George Eliot Hospital NHS Trust - Securing a sustainable future Project. Annex A

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1 Annex A ISOS financial submission requirements Historical financial performance NHS Foundation Trusts 1. Please provide a copy of the Annual Plan that you submitted to Monitor for 2013/14. If a revised plan has been agreed with Monitor since the original was submitted please provide a copy of this with an explanation of the revision. (pass/fail) 2. Please provide copies of your most recent financial monitoring submissions to Monitor including commentary. If there are any material changes in the reported position since submission to Monitor please identify these and provide an explanation. Please also supply copies of any exception reports relating to finance submitted to Monitor during 2013/14. (pass/fail) 3. Please provide details of your Cost Improvement Plans (CIPs) and details of achievement of CIPs for 2011/12 and 2012/13. For 2013/14 provide details of your CIPs and actual achievement to date. For all years these should identify separately recurrent and nonrecurrent savings. Where actual recurrent savings are for part of the current year please show the forecast full year effect for 2013/14. Please distinguish between improvements that deliver cost reduction and improvements that rely on increased income. Where there are variances between planned cost improvements and actual improvements delivered (whether positive or adverse) these should be explained, again distinguishing variances in cost reduction and income generation. (pass/fail) 4. Please advise whether Monitor has been notified that your organisation is considering any other major investments in addition to this transaction as described in Monitor s Compliance Framework 2013/14 (as amended or updated from time to time). If a notification has been made please provide copies of the notification and any accompanying financial analysis. (pass/fail) NHS Trusts 5. Please provide a copy of the Annual Plan that you submitted to the TDA for fiscal year 2013/14. If a revised plan has been agreed with the TDA since the original was submitted please provide a copy of this with an explanation of the revision. (pass/fail) 6. Please provide copies of your most recent financial monitoring submissions to the TDA including commentary. If there are any material changes in the reported position since submission to the TDA please identify these and provide an explanation. Please also supply copies of any exception reports relating to finance submitted to the TDA during 2013/14. (pass/fail) 7. Please provide details of your Cost Improvement Plans (CIPs) and details of achievement of the CIPs for 2011/12 and 2012/13. For 2013/14 provide details of your CIPs and actual achievement to date. For all years these should identify separately recurrent and non- 1

2 recurrent savings. Where actual recurrent savings are for part of the current year please show the forecast full year effect for 2014/15. Please distinguish between improvements that deliver cost reduction and improvements that that rely on increased income. Where there are variances between planned cost improvements and actual improvements delivered (whether positive or adverse) these should be explained, again distinguishing variances in cost reduction and income generation. (pass/fail) Independent sector organisations 8. Please provide details of your latest trading performance based on the most recently available management accounts together with details of any announcements/profit warnings issued subsequently to the last published set of accounts. (pass/fail) 9. Please provide details of cost saving initiatives that you have delivered in other healthcare environments. These should include the nature and amount of the savings and whether they are recurrent or non recurrent. (pass/fail) Forecast financial performance Franchise bids 10. A template LTFM will be provided which you should complete to demonstrate forecast financial performance under your operating franchise bid. This has been populated with GEH forecast data for the financial years 2013/14 and 2014/15. The model should cover a minimum period of 7 years commencing 2015/16. This LTFM will be evaluated. 11. Your bid must demonstrate how and when you anticipate that GEH should be in a position to meet the current financial requirements for Foundation Trust status. 12. The model contains provision for a franchise fee to be input which should be input under other non recurring costs. (Details of the principles of the calculation of the franchise fee are set out in the draft Franchise Agreement). In the event that you propose an alternative model for remunerating your investment in the franchise operation please provide a clear description of you proposal and how this impacts on the Continuity of Service Risk Rating. 13. Please provide the key assumptions used in the LTFM including: a. NHS income inflation. b. Other income inflation. c. Income growth/reduction assumptions supported, where appropriate, by activity assumptions including details of the assumed impact of any demand management ; d. Assumptions in relation to projected CQUIN income and any investment requirements. e. Pay costs inflation. f. Pay cost pressures (agenda for change, consultants, contract, EWTD). g. Service developments and other key drivers of projected trading performance. h. Any planned asset disposals. i. Any significant capital expenditure anticipated over the projected period. j. Key working capital balance assumptions (e.g. debtor days, creditor days etc.) and rationale for the assumptions made. 2

3 k. Required CIP savings targets supported by plans for the delivery of required targets (including the identification of recurring and non-recurring savings). l. Start up and implementation costs and funding for these costs. m. Clinical supplies and consumables. n. Other material costs categories e.g. estates. o. Marginal cost assumptions. p. QIPP assumed within projection period. q. Details of any PFI/LIFT schemes and funding requirements (where applicable). 14. All assumptions should be consistent with responses provided in respect of other sections of the ISOS e.g. service delivery, workforce and support functions. 15. In constructing your LTFM you should assume that: a. The business transfer will take place on 1 April b. The GEH forecast outturn for 2013/14 is a deficit of 7.9m before revenue financial support from the CCGs of an equivalent amount to deliver breakeven on a turnover of 125m. Additional details can be found in the template LTFM which has been populated with 2013/14 and 2015/16 data. c. Current planning assumptions for 2014/15 are set out below: Tariff deflation 1.6% applied to all services. Tariff efficiency 4%. Pay awards 1.8%. Drug inflation 7%. Clinical supplies and services 4%. Other expenses inflation 6%. CNST inflation 5%. Capex inflation 2.8%. 16. If these assumptions are not used in respect of the GEH services please provide an explanation and justification of any alternative assumptions used. 17. It is recognised that in consideration of the Trust s financial position based on latest forecasts, the need to prioritise the quality and safety of patient services may mean that it will not be possible to achieve break even without transitional financial support. Bidders will be expected to achieve a turn-around of the Trust s finances under their management, within a realistic timescale, but this may not be possible immediately. 18. At this stage no commitment can be given that any transitional financial support will be available. Bidders should identify in their proposals the need (if any) for transitional financial support from Commissioners, identifying the amount and timing, but should not assume at this stage that this support will be available. As will be clear from the description of the financial evaluation in Section 7 of the ISOS, the amount of any requests for transitional financial support will be a factor to be taken into account when evaluating bids. 3

4 19. A separate spreadsheet template ( GEH CIPs proforma V1.xls ) is provided for bidders to identify their cost savings initiatives (including revenue generating opportunities). Recurrent and non-recurrent savings initiatives must be separately identified. The results of these initiatives feed the LFTM and thus the CoSRR resulting from bidders proposals. 20. Bidders should also provide a narrative description of each of their proposed cost savings initiatives in sufficient detail to allow the Trust to assess the impact on safety and quality of services and the deliverability of each initiative. For each initiative please complete the template provided in pages 7 to 18 below. 21. Please provide details of your downside case along with any mitigation identified to offset or manage the impact of the identified downside scenario. (pass/fail) Acquisition bids 22. Please provide a Monitor 10 year LTFM for the merged organisation showing 2014/15 forecast outturn and a minimum of 7 years post Acquisition. (The Monitor 10 year LTFM can be obtained by ing modelqueries@monitor-nhsft.gov.uk).this LTFM will be evaluated. 23. The LTFM should show GEH services as a separate business unit within your overall organisation. This should be for the periods as above. This should clearly demonstrate any resource transfers to or from the GEH business unit and the Trust as a whole. (pass/fail). 24. Please provide the key assumptions used in the LTFMs which should be consistent across both. These should identify any difference in assumptions in respect of the Bidders existing services and those in respect of the acquired GEH services. This should include the identification of any savings assumptions and CIPs made in order to achieve an acceptable CoSRR for the whole Trust. If savings are required to achieve an acceptable CoSRR please indicate whether you have identified areas where you consider such saving could be made, what those areas are, and any estimates of the savings that you have made. Where savings have been identified please provide a detailed analysis identifying your CIPs and the extent to which these relate to your existing services and to GEH services. 25. Details of other key assumptions made within the LTFM should include: a. NHS income inflation. b. Other income inflation. c. Income growth/reduction assumptions supported, where appropriate, by activity assumptions including details of the assumed impact of any demand management. d. Assumptions in relation to projected CQUIN income and any investment requirements. e. Pay costs inflation. f. Pay cost pressures (agenda for change, consultants, contract, EWTD). g. Service developments and other key drivers of projected trading performance. 4

5 h. Any planned asset disposals. i. Any significant capital expenditure anticipated over the projected period. j. Key working capital balance assumptions (e.g. debtor days, creditor days etc.) and rationale for the assumptions made. k. Required CIP savings targets supported by plans for the delivery of required targets (including the identification of recurring and non-recurring savings). l. Acquisition and implementation costs and funding for these costs. m. Clinical supplies and consumables. n. Other material costs categories e.g. estates. o. Marginal cost assumptions. p. QIPP assumed within projection period. q. Details of any PFI/LIFT schemes and funding requirements (where applicable). 26. All assumptions should be consistent with responses provided in respect of other sections of the ISOS e.g. service delivery, workforce and support functions. 27. In constructing your LTFM for the merged entity you should assume that: a. The business transfer will take place on 1 April b. The GEH forecast outturn for is a deficit of 7.9m before revenue financial support from the CCGs of an equivalent amount to deliver breakeven on a turnover of 125m. Additional details can be found in the template LTFM which has been populated with 2013/14 and 2014/15 data. c. Current planning assumptions for 2014/15 are set out below: Tariff deflation 1.6% applied to all services. Tariff efficiency 4%. Pay awards 1.8%. Drug inflation 7%. Clinical supplies and services 4%. Other expenses inflation 6%. CNST inflation 5%. Capex inflation 2.8%. 28. If these assumptions are not used in respect of the GEH services please provide an explanation and justification of any alternative assumptions used. 29. It is recognised that in consideration of the Trust s financial position based on latest forecasts, the need to prioritise the quality and safety of patient services may mean that it will not be possible to achieve break even without transitional financial support. Bidders will be expected to achieve a turn-around of the Trust s finances under their management, within a realistic timescale, but this may not be possible immediately. 30. At this stage no commitment can be given that any transitional financial support will be available. Bidders should identify in their proposals the need (if any) for transitional financial support from Commissioners, identifying the amount and timing, but should not assume at this stage that this support will be available. As will be clear from the description of the financial evaluation in Section 7 of the ISOS, the amount of any 5

6 requests for transitional financial support will be a factor to be taken into account when evaluating bids. 31. A separate spreadsheet template ( GEH CIPs proforma V1.xls ) is provided for bidders to identify their cost savings initiatives (including revenue generating opportunities). Recurrent and non-recurrent savings initiatives must be separately identified. The results of these initiatives feed the LFTM and thus the CoSRR resulting from bidders proposals. 32. Bidders should also provide a narrative description of each of their proposed cost savings initiatives in sufficient detail to allow the Trust to assess the impact on safety and quality of services and the deliverability of each initiative. For each initiative please complete the template provided in pages 7 to 18 below. 33. Please provide details of your downside case along with any mitigations identified to offset or manage the impact of the identified downside scenario. (pass/fail) 6

7 Securing a Sustainable Future Project CIP INITIATIVE TEMPLATE INITIATIVE TITLE : 7

8 Contents 1. Introduction 2. Management Summary (Project Overview) 3. Financial Summary Financial Benefit (Savings) Financial Calculation 4. Quality and Service Impact 4.1 Patient Safety 4.2 Patient Experience 4.3 Workforce 4.4 Key performance indicators 5. Project Organisation 6. Communication including Demand Issues 6.1 Communication Strategy 6.2 Service model analysis of potential Demand and Income 6.3 Implementation 7. Clinical & Quality Risk Assessment & Confidence (Summary) 8. Key Interventions Appendix Risk Analysis and Management (Clinical & Operational) Summary Project Plan 8

9 1. Introduction (Background to the initiative) 2. Management Summary (Project Overview/ Description) 3. Financial Summary Financial Benefit (Savings/Income generation) 9

10 Financial Calculation Investment (if applicable) Savings Analysed Net Savings x x x Implementation Date Phasing - timeline 4. Quality and Service Impact 4.1 Patient Safety 4.2 Patient Experience 10

11 4.3 Workforce 4.4 Key Performance Indicators 5. Project Organisation Who needs to be involved? Who is the Lead / wider team accountable for delivery? 11

12 6. Communication including Demand Issues 6.1 Communication Strategy 6.2 Service model analysis of potential Demand and Income (if applicable) Schedule of Demand Total Activity x Schedule of Income x Schedule of Cost x 6.3 Implementation 12

13 7. Clinical & Quality Risk Assessment & Confidence (Summary) Clinical & Quality (RAG) 0-5 Green 6-12 Amber Red Confidence (RAG) 3= Green 2 = Amber 1=Red See Appendix 1 13

14 8. Key Interventions Task Person Responsible Date 14

15 ISOS Financial Submission Requirements Appendix 1 Risk Analysis and Management (Clinical & Operational) Risk Management Plan Risk Analysis Clinical Quality Risk (5x5matrix) Weighted Risk Score Confidence in delivery 3= High Who is Responsible Avoidance Strategy Contingency Strategy Likelihood Severity (1 25) 2= Medium 1= Low Clinical A B C etc Operational A B C 15

16 ISOS Financial Submission Requirements etc Patient Experience Financial Others A B C etc A B C etc A B C etc 16

17 ISOS Financial Submission Requirements Appendix 2 Summary Project Plan (Gantt Chart) 17

Item 8iii. Draft financial Plan Document for Moorfields Eye Hospital NHS Foundation trust. Prepared by:

Item 8iii. Draft financial Plan Document for Moorfields Eye Hospital NHS Foundation trust. Prepared by: Item 8iii Draft financial Plan Document for 2016-17 Moorfields Eye Hospital NHS Foundation trust Prepared by: Steven Davies NHS Finance Director & Deputy Chief Financial Officer Board of Directors Meeting