officer Chief Officer Director of Quality and Governance Director of Strategy and Engagement Assistant Clinical Chair GP Member GP Member GP Member GP Member (Development) GP Member 2016/17 COMMITTEE MEMBERSHIP AND ATTENDANCE RECORD Chair 7/8 Performance Committee Registered Nurse 7/8 - Lay Member for Audit and Governance Lay Member for Patient and Public Engagement Robin Verso Lay Member - Generalist (stand in for L Fulcher) John Linnane John Dixon Dr. Kim Panting Dr. Gareth Rowland Co-opted WCC Director of Public Health Co-opted WCC Strategic Director of Social Services Clinical Quality And Governance Committee Primary Care Committee Audit Committee 10/12-6/7 - Remuneration Committee - 1/ /6 8/8-7/7 4/4-2/2 3/ /1 - Chair 2/3**** 8/8 11/12-6/7-3/3-9/12 5/5 7/ /12 5/5 5/ /8 10/12 3/5 6/7-3/3 8/ /5 3/3 8/ /7 5/5-7/8-5/ / /8-5/ /8 Chair 10/12 Chair 4/5-6/ Chair 2/2 4/6 1/ /8 4/4 3/3 Chair 7/7 5/5 3/3 3/5 2/3 3/8-0/ / GP Associate - - 3/ GP Associate - 11/ *Paul Jarvis was Chief Finance Officer from 1 April-15 May **Liz Flavell-Smith (nee Murray) was Acting Chief Finance Officer from 1 May- 31 December 2016 ***Paul Sheldon was Chief Finance Officer from 1 January 2017 to present. ****Laura Fulcher resigned her post on 31 August R Verso took over from L Fulcher in mid-november ****D Spraggett did not attend the Remuneration meeting due to a conflict of interest exclusion. 47 P a g e

48 The terms of reference of Governing Body Committees are contained within the CCG Constitution which is published on the CCG s website at Each Committee s terms of reference outlines the scope, function and duties of the committee. The Governing Body reviews its own effectiveness on an ongoing basis and has made amendments to its Constitution and Committee Terms of Reference as a result. The Clinical Commissioning Group Risk Management Framework The CCG has a responsibility to ensure that the organisation is properly governed in accordance with best practice corporate, clinical and financial governance. Every activity that the CCG undertakes or commissions others to undertake on its behalf, brings with it some element of risk that has the potential to threaten or prevent the organisation achieving its objectives. The risk registers and other systems of internal control are an evolutionary process designed to identify and prioritise the risks to the delivery of aims and objectives, evaluate the likelihood of those risks occurring and the impact should they be realised, and to manage them efficiency, effectively and economically. The risk registers are reviewed and updated each month by the Senior Management Team. The Operational Risk Register is reviewed monthly by the Executive Team and bi-monthly by the Clinical Quality and Governance Committee where gaps in either assurance or controls are identified. All lower level risks are included on departmental and project risk registers and monitored appropriately internally. All staff and stakeholders are encouraged to identify risk. The Assurance Framework is designed to provide the CCG with a comprehensive method for the effective and focused management of the principal risks to meeting the corporate objectives. The Assurance Framework is reviewed at every Governing Body meeting and every Audit Committee meeting. Control measures are in place to ensure that all the CCG s obligations under equality, diversity and human rights legislation are complied with. For example, all CCG policies are required to include an Equality Statement and have undertaken either impact assessment screening or full assessment as part of core business. A risk management process is in place to identify and manage information risks. This consists of proactive risk assessments on key information assets, investigation of information-related incidents and review of information related complaints. Risk Assessment The CCG identifies, assesses, prioritises and records its risk profile through a variety of systems both internal, such as the risk registers, Assurance Framework and business continuity planning, and external through our collaborative working arrangements on our Better Care Fund, Better Together five year strategy and Sustainability and Transformation Plan. The review of risks and current control measures enable risks to be prioritised to aid the CCG to determine the degree of risk acceptable i.e., risk tolerance. The CCG has a common template for the assessment and analysis of all risks and uses a 5 x 5 risk scoring matrix giving equal weighting to both the impact and the likelihood of the risk. This risk tool provides both a qualitative and quantitative analysis of the risk and is used to assess the severity of the risk for all events. All identified CCG risks are owned, scored and assigned to a strategic objective. The Audit Committee has a specific responsibility to maintain oversight and scrutiny of the risk management arrangements as part of its portfolio to review all systems of internal control and governance across the totality of the CCG functions. 48 P a g e

49 Principal Risks for the clinical commissioning group The CCG identifies risks, which are aligned to our corporate objectives, at the beginning of the year and the Governing Body reviews the Assurance Framework at every meeting. All risks were effectively managed. Key risks rated high through the year were: Failure to achieve the 2016/17 Financial Plan and achieve a 1% surplus, and Failure to deliver the QIPP target: In line with NHS England s (NHSE) planning requirements, the CCG s control total for 2016/17 was 1% of the organisation s total resource allocation, i.e. a 3.3m surplus. The CCG commenced 2016/17 with an underlying financial deficit of 5.3m and a significant QIPP target of 14m. Despite these pressures the CCG made in-roads into tackling the underlying deficit during the year reducing it to 3m by the end of 2016/17, achieved full delivery of its QIPP plan by year-end, and met the required control total surplus. The current QIPP Plan includes a high value for acute based QIPPs requiring provider engagement/support: During 2016/17 the CCG has been rigorous with its contract monitoring of the SWFT contract in order to ensure delivery of the transactional acute QIPP schemes to plan. During the course of the year partnership working with SWFT has identified the potential for more transformational QIPP schemes, such as transferring activity from secondary to primary care to improve patient experience and reducing costs for both the commissioner and the provider. A QIPP Board, attended by both organisations, has been set up to drive this forward this approach. The Arden & GEM commissioning support services do not deliver business critical functions as per the Service Level Agreement: The CCG buys in commissioning support services from Arden & GEM Commissioning Support via a service level agreement (SLA). During the year there have been challenges with regards to quality in some service areas which have required escalation and joint resolution, in particular, business intelligence and Continuing Healthcare, both of which have been subject to recovery action plans and weekly monitoring. Both these services were tendered by the three CCGs during 2016/17 via the NHSE Lead Provider Framework together with the Medicines Management service. The tendering process put an additional risk into the system during 2016/17 as staff job security fears were raised. Whilst Arden & GEM CSU won the tender for Business Intelligence (and Medicines Management), and this service has since stabilised, CHC services remain an on-going concern because no contract award was made. Discussions are now taking place regarding an embedded service model for South Warwickshire CCG whilst further work is undertaken to explore the preferred long term option. The active management of these risks was a high priority for the CCG for 2016/17 and strong performance management of the new contracts is a high priority for the CCG moving into 2017/18. Transforming Care: Governance across 7 entities and the inability to move money around the system to reflect new delivery models compromises the discharge of individuals from hospital: The national Transforming Care Programme (TCP), focused on people with learning disability and/or autism, with behaviour that challenges, originated from quality concerns at Winterborne View hospital. The programme is focused on ensuring that such individuals are not inappropriately accommodated in a hospital environment and, rather, are supported to live at home in the community with appropriate community support. Coventry, Warwickshire and Solihull are a fast-track partnership and, as such, are at the forefront nationally in respect of redesigning models of care and commissioning arrangements across Health and Social Care. 2016/17 saw the closure of Gosford Ward at the Caludon 49 P a g e

50 Centre in Coventry to new admissions, as well as the discharge of a number of individuals from hospital based provision. Fast-track status attracted non-recurrent funding to the TCP in 2015/16, and the closure of Gosford Ward released some recurrent funding for a community based intensive support team. However, the discharge of individuals from NHSE funded specialised services beds, and the need for complex health and social care packages in the community, introduces significant challenges financially for the TCP if money does not move around the system accordingly. Whilst pooled budgets and joint commissioning arrangements are embedded within TCP discussions, the four CCGs and three Local Authorities remain very concerned that NHSE funding will not follow the discharge of patients from NHSE commissioned specialised services beds and this will continue to be a cost pressure to local budgets. This will remain a high risk area moving into 2017/18. Delivery of the 2016/17 planned surplus (control total) set by NHS England: In line with NHS England s (NHSE) planning requirements, the CCG s control total for 2016/17 was to deliver a 3.3m surplus which is 1% of the organisation s total resource allocation. 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 provider 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 South Warwickshire CCG has released its 1% reserve to the bottom line, resulting in an additional surplus for the year of 3.6m. This additional surplus will be carried forward for drawdown in future years. Overall the CCG s QIPP programme was 13.9m for 2016/17. Pressure on the CCG s finances arose throughout the year across areas of expenditure in Mental Health placements and hospital activity; both acute and nonacute. Despite these pressures the CCG remained on course, and did indeed deliver its financial plan throughout the year. Looking forward to the next financial year the continued constraints on resource growth, relative to ever increasing pressures on hospital and other health services, indicates achieving the required financial targets will be even more challenging than in 2016/17. The CCG s 2017/18 financial control total set by NHS England: The CCG is again required to deliver a 3.3m (1%) surplus in line with NHS England s expectations. The impact of funding anticipated growth from population increases and price increases has resulted in the need to plan to deliver 16.2m of QIPP savings (4.4% of the CCG s resource allocation in 2017/18). This compares to 13.9m delivered in 2016/17, and 7m in 2015/16. The size of the challenge must not be underestimated however the CCG is optimistic that continued joint working with our local partners in health and social care, and with the support of patients and public, QIPP delivery is achievable. The CCG has developed a comprehensive programme based approach to efficiencies, which includes a focus on the national Right Care initiative. This initiative highlights variations in volume and value of services commissioned by the CCG compared to a representative peer group. For example, the CCG appears to spend considerably more on musculoskeletal services than do other CCGs with similar population demographics. 50 P a g e

51 The Clinical Commissioning Group Internal Control Framework A system of internal control is the set of processes and procedures in place in the CCG to ensure it delivers its policies, aims and objectives. It is designed to identify and prioritise the risks, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control allows risk to be managed to a reasonable level rather than eliminating all risk; it can therefore only provide reasonable and not absolute assurance of effectiveness. Together with the Chair of the Governing Body, as Accountable Officer, I ensure that proper constitutional, governance and development arrangements are in place to assure the members (through the Governing Body) of the organisation s ongoing capability and capacity to meet its duties and responsibilities. This includes arrangements for the ongoing development of its members and staff. The system of internal control has been in place in the CCG for the last year, ending 31 March The CCG is committed to the provision of services which are safe and of a high quality. The Governing Body recognises the pervasive nature of risk and considers effective risk management to be an integral part of good management practice. Risk management is the responsibility of everyone in the organisation. Thus, the review and maintenance of an effective risk management system involves all staff and, as appropriate, key stakeholders and will be applied to all systems and processes, corporate and financial. Leadership of risk management is provided by the Governing Body which is committed to ensuring that an effective risk management system is operating throughout the CCG. The Governing Body meets in public and publishes papers, agenda and minutes on its website. The Governing Body adheres to the Nolan Principles setting out the ways in which holders of Public Office behave in the discharge of their duties and as a guiding principle for decision making. The principles adopted by the Governing Body are: Selflessness; Integrity; Objectivity; Accountability; Openness; Honesty; Leadership. As set out earlier the CCG has established five committees of the Governing Body which collectively oversee and scrutinise the business of the CCG. Terms of reference for each of these committees can be found in the CCG s Constitution which is on the website at The prime financial policies are part of the CCG s control environment for managing the organisation s financial affairs. They contribute to good corporate governance, internal control and managing risks. They enable sound administration, lessen the risk of irregularities and support commissioning and delivery of effective, efficient and economical services. They also help me as Accountable Officer and the Chief Financial Officer to effectively perform our responsibilities. As a part of the NHS, the Governing Body affirms its commitment to the rights and values set out in the NHS Constitution and the seven key principles that guide the Governing Body in all its actions: The NHS provides a comprehensive service available to all; Access to NHS Services is based on clinical need, not an individual s ability to pay; The NHS aspires to the highest standards of excellence and professionalism on the provision of high-quality care that is safe, effective and focussed on the patient experience; 51 P a g e

52 NHS services must reflect the needs and preferences of patients, their families and carers; The NHS works across organisational boundaries and in partnership with other organisations in the interest of patients, local communities and the wider population; The NHS is committed to providing best value for taxpayer s money and the most cost-effective, fair and sustainable use of finite resources; The NHS is accountable to the public, communities and patients that it serves. The Assurance Framework plays a key role in ensuring the effectiveness of internal control mechanisms. At the beginning of the year the Governing Body considered the main risks to the delivery of its strategy for the year. This list formed the basis of the Assurance Framework which was reviewed by the full Governing Body throughout the year. This process of managing risk is reviewed by the Audit Committee at each of its meetings. Conflicts of Interest Management The revised statutory guidance on managing conflicts of interest, published in June 2016, requires CCGs to undertake an annual internal audit of conflicts of interest management. NHS England published a template audit framework to support CCGs in this task and the annual internal audit of conflicts of interest has been completed. The outcome of the audit, which was undertaken during the Autumn/Winter period is summarised in the table below. NHS England Guidance key areas Governance arrangements Declarations of interest, gifts and hospitality Register of interests, gifts and hospitality and procurement decisions Decision making processes and contract monitoring Report concerns and identifying and managing breaches/non-compliance The CCG s position on conflicts of interest has improved significantly since this internal audit report was produced and it is confident that full compliance would now be achieved across all five areas. All Governing Body Members, employees and General Practices have received a copy of the CCG s revised conflicts of interest policy and have been asked to formally declare any conflicts of interest or gifts/hospitality of 25 or more with a view to updating the conflicts of interest and gifts/hospitality registers which are available on the CCG s website. The Lay Member (PPI) post has been filled through an open recruitment process from 1 April 2017 and the Lay Member (Generalist) has been reappointed for a further two years under the same process. Following a six month vacancy period a new Level of Compliance Full Part None X X X X X Corporate Services Manager will also commence in post from 1 April Information Governance The NHS Information Governance Framework sets the processes and procedures by which the NHS handles information about patients and employees, in particular personal identifiable information. The NHS Information Governance Framework is supported by an information governance toolkit and the annual submission process provides assurances to the CCG other organisations and to individuals that personal information is dealt with legally, securely, efficiently and effectively. We place high importance on ensuring there are robust information governance 52 P a g e

53 systems and processes in place to help protect patient and corporate information. We have established an information governance management framework and are developing information governance processes and procedures in line with the information governance toolkit. We have ensured all staff undertake annual information governance training and have implemented a staff information governance handbook to ensure staff are aware of their information governance roles and responsibilities. There are processes in place for incident reporting and investigation of serious incidents, which are fully embedded in our risk management culture. I can confirm that the CCG has not identified any lapses in data security. Risks to data security are assessed and monitored by the joint Coventry and Warwickshire CCGs Information Governance Steering Group. A risk register containing all risks and their mitigating actions is reviewed by the Clinical Quality and Governance Committee and the CCG s Senior Information Risk Owner (SIRO) who then escalates the risks as necessary to the Governing Body. Review of Economy, Efficiency & Effectiveness of the Use of Resources As Accountable Officer I have responsibility for ensuring that our resources are used economically, efficiently and effectively. In order to do this the CCG has the following assurance mechanisms in place: Monthly financial and operational performance reports are presented to the Performance Committee each month, which are then reported to the Governing Body in order to seek assurances that controls are operating effectively and to advise on areas for improvement. The Audit Committee receives regular reports on financial governance and reviews the Annual Accounts, Annual Governance Statement and Head of Internal Audit opinion. The internal audit programme covers a wide range of organisational, governance and risk issues. Individual recommendations and overall conclusions are risk assessed, and action plan priorities are agreed with Audit Committee. An external audit function which is an essential part of the process of accountability for public money. It makes an important contribution to the stewardship of public resources and the corporate governance of public services. External auditors in the public sector give an independent opinion on public bodies financial statements and conclude upon the entity s arrangements for securing economy, efficiency and effectiveness in its resources. NHS England undertakes an assurance assessment of the CCG and, whilst the final results for the year are awaited, the mid-year assessment commented on the strong South Warwickshire culture under the leadership sustainability section. Each member of the Governing Body is aware of their responsibility to ensure they receive assurance that public money is spent wisely and appropriately. This message has also been communicated throughout the organisation so that staff members are also aware of their responsibility. We continually review our contracts in order to ensure that we are commissioning high quality and efficient services that provide value for money by obtaining the maximum benefit from services for patients within the available resources. The CCG spent 5.229m against our revenue administration resource allocation (also known as central management costs) of 5.837m in 2016/17. The underspend was mainly due to the CCG tendering continuing healthcare, medicines optimisation and business intelligence services through the Lead 53 P a g e

54 Provider Framework (LPF) to ensure best value for money. Feedback from Delegation Chains Regarding Business, use of Resources and Responses to Risk From April 2015 the CCG took on delegated commissioning of primary care (GP services only) from NHS England. The Primary Care Commissioning Committee is the CCG s decision making body for the management of the delegated functions and the exercise of the delegated powers. The Committee meets bi-monthly in public and all decisions made by the Committee are reported to the Governing Body. To ensure openness and probity in our decision making, the membership of this Committee is constituted so as to ensure that the majority is held by Lay Members. Both the Chair and Vice-Chair are non- GPs. These arrangements do not preclude GP participation in strategic discussions on primary care issues, subject to appropriate management of conflicts of interest. Although not forming part of the membership of the Committee, a standing invitation to attend this Committee is open to Healthwatch Warwickshire, the Local Medical Committee (LMC) and the Warwickshire Health and Wellbeing Board. At an operational level, a Primary Care Operations Group has been formed. This group is accountable to the Primary Care Commissioning Committee and was established to facilitate effective working between CCG teams and other key stakeholders (e.g. NHS England) in order to ensure robust oversight of primary medical care contracts and service provision. Both the Primary Care Commissioning Committee and the Primary Care Operations Group work closely with the CCG s other Committees to ensure a complete oversight of the CCG s activity: The CCG s Performance Committee proactively manages the CCG s procurement and contracting activities and receives reports from the Primary Care Operations Group in relation to identified contractual performance issues. The Performance Committee endorses the proposed next actions. The CCG s Clinical Quality and Governance Committee oversees matters relating to clinical safety, safeguarding, incident reporting and information governance and receives regular reports from the Primary Care Operations Group in relation to identified quality improvement issues. The Clinical Quality and Governance Committee endorses the proposed next actions. The CCG submits a quarterly assurance return for activity relating to delegated commissioning of primary care (GP) services which forms part of the CCG Assurance Framework operated by NHS England. The CCG delegates some of its functions, such as Business Intelligence, Medicines Optimisation, Continuing Healthcare, Financial Accounting and some corporate support services to Arden & GEM Commissioning Support Unit. The CCG has a service level agreement in place with the CSU for provision of such services and monitors this on a monthly basis through feedback from CCG staff regarding the CSU s performance against its contracted key performance indicators. A regular monthly meeting is held between the CCG s contract manager and the CSU s relationship manager to discuss performance and to agree rectification plans where performance falls short of expectations. A regularly quarterly report regarding CSU delivery is also discussed by the CCG s Performance Committee. During 2016/17, for Continuing Healthcare, the CCG escalated the monthly meetings to weekly given concerns about assessment and invoice backlogs, patient experience and financial forecasting and payments. The capacity and capability of the CSU to support delivery of the CCG s core functions has appeared on the Assurance 54 P a g e

55 Framework and Operational Risk Register during 2016/17 given the inherent risk to the CCG of under-delivery in commissioning support services. In order to ensure value for money, the CCG tested the market, via the NHS England Lead Provider Framework, for a CSU provider for Business Intelligence, Medicines Optimisation and Continuing Healthcare during the summer/autumn and awarded new contracts for Business Intelligence and Medicines Optimisation. Options regarding long-term support for Continuing Healthcare will be considered during 2017/18. Counter Fraud Arrangements The CCG has contracted with CW Audit and Assurance Services to provide counter fraud services and an accredited Local Counter Fraud Specialist (LCFS) is allocated to undertake necessary work in this area. There is a comprehensive Fraud Plan for 2016/17 which clearly sets out the fraud arrangements for the CCG with reference to the NHS Protect standards, including tasks linked to specific risks identified. The Plan was considered and approved by the CCG s Audit Committee and progress reports on fraud issues together with the annual report on fraud are brought to Audit Committee meetings. The CCG s Chief Finance Officer provides executive leadership for this area of work and monitors delivery of the work plan on its behalf. No NHS Protect quality assurance recommendations have been made during the year. Review of the Effectiveness of Governance, Risk Management and Internal Control As Accountable Officer I have responsibility for reviewing the effectiveness of the system of internal control within the CCG. Capacity to Handle Risk The CCG has implemented a Risk Management Strategy which sets out our philosophy for the management of risk and individual responsibilities and accountabilities in this regard. The Governing Body is responsible for overseeing the delivery of our strategy and is supported in this regard by the work of its committees, which review risks related to their remit. The Governing Body gains independent assurance of the effectiveness of its risk management processes through the work of internal audit and the external audit programme. Appropriate risk management training, information and support is given to all staff as part of induction to enable them to undertake their work safely and regular updates are also provided. Review of Effectiveness My review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers and clinical leads within the CCG who have responsibility for the development and maintenance of the internal control framework. I have drawn on performance information available to me. My review is also informed by comments made by the external auditors in their management letter and other reports. The Assurance Framework itself provides me with evidence that the effectiveness of controls that manage risks to the CCG achieving its principles objectives have been reviewed. I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Governing Body, the Audit Committee and Clinical Quality and Governance Committee, if appropriate and a plan to address weaknesses and ensure continuous improvement of the system is in place. The Governing Body regularly reviews progress against a number of documents, including the Assurance Framework, to ensure that identified actions are implemented in a timely manner. The Audit Committee receives regular reports 55 P a g e

56 on the assurance outcomes of assessments undertaken by the CCG s Internal and External Auditors and also monitors the implementation of recommendations from Internal and External Audit action plans. The CCG s Performance Committee monitors delivery against operational plans, receiving regular finance, quality and performance reports, investigating variances from plan and agreeing rectification plans. Regular reports regarding clinical and non-clinical incidents, complaints, legal claims and other risks identified are submitted to the Clinical Quality and Governance Committee which tracks progress and monitors related action plans, as appropriate. Directors and senior managers of the CCG have specific responsibilities for reviewing the risks and controls for which they are responsible and for maintaining internal control systems. The system of internal control has been in place in the CCG for the last year, ending 31 March As Accountable Officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review is informed in a number of ways: The work programme of Internal Audit and in particular their opinion on the system of internal control and the Assurance Framework; The CCG s Relationship Manager in Arden & GEM Commissioning Support Service has provided me with assurance that effective control systems are in operation within that organisation in respect of the work it undertakes for the CCG; Assurance of the controls and operation for services provided by the Arden & GEM Commissioning Support Service via Service Auditor Reports; Personal involvement in the Governing Body and Performance Committees; Reviews with NHS England; The NHS Counter Fraud Specialist s reports to the Audit Committee; External reviews of the CCG s main provider organisations; External Audit Annual Audit Letter; Internal and External Audit reports; Information Governance Toolkit assurance. Following completion of the planned audit work for the financial year for the CCG, the Head of Internal Audit issued an independent and objective opinion on the adequacy and effectiveness of the CCG s system of risk management, governance and internal control. The Head of Internal Audit concluded that: My overall opinion is that significant assurance can be given that there is a generally sound system of internal control, designed to meet the organisation s objectives, and that controls are generally being applied consistently. However, some weakness in the design and/or inconsistent application of controls, put the achievement of particular objectives at risk. During the year, Internal Audit did not report any material concerns regarding governance, risk management and/or control issues which were significant to the organisation. During the Year, Internal Audit issued the following audit reports with a conclusion of moderate assurance: 56 P a g e

57 Review Scope of Review Risks Identified Conflicts of Interest Financial Reporting A review against the best practice checklist issued during 2016/17 by NHS England Review of in-year financial reporting accuracy and robustness of forecast position Non-adherence to national guidance Increased potential for fraud/misappropriation Impact on delivery of strategic objectives Assumed level of successful contract challenges to be resolved Assumed delivery of significant QIPP programme Lack of confidence in CSU expenditure reports re CHC/MH/LD packages of care Since the financial reporting work was undertaken the CCG has made progress on the delivery of QIPP, on resolving contract queries with its main acute provider and validating CHC expenditure. Details of the action taken following the conflicts of interest review have already been described on page 53. My NHS Well-led The CCG s performance ratings against the My NHS Well-led metric as of July 2016 are: Metric Staff Engagement Index Progress Against Workforce Race Equality Standard Effectiveness of Working Relationships in the Local System Quality of CCG Leadership Probity and Corporate Governance Score / Rating % Fully Compliant NHS England assessed the CCG as good having considered the extent to which the CCG has strong and robust leadership; has robust governance arrangements; actively involves and engages patients and the public and works in partnership with others, including other CCGs. Data Quality Data utilised for the CCG s Performance reports and Quality and Safety reports utilises, on the whole, nationally reported data that has been subject to national controls on data quality. Where this is not the case, provider-reported data may be utilised, but this is always highlighted in the report. Given delays in receiving nationally validated data, locally sourced data may sometimes be utilised, but then substituted with the national data when this becomes available. Both the CCG Membership and Governing Body understand and accept that whilst locally sourced data may give them a more up to date view of performance, it cannot be deemed accurate until nationally validated. Arden & GEM CSU (through whom national data is sourced) has acquired accredited safe haven status for the storage and management of data. Business Critical Models The CCG has reviewed the Macpherson report (2013) into Business Critical Models in Government and, whilst noting this is aimed at Governmental Departments, ensures its principles of quality assurance are built into any local analysis utilised for the purposes of commissioning, particularly major procurement or service transformation programmes. Within the CCG, the principles of the Macpherson report recommendations 57 P a g e

58 have been adopted and applied to the strategic planning process. All QIPP schemes have executive sponsors, clinical leads, expert input for review and challenge, dedicated teams, project methodology and oversight by a programme board reporting to the Performance Committee and subsequently to the Governing Body. The CCG utilises national modelling outputs, developed within a quality assured environment, to support its work, wherever possible. Data Security The NHS Information Governance Framework sets the processes and procedures by which the NHS handles information about patients and employees, in particular personal identifiable information. The NHS Information Governance Framework is supported by an information governance toolkit and the annual submission process provides assurances to the CCG, other organisations and to individuals that personal information is dealt with legally, securely, efficiently and effectively. We place high importance on ensuring there are robust information governance systems and processes in place to help protect patient and corporate information. We have established information governance processes and procedures in line with the information governance toolkit. We have ensured all staff members undertake annual information governance training to ensure staff are aware of their information governance roles and responsibilities. compliance with the all relevant legislation. That legal advice also informed the matters reserved for Membership Body and Governing Body decision and the scheme of delegation. In light of the Harris Review, the CCG has reviewed all of the statutory duties and powers conferred on it by the National Health Service Act 2012 (as amended) and other associated legislation and regulations. As a result, I can confirm that the CCG is clear about the legislative requirements associated with each of the statutory functions for which it is responsible, including any restrictions on delegation of those functions. Responsibility for each duty and power has been clearly allocated to a lead Director. Directors have confirmed that their structures provide the necessary capability and capacity to undertake all of the CCG s statutory duties. Conclusion As Accountable Officer and based on the review process outlined above I can confirm that this Annual Governance Statement is a balanced reflection of the actual controls position and no significant internal control issues have been identified for the CCG. Signed: Gillian Entwistle Chief Officer (Accountable Officer) 30 May 2017 We have submitted a satisfactory level of compliance with the information governance toolkit assessment. I can confirm that the CCG has not identified any lapses in data security. Discharge of Statutory Functions During establishment, the arrangements put in place by the CCG and explained within the Corporate Governance Framework were developed with extensive expert external legal input, to ensure 58 P a g e

59 Remuneration and Staff Report As public sector bodies, CCGs are required to disclose information about senior managers and directors remuneration. According to the Government Financial Reporting Manual, the definition of senior managers is those persons in senior positions having authority or responsibility for directing or controlling the major activities of the CCG. This means those who influence the decisions of the CCG as a whole rather than the decisions of individual directorates or departments. Such persons will include advisory and lay members. Remuneration Committee The Remuneration Committee is responsible, under its Terms of Reference for confirming the salaries of the Chief Officer and Directors and considering any of the flexibilities available within these terms and conditions. Under the terms of national pay and conditions, the Remuneration Committee has responsibility for determining whether national pay uplifts and any nonconsolidated bonus payments should be paid to the Chief Officer and the Directors. Members of the Committee and their attendance are detailed below: Member Role Attendanc e Dr David Chair of CCG and 2/3 Spraggett Remuneration Committee Dr Adrian Member Practice 3/3 Parsons Representative Dr Richard Member Practice 3/3 Lambert Representative Rodney Pitts Lay Member: 3/3 Governance Laura Fulcher Lay Member: Public - and Patient Engagement (to 31 August 2016) Robin Verso Lay Member : 2/3 Generalist (from mid- November 2016) Gillian Entwistle Chief Officer 3/3 Remuneration Policy All senior managers and Directors remuneration is agreed in line with the national guidance on the following: Agenda for Change - where senior appointments are recruited in line with NHS Agenda for Change terms and conditions of service, the remuneration for the role will be in line with the nationally agreed process and in line with local Job Matching processes for Agenda for Change. With the exception of the lay members, General Practitioners, Chief Officer and Chief Finance Officer, all senior appointments within the CCG are appointed in line with this. Very Senior Managers (VSM) Pay Where an individual is appointed under the VSM recruitment process then this is followed as per national guidance. Medical Appointments For those Governing Body Members who are General Practitioners, including the Chair, remuneration was agreed prior to the CCG s authorisation at an agreed hourly rate, in line with the other local and regional CCGs. Lay members Lay member remuneration is in line with that of Non- Executive Directors remuneration in predecessor (Primary Care Trust) organisations. Senior Managers/Directors Performance Related Pay The CCG does not operate a performance related pay system for senior managers. Policy on Senior Managers/Directors Contracts All senior managers are employed on substantive, not fixed term, contracts. In line with NHS terms and conditions of service all senior managers, including the Chief Officer, are appointed on permanent NHS contracts with a notice period of 3 months for employees at director level. Those members of the CCG s Governing Body who are General Practitioners are elected to an initial two or three year 59 P a g e

60 period, in line with the CCG s Constitution, with the option to stand for re-election for a further period of three years up to a maximum of six years. The same applies to lay members. There is no agreement to pay extra contractual termination payments. Salaries Allowances (Audited) Salaries Allowances (Audited) Name Title (a) (b) (e) (f) (a) (b) (e) (f) Salary (bands of 5,000) Expense payments (Taxable) to nearest 100 Pension Related Benefits (bands of 2,500) TOTAL (bands of 5000) Salary (bands of 5,000) Expense payments (Taxable) to nearest 100 Pension Related Benefits (bands of 2,500) D Spraggett * Chair G Entwistle ** Chief Officer R Verso L Fulcher (left 31st August 2016) R Pitts P Jarvis (left 15th May 2016) E Flavell-Smith (acting CFO from 2nd May 2016 to 31st December 2017) P Sheldon (joined 2nd January 2017)** R Lambert I Allwood S Dhesi A Parsons K Clarke J Crowfoot Lay Member - Generalist Lay Member - Patient and Public Involvement Lay Member - Governance Chief Financial Officer Chief Financial Officer (Acting) Chief Financial Officer Assistant Clinical Chair Member Practice Rep Member Practice Rep Member Practice Rep Member Practice Rep Member Practice Rep TOTAL (bands of 5000) E Strachan-Hall Nurse A Hargrave *** A Walshe *** A Scott (began 1st November 2015)*** Director of Strategy and Engagement Director of Quality and Performance Director of Contracting There were no short term or long term bonuses paid to employees of the CCG which would have required disclosure in Columns (c) and (d) of the table. * Dr D Spraggett invoiced through his practice for his salary in but was paid through the payroll in In accordance with disclosure guidelines the salary for is the total amount invoiced, inclusive of elements for employer's National Insurance and pension contributions. ** / *** See table on page 64 During the CCG employed 53 permanent staff members costing 2.2m. 5 of the 53 individual staff members left during the financial year P a g e

61 The Greenbury calculations have been provided centrally by the Greenbury team in relation to the members identified above. Pensions Benefits (Audited) The table below shows all Governing Body Members and Directors who receive pensions funded by the CCG. Name G Entwistle P Sheldon P Jarvis (left 15/05/2016) Title Accountable Officer Chief Finance Officer Chief Finance Officer (a) Real increase in pension at pension age (bands of 2,500) 000 (b) Real increase in pension lump sum at pension age (bands of 2,500) 000 (c) Total accrued pension at pension age at 31 March 2017 (bands of 5,000) 000 (d) Lump sum at pension age related to accrued pension at 31 March 2017 (bands of 5,000) 000 (e) Cash Equivalent Transfer Value at 31 March (f) Real increase in Cash Equivalent Transfer Value 000 (g) Cash Equivalent Transfer Value at 31 March (h) Employer s contribution to stakeholder pension E Flavell- Smith (2/05/2016 to 31/12/2016) Chief Finance Officer A Hargarve A Walshe A Scott K Clarke I Allwood S Dhesi E Strachan- Hall J Crowfoot Director of Strategy and Engagement Director of Quality and Performance Director of Contracting Member Practice Rep Member Practice Representative Member Practice Representative Governing Body Nurse Member Practice Representative Lay members do not receive pensionable remuneration. The following have opted out of the NHS Pension Scheme in respect of their CCG service: A Parsons, R Lambert and D Spraggett. J Crowfoot, K Clarke and S Dhesi transferred to the 2015 NHS Pension Scheme with effect from 1st April This scheme has no provision for an automatic lump sum (although any lump sum previously earned is protected). 61 P a g e

62 Pension Liabilities The CCG s treatment of Pension Liabilities is outlined in Note 4 on page 13 of the Financial Statements. Pension Benefits GAD Actuarial Factors NHS Pensions are using the most recent set of actuarial factors produced by GAD with effect from 31 March 2016, in calculating Senior Managers pension benefits as at 31 March Cash Equivalent Transfer Values A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member s accrued benefits and any contingent spouse s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries. Real Increase in CETV This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to inflation, the value of any benefits transferred from another scheme or arrangement, and uses common market valuation factors for the start and end of the period. On 16 March 2016, the Chancellor of the Exchequer announced a change in the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate from 3.0% to 2.8%. This rate affects the calculation of CETV figures in this report. Due to the lead time required to perform calculations and prepare annual reports, the CETV figures quoted in this report for members of the NHS Pension scheme are based on the previous discount rate and have not been recalculated Real Increase in Pension and Lump Sum The calculation of the real increase (or decrease) in the pension and lump sum reflects pensionable earnings within the financial year, compared with pension calculated from pensionable earnings in the previous year, each year taken in isolation. The calculation also takes account of changes in value as a result of inflation. Note that there is no increase in lump sum for those employees who have transferred to the 2015 NHS Pension Scheme. This is explained below. Changes to the NHS Pension Scheme The new NHS Pension Scheme went live on 1st April Most staff transferred from the existing scheme on that day although any benefits earned under the previous scheme remain protected. Some staff that are close to retirement age will remain in the old scheme while a number of others will transfer on a phased basis over a period of six years. The main differences are that the new scheme is based on career average earnings rather than final salary and has no provision for an automatic lump sum. Compensation Paid for Early Retirement or for Loss of Office (Audited) There were no payments made for loss of office. 62 P a g e

63 Payments to Past Directors (Audited) No extra-contractual payments or awards have been made to past senior managers of the CCG. Pay Multiples (Audited) The CCG is assured through its Remuneration Committee that, in each case, the remuneration is commensurate with the responsibility of the post and inline with equivalent roles at other similar organisations. Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation s workforce. The banded remuneration of the highest paid member of the Governing Body in the financial year was 132.5k ( k). This was 2.7 times ( times) the median remuneration of the workforce, calculated on an annualised full time equivalent basis, which was 50k ( k). The increase in the multiple is attributable to a fall in median remuneration arising from the creation of a number of new posts in the lower salary bands as services are brought in-house. In no employees ( NIL) received remuneration in excess of the highest-paid member of the Governing Body. Remuneration ranged from 17k to 132.5k ( k to 132.5k) Total remuneration includes salary, nonconsolidated performance-related pay, benefits-in-kind, and the increase in accrued pension entitlement net of employee contributions. It does not include severance payments, or the cash equivalent transfer value of pensions. Staff with remuneration higher than that of the Prime Minister In the CCG employed 9 people ( ) whose annualised full-time equivalent remuneration exceeded the 142,500 salary of the Prime Minister. These are GPs working on a sessional part-time basis and on average these GPs receive remuneration of 33,828 from the CCG. 63 P a g e

64 Our Staff Reflecting back over the year we recognise this has been a challenging yet rewarding time for our employees as we make progress against delivery of our strategic aims. Our team is made up of clinical and managerial leads and also a key corporate administrative function supporting the organisation. The CCG buys in commissioning support services from Arden & GEM Commissioning Support Unit (CSU) via a service level agreement (SLA). This arrangement provides a valuable contribution to the delivery of our objectives and we work closely with the CSU to influence, direct and/or oversee these areas. Our values are central to everything we do as an organisation and as individuals and we will demonstrate our commitment to our values through our behaviours. Our values are detailed in the Strategic Plan. Composition (by gender) (Audited) As at 31 March 2017 we employed 46 staff and office holders. The following table gives a breakdown of the number of persons by gender. Governing Body Members (excluding Senior Managers) Senior Managers (Governing Body Members) ** Senior Managers (other Directors) *** Male Female Other Staff Members 4 23 ** / *** See Salaries Allowances table on page 60 for bands Employee engagement and training We hold monthly team briefs delivered by our Chief Officer (Accountable Officer) to communicate key messages and allow staff to feedback. We consult staff on a range of issues including policies, proposals to improve services for the local population and CCG developments. We have ensured that all of our staff completed all the necessary statutory and mandatory training. Sickness absence data As at 31 March 2017, the CCG employed 46 employees and office holders. The table below and in the Financial Statement sets out the days lost due to sickness absence 01 January 2016 to 31 December Sickness figures for NHS bodies are reported on a calendar year basis. Total days lost 84 Average working days Lost 2 The CCG recognises the contribution of its employees and is committed to providing good working conditions and health and safety standards. The Absence Management Policy clearly sets out responsibilities in relation to absence management. Regular absence data is reviewed and absence triggers highlighted for individuals. The policy enables managers to address sickness absence issues, both short and long-term, in a fair, consistent and equitable manner, and a number of support actions are available to support return to work. All cases however are dealt with on an individual basis because of differing circumstances. Staff Policies To ensure that staff do not experience discrimination, harassment and victimisation we ensure equality is integrated across all our employment practices and have a range of policies including: Dignity at Work Policy; Equal Opportunities Policy; Managing Sickness Absence Policy; Recruitment and Selection Policy; Whistleblowing Policy. Equality impact assessments have been carried out on all relevant policies and 64 P a g e

65 over the next year we will be monitoring the impact of the implementation of our workforce policies on our staff to ensure that we are proactively identifying and addressing any inequalities. We value diversity, and aim to support protected groups and recognise that in order to remove the barriers experienced by disabled people. We guarantee to offer an interview to disabled candidates who meet the minimum person specification for a job. Provisions are in place to ensure that disabled staff are supported to keep them in employment by making reasonable adjustments to workstations, patterns of working or other adaptions as necessary, and ensuring appropriate training opportunities to facilitate career development and promotion. The CCG also has a whistleblowing policy and promotes effective procedures to ensure that concerned members of staff have the means through which to voice their concerns. Health and safety The CCG is committed to protecting the health, safety and welfare of its employees and others who are affected by our activities. The CCG carried out its annual health and safety risk assessment in August Our Health and Safety Policy was refreshed in November 2015 and sets out the CCG s commitment to preventing accidents and cases of work-related ill health and providing adequate control of health and safety risks. Consultancy expenditure In the CCG spent 244k on consultancy services. Off payroll engagements New off-payroll engagements between 01 April 2016 and 31 March 2017, for more than 220 per day and that last longer than six months are detailed below. No. of new engagements, or those that reached six months in duration, between 01 April 2015 and 31 March 2016 No. of new engagements which include contractual clauses giving the department the right to request assurance in relation to income tax and National Insurance obligations No. for whom assurance has been requested Of which; Number Number Assurance has been received 0 0 Assurance has not been received 0 0 Engagements terminated as a result of not being received. 0 0 Off-payroll engagements as of 31 March 2017, for more than 220 per day and that last longer than six months are as follows: Number of existing engagements as of 31 March 2017 Of which, the number that have existed: for less than one year at the time of reporting for between one and two years at the time of reporting for between 2 and 3 years at the time of reporting for between 3 and 4 years at the time of reporting for 4 or more years at the time of reporting Number of off-payroll engagements of board members, and/or senior officers with significant financial responsibility, during the year Number of individuals that have been deemed board members, and/or senior officers with significant financial responsibility during the financial year. This figure includes both offpayroll and on-payroll engagements All existing off-payroll engagements, outlined above, have at some point been subject to a risk based assessment as to whether assurance is required that the individual is paying the right amount of tax and, where necessary, that assurance has been sought. Exit packages, including special (noncontractual) payments (Audited) There were no exit package or special payments made P a g e

66 Parliamentary Accountability and Audit Report South Warwickshire CCG is not required to produce a Parliamentary Accountability and Audit Report. Disclosures on remote contingent liabilities, losses and special payments, gifts and fees and charges are included as notes in the Financial Statements of this report (see Appendix 2). An audit certificate and report is also included in this report (see Appendix 1). Audit Report Independent Auditors Report to the Members of South Warwickshire Clinical Commissioning Group The CCG s external auditors are Ernst and Young LLP. Their report to the Members of South Warwickshire CCG can be found at Appendix P a g e

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73 South Warwickshire CCG - Annual Accounts CONTENTS Page Number The Primary Statements: Statement of Comprehensive Net Expenditure for the year ended 31st March Statement of Financial Position as at 31st March Statement of Changes in Taxpayers' Equity for the year ended 31st March Statement of Cash Flows for the year ended 31st March Notes to the Accounts Accounting policies 7-11 Other operating revenue 11 Revenue 11 Employee benefits and staff numbers Operating expenses 14 Better payment practice code 15 Finance costs 15 Operating leases 15 Property, plant and equipment 16 Trade and other receivables 17 Cash and cash equivalents 18 Trade and other payables 18 Provisions 19 Contingencies 20 Commitments 20 Financial instruments Operating segments 22 Pooled budgets 22 Related party transactions Events after the end of the reporting period 24 Losses and special payments 24 Financial performance targets 24 1 Page

74 Foreword to the accounts South Warwickshire CCG - Annual Accounts These accounts for the year ending 31 March 2017 have been prepared by the CCG under Schedule 17 of Schedule 1A of the National Health Service Act 2006 in the form which the Secretary of State has, with the approval of Treasury, directed. 2 Page

75 South Warwickshire CCG - Annual Accounts Statement of Comprehensive Net Expenditure for the year ended 31-March Note Income from sale of goods and services 2 (373) (3,286) Other operating income 2 (2,804) (3,880) Total operating income (3,177) (7,166) Staff costs 4 2,027 1,837 Purchase of goods and services 5 362, ,465 Depreciation and impairment charges Provision expense 5 (91) 0 Other Operating Expenditure 5 1,761 1,749 Total operating expenditure 366, ,053 Net Operating Expenditure 362, ,887 Finance expense Net expenditure for the year 362, ,889 Total Net Expenditure for the year 362, ,889 Comprehensive Expenditure for the year ended 31 March , ,889 The notes on pages 7 to 24 form part of this statement 3 Page

76 South Warwickshire CCG - Annual Accounts Statement of Financial Position as at 31-March Note Non-current assets: Property, plant and equipment Total non-current assets 34 4 Current assets: Trade and other receivables 10 14,894 10,606 Cash and cash equivalents Total current assets 14,927 10,619 Total current assets 14,927 10,619 Total assets 14,961 10,623 Current liabilities Trade and other payables 12 (21,059) (24,651) Provisions 13 0 (54) Total current liabilities (21,059) (24,705) Non-Current Assets plus/less Net Current Assets/Liabilities (6,098) (14,082) Non-current liabilities Trade and other payables Provisions 13 0 (35) Total non-current liabilities 0 (35) Assets less Liabilities (6,098) (14,117) Financed by taxpayers equity General fund (6,098) (14,117) Total taxpayers' equity: (6,098) (14,117) The notes on pages 7 to 24 form part of this statement The financial statements on pages 2 to 24 were approved by the Audit Committee on behalf of the Governing Body on 24 May 2017 and signed on its behalf by: Chief Accountable Officer 24 May Page

77 South Warwickshire CCG - Annual Accounts Statement of Changes In Taxpayers Equity for the year ended 31-March-2017 Changes in taxpayers equity for Total General fund reserves Balance at 1 April 2016 (14,117) (14,117) Adjusted NHS Clinical Commissioning Group balance at 1 April 2016 (14,117) (14,117) Changes in NHS Clinical Commissioning Group taxpayers equity for Net operating expenditure for the financial year (362,961) (362,961) Net Recognised NHS Clinical Commissioning Group Expenditure for the Financial Year (362,961) (362,961) Net funding 370, ,980 Balance at 31 March 2017 (6,098) (6,098) Changes in taxpayers equity for Total General fund reserves Balance at 1 April 2015 (11,359) (11,359) Adjusted NHS Commissioning Board balance at 1 April 2015 (11,359) (11,359) Changes in NHS Commissioning Board taxpayers equity for Net operating costs for the financial year (355,889) (355,889) Net Recognised NHS Commissioning Board Expenditure for the Financial Year (355,889) (355,889) Net funding 353, ,131 Balance at 31 March 2016 (14,117) (14,117) The notes on pages 7 to 24 form part of this statement 5 Page

78 South Warwickshire CCG - Annual Accounts Statement of Cash Flows for the year ended 31-March Note Cash Flows from Operating Activities Net operating expenditure for the financial year (362,961) (355,889) Depreciation and amortisation Finance Costs (1) 0 Unwinding of Discounts 2 2 (Increase)/decrease in trade & other receivables 11 (4,288) (7,146) Increase/(decrease) in trade & other payables 13 (3,592) 9,860 Provisions utilised 14 0 (37) Increase/(decrease) in provisions 14 (90) 0 Net Cash (Outflow) from Operating Activities (370,925) (353,207) Cash Flows from Investing Activities (Payments) for property, plant and equipment (35) 0 Net Cash Inflow (Outflow) from Investing Activities (35) 0 Net Cash (Outflow) before Financing (370,960) (353,207) Cash Flows from Financing Activities Grant in Aid Funding Received 370, ,131 Net Cash Inflow from Financing Activities 370, ,131 Net Increase (Decrease) in Cash & Cash Equivalents (76) Cash & Cash Equivalents at the Beginning of the Financial Year Cash & Cash Equivalents at the End of the Financial Year Page

79 South Warwickshire CCG - Annual Accounts Notes to the financial statements 1. Accounting Policies NHS England has directed that the financial statements of clinical commissioning groups shall meet the accounting requirements of the Group Accounting Manual issued by the Department of Health. Consequently, the following financial statements have been prepared in accordance with the Group Accounting Manual issued by the Department of Health. The accounting policies contained in the Group Accounting Manual follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to clinical commissioning groups, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the Group Accounting Manual permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the clinical commissioning group for the purpose of giving a true and fair view has been selected. The particular policies adopted by the clinical commissioning group are described below. They have been applied consistently in dealing with items considered material in relation to the accounts Going Concern These accounts have been prepared on the going concern basis (despite the issue of a report to the Secretary of State for Health under Section 30 of the Local Audit and Accountability Act 2014). Public sector bodies are assumed to be going concerns where the continuation of the provision of a service in the future is anticipated, as evidenced by inclusion of financial provision for that service in published documents. Where a clinical commissioning group ceases to exist, it considers whether or not its services will continue to be provided (using the same assets, by another public sector entity) in determining whether to use the concept of going concern for the final set of Financial Statements. If services will continue to be provided the financial statements are prepared on the going concern basis Accounting Convention These accounts have been prepared under the historical cost convention Movement of Assets within the Department of Health Group Transfers as part of reorganisation fall to be accounted for by use of absorption accounting in line with the Government Financial Reporting Manual, issued by HM Treasury. The Government Financial Reporting Manual does not require retrospective adoption, so prior year transactions (which have been accounted for under merger accounting) have not been restated. Absorption accounting requires that entities account for their transactions in the period in which they took place, with no restatement of performance required when functions transfer within the public sector. Where assets and liabilities transfer, the gain or loss resulting is recognised in the Statement of Comprehensive Net Expenditure, and is disclosed separately from operating costs. Other transfers of assets and liabilities within the Department of Health Group are accounted for in line with IAS 20 and similarly give rise to income and expenditure entries Pooled Budgets Where the clinical commissioning group has entered into a pooled budget arrangement under Section 75 of the National Health Service Act 2006 the clinical commissioning group accounts for its share of the assets, liabilities, income and expenditure arising from the activities of the pooled budget, identified in accordance with the pooled budget agreement Critical Accounting Judgements & Key Sources of Estimation Uncertainty In the application of the clinical commissioning group s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates and the estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods Critical Judgements in Applying Accounting Policies In assessing critical judgements the CCG has had to consider its accounting treatment for the Better Care Funds for Warwickshire. Under IFRS 11 Joint Arrangements, Joint Control exists where decisions about the relevant activities require the unanimous consent of the parties sharing control. As the Fund is run by a Partnership Board the initial assumption is that all BCF transactions should be accounted for as a Joint Operation. Consideration has also been made to the underlying substance of the commissioning transactions in the Pool. This has also resulted in the conclusion that a Joint Commissioning arrangement is in place so that each Pool partner accounts for their share of expenditure and balances with the end provider (net accounting would apply between partners). Otherwise there are no critical judgements, apart from those involving estimations that management has made in the process of applying the clinical commissioning group s accounting policies that have any significant effect on the amounts recognised in the financial statements Key Sources of Estimation Uncertainty The following is the key estimation that management has made in the process of applying the clinical commissioning group s accounting policies that have the most significant effect on the amounts recognised in the financial statements: Prescribing liabilities: NHS England actions monthly cash charges to the CCG for prescribing contracts. These are issued approximately 6 weeks in arrears. The CCG uses information provided by the NHS Business Authority as part of estimate for full year expenditure. In the accrual was 6,251,958 ( ,030,280). CHC liabilities: The CCG has experienced significant data quality issues in obtaining reliable monitoring information following migration to a new CHC database. The CCG has tried to address these data quality issues and to independently validate package costs where possible. The accrual is based on the assumption that if a package of care has been open for greater than two months and no invoice has been received in respect of the two month period up to the reporting date then liability is presumed to have ended. The CCG has included a contingency of 320,000, equal to 1% of forecast expenditure, to reflect that there is a risk some invoices may not be provided for all existing packages and packages agreed retrospectively after the year-end date. 7 Page

80 South Warwickshire CCG - Annual Accounts Notes to the financial statements Cont'd 1.6. Revenue Revenue in respect of services provided is recognised when, and to the extent that, performance occurs, and is measured at the fair value of the consideration receivable. Where income is received for a specific activity that is to be delivered in the following year, that income is deferred Employee Benefits Short-term Employee Benefits Salaries, wages and employment-related payments are recognised in the period in which the service is received from employees, including bonuses earned but not yet taken. The cost of leave earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry forward leave into the following period Retirement Benefit Costs Past and present employees are covered by the provisions of the NHS Pensions Scheme. The scheme is an unfunded, defined benefit scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical commissioning group of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to expenditure at the time the clinical commissioning group commits itself to the retirement, regardless of the method of payment Other Expenses Other operating expenses are recognised when, and to the extent that, the goods or services have been received. They are measured at the fair value of the consideration payable. Expenses and liabilities in respect of grants are recognised when the clinical commissioning group has a present legal or constructive obligation, which occurs when all of the conditions attached to the payment have been met Property, Plant & Equipment Recognition Property, plant and equipment is capitalised if: It is held for use in delivering services or for administrative purposes; It is probable that future economic benefits will flow to, or service potential will be supplied to the clinical commissioning group; It is expected to be used for more than one financial year; The cost of the item can be measured reliably; and, The item has a cost of at least 5,000; or, Collectively, a number of items have a cost of at least 5,000 and individually have a cost of more than 250, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; or Items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual or collective cost. Where a large asset, for example a building, includes a number of components with significantly different asset lives, the components are treated as separate assets and depreciated over their own useful economic lives Subsequent Expenditure Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is capitalised. Where subsequent expenditure restores the asset to its original specification, the expenditure is capitalised and any existing carrying value of the item replaced is written-out and charged to operating expenses. 8 Page

81 South Warwickshire CCG - Annual Accounts Notes to the financial statements Cont'd Intangible Assets Recognition Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the clinical commissioning group s business or which arise from contractual or other legal rights. They are recognised only: When it is probable that future economic benefits will flow to, or service potential be provided to, the clinical commissioning group; Where the cost of the asset can be measured reliably; and, Where the cost is at least 5,000. Intangible assets acquired separately are initially recognised at fair value. Software that is integral to the operating of hardware, for example an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software that is not integral to the operation of hardware, for example application software, is capitalised as an intangible asset. Expenditure on research is not capitalised but is recognised as an operating expense in the period in which it is incurred. Internally-generated assets are recognised if, and only if, all of the following have been demonstrated: The technical feasibility of completing the intangible asset so that it will be available for use; The intention to complete the intangible asset and use it; The ability to sell or use the intangible asset; How the intangible asset will generate probable future economic benefits or service potential; The availability of adequate technical, financial and other resources to complete the intangible asset and sell or use it; and, The ability to measure reliably the expenditure attributable to the intangible asset during its development Measurement The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is recognised in the period in which it is incurred. Following initial recognition, intangible assets are carried at current value in existing use by reference to an active market, or, where no active market exists, at the lower of depreciated replacement cost or the value in use where the asset is income generating. Internally-developed software is held at historic cost to reflect the opposing effects of increases in development costs and technological advances Depreciation, Amortisation & Impairments Freehold land, properties under construction, and assets held for sale are not depreciated. Otherwise, depreciation and amortisation are charged to write off the costs or valuation of property, plant and equipment and intangible non-current assets, less any residual value, over their estimated useful lives, in a manner that reflects the consumption of economic benefits or service potential of the assets. The estimated useful life of an asset is the period over which the clinical commissioning group expects to obtain economic benefits or service potential from the asset. This is specific to the clinical commissioning group and may be shorter than the physical life of the asset itself. Estimated useful lives and residual values are reviewed each year end, with the effect of any changes recognised on a prospective basis. Assets held under finance leases are depreciated over their estimated useful lives. At each reporting period end, the clinical commissioning group checks whether there is any indication that any of its tangible or intangible non-current assets have suffered an impairment loss. If there is indication of an impairment loss, the recoverable amount of the asset is estimated to determine whether there has been a loss and, if so, its amount. Intangible assets not yet available for use are tested for impairment annually Leases Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases The Clinical Commissioning Group as Lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term. Contingent rentals are recognised as an expense in the period in which they are incurred. Where a lease is for land and buildings, the land and building components are separated and individually assessed as to whether they are operating or finance leases. While our arrangements with NHS Property Services Ltd fall within the definition of operating leases, the rental charge for future years, including void spaces, has not yet been agreed. Consequently, this note does not include future minimum lease payments for these arrangements. 9 Page

82 South Warwickshire CCG - Annual Accounts Notes to the financial statements Cont'd Cash & Cash Equivalents Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the clinical commissioning group s cash management Provisions Provisions are recognised when the clinical commissioning group has a present legal or constructive obligation as a result of a past event, it is probable that the clinical commissioning group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows using HM Treasury s discount rate as follows: Timing of cash flows (0 to 5 years inclusive): Minus 2.70% (previously: minus 1.55%) Timing of cash flows (6 to 10 years inclusive): Minus 1.95% (previously: minus 1.%) Timing of cash flows (over 10 years): Minus 0.80% (previously: minus 0.80%) When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of the receivable can be measured reliably Clinical Negligence Costs Authority which in return settles all clinical negligence claims. The contribution is charged to expenditure. Although the NHS Litigation Authority is administratively responsible for all clinical negligence cases the legal liability remains with the clinical commissioning group. There were no clinical negligence claims in year (and none notified since year end) Non-clinical Risk Pooling The clinical commissioning group participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the clinical commissioning group pays an annual contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses as and when they become due Continuing healthcare risk pooling In a risk pool scheme was introduced by NHS England for continuing healthcare claims, for claim periods prior to 31 March Under the scheme clinical commissioning group contribute annually to a pooled fund, which is used to settle the claims Contingencies A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group, or a present obligation that is not recognised because it is not probable that a payment will be required to settle the obligation or the amount of the obligation cannot be measured sufficiently reliably. A contingent liability is disclosed unless the possibility of a payment is remote. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group. A contingent asset is disclosed where an inflow of economic benefits is probable. Where the time value of money is material, contingencies are disclosed at their present value Financial Assets Financial assets are recognised when the clinical commissioning group becomes party to the financial instrument contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the contractual rights have expired or the asset has been transferred. Financial assets are classified into the following categories: Financial assets at fair value through profit and loss; Held to maturity investments; Available for sale financial assets; and, Loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. 10 Page

83 South Warwickshire CCG - Annual Accounts Notes to the financial statements Cont'd Financial Liabilities Financial liabilities are recognised on the statement of financial position when the clinical commissioning group becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the goods or services have been received. Financial liabilities are derecognised when the liability has been discharged, that is, the liability has been paid or has expired Value Added Tax Most of the activities of the clinical commissioning group are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT Foreign Currencies The clinical commissioning group s functional currency and presentational currency is sterling. Transactions denominated in a foreign currency are translated into sterling at the exchange rate ruling on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the spot exchange rate on 31 March. Resulting exchange gains and losses for either of these are recognised in the clinical commissioning group s surplus/deficit in the period in which they arise Losses & Special Payments Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled. Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis, including losses which would have been made good through insurance cover had the clinical commissioning group not been bearing its own risks (with insurance premiums then being included as normal revenue expenditure) Research & Development Research and development expenditure is charged in the year in which it is incurred, except insofar as development expenditure relates to a clearly defined project and the benefits of it can reasonably be regarded as assured. Expenditure so deferred is limited to the value of future benefits expected and is amortised through the Statement of Comprehensive Net Expenditure on a systematic basis over the period expected to benefit from the project. It should be re-valued on the basis of current cost. The amortisation is calculated on the same basis as depreciation Accounting Standards That Have Been Issued But Have Not Yet Been Adopted The Government Financial Reporting Manual does not require the following Standards and Interpretations to be applied in , all of which are subject to consultation: IFRS 9: Financial Instruments ( application from 1 January 2018) IFRS 14: Regulatory Deferral Accounts ( not applicable to DH groups bodies) IFRS 15: Revenue for Contract with Customers (application from 1 January 2018) IFRS 16: Leases (application from 1 January 2019) The application of the Standards as revised would not have a material impact on the accounts for , were they applied in that year. 2. Other Operating Revenue Total Admin Programme Total Recoveries in respect of employee benefits Patient transport services Education, training and research Non-patient care services to other bodies ,281 Other revenue 2, ,289 3,880 Total other operating revenue 3, ,565 7,166 Admin revenue is revenue received that is not directly attributable to the provision of healthcare or healthcare services. Revenue in this note does not include cash received from NHS England, which is drawn down directly into the bank account of the CCG and credited to the General Fund. 3. Revenue Total Admin Programme Total From rendering of services 3, ,565 7,166 Total 3, ,565 7,166 The CCG receives no revenue from the sale of goods. ( 2015/16 Nil) 11 Page

84 South Warwickshire CCG - Annual Accounts Employee benefits and staff numbers Employee benefits Total Permanent Total Employees Other Total Employee Benefits Salaries and wages 1,615 1, ,615 Social security costs Employer Contributions to NHS Pension scheme Gross employee benefits expenditure 2,027 1, ,027 Less recoveries in respect of employee benefits (note 4.1.2) (118) (118) 0 (118) Total - Net admin employee benefits including capitalised costs 1,909 1, ,909 Less: Employee costs capitalised Net employee benefits excluding capitalised costs 1,909 1, , Employee benefits cont'd Total Permanent Total Employees Other Total Employee Benefits Salaries and wages 1,505 1, ,451 Social security costs Employer Contributions to NHS Pension scheme Gross employee benefits expenditure 1,838 1, ,773 Less recoveries in respect of employee benefits (note 4.1.2) Total - Net admin employee benefits including capitalised costs 1,838 1, ,773 Less: Employee costs capitalised Net employee benefits excluding capitalised costs 1,838 1, , Recoveries in respect of employee benefits Total Permanent Employees Other Total Employee Benefits - Revenue Salaries and wages (85) (85) 0 0 Social security costs (14) (14) 0 0 Employer contributions to the NHS Pension Scheme (18) (18) 0 0 Total recoveries in respect of employee benefits (118) (118) Page

85 South Warwickshire CCG - Annual Accounts Average number of people employed Total Permanently Employed Other Total Number Number Number Number Total Staff sickness absence and ill health retirements Number Number Total Days Lost Total Staff Years Average working Days Lost 3 11 There are no Ill Health retirements in 2016/17 (2015/16 Nil) 4.4. Exit packages agreed in the financial year There are no Exit packages or other agreed departures in the year ( Nil) 4.5. Pension costs Past and present employees are covered by the provisions of the NHS Pension Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at The Scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The Scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the Scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical commissioning group of participating in the Scheme is taken as equal to the contributions payable to the Scheme for the accounting period. The Scheme is subject to a full actuarial valuation every four years (until 2004, every five years) and an accounting valuation every year. An outline of these follows: Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the Scheme (taking into account its recent demographic experience), and to recommend the contribution rates to be paid by employers and scheme members. The last such valuation, which determined current contribution rates was undertaken as at 31 March 2012 and covered the period from 1 April 2008 to that date. Details can be found on the pension scheme website at For , employers contributions of 217,103 were payable to the NHS Pensions Scheme ( : 181,403) were payable to the NHS Pension Scheme at the rate of 14.3% of pensionable pay. The scheme s actuary reviews employer contributions, usually every four years and now based on HMT Valuation Directions, following a full scheme valuation. The latest review used data from 31 March 2012 and was published on the Government website on 9 June 2012 These costs are included in the Employers Contributions to NHS Pensions scheme in note 4 The next actuarial valuation is to be carried out as at 31 March This will set the employer contribution rate payable from April 2019 and will consider the cost of the Scheme relative to the employer cost cap. There are provisions in the Public Service Pension Act 2013 to adjust member benefits or contribution rates if the cost of the Scheme changes by more than 2% of pay. Subject to this employer cost cap assessment, any required revisions to member benefits or contribution rates will be determined by the Secretary of State for Health after consultation with the relevant stakeholders. 13 Page

86 South Warwickshire CCG - Annual Accounts Operating expenses Total Admin Programme Total Gross employee benefits Employee benefits excluding governing body members 1,536 1, ,550 Executive governing body members ( Note 4) Total gross employee benefits 2,027 2, ,837 Other costs Services from other CCGs and NHS England 4,564 2,568 1,997 5,280 Services from foundation trusts ( note 2) 171, , ,108 Services from other NHS trusts 62, ,273 61,025 Services from other NHS bodies Purchase of healthcare from non-nhs bodies (Note 1) 49, ,077 50,975 Chair and Non Executive Members Supplies and services clinical Supplies and services general Consultancy services Establishment Transport Premises Impairments and reversals of receivables Depreciation Amortisation Audit fees ( note 3) Other non statutory audit expenditure Internal audit services Other services Prescribing costs 38, ,102 38,370 Pharmaceutical services General ophthalmic services GPMS/APMS and PCTMS 34, ,884 35,917 Other professional fees excl. audit Grants to other public bodies 1, ,621 1,632 Clinical negligence Research and development (excluding staff costs) Education and training Change in discount rate (1) 0 (1) (0) Provisions (90) 0 (90) 0 CHC Risk Pool contributions ,251 Other expenditure Total other costs 364,109 3, , ,216 Total operating expenses 366,136 5, , ,053 Note 1: Included in Purchase of healthcare from non-nhs bodies is Better Care Fund expenditure relating to Social Care of 5,854k (2015/16 5,715k) Note 2. Internal Audit fees of 28k are included under Services from foundation Trusts Note 3. Audit fees includes 17k of additional fees for 1516 audit). Note 4. Executive Governing Body members includes 180k for clinical leads 14 Page

87 South Warwickshire CCG - Annual Accounts Better Payment Practice Code Measure of compliance Number 000 Number 000 Non-NHS Payables Total Non-NHS Trade invoices paid in the Year 16, ,011 13,721 74,350 Total Non-NHS Trade Invoices paid within target 15, ,045 13,663 73,955 Percentage of Non-NHS Trade invoices paid within target 97.31% 98.16% 99.58% 99.47% NHS Payables Total NHS Trade Invoices Paid in the Year 3, ,645 2, ,046 Total NHS Trade Invoices Paid within target 3, ,531 2, ,044 Percentage of NHS Trade Invoices paid within target 97.47% 99.55% 99.85% % 6.2. The Late Payment of Commercial Debts (Interest) Act Amounts included in finance costs from claims made under this legislation 0 0 Compensation paid to cover debt recovery costs under this legislation 0 0 Total Finance costs Other interest expense 0 0 Total interest 0 0 Other finance costs 0 0 Provisions: unwinding of discount 2 3 Total finance costs As lessee While the arrangements with NHS Property Services Ltd fall within the definition of operating leases, the rental charge for future years, including void spaces, has not been agreed. Consequently, this note does not include future minimum lease payments for these arrangements Payments recognised as an Expense Buildings Other Total Total Payments recognised as an expense Minimum lease payments Contingent rents Sub-lease payments Total Page

88 South Warwickshire CCG - Annual Accounts Property, plant and equipment Plant & Machinery Information Technology Furniture & Fittings Total Cost or valuation at 01-April Additions purchased Reclassifications Impairments charged Cost/Valuation At 31-March Depreciation 01-April Reclassifications Reclassified as held for sale and reversals Charged during the year Depreciation at 31-March Net Book Value at 31-March Purchased Total at 31-March Asset financing: Owned Total at 31-March All assets were purchased by, and are owned by the clinical commissioning group 9.1. Compensation from third parties There are no amounts of any compensation from third parties for assets impaired, lost or given up, that is included in the Statement of Comprehensive Net Expenditure Write downs to recoverable amount There are no assets written down to recoverable amounts and any reversals of previous write-downs 9.3. Temporarily idle assets The net book value of temporarily idle assets was nil (2015/16 nil) Cost or valuation of fully depreciated assets The cost or valuation of fully depreciated assets still in use was nil (2015/16 nil) Economic lives Minimum Life (years) Maximum Life (Years) Plant & machinery 2 5 Information technology 2 5 Furniture & fittings Page

89 South Warwickshire CCG - Annual Accounts Trade and other receivables Current Non-current Current Non-current NHS receivables: Revenue 4, ,951 0 NHS prepayments 2, ,033 0 NHS accrued income 4, ,251 0 Non-NHS receivables: Revenue Non-NHS prepayments Non-NHS accrued income 2, Provision for the impairment of receivables VAT Other receivables Total Trade & other receivables 14, ,606 0 Total current and non current 14,894 10,606 Included above: Prepaid pensions contributions Receivables past their due date but not impaired By up to three months By three to six months 0 0 By more than six months 59 0 Total Provision for impairment of receivables Balance at 01-April (15) Amounts written off during the year 0 15 Amounts recovered during the year 0 0 (Increase) decrease in receivables impaired 0 0 Balance at 31-March Page

90 South Warwickshire CCG - Annual Accounts Cash and cash equivalents Balance at 01-April Net change in year 20 (76) Balance at 31-March Made up of: Cash with the Government Banking Service Cash with Commercial banks 0 0 Cash in hand 1 1 Cash and cash equivalents as in statement of financial position Balance at 31-March The CCG achieved its cash target for 2016/17 with a cleared Cash balance at 31 March 2017 of 32k (target max 338k). The CCG's cash target is 1.25% of the final month's cash drawdown. 12. Trade and other payables Current Non-current Current Non-current NHS payables: revenue 5, ,533 0 NHS accruals 1, ,079 0 NHS deferred income Non-NHS payables: revenue 2, ,296 0 Non-NHS payables: capital Non-NHS accruals 9, ,040 0 Non-NHS deferred income Social security costs VAT Tax Payments received on account Other payables 1, ,655 0 Total Trade & Other Payables 21, ,651 0 Total current and non-current 21,059 24,651 Other payables include 373k outstanding pension contributions at 31 March 2017 (2015/16 30k) 18 Page

91 South Warwickshire CCG - Annual Accounts Provisions Current Non-current Current Non-current Continuing care Other Total Total current and non-current 0 89 Continuing Care Other Total 000s 000s 000s Balance at 01-April Arising during the year Utilised during the year Reversed unused (90) 0 (90) Unwinding of discount Change in discount rate (1) 0 (1) Balance at 31-March Expected timing of cash flows: Within one year Between one and five years After five years Balance at 31-March Page

92 South Warwickshire CCG - Annual Accounts Contingencies Contingent liabilities There are no contingent liabilities at 31 March 2017 (31 March 2016 nil) Contingent assets There are no contingent assets at 31 March 2017 (31 March 2016 nil). 15. Commitments Capital commitments The CCG has no Capital commitments Other financial commitments The CCG has no other financial commitments. 16. Financial instruments Financial risk management Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities. Because NHS Clinical Commissioning Group is financed through parliamentary funding, it is not exposed to the degree of financial risk faced by business entities. Also, financial instruments play a much more limited role in creating or changing risk than would be typical of listed companies, to which the financial reporting standards mainly apply. The clinical commissioning group has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the risks facing the clinical commissioning group in undertaking its activities. Treasury management operations are carried out by the finance department, within parameters defined formally within the NHS Clinical Commissioning Group standing financial instructions and policies agreed by the Governing Body. Treasury activity is subject to review by the NHS Clinical Commissioning Group and internal auditors Currency risk The NHS Clinical Commissioning Group is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and sterling based. The NHS Clinical Commissioning Group has no overseas operations and therefore has low exposure to currency rate fluctuations Interest rate risk The Clinical Commissioning Group borrows from government for capital expenditure, subject to affordability as confirmed by NHS England. The borrowings are for 1 to 25 years, in line with the life of the associated assets, and interest is charged at the National Loans Fund rate, fixed for the life of the loan. The clinical commissioning group therefore has low exposure to interest rate fluctuations Credit risk Because the majority of the NHS Clinical Commissioning Group's revenue comes parliamentary funding, NHS Clinical Commissioning Group has low exposure to credit risk. The maximum exposures as at the end of the financial year are in receivables from customers, as disclosed in the trade and other receivables note Liquidity risk NHS Clinical Commissioning Group is required to operate within revenue and capital resource limits, which are financed from resources voted annually by Parliament. The NHS Clinical Commissioning Group draws down cash to cover expenditure, as the need arises. The NHS Clinical Commissioning Group is not, therefore, exposed to significant liquidity risks. 20 Page

93 South Warwickshire CCG - Annual Accounts Financial instruments cont'd Financial assets At fair value through profit and loss Loans and Receivables Available for Sale Total Receivables: NHS 0 9, ,018 Non-NHS 0 3, ,242 Cash at bank and in hand Other financial assets Total at 31-March , ,293 At fair value through profit and loss Loans and Receivables Available for Sale Total Receivables: NHS 0 8, ,202 Non-NHS Cash at bank and in hand Other financial assets Total at 31-March , , Financial liabilities At fair value through profit and loss Other Total Payables: NHS 0 7,612 7,612 Non-NHS 0 13,386 13,386 Total at 31-March ,997 20,997 At fair value through profit and loss Other Total Embedded derivatives Payables: NHS 0 12,612 12,612 Non-NHS 0 11,992 11,992 Total at 31-March ,604 24, Page

94 South Warwickshire CCG - Annual Accounts Operating segments In accordance with IFRS 8 the CCG recognises Operating Segments as outlined below. These fall within the definition of a recognisable segment that :- that engages in activities from which it may earn revenues and incur expenses (including revenue and expenses generated internally) whose operating results are regularly reviewed by the entity s chief operating decision maker to make decisions about resource allocation to the segment and assess its performance, and for which discrete financial information is available. Running Cost Acute Non Acute Primary Care Allowance Total Gross expenditure 182, ,256 75,271 5, ,138 Income (1,566) (853) (146) (612) (3,177) Net expenditure 181, ,403 75,125 5, ,961 Revenue resource limit (excluding surplus b/f) 367,551 Operating surplus / (deficit) 4,590 Cumulative surplus / (deficit) b/f from 2015/16 2,262 Cumulative surplus / (deficit) c/f 6,852 Operating surplus consists of: In-year surplus / (deficit) 1,037 Release of uncommitted non-recurrent system risk reserve 3,553 4,590 Running Cost Acute Non Acute Primary Care Allowance Total Gross expenditure 175, ,862 80,205 6, ,055 Income (1,876) (3,540) (1,141) (609) (7,166) Net expenditure 173,797 97,322 79,064 5, ,889 Revenue resource limit (excluding surplus b/f) 354,630 Operating surplus / (deficit) (1,259) Cumulative surplus / (deficit) b/f from 2014/15 3,521 Cumulative surplus / (deficit) c/f 2,262 Operating surplus consists of: In-year surplus / (deficit) (1,259) Release of uncommitted non-recurrent system risk reserve 0 (1,259) Total Assets and Total Liabilities are not reported as Operating Segments 18. Pooled budgets The CCG is party to the Warwickshire Better Care Fund established under Section 75 of the NHS Act The fund has been established to further the integration of health and social care services in Warwickshire. The contributions to the fund are set out below. The contribution of WCC has also been disclosed. The Partners determine how any balance carried forward will be invested where allowed for under the Section 75 Agreement. The table shows the gross contributions made by each organisation, although the accounts are prepared on a net accounting basis. 2016/17 Warwickshire Pool Budget 2015/16 Warwickshire Pool Budget South Warwickshire CCG Other CCGs Warwickshire County Council Total South Warwickshire CCG Other CCGs Warwickshire County Council Total Contributions to the fund 15,812 17,887 3,661 37,360 15,500 17,469 3,169 36,138 Expenditure on service provision (9,958) (11,432) (15,973) (37,360) (9,785) (11,165) (15,188) (36,138) Total surplus/(deficit) 5,854 6,455 (12,312) 0 5,715 6,304 (12,019) 0 22 Page

95 South Warwickshire CCG - Annual Accounts Related party transactions Details of related party transactions with individuals are as follows: South Warwickshire CCG is a corporate body established by order of the Secretary of State for Health. During the year the following Board Members or members of the key management staff or parties related to them have undertaken transactions with South Warwickshire CCG Payments to Payments to Amounts owed Related Party Related Party to Related Party D Spraggett - Castle Medical Centre 1,348 1,438 0 R Lambert - The Arrow Surgery S Dhesi - Croft Medical Centre 1,196 1,210 0 I Allwood - Bridge House Medical Centre 1,081 1,089 7 I Allwood - Bar None Healthcare A Parsons - Clarendon Lodge 1,484 1,423 0 K Clarke - Meon Medical Centre K Clarke - Prime GP E Strachan-Hall - Healthcare at Home (to Jan 2017) J Crowfoot - Arden Medical Centre There were no amounts due from these interests and no receipts in year. The Department of Health is regarded as a related party. During the year South Warwickshire CCG has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. These entities are listed below; Payments to Receipts from Amounts owed to Amounts due from Payments to Receipts from Amounts owed to Amounts due from Related Party Related Party Related Party Related Party Related Party Related Party Related Party Related Party South Warwickshire NHS Foundation Trust 154, ,779 6, ,985 3,799 1,487 5,429 Related parties with which South Warwickshire CCG non-material* transactions included: University Hospitals Coventry and Warwickshire NHS Trust West Midlands Ambulance Service NHS Foundation Trust Worcestershire Acute Hospitals NHS Trust Oxford University Hospitals NHS Trust Coventry & Warwickshire Partnership Trust * Where our payments to them represented more than 1% but less than 10% of their total income. Organisations where more than 10% of their income came from South Warwickshire CCG have been reported separately as material transactions. The CCG had no material transactions with Central Government departments. The CCG engaged in material transactions with the following local authorities and other bodies Payments to Receipts from Amounts owed to Amounts due from Payments to Receipts from Amounts owed to Amounts due from Related Party Related Party Related Party Related Party Related Party Related Party Related Party Related Party Warwickshire County Council 6, ,510 8, Better Care Fund transactions with Warwickshire County Council are accounted for net so, whilst payments and receipts occurred with those bodies, the above analysis reflects the net payment in Payments to Related Parties. 23 Page

96 South Warwickshire CCG - Annual Accounts The following Delegated Primary Care Practices had transactions in the year with the CCG As a result of the Delegated Primary Care arrangements for 2016/17, the following practices had transactions with South Warwickshire CCG that are disclosed under GMS/PMS and prescribing expenditure within Note 5 of the accounts Payments to Amounts owed Amounts owed Payments to Amounts owed Amounts owed Related Party to Related Party by Related Party Related Party to Related Party by Related Party Abbey Medical Centre 1, , Avonside Health Centre Bidford Health Centre 1, , Budbrooke Medical Centre 1, , Cantilup Surgery (was Waterside Medical Centre) Cape Road Surgery Cubbington Road Surgery Fenny Compton Surgery Harbury Surgery Hastings House 1, , Henley-in-Arden Medical Centre Kineton Surgery Lapworth Surgery (1) 0 Lisle Court New Dispensary Chase Meadow Pool MC Priory Medical Centre 1, , Priory Road Health Centre (was Alcester Health Centre) 1, , Rother House Medical Centre , Sherbourne Medical Centre 1, , Shipston on Stour Medical Centre (3) 0 Southam Surgery Spa Medical Centre (was Radford Road Surgery) St Wulfstan Studley Health Centre Tanworth Medical Centre 2, , Trinity Court Warwick Gates Medical Centre 1, , Whitnash Medical Centre Total 26, ,641 (3) Events after the end of the reporting period There are no known significant events after the reporting period 21. Losses and special payments There are no losses and special payments during the year (2015/16 nil). 22. Financial performance targets The Clinical Commissioning Group have a number of financial duties under the NHS Act 2006 (as amended). The Clinical Commissioning Group performance against those duties was as follows: Expenditure not to exceed income Capital resource use does not exceed the amount specified in Directions Revenue resource use does not exceed the amount specified in Directions Capital resource use on specified matter(s) does not exceed the amount specified in Directions Revenue resource use on specified matter(s) does not exceed the amount specified in Directions Revenue administration resource use does not exceed the amount specified in Directions Target Performance Target Performance , , , , n/a 369, , , ,889 N/A N/A N/A N/A N/A N/A N/A N/A 5,837 5,229 6,208 5,706 The financial performance targets above are produced on a cumulative basis. The in-year targets, which exclude the CCG's surplus brought forward from 2015/16 are shown below: Expenditure not to exceed income Revenue resource use does not exceed the amount specified in Directions 370, , , ,961 The reconciliation of the cumulative and in-year target figures is shown as: In Year Target expenditure not to exceed income 370,771 Surplus brought forward from ,262 Cumulative target expenditure not to exceed income 373,033 In-year target revenue resource use does not exceed the amount specfied in Directions 367,551 Surplus brought forward from ,262 Cumulative target revenue resource use does not exceed the amount specified in Directions 369, Page

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