Catherine Phillips, Director of Finance Sarah Elsey, Interim Head of Financial Management

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1 Report To: Public Trust Board Agenda item: 11 Date of Meeting: 26 September 2012 Title of Report: Status: Board Sponsor: Author: Appendices Report Discussion Catherine Phillips, Director of Sarah Elsey, Interim Head of Financial Management None 1. Purpose of Report (Including link to objectives) The purpose of this report is to set out the Trust s financial performance for the period to 30th September Summary of Key Issues for Discussion This report details the current and forecast performance against the Trust s main financial duties and the key risks and assumptions in the delivery of those financial targets, and includes recommendations where further action is required 3. Recommendations (Note, Approve, Discuss etc.) The Board should note the financial position for August 2012, and that the Trust is forecasting a 4.6m surplus in Savings plans need to be fully implemented and the red rates schemes should have mitigating actions identified. To understand the key risks and the actions being taken to mitigate them. 4. Care Quality Commission Regulations (which apply) Care Quality Commission Regulation 13: Financial position People can be confident that the provider has the financial resources needed to provide safe and appropriate services. 5. Legal / Regulatory Implications (NHSLA / Value for money conclusion) Not achieving financial duties will impact on the ability and sustainability to achieve the Value for money conclusion. 6. NHS Constitution Not applicable Agenda Item: 11 Page 1 of 8

2 7. Risk (Threats or opportunities link to risk on register etc.) As captured in board assurance framework 8. Resources Implications (Financial / staffing) Not applicable 9. Equality and Diversity Not applicable 10. Communication Not applicable 11. References to previous reports Standing item 12. Freedom of Information Public Agenda Item: 11 Page 2 of 8

3 1. Executive Summary 1.1. Introduction The Trust reported a surplus of 2.2m year to date, which is adverse to plan of 361k. This position represents deterioration in month of 75k which in the main is due to slippage on QIPP delivery. The current forecast based on actions agreed, continues to predict a 4.6m surplus as the most likely outturn position. 2. Overview of Financial Performance 2.1. Statement of Comprehensive Income The Trusts overall income and expenditure position is outlined in the table below: Agenda Item: 11 Page 3 of 8

4 Income Income year to date is 521k over plan, SLA income is marginally over-recovering against plan 354k year to date. Non-elective activity remains the main driver of the Trust s SLA performance with the continuing impact on the non-elective threshold. The financial pressure of the marginal rate is 931k to date. Day case and elective activity remains below plan, with a shortfall of 262k in month bringing year to date under performance to 930k. The Trust continues to work with the PCT to mitigate the increased rise in nonelective demand through a review of some key patient pathways and the implementation and further development of community QIPP initiatives Expenditure Expenditure year to date is 84.1m against the plan of 83.1m. EBITDA is adverse to plan ( 432k). Slippage against expenditure savings targets is 1,235k adverse to plan. This is offset in part by over performance against planned income and non recurrent savings in the Facilities and Corporate divisions e.g. vacancies against cleaning staff. The nursing budget variance has worsened in the month by 25k.Some of this additional cost in month is due to new nurses being inducted into the Trust and being supernumerary on wards. The recruitment forecast continues to show a significant expected reduction in vacant nurse posts. It is anticipated that by November 2012 this should reduce overall nursing costs as the use of agency reduces premium costs. The forecast position is to achieve 4.6m surplus by year end Charges charges consist of depreciation, and PDC. This is expected to deliver in line with plan by year end QIPP Programme (Savings) The year to date QIPP position shows that the Trust has delivered savings of 2,695k year to date to August 2012, an achievement of 69% of the planned year to date target ( 3,930k). Agenda Item: 11 Page 4 of 8

5 The Plan full year effect is to deliver 11.4m savings. However there are still some schemes that have slippage but it is anticipated that the Trust planned surplus will be delivered by other mitigating schemes. The key issues of concern are: The ability to achieve the full savings in year as a result of reductions in length of stay due to activity levels. The ability to identify and release the full cash releasing savings from the outpatient efficiencies project. The ability to deliver the full year effect of theatre efficiency savings. The ability to deliver the planned level of medical workforce savings. 3. Statement of Cash flow and Financial Position The table below shows the current cash flow for the Trust Statement of cash flows Plan to date Actual to date Variance to date '000 '000 '000 Operating surplus/(deficit) 8,248 7,816 (432) Movements in: Inventories Receivables (567) (2,615) (2,048) Payables (3,361) (655) 2,706 Provisions (600) (494) 106 Cashflow from operations 3,720 4, Capital expenditure (2,164) (1,551) 613 Cashflow before financing 1,556 2,757 1,201 Net interest paid Dividend paid Repayment of borrowings Loan Received 4,000 4,000 0 Net in/(out)flow 5,556 6,776 1,220 Opening cash balance 6,068 6,068 0 Closing cash balance 11,624 12,844 1,220 The cash balance as outlined in the graph below is above plan, the cash balance is above where we expected to be predominantly due to delays in the capital programme. Agenda Item: 11 Page 5 of 8

6 The main movements in the balance sheet as outlined below. Non-Current Assets have decreased due to the depreciation charge being higher than the capital spend at this time in the year. This has resulted in a decrease of 2.1m year to date. Current Assets: year to date have increased by 9.1m, this reflects the cash receipt of the last instalment of the capital loan for the Pathology build ( 4m) and Trade receivables have increased due to additional billing to Provider to Provider organisations. From the beginning of the year there has been an increase in invoices raised and accruals made against Provider to Provider and other NHS organisation which has increased Trade receivables. Current Liabilities: year to date have increased by 1.5m mainly reflecting an increase in invoices accrued, however during September this will decrease due to payments of PDC and interest on loans. Non-Current Liabilities: have increased due to receipt of the capital loan of which 3.6m is non-current. Capital and Reserves: Within reserves, retained earnings have changed in line with the surplus earned for the year-to-date. Agenda Item: 11 Page 6 of 8

4. Capital The capital programme expenditure for the period to

Pathology Laboratories build, 254k on the Hamilton (Dermatology)

7 4. Capital The capital programme expenditure for the period to August totalled 1,552k, with an additional 55k from charitable funds. The main schemes that have progressed to date are: 570k on the Pathology Laboratories build, 254k on the Hamilton (Dermatology) refurbishment, 125k on the Medical Equipment Rolling Replacement Programme and 177k on Community X-Ray. Agenda Item: 11 Page 7 of 8

8 The current forecast is that the Trust will achieve the planned capital programme by the end of the financial year. 5. Financial Risks Risk Description of risk Included in Forecast Escalation costs Penalties with PCT contracts Impact on Non Elective admissions on number of open beds, increasing nursing costs. Fined for performance penalties QIPP delivery Mitigating Actions PCT QIPP Robust PMO Management A number of the red rag rated QIPP schemes may not deliver in year. Working with the PCT on community QIPP to mitigate the risk of rising Non Elective admissions. Ensure PMO function continues to provide rigour & challenge to ensure delivery of QIPP in year. Agenda Item: 11 Page 8 of 8

Board Sponsor: Sarah Truelove, Director of Finance and Deputy Chief Executive. Author: Lynne Abbott, Head of Financial Management

Report To: Public Trust Board Agenda item: 13 Date of Meeting: 23 October 2013 Title of Report: Finance Report Status: Discussion Board Sponsor: Sarah Truelove, Director of Finance and Deputy Chief Executive