SALISBURY NHS FOUNDATION TRUST

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1 SALISBURY NHS FOUNDATION TRUST PAPER NUMBER: SFT 3001 TITLE: FINANCE REPORT FOR THE PERIOD TO 30 APRIL 2010 PURPOSE OF PAPER: To inform the Board of the financial and contracting position to 30 April EXECUTIVE SUMMARY: 1. The Trust is reporting an overspend of 570k after the first month of the financial year which reflects less income due to lower activity than expected, and the timescale to develop and implement savings. 2. The new Directorate structures are in place and the new Teams are focussed on preventing their budgets from oversp and achieving the agreed savings levels. Much work is taking place regarding this. 3. New contracts have not been agreed with PCTs for the new financial year and the 2009/10 contracts have been rolled forward. Contract variations will take place as agreed during the year. 4. There is a sum in the order of 1.6m which is in dispute with Wiltshire PCT which is currently under negotiation. ACTION REQUIRED BY THE BOARD: The Trust Board is asked to note the contents of the report. Malcolm Cassells Director of Finance and Procurement 27 May 2010

2 1. EXECUTIVE SUMMARY SALISBURY NHS FOUNDATION TRUST TRUST BOARD PERFORMANCE TO 30 APRIL 2010 This is a shortened report due to timescales associated with closing of accounts, contract discussions, Directorate restructures and the preparation of the 3 year plan. FT Plan to Actual to EBITDA m I & E Surplus m Total spells (phased) 4,686 Outpatient attendances 17,944 A&E Attendances 3,385 Income and expenditure is shown in Appendix 1 and shows a deficit of 0.57m Operating income was 13.6m which is below the FT plan of 14.57m. Operating Expenditure is 13.0m which is below FT plan of 13.5m and is related to activity being below plan. EBITDA is below plan. A new contract agreement has not been reached with NHSW and NHSD and therefore we are remaining on the existing 2009/10 contract which has a three year life. Negotiations continue to resolve the issue with non-pbr services. The financial envelope with Hampshire PCT has still to be concluded. Negotiations still need to be concluded with NHS South West Specialist Commissioners. Overperformance monies for 2009/10 for Dorset and Wiltshire are being challenged. 2. SALES Elective work in General Surgery, Plastics and Orthopaedics are significantly lower than expected. Last year activity was taking place to achieve 13 week targets which may not be necessary now. There has been considerable operational difficulties in Orthopaedics that has caused a fall in elective work when growth was expected from the repatriation of New Hall work. These difficulties, which involved consultant sickness and shortage of junior doctors, were compounded by the bank holidays in April which were always going to interrupt activity. The level of uncoded activity arriving at the income position is 30% which is not acceptable and will result in a level of error in income estimation. Discussions are taking place as to how we can achieve our target of coding within five working days.

3 Performance v FT Plan Actual M1 2009/10 Actual M1 2010/11 Elective: Inpatients Elective: Daycases 1,941 2,125 Non-elective: short stay spells Non-elective: longer stay spells 1,763 1,821 Outpatient: Initial attendances 6,577 5,009 Outpatient: Follow-up 12,169 10,583 attendances Out Patient Procedures 291 2, COST OF SALES INCLUDING INDIRECT COSTS Expenditure in total amounts to 13m against Foundation Trust plan of 13.5m. EBIDTA is below plan. All pay and non-pay costs and provisions have been fully accrued, and inflation and other reserves have been placed into budgets as appropriate. Having funded excess activity Directorates are overspent by 160,000 as summarised below: Directorate Net Budget to Net Expend to Variance to Medicine 2,506 2, Musculo Skeletal 2,024 2, Surgery 2,637 2, Clinical Support 2,339 2, Facilities 1,041 1, Sub-Total 220 Other Directorates 1,170 1, TOTAL 11,717 11, COST IMPROVEMENT PLANS The Directorates have achieved 58% of target but there is good work going on to rectify this position and the appointment of a manager to coordinate the savings activity will help to drive forward the work. It must also be borne in mind that with the reorganisation there was always going to be an impact on the ability to deliver savings in April as the new Teams get to know their Directorates. 5. RESERVES Limited reserves are held and these have been applied into the financial position. 6. CONTRACT DISCUSSIONS FOR 2010/11 Discussions with all commissioners have proved exceptionally difficult this year and there is only one very small new contract agreed. As existing contracts have a three year life we are continuing with these. This will affect penalties and the ability to access CQUIN money and these areas are still being discussed. Chief executive negotiations are on-going and a resolution may require additional support with regard to the non-pbr services. There is currently a gap in the order of 1.6m. Similarly with Dorset there is a gap of 1m, and a lesser gap with Hampshire.

4 Specialist commissioners are seeking to remove 300k which is being discussed. 7. LLANGARREN The insurance discussions regarding Llangarren have resulted in a satisfactory outcome which has been approved by the Finance Committee and steps are now being taken to market the site. 8. CONCLUSION A 0.57m deficit has been reported due mostly to lower that expected income from activity. 10. RECOMMENDATION The Trust Board is asked to consider the position as at the end of April Malcolm Cassells Director of Finance 27 May 2010

5 INCOME STATEMENT APPENDIX 1 Year 31-Mar June April Actual YTD Operating M M M M M NHS Clinical Revenue Var Elective ElectiveTariff revenue NE Non-Tariff revenue Non-Elective revenue Tariff revenue Non-Tariff revenue Planned Same day (Day cases) Tariff revenue Non-Tariff revenue Outpatient Tariff revenue Non-Tariff revenue A&E Tariff revenue Non-Tariff revenue Other NHS Tariff revenue Non-Tariff revenue Total NHS Tariff income Total NHS Non-Tariff income NHS Acute Activity Income, Total Sub-total NHS Clinical Revenue PBR (clawback)/ relief NHS Clinical Revenue, Total Non Mandatory/Non protected revenue 0.00 Private patient revenue Other Non Mandatory/Non protected clinical revenue Non Mandatory/Non protected revenue, Total Other Operating income Research and Development income Education and Training income PFI Specific income Misc. Other Operating Income Other Operating income, Total Operating Income, Total Operating Expenses Drugs Clinical supplies Non-clinical supplies Cost of Secondary Commissioning of mandatory services Employee Benefits Expenses [ was "Pay"] Research & Development expense Education and training expense Misc. other Operating expenses PFI operating expenses Operating Expenses, Total Profit (Loss) from Operations Year 31-Mar June April Actual YTD Non Operating M M M M M Non-Operating income Finance Income [for non-financial activities] Gain (Loss) on Financial Instruments Designated as Cash Flow Hedges Gain (Loss) on Derecognition of Available-for-Sale Financial Assets Gain (Loss) on Derecognition of Non-Current Assets Not Held for Sale, Total Gain (Loss) from investments (NOT charitable funds) Var Interest Income Dividend Income Share of profit (loss) from equity accounted Associates, Joint Ventures Share of Private Patient Income from equity accounted Associates, Joint Ventures Share of non Private Patient Income from equity accounted Associates, Joint Ventures Share of expenses from equity accounted Associates, Joint Ventures Share of profit (loss) from equity accounted Associates, Joint Ventures, Total Finance Income [for non-financial activities], Total Other Non-Operating income Profit (loss) on asset disposals Income of Charitable Funds ( if consolidated) Gain / (Loss) from charitable funds investments (if consolidated) Other Non-Operating income Other Non-Operating income, Total Non-Operating income, Total Non-Operating expenses NEW Finance Costs [for non-financial activities] Interest Expense Interest Expense on Overdrafts and Working Capital Facilities Interest Expense on Bridging loans Interest Expense on Non-commercial borrowings Interest Expense on Commercial borrowings Interest Expense on Finance leases (non-pfi) Interest Expense on PFI leases & liabilities Interest Expense, Total Depreciation and Amortisation Depreciation and Amortisation - owned assets Depreciation and Amortisation - assets held under finance leases Depreciation and Amortisation - PFI assets Depreciation and Amortisation, Total Other Finance Costs PDC dividend expense Finance Costs [for non-financial activities], Total Other Non-Operating expenses Impairment Losses (Reversals) net (on non-pfi assets) Impairment Losses (Reversals) net on PFI assets Restructuring Costs Expenditure of Charitable Funds (if consolidated) Other Non-Operating expenses Other Non-Operating expenses, Total Non-Operating expenses, Total Surplus (Deficit) before Tax Income Tax (expense)/ income Surplus (Deficit) After Tax Profit/(loss) from discontinued Operations, Net of Tax Surplus (Deficit) After Tax from Continuing Operations Total Income Total Expenses EBITDA Surplus (Deficit) After Tax

6 APPENDIX 2 TRUST SAVING TARGETS 2010/11 Remaining Non Recurring Directorate Saving Target Saving Target Allocation to Total Expected Achieved to Achieved Achieved 2009/ /11 Savings Targets as at M1 as at M1 (Not Achieved) % Medicine Musculo Skeletal Surgery Clinical Support & Family Services Facilities Corporate Directorates Nursing Medical/Clinical Effectiveness Total Savings

SALISBURY NHS FOUNDATION TRUST

SALISBURY NHS FOUNDATION TRUST PAPER NUMBER: SFT 3026 TITLE: FINANCE REPORT FOR THE PERIOD TO 30 JUNE 2010 PURPOSE OF PAPER: To inform the Board of the financial and contracting position to 30 2010. EXECUTIVE