PAPER FOR THE LUTON CLINICAL COMMMISSIONING GROUP PUBLIC BOARD TO BE HELD ON TUESDAY 24 th JUNE Nigel Armitt, Chief Finance Officer

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1 Agenda Item 9 PAPER FOR THE LUTON CLINICAL COMMMISSIONING GROUP PUBLIC BOARD TO BE HELD ON TUESDAY 24 th JUNE 2014 TITLE CCG Finance Report for period ending May 2014 Month 2 PRESENTED BY (Plus contact details for pre Board enquiries) LEAD CLINICIAN/MANAGER PURPOSE OF PAPER RECOMMENDATIONS Nigel Armitt, Chief Finance Officer n/a To provide an overview of the financial position for the period ending May 2014 The Board is asked to: Note the 2014/15 financial position Deficit of 1.4m 0.6m under accrual prior year m L&D Feb/Mar actual costs higher than expected not known until June m Continuing Care 0.2m PCI QIPP late start 11 June 0.2m Non L&D acute challenges to be worked up 0.2m additional costs increased activity on Continuing Care 0.1m Primary care GPIT expenditure incurred but allocation not confirmed until Month 3 0.1m various EQUALITY IMPACT ASSESSMENTS Has an Equality Impact Assessment been carried out? If not, why not? What is the impact? How is the impact (when negative) being managed? Please tick as appropriate None No Not required Positive/Neutral/Negative* Further consultation Changes to function egg policy, decision etc. No action 1 of 7

1. Summary of Financial Position i) Overall 1.4m adverse year to date () variance mostly arises from the following five reasons which are further explained in this paper where noted below: 0.

2 1. Summary of Financial Position i) Overall 1.4m adverse year to date () variance mostly arises from the following five reasons which are further explained in this paper where noted below: 0.6m under accrual prior year m L&D Feb/Mar actual costs higher than expected not known until June. Refer to section 2 for more detail m Continuing Care. Refer to section 3 ii) for more detail. 0.2m PCI QIPP late start 11 June. Refer to section 2 for more detail. 0.2m Non L&D acute challenges to be worked up. 0.2m additional costs increased activity on Continuing Care. Refer to section 3 ii) for more detail. 0. 1m Primary care due to GPIT actual expenditure incurred but allocation not confirmed until Month 3 ii) 5.3m of the actual (and budgeted) deficit arises from the Brought Forward deduction of 2013/14 5.3m deficit from current year non-recurrent Transformation Fund (TF) allocation in M1. iii) Revised final FRP submission due on 20 th June. 2 of 7

3 2. Acute ACUTE: CONTRACT MONITORING REPORT FOR MONTH 2 ENDING 31 MAY 2014 Provider In Month Year To Date Actual Variance Variance Actual Variance Variance Annual % % 000 Luton & Dunstable NHSFT 8,681 8, % 17,207 17, % 103,135 East of England Ambulance (14) -2.3% 1,245 1,229 (16) -1.3% 7,533 East North Herts NHS Trust (26) -11.0% (27) -5.8% 2,708 West Herts NHS Trust % % 1,578 Bedford (35) -34.7% (92) -46.5% 1,227 UCLH (120) % (119) -70.4% 1,034 RNOH % % 1,012 Royal Free (4) -5.3% (11) -7.4% 908 Cambridge % (47) -51.1% 552 Royal Brompton & Harefield (148) % (180) % 543 Imperial College (40) % % 511 Great Ormond Street % % 459 Sub-Total Main Acute Trusts 10,415 10,181 (234) -2.3% 20,616 20,180 (436) -2.2% 121,200 Other Acute Contracts (168) -97.7% (170) -50.3% 2,615 Non L&D Contract Challenge QIPP 93 (93) (186) 200.0% 0 (186) (186) 100.0% (1,042) Non Contract Activity (41) -18.6% (10) -2.2% 3,094 TOTAL ACUTE 11,110 10,481 (629) -6.0% 21,579 20,777 (801) -3.9% 125,867 Acute activity has been prepared based on M1 data where available plus an estimate for M2 based on trend. The L&D assumption in the absence of M1 data is that it will hit the plan of 103.1m ( 103.5m less 0.4m patient transport). Acute has detoriated in month by 0.6m increasing over spend to 0.8m. Non L&D budgeted contract challenge QIPP of 0.2m has not been reported as delivered because challenges have still to be raised as the analysis work on SUS data only recently received, has not been finished. Therefore any current over spend should be reduced in subsequent months when the challenges have been verified. 0.2m PCI QIPP goes live on 11 th June 14 so no savings have been achieved in M1-M2, this has resulted in over performance on contracts with Bedford & Royal Brompton. Remaining 0.4m over spend is prior year cost (UCLH & Cambridge are the two contracts with significant prior year movement). This is because an estimate had to be made in the year end accounts for M12 activity based on M11 trend, but actual costs have ended up higher by 0.4m. With regards to UCLH there is also a further prior year risk regarding high cost chemotherapy patients. An additional charge of 0.4m was issued from the trust in M12 for a number of these patients which up until M11 had been charged to NHS England. The CCG has strongly disputed these charges and continues to discuss this with the provider. Please note at this stage this 0.4m is not included within the above numbers. East of England Ambulance additional cost of 0.4m to support the trusts financial plans is also not included within the above as assumed to be offset against winter pressures funding. 3 of 7

3. Non-Acute i) Mental Health 27k over spend on Child and Adolescent Mental Health because an invoice has been received from SEPT for Bank and Agency staff required for Ward 25 patients at the L&D

4 3. Non-Acute i) Mental Health 27k over spend on Child and Adolescent Mental Health because an invoice has been received from SEPT for Bank and Agency staff required for Ward 25 patients at the L&D awaiting beds in an adolescent unit, not budgeted for. 28k over spend on Mental Health Services Adults mainly due to additional funding agreed at the Resource Allocation Panel. ii) Continuing Care CHC over spend of 369k. There are a number of elements to this, there was an under accrual at year end of 180k, as a result of invoices not being sent to SBS for processing which Finance discovered 2nd week of June. 21k budgeted QIPP saving arising from reduced activity will not be achieved as the activity is increasing. First 2 months of the year show 43 new starters, with 27 RIP s (based on the Caretrack system) as compared to same period last year 36 new starters, 23 RIP s. iii) Medicines Management 33k net over spend, as assumed actual same as budget because information 14/15 is 2 months delayed as usual. 4. Other 30k overall favourable variance as below: 4 of 7

5 5. Corporate Costs ADMIN COSTS ( 000s) Annual % Actual Variance CEO/ BOARD OFFICE % 567 CHAIR AND NON EXECS % 424 CLINICAL SUPPORT % 168 CORPORATE COSTS & SERVICES % 2239 CORPORATE GOVERNANCE % 40 FINANCE % 575 OPERATIONS MANAGEMENT % 188 STRATEGY & DEVELOPMENT % 989 TOTAL % 5,190 PROGRAMME COSTS ( 000s) Actual Variance % Annual NHS PROPERTY SERVICES (EXCL THE LODGE) % 254 SAFEGUARDING % 618 MEDICINE MANAGEMENT % 862 CHC ADULT PERSONAL HEALTH BUDGETS % 42 CONTINUING HEALTHCARE & COMMUNITY EQUIPMENT % 482 TOTAL % 2,259 TOTAL CORPORATE COSTS 1,200 1, % 7,449 Corporate Costs include Luton CCG s RCA (Running Cost Allowance) classified as administrative type costs accounted for under Admin, as well as other Corporate related non-admin type costs accounted for under Programme. See table above for further detail. At the end of month 2, Corporate related commitments such as staffing and other incidental costs shows a collective underspend of 42k against budget. This is made up of an over spend in Admin costs of 20k and an under spend of 61k in Programme. i) Admin Costs: Main reasons for 20k over spend position under Admin relates largely to the extension of key additional interim support to deliver specific projects and cover for vacant key posts, including the Re-procurement of Mental Health and Community Contracts as agreed by NHS England. All other areas under Admin show year to date costs mainly in line with budget or under spent where vacancies exist with no backfill costs to date. Based on month 2, Running Costs are currently showing a cost per head of population of 25.4 compared to allocated 24.7 as notified by NHSE. ii) Programme Costs: 61k under spend position under Programme relates largely to existing vacancies within the Safeguarding, Medicines and CHC Personal Health Teams. Most of these vacancies are not currently being backfilled but all are actively being recruited to with the intention to appoint substantive post holders as soon as possible. 5 of 7

6 Over spend of 23k under Continuing Healthcare relates to temporary support covering both vacancies and backlog support to the team. 6. Financial Management Better Payments Practice Code 74% of all invoices paid during May were paid within 30 days. This has reduced over the past few months for the reasons below: NHS invoices: a number of large NHS invoices were paid late this month. Some where they had been in dispute and resolved but not approved in time for the payment run and others just simply not approved in time. Efforts are being made by the finance department to chase up budget holders wherever possible. Non-NHS invoices: The reason this has occurred is that when invoices are matched to a purchase order and receipted they are not released for payment by SBS if there are any un-receipted invoices on the system with the same purchaser order number. In order to clear these we have to contact SBS direct and make a request for each invoice we want to be paid. We are continuing to monitor these to ensure we do not get a back log. A glitch in the system means that a tidy up of credit notes where they are matched to identical invoices count as 2 fails each on the system. Cash position 8.3m cash balance at 31 May. This is higher than normal due to the L&D monthly contract payment not being paid in May. It has been held back whilst negotiations are taking place. Creditors (Trade and other payables) 22.9m, made up of 13.4m of accounts payable, 4.9m of accrued costs, 4.3m of prescribing accrual and 280k of deferred income. The accounts payable is higher than normal by approximately 8m as it includes the unpaid L&D invoice for May Debtors (Trade receivables, prepaid costs and accrued income) 1.1m, made up of 506k of prepaid costs, 465k of sales invoices and 141k of accrued income. 6 of 7

7 7. Appendices and notes Appendix A. Operating Cost Statement Appendix B. Contract Monitoring Report Appendix C. Financial Risk and Opportunity Schedule (n/a M2) Appendix D. QIPP Appendix E. Better Payments Practice Report Appendix F. Statement of Financial Position Appendix G. Cashflow forecast Notes to Appendices: Appendix B for Contract Monitoring lists the contracted providers separately where the annual contract exceeds 400k. All remaining contracts are included under the heading Other Acute Trusts. Terminology L&D AT FOT Luton and Dunstable NHS Foundation Trust Area Team - NHS England s area team e.g. Hertfordshire and South Midlands Year to Date Forecast Outturn 7 of 7

Report. Chris Ford Joint Chief Finance Officer

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