Bedford Hospital NHS Trust Annual Accounts 2012/13

Transcription

1 Bedford Hospital NHS Trust Annual Accounts 2012/13

2 Data entered below will be used throughout the workbook: Trust name Bedford Hospital NHS Trust This year Last year This year ended 31 March 2013 Last year ended 31 March 2012 This year commencing: 1 April 2012 Last year commencing: 1 April 2011 Manual for Accounts Page 2 of 47

3 Statement of Comprehensive Income for year ended 31 March NOTE Gross employee benefits 9.1 (136,093) (132,849) Other costs 8 (82,524) (75,640) Revenue from patient care activities 4 204, ,446 Other Operating revenue 5 18,878 17,447 Operating surplus/(deficit) 4,392 4,404 Investment revenue Other gains and (losses) 12 (193) (32) Finance costs 13 (547) (525) Surplus/(deficit) for the financial year 3,712 3,876 Public dividend capital dividends payable (2,717) (2,823) Net Gain/(loss) on transfers by absorption 0 Retained surplus/(deficit) for the year 995 1,053 Other Comprehensive Income Impairments and reversals (2,133) (18) Net gain/(loss) on revaluation of property, plant & equipment 3,464 2,124 Net gain/(loss) on revaluation of intangibles 0 0 Net gain/(loss) on revaluation of financial assets 0 0 Movements in Other Reserves eg. Non NHS Pensions Scheme 0 0 Net gain/(loss) on available for sale financial assets 0 0 Net Gain / (loss) on Assets Held for Sale 0 Net actuarial gain/(loss) on pension schemes 0 0 Reclassification Adjustments On disposal of available for sale financial assets 0 0 Total comprehensive income for the year* 2,326 3,159 * This sums the rows above and the surplus / (deficit) for the year before adjustments for PDC dividend and absorption accounting Financial performance for the year# Retained surplus/(deficit) for the year 995 1,053 Prior period adjustment to correct errors 0 0 IFRIC 12 adjustment 0 0 Impairments 234 (457) Adjustments in respect of donated asset/gov't grant reserve elimination (3) 399 Adjustment re Absorption accounting 0 Adjusted retained surplus/(deficit) 1, #The statutory requirement for NHS Trusts is to break-even taking one year with another. DH has determined that some items, as adjusted for below, can be excluded when considering this statutory requirement. Refer also to note 33.1 PDC dividend: balance receivable/(payable) at 31 March PDC dividend: balance receivable/(payable) at 1 April The notes on pages 6 to 43 form part of this account. Page 3 of 47

4 Statement of Financial Position as at 31 March March March 2012 NOTE 000s 000s Non-current assets: Property, plant and equipment 15 97,403 96,027 Intangible assets 16 1,131 1,203 Investment property Other financial assets Trade and other receivables Total non-current assets 99,359 97,934 Current assets: Inventories 20 1,772 1,655 Trade and other receivables 21 11,000 11,028 Other financial assets Other current assets Cash and cash equivalents 24 7,676 13,876 Total current assets 20,448 26,559 Non-current assets held for sale Total current assets 20,448 26,559 Total assets 119, ,493 Current liabilities Trade and other payables 28 (18,182) (26,435) Other liabilities Provisions 35 (577) (281) Borrowings 30 (1,942) (323) Other financial liabilities Working capital loan from Department Capital loan from Department 30 0 (750) Total current liabilities (20,701) (27,789) Non-current assets plus/less net current assets/liabilities 99,106 96,704 Non-current liabilities Trade and other payables Other Liabilities Provisions 35 (1,237) (994) Borrowings 31 (6,280) (6,447) Other financial liabilities Working capital loan from Department Capital loan from Department Total non-current liabilities (7,517) (7,441) Total Assets Employed: 91,589 89,263 FINANCED BY: TAXPAYERS' EQUITY Public Dividend Capital 78,022 78,022 Retained earnings (14,037) (16,206) Revaluation reserve 27,604 27,447 Other reserves 0 0 Total Taxpayers' Equity: 91,589 89,263 The notes on pages 6 to 43 form part of this account. The financial statements on pages [a to b] were approved by the Board on [date] and signed on its behalf by Chief Executive: Date: Page 4 of 47

5 Statement of Changes in Taxpayers' Equity For the year ended 31 March 2013 Public Dividend capital Retained earnings Revaluation reserve Other reserves Total reserves 000s 000s 000s 000s 000s Balance at 1 April ,022 (16,206) 27, ,263 Changes in taxpayers equity for Retained surplus/(deficit) for the year Net gain / (loss) on revaluation of property, plant, equipment 3,464 3,464 Net gain / (loss) on revaluation of intangible assets 0 0 Net gain / (loss) on revaluation of financial assets 0 0 Net gain / (loss) on revaluation of assets held for sale 0 0 Impairments and reversals (2,133) (2,133) Movements in other reserves 0 0 Transfers between reserves 1,174 (1,174) 0 0 Release of reserves to Statement of Comprehensive Income 0 0 Reclassification Adjustments Transfers to/(from) Other Bodies within the Resource Account Boundary Transfers between Revaluation Reserve & Retained Earnings in respect of assets transferred under absorption On Disposal of Available for Sale financial Assets 0 0 Reserves eliminated on dissolution Originating capital for Trust established in year 0 0 New PDC Received 0 0 PDC Repaid In Year 0 0 PDC Written Off 0 0 Transferred to NHS Foundation Trust Other Movements in PDC In Year 0 0 Net Actuarial Gain/(Loss) on Pension Net recognised revenue/(expense) for the year 0 2, ,326 Balance at 31 March ,022 (14,037) 27, ,589 Balance at 1 April ,022 (18,813) 26, ,104 Changes in taxpayers equity for the year ended 31 March 2012 Retained surplus/(deficit) for the year 1,053 1,053 Net gain / (loss) on revaluation of property, plant, equipment 2,124 2,124 Net gain / (loss) on revaluation of intangible assets 0 0 Net gain / (loss) on revaluation of financial assets 0 0 Net gain / (loss) on revaluation of assets held for sale 0 0 Impairments and reversals (18) (18) Movements in other reserves 0 0 Transfers between reserves 1,554 (1,554) 0 0 Release of reserves to Statement of Comprehensive Income 0 0 Reclassification Adjustments Transfers to/(from) Other Bodies within the Resource Account Boundary On Disposal of Available for Sale financial Assets 0 0 Reserves eliminated on dissolution Originating capital for Trust established in year 0 0 New PDC Received 0 0 PDC Repaid In Year 0 0 PDC Written Off 0 0 Transferred to NHS Foundation Trust Other Movements in PDC In Year 0 0 Net Actuarial Gain/(Loss) on Pension Net recognised revenue/(expense) for the year 0 2, ,159 Balance at 31 March ,022 (16,206) 27, ,263 Page 5 of 47

6 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 March NOTE 000s 000s Cash Flows from Operating Activities Operating Surplus/Deficit 4,392 4,404 Depreciation and Amortisation 5,455 5,796 Impairments and Reversals 234 (457) Other Gains / (Losses) on foreign exchange 0 0 Donated Assets received credited to revenue but non-cash 0 (540) Government Granted Assets received credited to revenue but non-cash 0 0 Interest Paid (478) (476) Dividend (Paid) / Refunded (2,631) (2,843) Release of PFI/deferred credit 0 0 (Increase)/Decrease in Inventories (117) 151 (Increase)/Decrease in Trade and Other Receivables (153) (3,734) (Increase)/Decrease in Other Current Assets 0 0 Increase/(Decrease) in Trade and Other Payables (6,527) 10,628 (Increase)/Decrease in Other Current Liabilities 0 0 Provisions Utilised (34) (273) Increase/(Decrease) in Provisions (1,123) 315 Net Cash Inflow/(Outflow) from Operating Activities (982) 12,971 CASH FLOWS FROM INVESTING ACTIVITIES Interest Received (Payments) for Property, Plant and Equipment (5,594) (2,667) (Payments) for Intangible Assets (386) (734) (Payments) for Investments with DH 0 0 (Payments) for Other Financial Assets 0 0 (Payments) for Financial Assets (LIFT) 0 0 Proceeds of disposal of assets held for sale (PPE) Proceeds of disposal of assets held for sale (Intangible) 0 0 Proceeds from Disposal of Investment with DH 0 0 Proceeds from Disposal of Other Financial Assets 0 0 Proceeds from the disposal of Financial Assets (LIFT) 0 0 Loans Made in Respect of LIFT 0 0 Loans Repaid in Respect of LIFT 0 0 Rental Revenue 0 0 Net Cash Inflow/(Outflow) from Investing Activities (5,920) (2,741) NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING (6,902) 10,230 CASH FLOWS FROM FINANCING ACTIVITIES Public Dividend Capital Received 0 0 Public Dividend Capital Repaid 0 0 Loans received from DH - New Capital Investment Loans 0 0 Loans received from DH - New Revenue Support Loans 0 0 Other Loans Received 0 0 Loans repaid to DH - Capital Investment Loans Repayment of Principal (750) (1,500) Loans repaid to DH -Revenue Support Loans 0 0 Other Loans Repaid 0 0 Cash transferred to NHS Foundation Trusts 0 0 Capital Element of Payments in Respect of Finance Leases and On-SoFP PFI and LIFT (158) (150) Capital grants and other capital receipts Net Cash Inflow/(Outflow) from Financing Activities (908) (1,110) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (7,810) 9,120 Cash and Cash Equivalents ( and Bank Overdraft) at Beginning of the Period 13,711 4,591 Effect of Exchange Rate Changes in the Balance of Cash Held in Foreign Currencies 0 0 Cash and Cash Equivalents (and Bank Overdraft) at year end 5,901 13,711 Page 6 of 47

7 NOTES TO THE ACCOUNTS 1. Accounting Policies The Secretary of State for Health has directed that the financial statements of NHS trusts shall meet the accounting requirements of the NHS Trusts Manual for Accounts, which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the NHS Trusts Manual for Accounts issued by the Department of Health. The accounting policies contained in that manual follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the NHS Trusts Manual for Accounts permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the trust for the purpose of giving a true and fair view has been selected. The particular policies adopted by the trust are described below. They have been applied consistently in dealing with items considered material in relation to the accounts. 1.1 Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment. 1.2 Acquisitions and discontinued operations Activities are considered to be acquired only if they are taken on from outside the public sector. Activities are considered to be discontinued only if they cease entirely. They are not considered to be discontinued if they transfer from one public sector body to another. 1.3 Transforming Community Services (TCS) transactions Under the TCS initiative, services historically provided by PCTs have transferred to other providers - notably NHS Trusts and NHS Foundation Trusts. Such transfers fall to be accounted for by use of absorption accounting in line with the Treasury FReM. The FReM 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 SOCNI, and is disclosed separately from operating costs. 1.4 Pooled Budgets The Trust is partly funded through three pooled budget agreements in place between Milton Keynes PCT (MKPCT) and Milton Keynes Council (MKC). Under the arrangements funds are pooled under a s75 of the NHS Act 2006 for Adult Mental Health Services, Learning Disability Services and Community Equipment activities. The Mental Health Pool is hosted by MKPCT and the other pools are hosted by MKC. The Trust has trading arrangements only with these for services and accounts as income from PCTs or other public bodies. Page 7 of 47

8 Notes to the Accounts - 1. Accounting Policies (Continued) 1.5 Critical accounting judgements and key sources of estimation uncertainty In the application of the Trust 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 Management has not applied any critical judgements in applying accounting policies. 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. The main source of revenue for the trust is from commissioners for healthcare services. Revenue relating to patient care spells that are part-completed at the year end are apportioned across the financial years on the basis of costs incurred to date compared to total expected costs. Where income is received for a specific activity that is to be delivered in the following year, that income is deferred. The Trust receives income under the NHS Injury Cost Recovery Scheme, designed to reclaim the cost of treating injured individuals to whom personal injury compensation has subsequently been paid e.g. by an insurer. The Trust recognises the income when it receives notification from the Department of Work and Pension's Compensation Recovery Unit that the individual has lodged a compensation claim. The income is measured at the agreed tariff for the treatments provided to the injured individual, less a provision for unsuccessful compensation claims and doubtful debts. The Trust receives income from the sale of goods or other Non Patient Services. These are accounted for on a cash received basis and arise from the following areas: Restaurants for use by both the public and staff Shops Vending machines Car Parks Rent and overhead recovery for accommodation and premises Coroners fees Hire of equipment Supplier rebates Pathology testing fees Photocopying cost recovery Staff cost recovery for estates management, training and research Handling fees for organ donation 1.7 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. Page 8 of 47

9 Notes to the Accounts - 1. Accounting Policies (Continued) 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 NHS body 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 Trust commits itself to the retirement, regardless of the method of payment. 1.8 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. 1.9 Property, plant and 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 trust; 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 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. Valuation All property, plant and equipment are measured initially at cost, representing the cost directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets are measured subsequently at fair value. Land and buildings used for the trust s services or for administrative purposes are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation less any impairment, subsequent accumulated depreciation and impairment losses. Revaluations are performed with sufficient regularity to ensure that carrying amounts are not materially different from those that would be determined at the end of the reporting period. Fair values are determined as follows: Land and non-specialised buildings market value for existing use Specialised buildings depreciated replacement cost HM Treasury has adopted a standard approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued. Page 9 of 47

10 Notes to the Accounts - 1. Accounting Policies (Continued) Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees but not borrowing costs, which are recognised as expenses immediately, as allowed by IAS 23 for assets held at fair value. Assets are revalued and depreciation commences when they are brought into use. Until 31 March 2008, fixtures and equipment were carried at replacement cost, as assessed by indexation and depreciation of historic cost. From 1 April 2008 indexation has ceased. The carrying value of existing assets at that date will be written off over their remaining useful lives and new fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from fair value. An increase arising on revaluation is taken to the revaluation reserve except when it reverses an impairment for the same asset previously recognised in expenditure, in which case it is credited to expenditure to the extent of the decrease previously charged there. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit should be taken to expenditure. Gains and losses recognised in the revaluation reserve are reported as other comprehensive income in the Statement of Comprehensive Income. 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 Intangible assets Recognition Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the trust 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 trust; where the cost of the asset can be measured reliably, and where the cost is at least 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: it 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 Page 10 of 47

11 Notes to the Accounts - 1. Accounting Policies (Continued) 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 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 fair value by reference to an active market, or, where no active market exists, at amortised replacement cost (modern equivalent assets basis), indexed for relevant price increases, as a proxy for fair value. Internally-developed software is held at historic cost to reflect the opposing effects of increases in development costs and technological advances Depreciation, amortisation and impairments 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, on a straightline basis. The estimated useful life of an asset is the period over which the Trust expects to obtain economic benefits or service potential from the asset. This is specific to the Trust 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 trust 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. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit are taken to expenditure. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable amount but capped at the amount that would have been determined had there been no initial impairment loss. The reversal of the impairment loss is credited to expenditure to the extent of the decrease previously charged there and thereafter to the revaluation reserve Donated assets Donated non-current assets are capitalised at their fair value on receipt, with a matching credit to Income. They are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations, impairments and sales are as described above for purchased assets. Donated income is deferred only where conditions attached to the donation have not been met Government grants The value of assets received by means of a government grant are credited directly to income. Government grant income is deferred only where conditions attached to the grant have not been met. Page 11 of 47

12 Notes to the Accounts - 1. Accounting Policies (Continued) 1.14 Non-current assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met when the sale is highly probable, the asset is available for immediate sale in its present condition and management is committed to the sale, which is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Fair value is open market value including alternative uses. The profit or loss arising on disposal of an asset is the difference between the sale proceeds and the carrying amount and is recognised in the Statement of Comprehensive Income. On disposal, the balance for the asset on the revaluation reserve is transferred to retained earnings. For donated and government-granted assets, a transfer is made to or from the relevant reserve to the profit/loss on disposal account so that no profit or loss is recognised in income or expenses. The remaining surplus or deficit in the donated asset or government grant reserve is then transferred to retained earnings. Property, plant and equipment that is to be scrapped or demolished does not qualify for recognition as held for sale. Instead, it is retained as an operational asset and its economic life is adjusted. The asset is derecognised when it is scrapped or demolished 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 trust as lessee Property, plant and equipment held under finance leases are initially recognised, at the inception of the lease, at fair value or, if lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate on interest on the remaining balance of the liability. Finance charges are recognised in calculating the trust s surplus/deficit. 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. The trust as lessor Amounts due from lessees under finance leases are recorded as receivables at the amount of the trust s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the trust s net investment outstanding in respect of the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. Page 12 of 47

13 Notes to the Accounts - 1. Accounting Policies (Continued) 1.16 Inventories Inventories are valued at the lower of cost and net realisable value using the first-in first-out cost formula. This is considered to be a reasonable approximation to fair value due to the high turnover of stocks Cash and 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 Trust s cash management Provisions Provisions are recognised when the Trust has a present legal or constructive obligation as a result of a past event, it is probable that the Trust will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the end of the reporting period, taking into account the risks and uncertainties. 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 of 2.2% in real terms (2.8% for employee early departure obligations). 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. Present obligations arising under onerous contracts are recognised and measured as a provision. An onerous contract is considered to exist where the Trust has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A restructuring provision is recognised when the Trust has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with ongoing activities of the entity Clinical negligence costs The NHS Litigation Authority (NHSLA) operates a risk pooling scheme under which the trust pays an annual contribution to the NHSLA which in return settles all clinical negligence claims. The contribution is charged to expenditure. Although the NHSLA is administratively responsible for all clinical negligence cases the legal liability remains with the trust. The total value of clinical negligence provisions carried by the NHSLA on behalf of the trust is disclosed at note 28. As the provisions for clinical negligence claims are included in the accounts of the NHSLA, they are not included in these accounts Page 13 of 47

14 Notes to the Accounts - 1. Accounting Policies (Continued) 1.20 Non-clinical risk pooling The Trust participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the trust 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 EU Emissions Trading Scheme EU Emission Trading Scheme allowances are accounted for as government grant funded intangible assets if they are not expected to be realised within twelve months, and otherwise as other current assets. They are valued at open market value. As the NHS body makes emissions, a provision is recognised with an offsetting transfer from deferred income. The provision is settled on surrender of the allowances. The asset, provision and deferred income amounts are valued at fair value at the end of the reporting period 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 trust, 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 trust. 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 Trust 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 initially recognised at fair value. 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. Financial assets at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial assets at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in calculating the trust s surplus or deficit for the year. The net gain or loss incorporates any interest earned on the financial asset. Fair value is determined by reference to quoted market prices. Page 14 of 47

15 Notes to the Accounts - 1. Accounting Policies (Continued) Held to maturity investments Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, and there is a positive intention and ability to hold to maturity. After initial recognition, they are held at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. Available for sale financial assets Available for sale financial assets are non-derivative financial assets that are designated as available for sale or that do not fall within any of the other three financial asset classifications. They are measured at fair value with changes in value taken to the revaluation reserve, with the exception of impairment losses. Accumulated gains or losses are recycled to surplus/deficit on de-recognition. There are no available 'for sale' assets. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. Fair value is determined by reference to quoted market prices. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, to the initial fair value of the financial asset. At the end of the reporting period, the trust assesses whether any financial assets, other than those held at fair value through profit and loss are impaired. Financial assets are impaired and impairment losses recognised if there is objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset. For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset s carrying amount and the present value of the revised future cash flows discounted at the asset s original effective interest rate. The loss is recognised in expenditure and the carrying amount of the asset is reduced through a provision for impairment of receivables Page 15 of 47

16 Notes to the Accounts - 1. Accounting Policies (Continued) If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through expenditure to the extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised Financial liabilities Financial liabilities are recognised on the statement of financial position when the trust 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 de-recognised when the liability has been discharged, that is, the liability has been paid or has expired. Loans from the Department of Health are recognised at historical cost. Otherwise, financial liabilities are initially recognised at fair value. Financial guarantee contract liabilities Financial guarantee contract liabilities are subsequently measured at the higher of: The premium received (or imputed) for entering into the guarantee less cumulative amortisation. The amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets ; and Financial liabilities at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial liabilities at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the trust s surplus/deficit. The net gain or loss incorporates any interest payable on the financial liability. Fair value is determined by reference to quoted market prices. Other financial liabilities After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method, except for loans from Department of Health, which are carried at historic cost. The effective interest rate is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest is recognised using the effective interest method Value Added Tax Most of the activities of the trust 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 Trust'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 trust s surplus/deficit in the period in which they arise Third party assets Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the trust has no beneficial interest in them. Details of third party assets are given in Note 44 to the accounts. Page 16 of 47

17 Notes to the Accounts - 1. Accounting Policies (Continued) 1.28 Public Dividend Capital (PDC) and PDC dividend Public dividend capital represents taxpayers equity in the NHS trust. At any time the Secretary of State can issue new PDC to, and require repayments of PDC from, the trust. PDC is recorded at the value received. As PDC is issued under legislation rather than under contract, it is not treated as an equity financial instrument. An annual charge, reflecting the cost of capital utilised by the trust, is payable to the Department of Health as public dividend capital dividend. The charge is calculated at the real rate set by HM Treasury (currently 3.5%) on the average carrying amount of all assets less liabilities, except for donated assets and cash balances with the Office of the Paymaster General. The average carrying amount of assets is calculated as a simple average of opening and closing relevant net assets Losses and 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 NHS trusts not been bearing their own risks (with insurance premiums then being included as normal revenue expenditure) Subsidiaries Material entities over which the Trust has the power to exercise control so as to obtain economic or other benefits are classified as subsidiaries and are consolidated. Their income and expenses; gains and losses; assets, liabilities and reserves; and cash flows are consolidated in full into the appropriate financial statement lines. Appropriate adjustments are made on consolidation where the subsidiary s accounting policies are not aligned with the Trust s or where the subsidiary s accounting date is before 1 January or after 30 June. Subsidiaries that are classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell For and in accordance with the directed accounting policy from the Secretary of State, the Trust does not consolidate the NHS charitable funds for which it is the corporate trustee. Page 17 of 47

18 Notes to the Accounts - 1. Accounting Policies (Continued) 1.31 Associates Material entities over which the Trust has the power to exercise significant influence so as to obtain economic or other benefits are classified as associates and are recognised in the Trust s accounts using the equity method. The investment is recognised initially at cost and is adjusted subsequently to reflect the Trust s share of the entity s profit/loss and other gains/losses. It is also reduced when any distribution is received by the Trust from the entity. Associates that are classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell 1.32 Joint operations Joint operations are activities undertaken by the Trust in conjunction with one or more other parties but which are not performed through a separate entity. The Trust records its share of the income and expenditure; gains and losses; assets and liabilities; and cashflows Research and Development Research and development expenditure is charged against income 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 Operating Cost Statement on a systematic basis over the period expected to benefit from the project. It should be revalued on the basis of current cost. The amortisation is calculated on the same basis as depreciation, on a quarterly basis Accounting Standards that have been issued but have not yet been adopted The Treasury FReM does not require the following Standards and Interpretations to be applied in The application of the Standards as revised would not have a material impact on the accounts for , were they applied in that year: IAS 27 Separate Financial Statements - subject to consultation IAS 28 Investments in Associates and Joint Ventures - subject to consultation IFRS 9 Financial Instruments - subject to consultation - subject to consultation IFRS 10 Consolidated Financial Statements - subject to consultation IFRS 11 Joint Arrangements - subject to consultation IFRS 12 Disclosure of Interests in Other Entities - subject to consultation IFRS 13 Fair Value Measurement - subject to consultation IPSAS 32 - Service Concession Arrangement - subject to consultation IAS 1 Presentation of financial statements (amendment). IAS 12 Income Taxes (amendment). IAS 19 (Revised) Employee Benefits IFRS 7 Financial Instruments: Disclosures (amendment) IAS 27 Consolidated and separate financial statements Annual Improvements to IFRS 2011 IAS 32 Financial instruments: Presentation (amendment) Impact of IAS 27 Separate Financial Statements: If the Trust were to have consolidated its financial statements with those for the Trust's NHS charitable funds in 2012/13, the impact on its surplus would be to decrease it by 117k. The impact on assets would be to increase the fixed assets (investments) by 429k and decrease net current assets by 91k. Page 18 of 47

19 2. Operating segments On 3 November 2011, the Trust merged with Milton Keynes Community Health Services (MKCHS) and in accordance with the accounting policy noted in 1.3 has been reported as a full year transaction from 1 April It has been reported below as a separate segment following the elimination of any transactions within the Trust. Previously, MKCHS was part of Milton Keynes Primary Care Trust. Segment [BHT] Segment [MKCHS] Total s 000s 000s 000s 000s 000s Income 160, ,236 62,609 60, , ,893 Surplus/(Deficit) Segment surplus/(deficit) (898) (615) 1,053 Common costs (157,895) (148,886) (62,332) (60,656) (220,227) (209,542) Surplus/(deficit) before interest 1,607 4, ,167 4,404 Net Assets: Segment net assets 90,832 89, ,202 89,263 The operating segment disclosures are supported by the maintenance of a separate ledger and cash management for each segment. Transactions between the two organizations have been excluded for the purpose of consolidation in the statement of comprehensive income. Page 19 of 47

20 3. Income generation activities The trust undertakes income generation activities with an aim of achieving profit, which is then used in patient care. The following provides details of income generation activities whose full cost exceeded 1m or was otherwise material. Summary Table - aggegate of all schemes s 000s Income Full cost Surplus/(deficit) The Trust operates a restaurant, bistro and hospital shop for the benefit of staff, patients and visiting members of the public. The cost of these activities is based on a management estimate. The Board requires the operation to be self-financing on a fully absorbed cost basis. Surpluses contribute to the overall financial performance of the Trust and are reinvested in Trust facilities and serviecs. This objective was achieved in both 2012/13 and 2011/ Revenue from patient care activities s 000s Strategic Health Authorities 0 0 NHS Trusts 7 0 Primary Care Trusts - tariff 119, ,533 Primary Care Trusts - non-tariff 69,543 27,506 Primary Care Trusts - market forces factor 9,485 9,001 NHS Foundation Trusts 1,492 1,116 Local Authorities 2,056 1,343 Department of Health 1 1 NHS other 0 0 Non-NHS: Private patients Overseas patients (non-reciprocal) Injury costs recovery Other Total Revenue from patient care activities 204, ,446 Injury cost recovery income is subject to a provision for impairment of receivables of 12.6% to reflect the expected rates of collection. The following external customers individually represent more than 10% of income: s 000s Bedfordshire Primary Care Trust 131, ,040 Milton Keynes Primary Care Trust 59,295 57, Other operating revenue s 000s Recoveries in respect of employee benefits Patient transport services 0 0 Education, training and research 6,229 6,291 Charitable and other contributions to revenue expenditure - NHS 0 0 Charitable and other contributions to revenue expenditure -non- NHS 27 4 Receipt of donations for capital acquisitions - NHS Charity Receipt of Government grants for capital acquisitions 0 0 Non-patient care services to other bodies 6,117 5,337 Income generation 3,425 2,297 Rental revenue from finance leases 0 0 Rental revenue from operating leases Other revenue 2,936 2,302 Total Other Operating Revenue 18,878 17,447 Total operating revenue 223, ,893 'Other' operating revenue comprises management fee for MKCHS 462k ( k), SHA funding for strategic review 612k ( nil), library support 105k ( k), workforce support 250k ( nil), rent from Gilbert Hitchcock House 160k ( k), sale of goods ((Northants) 110k ( nil) 6. Revenue From rendering of services 204, ,446 From sale of goods 18,878 17,447 Revenue from the sale of good is considered to be all revenue arising from non patient care activity. Page 20 of 47

21 7. Operating expenses (excluding employee benefits) s 000s Services from other NHS trusts Services from PCTs Services from other NHS bodies 0 0 Services from foundation trusts 8,806 8,447 Purchase of healthcare from non NHS bodies 15,821 14,073 Trust Chair and Non-executive Directors Supplies and services - clinical 22,976 21,863 Supplies and services - general 3,491 3,346 Consultancy services 2,328 1,647 Establishment 3,731 3,812 Transport Premises 10,361 10,027 Impairments and Reversals of Receivables Inventories write down 0 0 Depreciation 5,069 5,317 Amortisation Impairments and reversals of property, plant and equipment 234 (457) Impairments and reversals of intangible assets 0 0 Impairments and reversals of financial assets [by class] 0 0 Impairments and reversals of non current assets held for sale 0 0 Impairments and reversals of investment properties 0 0 Audit fees Other auditor's remuneration [detail] 0 18 Clinical negligence 4,396 3,936 Research and development (excluding staff costs) 0 0 Education and Training Change in Discount Rate 0 Other 2,518 1,221 Total Operating expenses (excluding employee benefits) 82,524 75,637 Employee benefits Employee benefits excluding Board members 135, ,152 Trust Officer Board members Total employee benefits 136, ,152 Total operating expenses 218, ,789 Page 21 of 47

22 8 Operating Leases Trust as lessee Land Buildings Other Total s 000s 000s 000s 000s Payments recognised as an expense Minimum lease payments 192 2,456 Contingent rents 0 0 Sub-lease payments 2, Total 2,715 2,642 Payable: No later than one year , Between one and five years 799 1, ,524 1,787 After five years 1,883 11, ,199 12,602 Total 3,032 12,738 1,053 16,823 15,044 Total future sublease payments expected to be received: 0 0 On 27 March 2012, the Trust entered a lease for a CT Scanner at a quarterly rent of 21,027 inclusive of VAT, payable for 7 years. The estimated residual value at the conclusion of the primary rental period is 119,878 inclusive of VAT, at which point a secondary rental period would become effective. The Trust entered a lease for land with Network Rail for 300,000 per annum for the period 1 April 2013 to 31 March This is an extension to a previous leasing arrangement. 8.2 Trust as lessor The Trust rents Weller Wing to South Essex Partnership Foundation Trust s Recognised as income Rental revenue Contingent rents 0 0 Total Receivable: No later than one year Between one and five years After five years Total Page 22 of 47

23 9 Employee benefits and staff numbers 9.1 Employee benefits Total Permanently employed Other 000s 000s 000s Employee Benefits - Gross Expenditure Salaries and wages 113, ,487 11,686 Social security costs 10,469 10,469 0 Employer Contributions to NHS BSA - Pensions Division 12,458 12,458 0 Other pension costs Other post-employment benefits Other employment benefits Termination benefits Gross employee benefits 136, ,502 11,686 Less recoveries in respect of employee benefits (table below) (109) (109) 0 Total - Net Employee Benefits including capitalised costs 136, ,393 11,686 Gross Employee Benefits 136,188 Employee costs capitalised 95 Gross Employee Benefits excluding capitalised costs 136,093 Employee Benefits income Salaries and wages Social Security costs Employer Contributions to NHS BSA - Pensions Division Other pension costs Other Post Employment Benefits Other Employment Benefits Termination Benefits TOTAL excluding capitalised costs Total Permanently employed Other 000s 000s 000s Gross Employee Benefits & Net expenditure Salaries and wages 111, ,484 8,071 Social security costs 8,174 7, Employer Contributions to NHS BSA - Pensions Division 12,423 12, Other pension costs Other post-employment benefits Other employment benefits Termination benefits TOTAL - including capitalised costs (gross) 132, ,365 8,593 Less recoveries in respect of employee benefits (152) (152) 0 Total - Net Employee Benefits including capitalised costs 132, ,213 8,593 Recognised as Gross Employee Benefits 132,958 Employee costs capitalised 109 Net Employee Benefits excluding capitalised costs 132,849 Employee Benefits income Salaries and wages Social Security costs Employer Contributions to NHS BSA - Pensions Division Other pension costs Other Post Employment Benefits Other Employment Benefits Termination Benefits TOTAL excluding capitalised costs Staff Numbers Total Permanently employed Other Total Number Number Number Number Average Staff Numbers Medical and dental Ambulance staff Administration and estates Healthcare assistants and other support staff Nursing, midwifery and health visiting staff ,038 Nursing, midwifery and health visiting learners Scientific, therapeutic and technical staff Social Care Staff Other TOTAL 3,286 3, ,220 Of the above - staff engaged on capital projects Staff Sickness absence and ill health retirements Number Number Total Days Lost ,485 Total Staff Years ,050 Average working Days Lost Number Number Number of persons retired early on ill health grounds s 000s Total additional pensions liabilities accrued in the year 0 0 Page 23 of 47

24 9.4 Exit Packages agreed in Exit package cost band (including any special payment element) *Number of compulsory redundancies *Number of other departures agreed Total number of exit packages by cost band *Number of compulsory redundancies *Number of other departures agreed Total number of exit packages by cost band Number Number Number Number Number Number Less than 10, ,001-25, ,001-50, , , , , , , > 200, Total number of exit packages by type (total cost Total resource cost ( ) 186, , , , , ,000 Redundancy and other departure costs have been paid in accordance with the provisions of the NHS Scheme and MARS scheme. Where the Trust has agreed early retirements, the additional costs are met by the Trust and not by the NHS pensions scheme. Ill-health retirement costs are met by the NHS pensions scheme and are not included in the table. This disclosure reports the number and value of exit packages where they have been agreed with staff in year. BHT ran a Mutually Agreed Resignation Scheme (MARS) in the year to suppport delivery of efficiency plans and 26 staff left using the scheme at a cost of 416k. There were 5 redundancies made at a cost of 186k to support the efficiency plans in BHT and MKCHS. Page 24 of 47

25 9.5 Pension costs Past and present employees are covered by the provisions of the NHS Pensions 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 NHS Body 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: a) 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 2004 and covered the period from 1 April 1999 to that date. The conclusion from the 2004 valuation was that the scheme had accumulated a notional deficit of 3.3 billion against the notional assets as at 31 March In order to defray the costs of benefits, employers pay contributions at 14% of pensionable pay and most employees had up to April 2008 paid 6%, with manual staff paying 5%. Following the full actuarial review by the Government Actuary undertaken as at 31 March 2004, and after consideration of changes to the NHS Pension Scheme taking effect from 1 April 2008, his Valuation report recommended that employer contributions could continue at the existing rate of 14% of pensionable pay, from 1 April 2008, following the introduction of employee contributions on a tiered scale from 5% up to 8.5% of their pensionable pay depending on total earnings. On advice from the scheme actuary, scheme contributions may be varied from time to time to reflect changes in the scheme s liabilities. b) Accounting valuation A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period by updating the results of the full actuarial valuation. Between the full actuarial valuations at a two-year midpoint, a full and detailed member data-set is provided to the scheme actuary. At this point the assumptions regarding the composition of the scheme membership are updated to allow the scheme liability to be valued. The valuation of the scheme liability as at 31 March 2011, is based on detailed membership data as at 31 March 2008 (the latest midpoint) updated to 31 March 2011 with summary global member and accounting data. The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Resource Account, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office. c) Scheme provisions The NHS Pension Scheme provided defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the Scheme or the specific conditions that must be met before these benefits can be obtained: The Scheme is a final salary scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last three years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service. With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as pension commutation. Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. Early payment of a pension, with enhancement, is available to members of the scheme who are permanently incapable of fulfilling their duties effectively through illness or infirmity. A death gratuity of twice final year s pensionable pay for death in service, and five times their annual pension for death after retirement is payable 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 the statement of comprehensive income at the time the Trust commits itself to the retirement, regardless of the method of payment. Members can purchase additional service in the NHS Scheme and contribute to money purchase AVC s run by the Scheme s approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers. Page 25 of 47

26 10 Better Payment Practice Code 10.1 Measure of compliance Number 000s Number 000s Non-NHS Payables Total Non-NHS Trade Invoices Paid in the Year 49,057 78,240 31,686 48,264 Total Non-NHS Trade Invoices Paid Within Target 44,706 77,880 29,601 45,655 Percentage of NHS Trade Invoices Paid Within Target 91.13% 99.54% 93.42% 94.59% NHS Payables Total NHS Trade Invoices Paid in the Year 1,973 24,093 1,162 12,651 Total NHS Trade Invoices Paid Within Target 1,765 22,289 1,058 12,311 Percentage of NHS Trade Invoices Paid Within Target 89.46% 92.51% 91.05% 97.31% The Better Payment Practice Code requires the Trust to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later The Late Payment of Commercial Debts (Interest) Act s 000s Amounts included in finance costs from claims made under this legislation 0 1 Compensation paid to cover debt recovery costs under this legislation 0 0 Total 0 1 Page 26 of 47

27 11 Investment Income s 000s Interest Income Bank interest Other loans and receivables 0 0 Impaired financial assets 0 0 Other financial assets 0 0 Total investment income Other Gains and Losses s 000s Gain/(Loss) on disposal of assets other than by sale (PPE) (193) (32) Gain/(Loss) on disposal of assets other than by sale (intangibles) 0 0 Gain/(Loss) on disposal of Financial Assets other then held for sale 0 0 Gain (Loss) on disposal of assets held for sale 0 0 Gain/(loss) on foreign exchange 0 0 Change in fair value of financial assets carried at fair value through the SoCI 0 0 Change in fair value of financial liabilities carried at fair value through the SoCI 0 0 Change in fair value of investment property 0 0 Recycling of gain/(loss) from equity on disposal of financial assets held for sale 0 0 Total (193) (32) 13 Finance Costs s 000s Interest Interest on loans and overdrafts 3 13 Interest on obligations under finance leases Interest on obligations under PFI contracts: - main finance cost contingent finance cost 0 0 Interest on obligations under LIFT contracts: - main finance cost contingent finance cost 0 0 Interest on late payment of commercial debt 0 1 Other interest expense 0 0 Total interest expense Other finance costs 0 0 Provisions - unwinding of discount Total Page 27 of 47

28 14.1 Property, plant and equipment Land Buildings excluding dwellings Dwellings Assets under construction & payments on account Plant & machinery Transport equipment Information technology Furniture & fittings 000's 000's 000's 000's 000's 000's 000's 000's 000's Cost or valuation: At 1 April ,934 79,975 1, , ,011 3, ,403 Additions of Assets Under Construction 0 0 Additions Purchased 0 3, ,139 5,549 Additions Donated Additions Government Granted Additions Leased Reclassifications 0 (400) Reclassifications as Held for Sale and reversals Disposals other than for sale 0 (222) (222) Upward revaluation/positive indexation 75 2, ,464 Impairments/negative indexation (100) (1,886) (147) (2,133) Reversal of Impairments Transfers to NHS Foundation Trust Transfer (to)/from Other Public Sector bodies At 31 March ,909 83,430 1, , ,580 4, ,061 Depreciation At 1 April , , ,998 1,331 24,376 Reclassifications 0 (10) Reclassifications as Held for Sale and reversals Disposals other than for sale 0 (21) (21) Upward revaluation/positive indexation Impairments Reversal of Impairments Charged During the Year 0 2, , ,069 Transfers to NHS Foundation Trust Transfer (to)/from Other Public Sector bodies At 31 March , , ,687 1,688 29,658 Net Book Value at 31 March ,514 70,739 1, , ,893 2,943 97,403 Purchased 13,514 69,710 1, , ,893 2,943 95,680 Donated 0 1, ,723 Government Granted Total at 31 March ,514 70,739 1, , ,893 2,943 97,403 Asset financing: Owned 13,514 67,339 1, , ,893 2,943 94,003 Held on finance lease 0 3, ,400 On-SOFP PFI contracts PFI residual: interests Total at 31 March ,514 70,739 1, , ,893 2,943 97,403 Total Revaluation Reserve Balance for Property, Plant & Equipment Land Buildings Dwellings Assets under construction & payments on account Plant & machinery Transport equipment Information technology Furniture & fittings 000's 000's 000's 000's 000's 000's 000's 000's 000's At 1 April ,335 21,976 1, ,447 Movements (25) (1) (16) 0 0 (2) 157 At 31 March ,310 21,975 1, ,604 Total Page 28 of 47

29 14.2 Property, plant and equipment prior-year Land Buildings excluding dwellings Dwellings Assets under construction & payments on account Plant & machinery Transport equipment Information technology Furniture & fittings 000s 000s 000s 000s 000s 000s 000s 000s 000s Cost or valuation: At 1 April ,150 75,908 1, , ,205 2, ,978 Additions - purchased 0 1, ,869 Additions - donated Additions - government granted Reclassifications Reclassifications as Held for Sale and reversals Disposals other than by sale (198) 0 (572) 0 (3,362) 0 (1,944) (74) (6,150) Revaluation & indexation gains 0 2, ,124 Impairments (18) (18) Reversals of impairments In-year transfers to/from NHS bodies Transfer to NHS Foundation Trust Cumulative dep netted off cost following revaluation At 31 March ,934 79,975 1, , ,011 3, ,403 Depreciation At 1 April , , ,079 1,135 25,003 Reclassifications Reclassifications as Held for Sale and reversals Disposals other than for sale 0 0 (107) (3,362) 0 (1,944) (74) (5,487) Upward revaluation/positive indexation Impairments Reversal of Impairments 0 (656) (656) Charged During the Year 0 2, , ,317 Transfers to NHS Bodies Transfer to NHS Foundation Trust Cumulative dep netted off cost following revaluation At 31 March , , ,998 1,331 24,376 Net book value at 31 March ,539 70,092 1, , ,013 1,761 96,027 Purchased 13,539 69,015 1, , ,013 1,761 94,034 Donated 0 1, ,862 Government Granted Total at 31 March ,539 70,092 1, , ,013 1,761 96,027 Asset financing: Owned 13,539 66,492 1, , ,013 1,761 92,427 Held on finance lease 0 3, ,600 On-SOFP PFI contracts PFI residual: interests Total at 31 March ,539 70,092 1, , ,013 1,761 96,027 Total Revaluation Reserve Balance for Property, Plant & Equipment Land Buildings Dwellings Assets under construction & payments on account Plant & machinery Transport equipment Information technology Furniture & fittings 000's 000's 000's 000's 000's 000's 000's 000's 000's At 1 April ,446 20,891 1, ,895 Movements (111) 1,085 (387) (32) (3) 552 At 31 March ,335 21,976 1, ,447 Total Page 29 of 47

30 14.3 (cont). Property, plant and equipment The Trust employed the services of the a District Valuer to update the values of the land, buildings and dwellings for Bedford Hospital as at 31 March This resulted in an overall increase in the value of buildings of 895,099, dwellings of 227,535 and a decrease in the value of land by 25,000. These were primarily attributed to an overall increase in the buildings index due to commercial conditions. Whilst 234,047 has been charged to Income and Expenditure, the balance of 1,331,681 has been taken to the revaluation reserve. Estimated economic lives of fixed assets are as follows: Min years Max years Buildings excluding dwellings (as advised by the District Valuer) 5 63 Dwellings 3 36 Plant and Machinery 2 15 Transport and Equipment 7 15 Information Technology 3 15 Furniture and Fittings 4 15 The land related to Dwellings is valued at 733,000. ( ,000) Page 30 of 47

31 15.1 Intangible non-current assets Software internally generated Software purchased Licences & trademarks Patents Development expenditure 's 000's 000's 000's 000's 000's At 1 April , ,075 Additions - purchased Additions - internally generated Additions - donated Additions - government granted Additions - leased Reclassifications Reclassified as Held for Sale and Reversals Disposals other than by sale Revaluation & indexation gains Impairments charged to reserves Reversal of impairments charged to reserves Transfer to NHS Foundation Trust Transfer (to)/from Other Public Sector bodies At 31 March , ,389 Amortisation At 1 April , ,872 Reclassifications Reclassified as Held for Sale and Reversals Disposals other than by sale Revaluation or indexation gains Impairments charged to operating expenses Reversal of impairments charged to operating expenses Charged during the year Transfer to NHS Foundation Trust Transfer (to)/from Other Public Sector bodies At 31 March , ,258 Net Book Value at 31 March , ,131 Net book value at 31 March 2013 comprises: Purchased 1, ,082 Donated Government Granted Total at 31 March , ,131 Total Revaluation reserve balance for intangible non-current assets 000's 000's 000's 000's 000's 000's At 1 April Movements (specify) At 31 March Page 31 of 47

32 15.2 Intangible non-current assets prior year Software internally generated Software purchased Licences & trademarks Patents Development expenditure 000s 000s 000s 000s 000s 000s Cost or valuation: At 1 April , ,101 Additions - purchased Additions - internally generated Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale (867) (867) Revaluation & indexation gains Impairments Reversal of impairments Transfer to NHS Foundation Trust Less cumulative depreciation written down on revaluation At 31 March , ,075 Amortisation At 1 April , ,260 Reclassifications Reclassified as held for sale Disposals other than by sale (867) (867) Revaluation or indexation gains Impairments charged to operating expenses Reversal of impairments charged to operating expenses Charged during the year Transfer to NHS Foundation Trust Less cumulative depreciation written down on revaluation At 31 March , ,872 Net book value at 31 March , ,203 Net book value at 31 March 2012 comprises: Purchased 1, ,134 Donated Government Granted Total at 31 March , ,203 Total 15.3 Intangible non-current assets The estimated economic life of software licences ranges from a minimum of 3 years to a maxiumum of 5 years. Page 32 of 47

33 16 Analysis of impairments and reversals recognised in s Property, Plant and Equipment impairments and reversals taken to SoCI Loss or damage resulting from normal operations 234 Over-specification of assets 0 Abandonment of assets in the course of construction 0 Total charged to Departmental Expenditure Limit 234 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total charged to Annually Managed Expenditure 0 Property, Plant and Equipment impairments and reversals charged to the revaluation reserve Loss or damage resulting from normal operations 2,133 Over Specification of Assets 0 Abandonment of assets in the course of construction 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total impairments for PPE charged to reserves 2,133 Total Impairments of Property, Plant and Equipment 2,367 Intangible assets impairments and reversals charged to SoCI Loss or damage resulting from normal operations 0 Over-specification of assets 0 Abandonment of assets in the course of construction 0 Total charged to Departmental Expenditure Limit 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total charged to Annually Managed Expenditure 0 Intangible Assets impairments and reversals charged to the Revaluation Reserve Loss or damage resulting from normal operations 0 Over-specification of assets 0 Abandonment of assets in the course of construction 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total impairments for Intangible Assets charged to Reserves 0 Total Impairments of Intangibles 0 Financial Assets charged to SoCI Loss or damage resulting from normal operations 0 Total charged to Departmental Expenditure Limit 0 Loss as a result of catastrophe 0 Other 0 Total charged to Annually Managed Expenditure 0 Financial Assets impairments and reversals charged to the Revaluation Reserve Loss or damage resulting from normal operations 0 Loss as a result of catastrophe 0 Other 0 TOTAL impairments for Financial Assets charged to reserves 0 Total Impairments of Financial Assets 0 Non-current assets held for sale - impairments and reversals charged to SoCI. Loss or damage resulting from normal operations 0 Abandonment of assets in the course of construction 0 Total charged to Departmental Expenditure Limit 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total charged to Annually Managed Expenditure 0 Total impairments of non-current assets held for sale 0 Inventories - impairments and reversals charged to SoCI. Loss or damage resulting from normal operations 0 Total charged to Departmental Expenditure Limit 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total charged to Annually Managed Expenditure 0 Total impairments of Inventories 0 Investment Property impairments charged to SoCI Loss or damage resulting from normal operations 0 Total charged to Departmental Expenditure Limit 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total charged to Annually Managed Expenditure 0 Total Investment Property impairments charged to SoCI 0 Investment Property impairments and reversals charged to the revaluation reserve Loss or damage resulting from normal operations 0 Over Specification of Assets 0 Unforeseen obsolescence 0 Loss as a result of catastrophe 0 Other 0 Changes in market price 0 Total impairments for Investment Property charged to reserves 0 Total Impairments of Investment Property 0 Total Impairments charged to Revaluation Reserve 2,133 Total Impairments charged to SoCI - DEL 234 Total Impairments charged to SoCI - AME 0 Overall Total Impairments 2,367 Of which: Impairment on revaluation to "modern equivalent asset" basis 0 Donated and Gov Granted Assets, included above PPE - Donated and Government Granted Asset Impairments: amount charged to SOCI - DEL 0 Intangibles - Donated and Government Granted Asset Impairments: amount charged to SOCI - DEL 0 Total Page 33 of 47

34 17 Investment property 31 March March s 000s At fair value Balance at 1 April Additions Through Subsequent Expenditure 0 0 Other Acquisitions 0 0 Disposals 0 0 Property Reclassified as Held for Sale 0 0 Loss from Fair Value Adjustments - Impairments 0 0 Gain from Fair Value Adjustments - Reversal of Impairments 0 Gain from Fair Value Adjustments 0 0 Transfer to other NHS Foundation Trust 0 0 Transfers (to) / from Other Public Sector Bodies 0 0 Other Changes 0 0 Balance at 31 March Investment property transactions in Capital expenditure 0 0 Capital income Commitments 18.1 Capital commitments Contracted capital commitments at 31 March not otherwise included in these financial statements: 31 March March s 000s Property, plant and equipment 0 1,299 Intangible assets 0 0 Total 0 1, Other financial commitments The trust has entered into non-cancellable contracts (which are not leases or PFI contracts or other service 31 March March s 000s Not later than one year 0 0 Later than one year and not later than five year 0 0 Later than five years 0 0 Total Intra-Government and other balances Current receivables Non-current receivables Current payables Non-current payables 000s 000s 000s 000s Balances with other Central Government Bodies 6, ,501 0 Balances with Local Authorities Balances with NHS bodies outside the Departmental Group Balances with NHS Trusts and Foundation Trusts 1, ,807 0 Balances with Public Corporations and Trading Funds Balances with bodies external to government At 31 March , ,933 0 prior period: Balances with other Central Government Bodies 6, ,672 0 Balances with Local Authorities Balances with NHS Trusts and Foundation Trusts 1, ,932 0 Balances with Public Corporations and Trading Funds Balances with bodies external to government 3, ,577 0 At 31 March , ,435 0 Page 34 of 47

35 20 Inventories Drugs Consumables Energy Work in progress Loan Equipment Other Total 000s 000s 000s 000s 000s 000s 000s Balance at 1 April ,655 Additions Inventories recognised as an expense in the period (8) 0 (16) 0 0 (4) (28) Write-down of inventories (including losses) Reversal of write-down previously taken to SoCI Transfers (to) Foundation Trusts Transfers (to) / from other Public Sector Bodies Balance at 31 March , Trade and other receivables Current Non-current 31 March March March March s 000s 000s 000s NHS receivables - revenue 7,127 7, NHS receivables - capital NHS prepayments and accrued income Non-NHS receivables - revenue 1,789 1, Non-NHS receivables - capital Non-NHS prepayments and accrued income 1,201 1, Provision for the impairment of receivables (691) (530) 0 0 VAT Current/non-current part of PFI and other PPP arrangements prepayments and accrued income Interest receivables Finance lease receivables Operating lease receivables Other receivables Total 11,000 11, Total current and non current 11,825 11,732 Included in NHS receivables are prepaid pension contributions: 0 0 The great majority of trade is with Primary Care Trusts, as commissioners for NHS patient care services. As Primary Care Trusts are funded by Government to buy NHS patient care services, no credit scoring of them is considered necessary Receivables past their due date but not impaired 31 March March s 000s By up to three months 2, By three to six months By more than six months Total 3,572 1, Provision for impairment of receivables s 000s Balance at 1 April 2012 (530) (566) Amount written off during the year Amount recovered during the year 76 0 (Increase)/decrease in receivables impaired (239) (144) Transfer to NHS Foundation Trust 0 0 Balance at 31 March 2013 (691) (530) Provision has been made for all debts originating prior to 31 October 2011, the percentage depending on the age of the individual category of debt. Injury Allowance debtors have been provided for at 12.6%. Page 35 of 47

36 22 Cash and Cash Equivalents 31 March March s 000s Opening balance 13,876 4,879 Net change in year (6,200) 8,832 Closing balance 7,676 13,711 Made up of Cash with Government Banking Service 7,661 13,748 Commercial banks Cash in hand Current investments 0 0 Cash and cash equivalents as in statement of financial position 7,676 13,876 Bank overdraft - Government Banking Service 0 (165) Bank overdraft - Commercial banks (1,775) 0 Cash and cash equivalents as in statement of cash flows 5,901 13,711 Patients' money held by the Trust, not included above The Trust held 33,483 (2011/12 21,210) on behalf of patients or other parties. This has been excluded from the cash and cash equivalents. Page 36 of 47

37 23 Trade and other payables Current Non-current 31 March March March March s 000s 000s 000s Interest payable 0 0 NHS payables - revenue 3,011 4, NHS payables - capital NHS accruals and deferred income 1, Non-NHS payables - revenue 6,032 11, Non-NHS payables - capital 440 2, Non_NHS accruals and deferred income 2,964 3, Social security costs 913 1,265 VAT Tax 1,051 1,546 Payments received on account Other 2,292 1, Total 18,182 26, Total payables (current and non-current) 18,182 26,435 Included above: to Buy Out the Liability for Early Retirements Over 5 Years 0 0 number of Cases Involved (number) 0 0 outstanding Pension Contributions at the year end Borrowings Current Non-current 31 March March March March s 000s 000s 000s Bank overdraft - Government Banking Service Bank overdraft - commercial banks 1,775 0 Loans from Department of Health Loans from other entities Finance lease liabilities ,280 6,447 Other (describe) Total 1,942 1,073 6,280 6,447 Total other liabilities (current and non-current) 8,222 7,520 Loans - repayment of principal falling due in: 31 March 2013 DH Other Total 000s 000s 000s 0-1 years Years 0 1,942 1, Years Over 5 Years 0 5,511 5,511 TOTAL 0 8,222 8,222 Page 37 of 47

38 25 Deferred income Current Non-current 31 March March March March s 000s 000s 000s Opening balance at 1 April Deferred income addition 0 0 1,300 0 Transfer of deferred income 0 (152) 0 0 Current deferred Income at 31 March ,300 0 Total deferred income (current and non-current) 1, Finance lease obligations as lessee On 29 March 2004, the Trust entered a finance lease for Beeden House which expires on the 5 April 2128 at an annual rent of 522, The rent is subject to an annual escalation of 2.5% up to the 29th anniversary. Subsequent rent reviews take place on the 30th anniversary and every 5 years thereafter. The lease has a break date on the the 30th anniversary of the commencement of the term and each succeeding 10th anniversary of the commencement of the term. Amounts payable under finance leases (Buildings) Minimum lease payments Present value of minimum lease 31 March March March March s 000s 000s 000s Within one year Between one and five years 2,777 2, After five years 14,304 15,024 5,511 5,719 Less future finance charges (11,286) (11,764) Present value of minimum lease payments 6,447 6,605 6,447 6,605 Included in: Current borrowings Non-current borrowings 6,280 6,447 6,447 6,605 Rental Income 31 March March 2012 Contingent rent 0 0 Other 0 0 Total rental income 0 0 Finance lease commitments 0 18,369 Page 38 of 47

39 27 Provisions Comprising: Total Pensions to Former Directors Pensions Relating to Other Staff Legal Claims Restructuring Continuing Care Equal Pay Agenda for Change Other Redundancy 000s 000s 000s 000s 000s 000s 000s 000s 000s 000s Balance at 1 April , , Arising During the Year Utilised During the Year (34) (34) 0 Reversed Unused (19) (19) 0 Unwinding of Discount Change in Discount Rate Transfers to NHS Foundation Trusts (for Trusts becoming FTs only) Transferred (to)/from other public sector bodies Balance at 31 March , , Expected Timing of Cash Flows: No Later than One Year Later than One Year and not later than Five Years Later than Five Years 1, , Amount Included in the Provisions of the NHS Litigation Authority in Respect of Clinical Negligence Liabilities: As at 31 March ,439 As at 31 March ,908 To remove ligature risk at the Campbell Centre Mental health in-patient facility in Milton Keynes, and to commission further work by relevant experts on improvements to health and safety at the Campbell Centre. Further, plans to be developed by contractors to fully segregate male and female patients across the unit to meet best practice. The extent and value of the work was uncertain at 31/3/13, being subject to reports from experts and contractors, but professional Estates advice valued the potential costs as 500,000. Contractors from approved supplier list will be invited to meet with Estates Advisors to agree scope and timing of work in line with operational requirements. The Campbell Centre is valued at 4,945, Contingencies Bedford Hospital NHS Trust held no contingent assets as at 31 March 2013 (31 March 2012: nil). The Trust has a contingent liabilty of 26,307k which is in respect of: Clinical Negligence Scheme for Trust (CNST) 19,226 Existing Liabilities Scheme (ELS) 6,906 Page 39 of 47

40 29 Financial Instruments 29.1 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 of the continuing service provider relationship that the NHS trust has with primary care trusts and the way those primary care trusts are financed, the NHS trust 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 NHS trust 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 NHS trust in undertaking its activities. The trust s treasury management operations are carried out by the finance department, within parameters defined formally within the trust s standing financial instructions and policies agreed by the board of directors. Trust treasury activity is subject to review by the trust s internal auditors. Currency risk The trust is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and sterling based. The trust has no overseas operations. The trust therefore has low exposure to currency rate fluctuations. Interest rate risk The trust borrows from government for capital expenditure, subject to affordability as confirmed by the strategic health authority. The borrowings are for 1 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 trust therefore has low exposure to interest rate fluctuations. Credit risk Because the majority of the trust s income comes from contracts with other public sector bodies, the trust has low exposure to credit risk. The maximum exposures as at 31 March 2013 are in receivables from customers, as disclosed in the trade and other receivables note. Liquidity risk The trust s operating costs are incurred under contracts with primary care trusts, which are financed from resources voted annually by Parliament. The trust funds its capital expenditure from funds obtained within its prudential borrowing limit. The trust is not, therefore, exposed to significant liquidity risks Financial Assets At fair value through profit and loss Loans and receivables Available for sale Total 000s 000s 000s 000s Embedded derivatives 0 0 Receivables - NHS 7,127 7,127 Receivables - non-nhs 4,698 4,698 Cash at bank and in hand 7,676 7,676 Other financial assets Total at 31 March , ,501 Embedded derivatives 0 0 Receivables - NHS 7,250 7,250 Receivables - non-nhs 4,482 4,482 Cash at bank and in hand 13,711 13,711 Other financial assets Total at 31 March , , Financial Liabilities At fair value Other Total through profit and loss 000s 000s 000s Embedded derivatives 0 0 NHS payables 3,011 3,011 Non-NHS payables 15,171 15,171 Other borrowings 1,775 1,775 PFI & finance lease obligations 6,447 6,447 Other financial liabilities Total at 31 March ,404 26,404 Embedded derivatives 0 0 NHS payables 4,656 4,656 Non-NHS payables 21,779 21,779 Other borrowings PFI & finance lease obligations 6,605 6,605 Other financial liabilities Total at 31 March ,955 33, Events after the end of the reporting period On the 1st April 2013 Bedford Hospital NHS Trust ceased to provide community and mental health services for Milton Keynes. The contracts for these services have been awarded to Central and North West London NHS Foundation Trust (CNWL). Assets and liabilities accrued as a result of the provision of these services until the 31st March 2013 remain with Bedford Hospital NHS Trust. Provision of these services generated a net surplus of 283,000 in 2012/13. All costs and income related to this performance will not form part of future Bedford Hospital financial performance. Page 40 of 47

41 31 Related party transactions During the year none of the Department of Health Ministers, trust board members or members of the key management staff, or parties related to any of them, has undertaken any material transactions with.bedford Hospital NHS Trust. The Department of Health is not regarded as a siginificant related party as the Market Forces Factor (MFF) payment is paid by the PCTs. During the year Bedford Hospital NHS Trust has had a significant number of material transactions with with other entities for which the Department is regarded as the parent Department Nature of transactions Payables Receivables Revenue Expenditure Payables Receivables Revenue Expenditure Income and Expenditure 000s 000s 000s 000s 000s 000s 000s 000s Bedfordshire PCT Health care service provision by BHT 2, , , , Moorfields Eye Hospital Subcontractor for provision of Ophthalmology at BHT 1, ,753 6,093 1, ,619 6,833 East of England SHA Education and training funding , ,100 2 Luton Teaching PCT Health care service provision by BHT 43 3, ,858 NHS Business Services Authority Pensions 12, ,434 NHS Litigation Authority Clinical Negligence scheme 4, ,976 South East Essex PCT Health care service provision by BHT , ,493 South Essex Partnership Foundation Trust Provision of clinical and non clinical services by BHT , , NHS Blood And Transplant Authority Blood and blood products supplied to BHT ,026 Northants Teaching PCT Health care service provision by BHT Milton Keynes PCT Health care service provision by BHT 771 1,310 58,215-2, ,202 2,528 Cambridgeshire PCT Health care service provision by BHT Luton and Dunstable Hospital Foundation Trust Clinical and non clinical services South Central SHA Education and training funding East and North Herts NHS Trust Clinical and non clinical services Northampton General Hospital NHS Trust Provision of clinical and non clinical services by BHT Princess Alexandra Hospital NHS Trust Provision of clinical and non clinical services by BHT West Hertfordshire Hospitals NHS Trust Provision of clinical and non clinical services by BHT University Hospital Birmingham Foundation Trust Subcontractor for payroll and pension services East Midlands SHA Education and training funding Cambridge University Hospital NHS Foundation Trust Clinical and non clinical services Milton Keynes Council Learning disabilties/child and Adoloescent Mental Health and equipment services , Bedford Borough Council Business Rates& Council Tax Milton Keynes NHS Foundation Trust Clinical and non clinical services ,681 Oxford Health NHS Foundation Trust Clinical and non clinical services Buckinghamshire PCT Health care service provision , ,210 Hertfordshire PCT Health care service provision by BHT Suffolk PCT Health care service provision by BHT NB. South Essex Partnership FT took over Beds and Luton Patrnership Trust in 2011/12 In addition, the Trust has had a number of material transactions with other government departments and other central and local government bodies. Most of these transactions have been with Bedford Borough Council in respect of rates. The Trust has also received revenue payments from a number of charitable funds, certain of the trustees for which are also members of the Trust board. 32 Losses and special payments The total number of losses cases in and their total value was as follows: Total Value Total Number of Cases of Cases s Losses 53, Special payments Total losses and special payments 57, The total number of losses cases in and their total value was as follows: Total Value Total Number of Cases of Cases s Losses 185, Special payments 5, Total losses and special payments 190, Page 41 of 47

42 33. Financial performance targets The figures given for periods prior to are on a UK GAAP basis as that is the basis on which the targets were set for those years Breakeven performance s 000s 000s 000s 000s 000s 000s 000s Turnover 101, , , , , , , ,009 Retained surplus/(deficit) for the year (11,887) 3,513 2,234 2,118 1,351 (3,286) 1, Adjustment for: Timing/non-cash impacting distortions: Use of pre surpluses [FDL(97)24 Agreements] /07 PPA (relating to 1997/98 to 2005/06) /08 PPA (relating to 1997/98 to 2006/07) /09 PPA (relating to 1997/98 to 2007/08) Adjustments for Impairments 0 (739) 3,560 (457) 234 Adjustments for impact of policy change re donated/government grants assets (399) 3 Consolidated Budgetary Guidance - Adjustment for Dual Accounting under IFRIC12* Adsorption Accounting Adjustment 0 Other agreed adjustments 8,480 12, Break-even in-year position (3,407) 15,633 2,234 2, ,232 Break-even cumulative position (12,120) 3,513 5,747 7,865 8,477 8,751 8,948 10,180 #The statutory requirement for NHS Trusts is to break-even taking one year with another. DH has determined that some items, as adjusted for below, can be excluded when considering this statutory requirement % % % % % % % % Materiality test (I.e. is it equal to or less than 0.5%): Break-even in-year position as a percentage of turnover Break-even cumulative position as a percentage of turnover The amounts in the above tables in respect of financial years 2005/06 to 2008/09 inclusive have not been restated to IFRS and remain on a UK GAAP basis. Page 42 of 47

43 33.2 Capital cost absorption rate The dividend payable on public dividend capital is based on the actual (rather than forecast) average relevant net assets and therefore the actual capital cost absorption rate is automatically 3.5% External financing The trust is given an external financing limit which it is permitted to undershoot s 000s 000s External financing limit 7,417 (2,411) Cash flow financing 6,902 (10,230) less MKCHS 8,283 less MKCHS - overdraft (165) Finance leases taken out in the year 0 0 Other capital receipts 0 (540) External financing requirement 6,902 (2,652) Undershoot/(overshoot) It was necessary to adjust for MKCHS in as it was not part of the defined limit Capital resource limit The trust is given a capital resource limit which it is not permitted to exceed s 000s Gross capital expenditure 5,863 5,310 Less: book value of assets disposed of (201) (663) Less: capital grants 0 0 Less: donations towards the acquisition of non-current assets 0 (600) Charge against the capital resource limit 5,662 4,047 Capital resource limit 6,360 4,700 (Over)/underspend against the capital resource limit Page 43 of 47

44 34 Third party assets The Trust held cash and cash equivalents which relate to monies held by the NHS Trust on behalf of patients or other parties. This has been excluded from the cash and cash equivalents figure reported in the accounts. 31 March March s 000s Third party assets held by the Trust Page 44 of 47

45 Independent Auditors Report to the Directors of the Board of Bedford Hospital NHS Trust

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