Original 0 0 0 ' s Kingston Hospital NHS Foundation Trust Finance Report December 2017 (Month 09)
CONTENTS EXECUTIVE SUMMARY........3 SECTION 1: OVERALL INCOME AND EXPENDITURE.......4 SECTION 2: DIVISIONAL POSITION.... 5 SECTION 3: FINANCIAL IMPROVEMENT PLAN......6 SECTION 4: STATEMENT OF FINANCIAL POSITION.........7 SECTION 5: CASH FLOW POSITION...........8 SECTION 6: FINANCE AND USE OF RESOURCES METRICS.......... 9 Contents
EXECUTIVE SUMMARY Headline In Month Performance Against (Nov) Narrative I&E Position (excluding STF, Impairments & winter resilience) - The Trust reported a deficit in month of 1.9m which is 1.1m adverse to the budgeted position. YTD deficit is 6.4m which is 4.4m adverse to budget. In month position includes a reduction of to patient care income of 0.7m, primarily relating to re-presentation of CQUIN risk reserve following clarification from NHS Improvement. The underlying deficit in month is therefore 1.2m, and 0.4 adverse to budget. This underlying in month position is 0.2m favourable to the forecast for the month. The forecast includes an additional 3.3m of recovery and mitigations to be achieved in the last quarter. STF income is zero for Q3 as the variance to operating plan is 4.0m adverse YTD. The adverse financial position to the Operating at the end of quarter 3 results in zero STF and YTD adverse position of 2.3m. The trust has received 0.4m winter resilience funds in M9 which is 50% of the Tranche 1 funding and is shown below the line as per the guidance from NHS Improvement. The balance is expected to be received in month 11. Income (excluding STF) is a small adverse variance below budget in month and 1.8m below budget YTD. The underlying position on patient care income in month excluding the impact of the CQUIN adjustment, is 0.4m favourable to budget and 0.1m favourable to forecast. This is due to increased non-elective income, daycase activity and the expected recovery on A&E attendances income. Adverse maternity, elective and outpatient income offset these favourable variances. Other income is 0.2m above budget in month but in line with forecast. Pay expenditure is 0.6m above budget in month and 1.8m above budget YTD. Pay expenditure at 13.7m is in line with the forecast but is 0.5m above the average monthly spend in the first half of the year. This increase, seen across quarter 3, has been mainly driven by increased clinical pay costs in those serviceslines with increases in daycase and outpatient activity. Non-pay expenditure is 0.4m above budget in month and 1.4m above budget YTD Clinical supplies expenditure increased by 0.2m above the YTD run rate and is 0.1m above budget. The increases were in areas where activity has also increased but also due to SWL Pathology charges in month, offset by income. Pressures in other non-pay areas including drugs and transport continue but are in line with forecast. Financial Improvement (FIP) Delivery in month is 0.7m is 52% of plan and YTD delivery is 5.8m, 70% of the YTD plan of 7.3m. FIP delivery of 5.1m YTD and mitigations of 0.6m, give a total of 5.8m against the YTD target of 7.3m. The full year forecast for FIP is currently 7.9m against the 12.0m target. At the end of M9, capital expenditure YTD was 9.0m. Month 9 capital expenditure YTD is 9.0m which is 3.6m behind the YTD plan of 12.6m. Projected full year capital spend is 18.9m. The cash balance reported at the end of M9 was 3.7m. The closing cash position of 3.7m which was 0.7m above forecast. The variance was largely attributable to partial payment of Q2 STF by NHS England at the end of the month ( 1.1m). The timing of their payment had not been clear. Performance against plan Control Total (excluding STF, impairment and winter resilience) is 1.7m adverse in month and 4.0m adverse YTD. The variances YTD are 1.7m on FIP under delivery, 1.2m underperformance on patient care income and a further 1.1m expenditure overspend. Pg3
SECTION 1: OVERALL INCOME AND EXPENDITURE Summary as at the end Dec-17 IN MONTH YEAR TO DATE FULL YEAR FORECAST Income & Expenditure v s v s v Forecast Annual Annual Forecast Income Patient Care Income 216,627 17,133 16,825 (308) 160,473 158,497 (1,975) 216,627 214,062 (2,565) High Cost Drug Income 14,352 1,086 1,194 107 10,749 10,543 (207) 14,352 14,038 (314) Other Income 24,399 2,062 2,219 157 18,224 18,608 384 24,399 25,155 756 Income 255,378 20,281 20,237 (44) 189,446 187,648 (1,798) 255,378 253,255 (2,123) Expenditure Pay (156,131) (13,106) (13,694) (588) (117,646) (119,412) (1,766) (156,131) (160,748) (4,617) Non Pay (70,203) (5,813) (6,087) (274) (52,532) (53,904) (1,373) (70,203) (70,943) (740) High Cost Drugs (14,352) (1,086) (1,238) (151) (10,749) (10,834) (84) (14,352) (14,288) 64 Expenditure (240,686) (20,005) (21,019) (1,014) (180,927) (184,150) (3,223) (240,686) (245,979) (5,293) EBITDA 14,691 276 (782) (1,057) 8,519 3,498 (5,021) 14,691 7,276 (7,415) Depreciation and Amortisation (7,914) (625) (605) 20 (6,038) (5,438) 600 (7,914) (7,345) 569 Investment Revenue 0 0 2 2 0 10 10 0 12 12 Finance Costs (3,808) (303) (294) 10 (2,729) (2,750) (21) (3,808) (3,760) 48 Public Dividend Capital (2,245) (125) (233) (108) (1,870) (1,878) (8) (2,245) (2,578) (333) I&E excl. STF, Impairments and Winter resilience 725 (778) (1,911) (1,134) (2,118) (6,559) (4,440) 725 (6,395) (7,120) Depreciation on donated assets 138 11 15 4 103 145 41 138 182 44 Income from Donated Assets 0 0 0 0 0 0 0 0 I&E excl. STF and Impairments with donated asset adjs. 863 (766) (1,896) (1,130) (2,015) (6,414) (4,399) 863 (6,213) (7,076) STF Income 7,656 765 (1) (766) 4,976 2,678 (2,298) 7,656 2,678 (4,978) Winter resilience tranche 1 0 0 394 394 0 394 394 0 788 788 Impairments 0 0 0 0 0 (1,811) (1,811) (1,811) (1,811) Total Surplus/(Deficit) 8,381 (13) (1,518) (1,506) 2,858 (5,298) (8,155) 8,381 (4,740) (13,121) Annual YTD FOT YTD YTD EBITDA Margin 5.8% 1.4% -3.9% 4.5% 1.9% 5.8% 2.9% EBITDA Achieved 100.0% 100.0% -283.5% 100.0% 41.1% 100.0% 49.5% I&E Surplus Margin 0.3% -3.8% -9.4% -1.1% -3.5% 0.3% -2.5% 2.0 Cumulative Position Against 2017/18 (excl STF) 0.0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar -2.0 m -4.0-6.0-8.0-10.0 s 2016/17 s 2017/18 2017/18 Forecast 2017/18 Pg4
SECTION 2: DIVISIONAL POSITIONS Overview Summary as at the end Dec-17 Income & Expenditure v s IN MONTH iances v s YEAR TO DATE iances Annual Inc Pay Non Pay Total Inc Clinical Support Services Emergency Care (4,857) (683) (611) 73 433 (16) (345) 73 (3,266) (4,863) (1,598) 514 (959) (1,153) (1,598) ned Care 36,978 2,442 2,626 184 400 (129) (88) 184 27,571 27,011 (560) 198 (37) (721) (560) Clinical Divisions 32,121 1,759 2,016 257 834 (145) (432) 257 24,305 22,148 (2,158) 712 (996) (1,874) (2,158) Strategy Director (2,557) (219) (229) (11) 4 (16) 1 (11) (1,901) (1,899) 2 25 (49) 26 2 Corporate Affairs (3,039) (228) (256) (28) 3 (18) (14) (28) (2,355) (2,426) (71) 12 (32) (52) (71) Finance (3,752) (389) (333) 56 (5) 47 14 56 (2,811) (2,762) 49 21 117 (89) 49 Human Resources (2,631) (198) (333) (135) (15) (28) (92) (135) (2,037) (2,588) (551) (179) (145) (227) (551) Medical Director (461) (43) (14) 29 18 4 7 29 (331) (309) 22 41 (18) (0) 22 Nursing Director (2,639) (209) (211) (2) (3) (6) 7 (2) (2,012) (1,977) 36 (3) 22 17 36 Operations (21,144) (1,717) (1,721) (3) (21) (54) 72 (3) (15,865) (15,680) 185 (242) 52 376 185 Directorates (36,224) (3,003) (3,097) (94) (19) (71) (4) (94) (27,313) (27,640) (327) (325) (53) 51 (327) Central Income 7,225 593 734 141 97 0 44 141 5,446 5,969 523 115 0 408 523 Other Central s 19,225 1,692 (41) (1,733) (1,328) (373) (33) (1,733) 11,056 6,093 (4,963) (4,204) (717) (42) (4,963) EBITDA 22,347 1,041 (389) (1,429) (416) (588) (426) (1,429) 13,495 6,570 (6,925) (3,702) (1,766) (1,457) (6,925) Depreciation & Losses (7,914) (625) (605) 20 20 (6,038) (5,438) 600 600 Interest (3,808) (303) (291) 12 12 (2,729) (2,741) (11) (11) PDC (2,245) (125) (233) (108) (108) (1,870) (1,878) (8) (8) Impairments (1,811) (1,811) (1,811) Total I&E 8,381 (13) (1,518) (1,506) (1,506) 2,858 (5,297) (8,155) (8,155) Pay Non Pay Total Patient care income is ( 0.3m) adverse against budget, excluding high cost drugs. The in month position includes a reduction of to patient care income of 0.7m, primarily relating to representation of CQUIN risk reserve following clarification from NHS Improvement. The underlying income position is 0.4m favourable against budget and 0.1m favourable against forecast due to an increase in Non-elective income. Daycase income was also above budget and forecast with increases in Cardiology, Paediatrics and continued overperformance in Endoscopy. Offsetting these are outpatient income is ( 0.1m) below budget and is 0.2m below forecast off due to activity decreases in GUM, T&O and Cardiolology and Maternity income is 0.2m below budget and forecast. Other income is favourable by 0.2m against budget due to increased Other Income driven by SWL Pathology income (offset by increased non-pay costs) and an increase in Education funding from the HEE. Pay was 0.6m overspent in month although in line with forecast. The impact of undelivered FIP is 0.4m of the variance against budget. Expenditure this month of 13.7m matches the average for quarter 3 but is 0.5m above the monthly average spend in the first half of the year. The increase since the first half of the year is 0.4m across clinical areas and 0.1m across corporate departments. Clinical increases are in Oral & ENT, Gastro & Endoscopy, General Surgery, ophthalmology and maternity. Some of the increases do correlate with increased elective and daycase activity. The servicelines highlighted contributed 0.3m of the 0.5m average monthly income increase in elective and daycase income when Q3 is compared to the average in the first half of the year. Non-pay was unfavourable to budget in month by 0.3m (excluding high cost drugs). Expenditure on clinical supplies is 0.2m above the average run rate particularly in Pathology, T&O, general surgery and Elderly care. This increase in SWL Pathology testing costs in month (offset by income) and prosthesis charges in T&O and equipment spend in Elderly care due to opening of escalation ward. Drugs is 0.2m adverse to budget but in line with forecast. Pg5
SECTION 3: FINANCIAL IMPROVEMENT PROGRAMME Summary as at the end of Dec-17 CIP Allocation IN MONTH YEAR TO DATE Theme Annual Allocation Devolved to s Devolved Outstanding Devolved % In Month Mitigation iance (inc. mitigations) Year to Date Mitigation iance (inc. mitigations) In month achievement of 669k is 52% of the in month plan of 1,274k. The amount of FIP devolved in to budgets is 52%, 6.2m. Corporate Support 2,500 1,372 1,128 55% 387 305 5 (77) 1,585 1,394 45 (147) Improvement 1,500 254 1,246 17% 124 32 0 (92) 430 131 0 (300) Non-Pay Price 1,500 696 805 46% 145 21 0 (124) 981 601 0 (381) Operational 1,000 338 662 34% 100 59 0 (41) 349 251 0 (98) Pay Control 3,500 1,148 2,352 33% 358 78 0 (280) 2,426 1,038 580 (808) Exec Lead Themes Total 10,000 3,808 6,193 38% 1,114 495 5 (614) 5,772 3,414 625 (1,733) Emergency Care 937 986 (49) 105% 65 50 0 (15) 743 589 23 (131) ned Care 824 758 66 92% 67 74 0 8 621 606 0 (15) Corporate 238 674 (435) 29 44 0 16 153 506 1 354 Local allocations Total 2,000 2,418 (418) 160 169 0 9 1,517 1,701 24 208 The review of FIP plans and the action plan to close the previously forecast gap of 5.4m have reduced the gap to 4.1m against the 12.0m target. The pay control savings delivered YTD of 1.0m are 0.8m below the YTD plan of 2.4m including mitigations. Pay expenditure is forecast to exceed budget in future months. Total CIP 12,000 6,226 5,775 52% 1,274 664 5 (605) 7,289 5,115 649 (1,525) Type Annual Allocation Devolved to s Devolved Outstanding Devolved % In Month Mitigation iance YTD Mitigation iance Cost Reduction 10,495 5,264 5,227 50% 1,071 552 0 (520) 6,392 4,442 581 (1,370) % of 51% 0% 69% 9% Income Generation 1,510 962 548 64% 203 112 5 (86) 897 674 68 (155) % of 55% 2% 75% 8% Total CIP 12,005 6,226 5,775 52% 1,274 664 5 (605) 7,289 5,115 649 (1,525) % of 52% 0% 70% 9% Pg6
SECTION 4: STATEMENT OF FINANCIAL POSITION M9 November December m m NON CURRENT ASSETS: Property plant and equipment 112.6 115.0 Intangible assets 10.7 10.7 Other assets 0.7 0.7 TOTAL NON CURRENT ASSETS: 124.0 126.3 CURRENT ASSETS: Inventories 1.8 1.8 Trade and other receivables 24.5 23.4 Cash and cash equivalents 1.3 3.7 TOTAL CURRENT ASSETS 27.6 28.9 CURRENT LIABILITIES: Trade and other payables (33.3) (31.8) Current Borrowings (1.4) (1.4) Current Provisions (0.2) (0.2) TOTAL CURRENT LIABILITIES (34.9) (33.4) NET CURRENT ASSETS LESS CURRENT LIABILITIES (7.3) (4.5) TOTAL ASSETS LESS CURRENT LIABILITIES 116.7 121.8 NON CURRENT LIABILITIES: Borrowings (43.1) (49.9) Provisions (1.0) (1.0) Other liabilities TOTAL ASSETS EMPLOYED 72.5 70.9 FINANCED BY TAXPAYERS EQUITY: Public Dividend Capital 60.0 60.0 Revaluation reserve 18.6 18.6 Income and Expenditure Reserve - Prior years (2.4) (2.4) Income and Expenditure Reserve - Current Year (3.8) (5.3) TOTAL TAXPAYERS EQUITY 72.5 70.9 Non - Current Assets There was an overall increase of 2.3m in Non-Current Assets in December 2017 consisting a 2.9m increase in Property, t and Equipment offset by 0.6m depreciation charge. Current Assets There was a 1.3m increase in Current Assets in December 2017 comprising: 1.1m decrease in Trade and Other Receivables; Debtors, a 2.4m increase in Cash and Cash Equivalents, as analysed in Section 5: Cash Flow Statement. Inventories remained at 1.8m. Current Liabilities The decrease of 1.5m in Current Liabilities in December 2017 was due to a 1.5m decrease in Trade and Other Payables. Current Borrowings and Current Provisions remained at 1.4m and 0.2m respectively. Pg7
SECTION 5: CASH FLOW STATEMENT December 2017 m Surplus/(deficit) after tax (1.5) Non-cash flows in operating surplus/(deficit) Depreciation and amortisation 0.6 PDC Dividend expense 0.2 Non-cash flows in operating surplus/(deficit) 0.8 '000's 6,000 5,000 4,000 3,000 Cashflow Chart 17/18 Operating Cash flows before movements in working capital (0.7) Increase/(Decrease) in working capital Increase in Inventories 0.0 Increase in Trade and other receivables 1.1 Increase in Current Provisions 0.0 Decrease in Trade and Other payables (1.5) Increase/(Decrease) in working capital (0.3) 2,000 1,000 0 NHSI Net cash (outflow) from operating activities (1.0) Net cash inflow/(outflow) from investing activities Property t and Equipment (3.3) Intangible assets 0.0 Other assets 0.0 Net cash inflow/(outflow) from investing activities (3.3) Net cash inflow/(outflow) from financing activities PDC Drawdowns 0.0 PDC Dividend paid 0.0 Borrowings 6.7 Net cash inflow/(outflow) from financing activities 6.7 Net increase in cash 2.4 The closing cash position for December was 3.7m which was 0.7m above forecast. The variance was largely attributable to partial payment of Q2 STF by NHS England at the end of the month ( 1.1m). Significant receipts in the month included the 6.8m capital loan in respect of the Fire Programme, 1.5m for 17/18 CCG over-performance ( 1.0m from Kingston, 0.4m from Surrey Downs and and 0.1m from NW Surrey), 0.6m HMRC VAT monthly reclaim and 0.4m from NHS England for Winter Support. Capital payments of 3.2m were significantly higher than in previous months in the year, as work on the two A&E schemes progressed as anticipated. Overall payments to revenue creditors were in line with forecast and included a further 0.8m net payment to St Georges. The payment of trade suppliers continued to be managed closely during the month. Opening cash 1.3 Closing cash 3.7 Pg8
SECTION 6: FINANCE AND USE OF RESOURCES METRICS Weight 1 2 3 4 Capital Servicing Capacity 20% 2.50 1.75 1.25 <1.25 Liquidity 20% - - 7.00-14.00 <-14 I&E Margin - Underlying performance 20% 1% 0% -1% <=-1 I&E Margin - iance from plan 20% 0% -1% -2% <=-2 Agency 20% 0% 25% 50% >50% 100% 17/18 17/18 17/18 17/18 17/18 17/18 17/18 17/18 17/18 Heading M1 M2 M3 M4 M5 M6 M7 M8 M9 Capital Servicing Capacity (0.22) 0.9 1.3 1.5 1.4 1.4 0.7 1.5 1.2 Liquidity (27.8) (26.6) (13.5) (13.8) (14.6) (14.6) (13.0) (13.4) (9.1) I&E Margin - Underlying performance (7%) (2.9%) (1.6%) (1.2%) (1.3%) (1.4%) (0.1%) (1.2%) (1.8%) I&E Margin - iance from plan (1%) (0.5%) (0.7%) (0.7%) (1.0%) (1.3%) (0.5%) (0.7%) (1.4%) Agency (new metric) (3.3%) (10.6%) (4.9%) (5.7%) (20.4%) (19.9%) (16.9%) (15.3%) (12.8%) 17/18 16/17 16/17 16/17 16/17 16/17 16/17 16/17 16/17 Heading M1 M2 M3 M4 M5 M6 M7 M8 M9 Capital Service Cover 4 4 3 3 3 3 4 3 4 Liquidity 4 4 3 3 4 4 3 3 3 I&E Margin - Underlying performance 4 4 4 4 4 4 3 4 4 I&E Margin - iance from plan 2 2 2 2 2 3 2 2 3 Agency (new metric) 1 1 1 1 1 1 1 1 1 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Average 3.00 3.00 2.60 2.60 2.80 3.00 2.60 2.60 3.00 Rounded Score 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 Capital Servicing Capacity I&E Margin Agency Liquid ratio I&E Margin iance From Our current risk rating is 3.0. Pg9