Paper 16 Ayrshire and Arran NHS Board Monday 21 May 2018 Performance Governance Committee Annual Report 2017/18 Author: Frances Forsyth, Committee Secretary Sponsoring Director: Derek Lindsay, Director of Finance Date: 19 March 2018 Recommendation The NHS Board is asked to receive the Performance Governance Committee Annual Report 2017/18. Summary Members of the PGC are appointed annually by the NHS Board. This PGC annual report provides a record of attendance at meetings and gives assurance that the committee has fulfilled its remit. Key Messages: The Committee monitored performance against the Local Delivery Plan, scrutinised financial performance and monitored the progress and achievement of the NHS Ayrshire & Arran Transformational Change Programme. Glossary of Terms NHS A&A LDP PGC PWC NHS Ayrshire and Arran Local Delivery Plan Performance Governance Committee PricewaterhouseCoopers 1 of 12
Monitoring Form Policy/Strategy Implications Workforce Implications Financial Implications Consultation (including Professional Committees) Risk Assessment Best Value - Vision and leadership - Effective partnerships - Governance and accountability - Use of resources - Performance management None None None Performance Governance Committee approved this report on 12 March 2018. Not required This is a governance and accountability paper to assist the Board in its remit. Compliance with Corporate Objectives Single Outcome Agreement (SOA) Impact Assessment Deliver efficient and effective services within budget and to develop a culture of continuous improvement. Not applicable. Not required information and monitoring report. 2 of 12
NHS Ayrshire & Arran Performance Governance Committee Annual Report 2017/18 1. Introduction 1.1 The Performance Governance Committee was established by the NHS Board in December 2012 with the first meeting taking place on 4 March 2013. This is the fifth Annual Report of the PGC 1.2 Members of the PGC are appointed annually by the NHS Board. The NHS Board also requires input to the work of the PGC by Executive Directors. 1.3 This PGC Annual Report provides a record of the work of the Committee and gives assurance that the committee has fulfilled its remit. Membership in 2017/18 is detailed in section 3 below and attendance in section 4. 2. Remit 2.1 The Committee s Terms of Reference are detailed at Appendix 1 to this report. 3. Membership 3.1 The Committee is composed of six Non-Executive Members. The membership of the Committee during 2017/18 is given below: Mr Robert Martin, (Chair) Cllr Laura Brennan-Whitefield (from September 2017) Mr Stewart Donnelly Ms Claire Gilmore Cllr Hugh Hunter (until May 2017) Mr Stephen McKenzie Mr Ian Welsh Ex Officio members Dr Martin Cheyne, Chairman Mr John Burns, Chief Executive Mr Derek Lindsay, Director of Finance Ms Kirstin Dickson, Director of Transformation & Sustainability Where relevant to the subject matter, other officers attended meetings of the Committee. An open invitation is extended to Alan Hunter, Performance Director, Scottish Government and to the Board s internal auditor. 3 of 12
MEETING CANCELLED 4. Meeting 4.1 The Committee met on five occasions between 1 April 2017 and 31 March 2018. Dates are as follows: 10 April 2017 05 June 2017 10 August 2017 04 December 2017 12 March 2018 A meeting planned for 30 October 2017 had to be cancelled as it had not been possible to get a quorum of members in attendance. 4.2 The NHS Board agreed in 2010 that attendance at Committee meetings should be recorded in the relevant Annual Report. The attendance record of each member is shown below. 10 April 5 Jun 10 Aug 30 Oct 4 Dec 12 Mar 2017 2018 Robert Martin (Chair) x Laura Brennan- x Whitefield Stewart Donnelly Claire Gilmore x Hugh Hunter Stephen McKenzie x Ian Welsh x x 5. Committee Activities As outlined in the Code of Corporate Governance, the Performance Governance Committee is responsible for: Supporting the development of performance management and accountability across NHS Ayrshire and Arran Monitoring performance against the Local Delivery Plan Finance and Service Performance To provide scrutiny and challenge on the progress and achievement of the Transformational Change Programme. Investment Scrutiny Benefits Realisation Post project evaluation 4 of 12
These responsibilities were carried out through the receipt and consideration of reports as follows: Meeting date Reports received 10 April 2017 Best Value Initiatives: o Procedures of limited clinical value o Effective Prescribing o Medical Workforce Supplementary Spend o Nursing and Midwifery workforce governance and improvement o Admin Costs o Acute Performance Indicators o Better Quality Better Value procedures o Corporate Support Services o Theatre performance indicators Energy and Carbon Savings 2015/16 5 June 2017 Spend on Charities and Voluntary organisations CNORIS quarterly report 2016/17 Outturn Agency Spend Non-recurring cost pressures Internal Audit: Integration Joint Boards Performance Monitoring Local Delivery Plan 2016/17 Outturn of Prevention Bundles Outcomes Framework Prevention Bundle Financial Management Report to 30 April 2017 10 August 2017 PWC Diagnostic Review of the Transformation Portfolio Three Year Financial Plan Non-recurring cost pressures 2017/18 Financial Management Report to 30 June 2017 4 December 2017 National Resource Allocation Committee Timetable for 2017/18 budget setting process Financial Planning Assumptions Pay and Supplies Cost Pressures Submission to the Health and Sport Committee National Secure Adolescent Inpatient Service proposal LDP Standards mid year report Transformation proposition to Scottish Government (draft) Prescribing performance benchmarking Nursing and Midwifery Workforce progress report Benefits realisation Addiction Services Woodland View post project evaluation Quarter 1 Financial Review for Scottish Government Financial Management Report to 31 October 2017 5 of 12
Meeting date Reports received 12 March 2018 Prescribing Update Internal Audit review: Procurement Scottish Government report: Targets and Indicators in Health and Social Care in Scotland Draft Revenue Plan for 2018/19 Annual Operational Plan 2018/19 Financial Plan 2018/19 Draft Capital Plan for 2018/19 Financial Management Report to 31 January 2017 Building for Better Care Gateway Review 5.1 Finance and Service Performance Throughout the year the Committee received the Financial Management report which allowed it to monitor the Board s financial position against the forecast deficit of 13 million, and the Progress in achieving Cash Releasing Efficiency savings of 25 million which were essential to the financial position. At the 10 th August 2017 meeting, Committee members heard that the projected outturn at the year end was likely to exceed 20 million deficit as a result of the continually rising numbers of unfunded beds and the resulting increase in nursing costs; inability to achieve all cash releasing efficiency savings as well as prescribing cost pressures. Committee members challenged the bed models used in the business cases for the combined assessment units which had suggested that greater bed reductions would be achieved than appeared to be the case. At the meeting in June the Director of Finance provided an explanation of how the Board had managed to achieve a break-even position during the previous year in spite of financial challenges arising from a recurring deficit of 13.2 million; a 6.9 million overspend in acute services and the requirement to increase the medical staffing budget by around 4.5 to cover agency costs. At its meeting on 5 June 2017, the Committee looked at the non-recurring cost pressures which exceeded 7 million for the year. These were largely in the areas of medical agency costs. In addition, an unquantified overspend in Acute services was predicted resulting from a significant number of unfunded beds due to excessive demand resulting in the inability to close beds as originally anticipated. The Director of Finance reviewed the three year financial plan with Committee members at their meeting on 10th August 2017. Although there were major redesign programmes in unscheduled care and mental health services to reduce inefficiencies it was noted that there was uncertainty around future funding uplifts and the challenges faced by the Board as a result of the underlying recurring deficit due to cost pressures and uncertainty about pay award uplifts. A significant increase in the value of payments made to charities and voluntary organisations was noted by Committee members, who requested an evaluation of money directly commissioned by the Board. In March the Director of Finance provided the Committee with a schedule of payments in which it was noted that the main driver had been the Integrated Care Funds. The other largest recipients being the Ayrshire Hospice with which close links, including representation of the Board, were maintained. The second largest recipient of funds was Hollybush House, for 6 of 12
which money allocated by the Government for war veterans was passed through the Board. The Committee was satisfied with the governance associated with these payments. Following discussion at the meeting on 4 th December with the Head of Mental Health Services and Capital Planning Project Manager, Committee members approved the initial agreement for the development of a National Forensic Adolescent Services for Scotland Unit based in Ayrshire. At its meeting on 12 th March, the Committee considered a report titled Targets and Indicators in Health and Social Care in Scotland which had been conducted on behalf of the Scottish Government by Professor Sir Harry Burns. 5.2 Investment Scrutiny At its meeting on 12 March 2018, the Committee received an update on the progress of the delivery of the Realistic Medicine: Effective Prescribing work plan. In particular, progress in relation to Cash Releasing Cost Savings in primary and secondary care was noted. 5.3 Local Delivery Plan The draft Revenue Plan for 2018/19 was considered by the Performance Governance Committee at its meeting on 12 March 2018, as were the draft Capital Programme and Financial Plans for 2018/19. Committee members were given access to the Covalent Portal through which they were able to monitor performance statistics including the LDP standards. Mid and end of year summary reports were also presented to the Committee. At its June meeting, the Committee received a copy of a letter from John Connaghan, NHS Scotland Chief Operating Officer in response to the Local Delivery Plan for 2017/18 submitted by the Board. The Board received specific feedback in relation to unscheduled care and the alignment of acute and local authority working in order to address the unfunded bed issue. At the meeting on 12 March 2018 the Committee received the Annual Operational Plan (formerly Local Delivery Plan) for 2018/19, which had been submitted to the Scottish Government. 5.4 Transformational Change At its meeting in April 2017, the Committee received an overview of the Board s Best Value Initiatives which were being undertaken to address areas highlighted by the Scottish Government as offering the Board opportunities to achieve efficiencies should performance move to the Scottish average or upper quartile performance of other Boards. The Lead Directors for the areas of Effective Prescribing; Medical Workforce Supplementary Spend; Nursing and Midwifery workforce governance and improvement; Administration Costs; Acute Performance Indicators; Better Quality Better Value procedures; Corporate Support Services and Theatre performance indicators, presented an outline of the position and discussed progress with Committee members. The Committee suggested that the work planned should all have clear action plans, including targets, monitoring information, run rates and 7 of 12
compliance and that benchmarking should be against family groups to obtain meaningful comparisons, particularly within Prescribing. The Committee followed up its question regarding the benchmarking of prescribing against other Boards which were of a similar size and demographic, receiving a report from the Director of Pharmacy at its meeting on 4 th December which explained the comparison data and resulting workstreams and targets which had been identified as areas where the Board was an outlier. Funding was received from the Scottish Government for the conduct of an independent diagnostic review to verify the Board s underlying recurring position and to review the timescales and governance around the transformational programme and achievable savings arising from it. PWC presented their findings to the Performance Governance Committee at a specially convened meeting on 10 th August. The meeting was chaired by Martin Cheyne (Chairman of the Board) and Lesley Bowie (Vice Chair) was co-opted. Committee members received reassurance from the Chief Executive about the programme of work being undertaken in response to the report recommendations. The Board prepared a Transformation Proposition for presentation to Scottish Government for Creating Sustainable Health and Care Services for Ayrshire and Arran. Discussion of the final draft of this document took place at the Performance Governance Committee meeting on 4 th December. Members agreed that the emphasis to the Scottish Government must be on the particular demands created by the demographics within Ayrshire and Arran. The minutes of all meetings of the Transformational Change Leadership group were received by the Committee. These minutes helped to demonstrate the breadth of work being addressed and the level of interaction throughout the Board. 5.5 Post Project evaluation: The June Committee received reports on the 16/17 Outturn of Prevention bundle, Maternal and Infant Nutrition and Oral Health funding and noted that nationally funding had been reduced by 7.5%. Planned areas for expenditure during 2017/18 were noted by the Committee. A report on the beneficial impact to clients and the transformation of addiction services following the allocation of additional funding and the Opiate Replacement Therapy model of prescribing and support was received by the Committee on 4 th December 2017. A post project evaluation of the development of Woodland View was provided to the Committee at its meeting in December 2017 and prompted discussion about the effect of the new facility on sickness absence levels which had been high amongst Mental Health staff and the savings likely to be achieved once all patients had moved out of Ailsa Hospital. The fifth Gateway Review of the Building for Better Care project at University Hospital Ayr and University Hospital Crosshouse was received by the Committee at its meeting on 12 th March 2018. Members noted that the benefits set out in the Business Case were being achieved and that the operational service was running smoothly. 8 of 12
5.6 Budget setting 2017/18 The Director of Finance presented papers and led discussion on the following matters:- The budget setting process for 2018/19 was approved by the Committee on 4 th December 2017. Committee members noted and approved the submission to the Health and Sport Committee at their meeting on 4 th December 2017. Pay and Supplies cost pressures for 2018/19 were presented to the Committee for its consideration at its meeting on 4th December. 6. Risk Management Most meetings received a report on the corporate/strategic risk register and the risks for which the Performance Governance Committee is the lead governance committee. 7. Chairs Comments I appreciate the support from all members of the Committee for their input in the development of and contribution to the agenda and for the considerable work undertaken during the course of the year. Throughout 2017/18, the Committee oversaw a wide range of activity relating to Performance Governance. As well as routine reports in areas such as LDP standards and Finance, the Committee also scrutinised specific issues such as the Transformational Change Programme in more detail, asking for further information and assurance as is required as part of their remit. I can confirm that the Performance Governance Committee has fulfilled its remit and that the Board has adequate and effective governance arrangements in place. I would wish to record my thanks to all the staff who have supported the Committee over this and previous years, and to those who have responded to requests from the Committee for further information. This has enabled the Committee to fulfill its duties successfully throughout the past year. 9 of 12
Appendix 1 Performance Governance Committee: Terms of Reference Last review: March 2018 1. Introduction 1.1 The Performance Committee is identified as a Committee of the NHS Board. The approved terms of reference and information on the composition and frequency of the Committee will be considered as an integral part of the Standing Orders. 1.2 The Committee will be known as the Performance Governance Committee of the NHS Board and will be a Standing Committee of the Board. 2. Remit 2.1 To provide assurance to the NHS Ayrshire and Arran Board that systems and procedures are in place to monitor, manage and improve overall performance and best value is achieved from resources. 3. Committee Membership 3.1 The Committee shall be established by the full NHS Board and be composed of six Non-Executive Board Members. The Chair, and Committee members will be appointed by the Chair of the NHS Board and all will be Non- Executive Board members. A Vice Chair will be proposed by the Governance Committee Chair and agreed by the Committee 3.2 Committee membership will be reviewed at least annually. 4. Quorum 4.1 Three Non-Executive members will constitute a quorum. 5. Attendance 5.1 The Chief Executive, Head of Service - Planning and Performance and the Executive Director of Finance, will attend meetings in an ex-officio capacity to provide information and advice. 5.2 Chairs of Sub-Committees will be in attendance at the Performance Governance Committee to report on the work of the sub-committee. The Committee may establish Sub-Committees to support its functions. 5.3 Scottish Government colleagues will have an open invitation to Committee meetings. 5.4 A nominated Director from PricewaterhouseCoopers will be in attendance to scrutinise and challenge the progress and processes of the Transformation Programme. 10 of 12
Appendix 1 5.5 The Committee may co-opt additional advisors as required. 5.6 With the prior approval of the Chair of the Performance Committee the Head of Service - Planning and Performance and the Executive Director of Finance will be able to provide deputies on an exceptional basis. 6. Frequency of Meetings 6.1 The Committee will meet every two months 6.2 The Chair of the Committee may at any time convene additional meetings of the Committee. 7. Authority 7.1 Committee is authorised to investigate any matters which fall within its Terms of Reference and obtain external professional advice. 7.2 Committee is authorised to seek and obtain any information it requires from any employee, whilst taking account of policy and legal rights and responsibilities. 7.3 The Committee will have the authority to require the attendance of any employee of NHS Ayrshire and Arran, as may be required. 8. Duties 8.1 To scrutinise the overall performance of NHS Ayrshire and Arran across the following functions of the NHS Board: Resource allocation; Performance management; Strategic planning. 8.2 To provide scrutiny and challenge on the progress and achievement of the NHS Ayrshire & Arran Transformational Change Programme. 8.3 To ensure that systems and procedures are in place to monitor, manage and improve performance, across the whole system, and liaise closely with relevant Governance Committees (Staff, Clinical and Audit) to ensure appropriate remedial action takes place. 8.4 Consider financial plans and approve annual budget proposals and business cases for submission to the NHS Board. 8.5 The Performance Committee would consider: HEAT/Local Delivery Plan Investment Scrutiny Benefits Realisation Post Project Evaluation Finance and Service Performance 11 of 12
Appendix 1 8.6 To support the development of a performance management and accountability culture across NHS Ayrshire and Arran. 8.7 Receive annual reports and quarterly updates from the Sub-committees established by the Performance Committee in order to provide assurance and accountability. 8.8 To monitor and review risks falling within its remit. 9. Conduct of Meetings 9.1 Meetings of the Committee will be called by the Committee Chair. 9.2 The agenda and supporting papers will be sent to members at least five working days before the date of the meeting. 10. Reporting 10.1 Minutes will be kept of the proceedings of the Committee. These will be circulated, in draft normally within five working days to the Chair of the Committee and within five working days thereafter to members, prior to consideration at a subsequent meeting of the Committee. 10.2 The Chair of Committee shall provide assurance on the work of the Committee and the draft minutes will be submitted to the NHS Board meeting for information. 10.3 Items requiring urgent attention by the NHS Board can be raised at any time at NHS Board Meetings, subject to the approval of the Chair. 12 of 12