Agenda Item 7.3 CCG BOARD EXECUTIVE SUMMARY SHEET

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1 Agenda Item 7.3 CCG BOARD EXECUTIVE SUMMARY SHEET DATE: 8 th March 2016 TITLE OF PAPER: Financial Position- Month 10 EXECUTIVE RESPONSIBLE: Andrew Tannatt Nash - Chief Finance Officer Ext: andrew.nash@telfordccg.nhs.uk AUTHOR (if different from above) CCG OBJECTIVE: Ruth Yates- Finance Manager Ext: ruth.yates@telfordccg.nhs.uk 9. Improving quality of health outcomes within the agreed resources. For Information X For decision For performance monitoring X EXECUTIVE SUMMARY (Key points in report) This report provides an update on Telford and Wrekin CCG s financial position for the period ending 31st January 2016 and performance against key financial objectives. We are currently on target to achieve our agreed financial targets. Our forecast assumes continuation of prudent financial management and QIPP delivery. A number of our partners within the health system face significant financial challenges. The CCG is working with partners, where possible, to support the local system. The risk relating to the procurement of MsK Services continues to be an issue. Risks and mitigations section 10 has been updated. FINANCIAL IMPLICATIONS: EQUALITY & DIVERSITY PATIENT & PUBLIC ENGAGEMENT LEGAL IMPACT: RECOMMENDATIONS: As outlined above None None None Members are asked to: Note the current financial position reported at Month 10. Note that the CCG is currently on target to achieve a business rules 1% surplus. Note the MsK financial risk and the need to take urgent action to mitigate this risk. Note the financial challenges faced by partner organisations within the health system. Is there a need to consider inclusion in the Corporate Risk Register? No

2 1. Executive Summary This report provides an update on Telford and Wrekin CCG s financial position to 31 st January 2016 and performance against key financial objectives. A summary of performance against the objective is shown in the table below:- Objective RAG In Month Change Our year to date position is in line with the plan trajectory Our year end forecast is in line with breakeven plan We do not exceed our Running Cost Allowance We deliver recurrent cashable efficiencies outlined in the QIPP Programme Our Cash balances are a max. of 1.25% of drawdown at month end We pay our bills in line with Better Payment Practice Code We live within our Capital Resource Limit Comments Our year to date position is currently in line with plan. At Month 10 there is a 31,000 surplus against available resources. We are currently on target to achieve a breakeven position against available resources. We are slightly overspent on running costs at month 10 by 3,000 however we are still on track to achieve a break even position by year end. Recurrent cashable efficiencies based on current contractual performance are slightly below plan year to date and the overall forecast is now 0.76m below plan. The CCG achieved this requirement in Month 10. In January we failed this target for both NHS and Non NHS invoices. We have a small capital allocation for 2015/16 of 45k. Key Appendix 1 shows the key data return that has been submitted to NHS England for Month 10. On Track Moderately Off Track Materially Off Track Improvement No Change Deterioration 2

3 2. Summary Financial Position Month 10 Appendix 2 shows the overall financial position for the CCG at the end of January 2016 split by expenditure area. This is summarised in the table and chart below:- TO UPDATE Forecast Outturn Forecast Variance Budget Year to Actual Year to Variance Year to Total Resource Limit 223, , ,493 0 Acute Services 109,564 1,833 89,776 91,292 1,516 Non Acute Services 47,514 (175) 39,770 39,177 (593) Primary Care Services 34,419 (454) 29,204 28,852 (352) Other 3,741 (1,204) 2,125 1,562 (563) Running Costs 4, ,605 3,609 4 Primary Care Co-Commissioning 21, ,246 17,202 (44) Total Expenditure 221, , ,694 (32) Budget (Surplus) / Deficit (2,121) 0 (1,767) (1,799) (32) Key Messages The CCG is currently on target to contain expenditure within its available resources. Delivery of QIPP schemes and strong management of contracts will be key in delivering the overall surplus target. It should be noted that in 2015/16 the CCG has been given delegated co-commissioning for Primary Care and a separate allocation of 21.8m. The financial position against this allocation is now included in this report and the detail of this budget is reported to the CCG s Primary Care Committee. Key points from each expenditure header are highlighted in the following pages. 3

4 3. Acute Services Month 10 Key Messages Forecast Outturn Forecast Variance Budget Year to Actual Year to Variance Year to Financial performance against the following areas are of note: In County NHS 93,965 1,472 77,078 78,303 1,225 Out of County NHS 6,502 (624) 5,939 5,295 (644) WMAS 5, ,260 4, NCAs & Other 3, ,499 3, Total Acute Services 109,564 1,833 89,776 91,292 1,516 In County NHS Initial data for Month 9 from SATH indicates an under performance against contract of approximately 1,252k so far for the year. The underspend mainly sits in critical care, PbR Daycases, elective and outpatient procedures. Up to Month 9, the CCG has also applied penalties and payment threshold adjustments, to the value of 954k. The CCG is required to reinvest these deductions to improve the quality of patient care. In recognition of future cost pressures to the Trust, in relation to:- winter resilience, RTT and 7 Day working, the CCG has proposed a year end settlement to account for current performance and future expenditure. The forecast outturn in the table reflects the proposed settlement and the contract variation for MSK actioned in October. Initial data from RJAH shows an overspend of 250k so far this year. The overspend mainly sits in PbR Daycase, Electives and Non PbR Outpatients. Other Acute Contracts Based on the information that we have received these contracts are underspending at Month 9. This is largely due to an underperformance on the University Hospitals North Midlands and the Royal Wolverhampton Hospitals contracts. However, the over performance at the Nuffield Hospital remains significant.

3a. Acute Services SaTH Admitted For the first nine months of 2015/16 combined SATH admitted activity is exceeding plan by 753, 3% of contracted activity.

5 3a. Acute Services SaTH Admitted For the first nine months of 2015/16 combined SATH admitted activity is exceeding plan by 753, 3% of contracted activity. Financial performance is under by 489k which would suggest that the case mix is weaker than expected. The majority of this underspend sits within Daycase and Elective. The graphs below show how Months 1-9 of 2015/16 compares to the last twelve months of activity and costs. Point of Delivery Activity Cost Var Caused by: Plan Actual Variance Plan Actual Variance Activity Price '000 '000 '000 '000 '000 Admitted 25,452 26, ,702 35,214 (489) 1,057 (1,545) Note:- This is based on 9 months initial activity. Costs exclude the impact of Emergency Threshold adjustments. 5

3a.1 SaTH Admitted Elective / Non Elective SaTH

Elective Activity is underperforming by 317 spells.

The cost of this activity shows an underspend of

activity is currently over performing on plan by

6 3a.1 SaTH Admitted Elective / Non Elective SaTH Elective Activity As at Month 9 of 2015/16 SaTH Elective Activity is underperforming by 317 spells. These are mostly spells related to Daycases. The cost of this activity shows an underspend of 570k. SaTH Non Elective Activity Non Elective activity is currently over performing on plan by 1,071 spells. The cost of the activity shows an overspend of 82k. 6

3b. Acute Services SaTH Outpatients For the first nine months of 2015/16 SATH outpatient activity is under performing by 1,371 attendances, this represents 1% of the overall contract.

7 3b. Acute Services SaTH Outpatients For the first nine months of 2015/16 SATH outpatient activity is under performing by 1,371 attendances, this represents 1% of the overall contract. Financial performance is also under by 125k. The graphs below show how Month 1 to 9 of 2015/16 compares to the last twelve months of activity and costs. Point of Delivery Note - this is based upon 9 months initial activity. Activity Cost Var Caused by: Plan Actual Variance Plan Actual Variance Activity Price '000 '000 '000 '000 '000 Outpatients 100,014 98,643 (1,371) 12,325 12,200 (125) (169) 44

3c. Acute Services SaTH A&E For the first nine months of 2015/16 A&E activity is below plan by 1,804 attendances. Financial performance in this area is also below plan by 174k.

8 3c. Acute Services SaTH A&E For the first nine months of 2015/16 A&E activity is below plan by 1,804 attendances. Financial performance in this area is also below plan by 174k. The graphs below show how Months 1 to 9 of 2015/16 compares to the last twelve months of activity and costs. Point of Delivery Note - this is based upon 9 months initial activity Activity Cost Var Caused by: Plan Actual Variance Plan Actual Variance Activity Price '000 '000 '000 '000 '000 A&E 34,995 33,191 (1,804) 3,761 3,587 (174) (194) 20 8

9 4. Non Acute Services Key Messages Forecast Outturn Forecast Variance Budget Year to Actual Year to Variance Year to Community 25, ,841 21, Mental Health 15,600 (490) 13,413 12,983 (430) Special Placements etc 6,535 (19) 5,516 5,164 (352) Total Non Acute 47,514 (175) 39,770 39,177 (593) The contract with Shropshire Community Trust is set at budgeted levels. This is the main area of expenditure in community spend which is predominantly a block contract arrangement. The CCG has changed the way it procures MSK care through a formal tender. Any resultant increase in activity will result in a significant financial pressure to the CCG and this has been factored into the position. Another contributing factor to the overspend within the Community budget is the Wye Valley contract. The contract with Wye Valley is for PbR Podiatry surgery and therefore the overspend is because of this. The forecast assumes that this overspend will remain the same. The position for Continuing Healthcare (CHC), Funded Nursing Care (FNC) and special placements shows a YTD underspend of 352k. This area of spend is particularly volatile due to the fluctuation in numbers of patients and the high cost per placement. The forecast reflects new service user placements which is anticipated to continue for the rest of the year. Finance continue to work closely with CSU finance and commissioners. The contract with Staffordshire and Shropshire Mental Health Trust is a cost and volume contract for the first time in 2015/16. Data from the trust shows an underspend in PICU. Activity is currently at 312 OCBD which is 288 under plan. 9

10 5. Primary Care Services Forecast Outturn Forecast Variance Budget Year to Actual Year to Variance Year to Enhanced Services 692 (532) 1, (474) Out of Hours 2,294 (113) 2,006 1,907 (99) Prescribing 27,733 (499) 23,663 23,218 (445) Primary Care Other 3, ,515 3, Total Primary Care 34,419 (454) 29,204 28,852 (352) Key Messages Over 80% of expenditure in this area relates to Prescribing. We have now received eight month s data from the NHS BSA and this has been incorporated into the position. A new budget profile has been applied to the prescribing budget which is now showing an underspend year to date. The main area of underspend is GP Prescribing. The forecast assumes that the underspend will remain at the same level until we have further data. The position in other primary care services is currently showing an overspend, a large proportion of this is due to the over performance in the community pain management service which has previously been discussed at the CCG Board meeting and has now moved into the new MSK service. 10

11 6. Running Cost Allowance Budget Year to Actual Year to Variance Year to Area Corporate (24) Commissioning (21) Finance (inc CSU) 1,640 1, Nursing (3) Governance & Performance (11) Key Messages The Running Costs element of the CCG Allocation is 3,000 overspent at month 10. However, we are still on track for a break even position at year end. More detailed analysis can be found in Appendix 3. Total 3,153 3,157 3 Pay 1,364 1,195 (169) Non Pay 1,789 1,

12 7. Recurrent cashable efficiencies based on contractual performance. The table below shows the current performance of our QIPP schemes that create recurrent cashable efficiencies. This data is based on current contractual performance. Transactional QIPP Scheme Total Annual NHS E Plan YTD Plan Amount m Actual YTD m Variance m Forecast Acute n/a n/a MH Services n/a n/a Working together with Voluntary Community Health Services Sector to reduce Admissions Continuing Care n/a n/a Primary Care Prescribing and Primary Care efficiences Primary Co Commissioning Total Transformational QIPP Scheme YTD Plan Amount m Actual YTD m Variance m Forecast Acute Services multiple schemes MH Services Better Crisis Management Community Health Services n/a Continuing Care n/a Primary Care n/a Other n/a Total Grand Total The table above shows that we are currently under performing slightly year to date and our forecast shows 0.76m shortfall against the original 4.15m plan. The reason for this is an underperformance on acute, both year to date and in the forecast. There is also a slight underperformance on community health which is reflected in the forecast position. Also, In addition, the CCG has set itself an internal stretch target against prior year activity, rather than plan, to mitigate against any QIPP delivery risks. For programme management and internal assurance purposes, the CCG will continue to assess performance against its stretch target at the QIPP Sub Committee. 12

13 8. Statement of Financial Position The charts & narrative below highlight the key indicators from the CCG Statement of Financial Position or Balance Sheet. Cash Management The year to date cash position is summarised in the chart to the left. The target since January 2015 is to have a maximum cash balance at the end of each month of no more than 1.25% of that drawn down in the month. In January we achieved this target. Better Practice Payment Code (BPPC) Year to Number Value NHS 93.0% 97.7% Non NHS 93.6% 93.8% Total 93.2% 97.0% The table to the left summarises CCG current performance against BPPC. The target is to pay 95% of all invoices (in terms of both volume and value) within 30 days of receipt. For Month 10 this target is failed in terms of volume of NHS and Non NHS invoices paid and also for the value of Non NHS invoices. Capital Resource Limit The CCG has been assigned a small capital allocation of 45k for 2015/16. 13

14 9. Allocation Breakdown The table below shows our current allocation and adjustments that we have received in year. Month Programme Admin Primary Care Total R NR R NR R NR R NR Total Initial CCG Programme Allocation April 192, , ,644 BCF Allocation April 3,549 3, ,549 B/F surplus April Initial running costs allocation April 3,783 3, ,783 ETO/DTR May GP IT June Transfer for co commissioning June 21,029 21, ,029 GP IT Transition funding June Chemo transfer to specialised services July Waiting list validation July Transfer for co commissioning August Initial allocation of funding for eating disorders and planning Neurology Commissioning Responsibility Transfer August October Specialised Wheelchairs Commissioning Responsibility Transfer October CHIS Commissioning Responsibility Transfer October Liaison Psychiatry - Mental Health October CAMHs Transformational Funding November Liaison Psychiatry - Mental Health December Quality Premium award December CEOV and non-rechargeable services allocation adjustment January TOTAL 196,041 1,318 3, , ,623 1, ,484 14

15 10. Risks and Mitigations The risks that are currently inherent in our financial plan for the year are shown in the table below: Financial Risks Contract over performance- risk that activity at acute trusts will be greater than planned. System Management- risk related to the pressures of contributing/managing the whole LHE system rather than just the financial position of the CCG. Prompt Payment -risk that late payment of invoices affects the reputation of the CCG. QIPP Delivery- risk that QIPP schemes will not deliver in year leading to a cost pressure. BCF- financial risks associated with the delivery of the BCF due to health and social care pressures Specialised Services- Risk that the current exercise undertaken to split specialised services activity back to CCG level will incorrectly inform allocation adjustments and leave us with a cost pressure in future years. Future Fit- There is a risk that preferred options for Future Fit may be unaffordable to the LHE MsK- The CCG has revised care pathways and currencies through a formal tender for services. The increased pathway cost increases the financial impact of unplanned growth and it is also possible that activity may also remain within provider contracts. Mitigations in place Ensure up to date contract information is presented to PPQ and Board as part of the finance report. Discussions with providers eg at new SATH finance and activity group to highlight early warning signs of over performance through provider internal monitoring. Use of TRAQS data for up to date information on referrals. The CCG CFO has agreed a year end settlement with SATH which should mitigate a large proportion of the risk around this. Ensure regular LHE dialogue between all organisations to ensure system wide understanding of financial gap and action plan, including risk sharing where appropriate, to achieve sustainability. CCG to request training from CSU to optimise the timeliness of payments. For 2015/16 introduce new reporting principles for QIPP to ensure consistent and accurate reporting and to include trading accounts for each scheme area to give the full picture. Joint executive working group with Telford Council established. The working group will seek to increase congruence of plans and create opportunities to exploit synergies. The CCG Deputy CFO will continue to attend the monthly specialised services finance work stream to ensure that we are involved in understanding the exercise that is being undertaken and that queries are passed through to both the regional and central teams. Outputs of Future Fit are to be presented to the CCG QIPP sub committee for consideration by commissioning leads to ensure consistency and accuracy. Work continues through the future fit finance work stream chaired by the CCG CFO to ensure an accurate financial representation of each option and its affordability across the LHE. The Commissioning lead for the project will monitor referrals against the contract baselines and mitigate risks through the delivery of additional QIPP schemes. 15

Agenda Item 6.4 CCG Board EXECUTIVE SUMMARY SHEET

Agenda Item 6.4 CCG Board EXECUTIVE SUMMARY SHEET DATE: 9 th August 2016 TITLE OF PAPER: Financial Position- Month 3 EXECUTIVE RESPONSIBLE: Laura Boden - Acting Chief Finance Officer Ext:2483 Email: lboden@nhs.net