0.1% > variance < 0.5% 0.1% > variance < 0.5% <95% but >= 50% of plan

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Baldwin Rose
5 years ago
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1 Commentary Template The commentary template will need to be completed when either; a) An organisation is red rated in any of the criteria set out below Indicator Green Amber Red Comments Surplus -(variance to Variance Variance plan as % of allocation) <= 0.1% => 0.5% Expenditure - (variance to plan as % of net expenditure budget) Variance <= 0.1% QIPP >= 95% of plan 0.1% > variance < 0.5% 0.1% > variance < 0.5% <95% but >= 50% of plan Variance => 0.5% < 50% of plan Applied to in In Month, Year to Date and Forecast Outturn using the relevant allocation figure Applied to in In Month, Year to Date and Forecast Outturn using the relevant net expenditure plan figure Applied to In Month, Year to Date and Forecast Outturn Running costs <= RCA > RCA Applied to In Month, Year to Date and Forecast Outturn b) An organisation is forecasting a large favourable variance (0.5% greater than plan) on either year to date or forecast outturn. 1

2 CCG: Vale of York CCG Contact: Andrew Wilson, Key Financials Surplus/(Deficit) 000 Plan YTD 0 Actual YTD -621 Plan Forecast 0 Forecast Outturn -1,735 Headlines & Key Messages Programme Costs the CCG is overspent by 78k after discounting the accumulated 1% Surplus to date of 699k and forecast to breakeven by year end (after discounting the balance of the1% surplus). In year pressures / risks York Acute FT is over performing against contract YTD by 909k and a year end overspend of 1m is forecast. The relative improvement by the year end is due to QIPP schemes forecast to impact later in the financial year. Prescribing is currently overspent by 588k however there is only two months data available from the PPA and prescribing expenditure is notoriously volatile. The position is being reviewed. Continuing Health Care / Free Nursing Care underspent by 1.45m however a fundamental review is needed as it is suspected this understates the true position. QIPP The CCG is forecast to underachieve its QIPP Target of 10.7m by 4.3m To set a balanced plan a resource transfer of 1.733m from Running Costs to Programme resources is required 2

3 Please explain how the variance on surplus, expenditure and/or QIPP has arisen A CCG led confirm and challenge exercise undertaken to evaluate the 2013/14 QIPP schemes identified 5.1m of slippage against the plan target of 10.7m. This is due to proposed schemes not delivering the forecast savings. The overspend on Acute contracts is predominantly due to overtrading on the York Acute FT contract with over activity within Emergency Spells, First outpatients and Outpatient Procedures, and Diagnostics The prescribing overspend is due to two reasons, Firstly, expenditure is higher than planned, possibly due to GP s not achieving their QUIPP target, but also due to the Prescribing element of the CCG s allocation being too low and not including funding for the cost of central drugs. An underspend od 1.45m is currently recorded against Continuing Care. This is unexpected as the budget 2013/14 was set on outturn 12/13 levels and Continuing Care expenditure has increased in each of the preceding years. This budget area is to be the subject of a fundamental review to ensure all accrued expenditure is being captured. Following agreement of contract values 2013/14 it was identified that the value of signed contracts exceeded that planned leaving a financial imbalance. Management of which is discussed below. Actions being taken to resolve the variance and bring back in line with plan QIPP Although schemes totalling 5.6m of the 2013/14 QIPP target were found to be slipping, the level of savings from those schemes that were progressing was revised upwards to 5.7m. In addition, additional schemes totalling 0.78m have subsequently been identified with which the CCG has a high degree of confidence. The slippage against the QIPP target has therefore reduced from 5.6m to 4.3m. the CCG will continue to actively investigate further schemes towards the 2013/14 target 3

4 Management of the Acute PbR based contracts will be essential to managing the CCG s finances: The CCG is to use provider SLAM data in future (which the providers use for their own internal monitoring purposes) rather than relying upon SUS data. This will provide more up to date information on contract performance and is being allied with more proactive engagement with providers and management of activity. The forecast year end overspend is 1m The total financial challenge facing the CCG is 5.3m. This challenge has been discussed with the Local Area team and in management of this shortfall the CCG is proposing the following action - enter into Business transfer agreement with Leeds Partnership ( 1m) - deploy balance of contingency reserve ( 0.77m) - reduce 1% Surplus reserve on a non recurrent basis to 0.5% ( 1.78m) - review after month 6 options for managing residual balance through retention of penalty payments by providers, and / or deployment of balance of 1% Surplus reserve. In regard to the initial plan, pressures were identified with agreed contract values exceeding plan. This has been managed through - deployment of 0.7% of the contingency reserve - transfer of 1.733m from Running Costs Risks identified going forward and action being taken to mitigate risks The CCG faces three financial risks going forward; Prescribing The prescribing overspend at month 4 is 588k. However, only two months prescribing data is available from the PPA and prescribing expenditure is notoriously volatile. In addition, the CCG is being charged the cost of central drugs. Initial analysis of 2013/14 allocations indicate the corresponding central drug resources were not included in these start point allocations. This will be 4

5 investigated and if proven, the CCG will endeavour for allocations to be corrected. Over Trading The contract with York Acute FT is over performing. Going forward the CCG is placing greater emphasis on contract management, and to assist in this process, the contract will be monitored using SLAM data which the trust also uses for internal reporting purposes. Where over performance is identified, greater emphasis will be placed on remedial action to implement activity management schemes. Continuing Healthcare There are no indications that the CHC budget is currently over performing, however as this represents an area of risk for the CCG, a fundamental review will be undertaken before month 5 to verify the current and forecast financial performance. QIPP Plan Progress (performance to date including explanation of variances) A confirm and challenge exercise to validate the 2013/14 QIPP plans has been undertaken. This identified that the programme was likely to under achieve the annual target by 5.1m with a commensurate reduction in monthly savings against plan. The review also identified that of those schemes underway, forecast savings were higher than originally expected at 5.7m Additional schemes which the PCT has a high degree of confidence totalling 0.77m have subsequently been identified, but this still leaves the CCG 4.3m adrift from target. Management of the resultant shortfall against target has been discussed within the CCG and with the LAT (see above) 5

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Report. Chris Ford Joint Chief Finance Officer

Report. Chris Ford Joint Chief Finance Officer Governing Body Meeting held in public Report Date of Meeting: 8 November 2018 Agenda Item: 15.0 Report Title Finance Report as at 30 th September 2018 (Month 6) Report Author Presented By Responsible Director