Part 1 Part 2 NHS TRAFFORD CLINICAL COMMISSIONING GROUP GOVERNING BODY 24 April 2018 Title of report Finance Report for 12 months 2017/18 Purpose of the report and key highlights To provide members with an update on the in-year financial position for 2017/18 subject to audit Actions requested Decision (Decision and discussion required) Discussion (No decision required. Discussion only which may lead to actions ) Information (no discussion required) Strategic objectives supported by the report Continually improve engagement with member practices, patients, the public, carers, providers, our staff and other partners to effectively contribute to and influence the work of Trafford CCG. Working with health and social care partners deliver the transformation plan for Trafford including an increasing proportion of services from primary care and community services in an integrated way. Through effective integrated commissioning improve the quality of services and reduce the gap in health outcomes between the most and least deprived communities in Trafford. To be a sustainable economy both in terms of clinical services and finances. Recommendations The Governing Body is asked to note the contents of this paper. Discussion history prior to the Governing Body Financial implications The financial plan for 2017/18 was discussed and agreed at the Governing Body meetings and a number of items were approved at the Clinical Commissioning, Quality and Finance Committee meetings. Further actions have been considered and proposed and agreed by the Clinical Committee. The CCG has reported an in-year deficit of 8.6m including the release of the system risk reserve and the clawback of the Category M generic drug price savings released by NHS England.
Risk implications Equality Impact Assessment Communications Issues Public engagement summary Prepared by Responsible Director The CCG has not met its statutory duty to breakeven in-year and therefore not met the business rules and financial plan agreed for 2017/18 with NHS England. The Board Assurance Framework (BAF) has reflected this risk (no.11) throughout the year with a risk score of 20. The risk of under achievement of QIPP and its impact on delivering a breakeven position has also been recorded on the BAF with a risk score of 20. Quality impact assessments and equality impact assessments will be carried out where appropriate against individual schemes. Communications and engagement on the CCG s financial plan and actions will be considered against individual schemes. There has been a series of public engagement events with the recent Trafford Talks Health engagement events briefing the public on the CCG s financial expenditure. Julie Flanagan, Deputy Chief Finance Officer Nikki Bishop, Chief Finance Officer Priorities 2018-2019 1. Deliver implementation on New Models of Primary Care the Local Care and Care Complex 2. Prepare commissioning plans for the new primary care organisation (PCO) and the local care alliance (LCA) 3. Maximise the Trafford Co-ordination Centre (TCC) and prepare stage 2 delivery planning and implementation. 4. Attain delayed transfers of care targets (DTOCs). 5. Meeting waiting time standards in urgent care, cancer, mental health and planned care. 6. Achieve financial plans. 7. Implement primary care strategy and the new services from Altrincham. 8. Enhance engagement with communities, providers and primary care. 9. Progress organisational development throughout the health and social care sector. 10. Progress commissioned service pathways e.g. end of life, diabetes. 11. Manage the transition to the new integrated organisation. 12. Design and implement the new strategic commissioning function. 13. Support continuous quality improvement of Care Homes.
FINANCE REPORT for the 12 months 2017-18 1.0 INTRODUCTION AND BACKGROUND To meet the CCG business rules in 2017/18 a savings plan of 18.6m was required by Trafford CCG which would deliver an in-year surplus of 1.55m ( 6.3m cumulative surplus) whilst setting aside a local contingency of 0.5% for national system reserve and 0.5% for local use. This paper provides an update on the in-year financial position for 2017/18 to 31 March 2018 prior to completion of the external audit of the CCGs draft accounts. Following a sustained period of review and discussion with the Chief Finance Officer and senior colleagues from GM Health and Social Care Partnership, a revised in-year control total of 10.5m deficit was agreed at the beginning of March. As detailed in appendix 1 the CCG has an outturn position of an in-year deficit of 8.6m including the release of the system risk reserve of 1.5m and the release of the Category M generic price savings clawback of 385k by NHS England improving the year end outturn by c 1.9m. In order to deliver the revised in-year deficit control total the CCG has borrowed 6m repayable from the GM levy and has agreed a contract settlement with Manchester FT including 1m repayable, bringing a total of 7m repayable funds in 2018-19. Table 1 below summarises the movement in the CCG control total as agreed with GM Health and Social Care Partnership. '000 In year planned surplus 1,552 Brought Forward surplus 4,731 Cumulative planned surplus 17/18 original control total 6,283 Agreed in year revised deficit control total -10,530 Release of system risk reserve 1,500 Category M price savings released by NHS England 385 Adjusted in-year deficit revised control total -8,645 Table 1 The CCG outturn of 8.633m deficit as summarised in table 2 is slightly under the revised control total of 8.645m deficit.
2.0 PERFORMANCE AGAINST BUDGETS 2.1 Table 2 below summarises the outturn against the revised budget plan incorporating all non-recurrent allocations received by the CCG in year. Further financial analysis is provided in appendices 1 and 2. Summary Financial position for 12 months to 31 March 2018 Budget Expenditure Variance Resulting 18/19 pressures 000s 000s 000s 000s CCG Commissioned Services NHS Providers 226,535 237,386 10,851 Non NHS Providers 37,948 38,898 950 Prescribing 36,950 38,696 1,746 Primary Care 36,070 36,665 595 Unallocated QIPP -10,935 0 10,935 Total of Commissioned Services 326,568 351,644 25,077 0 Corporate 10,107 10,147 40 0 Total Expenditure Budgets 336,675 361,791 25,117 0 Reserves* 6,431 0-6,431 3,006 GM Levy Funding 6,000 0-6,000 6,000 Settlement Adjustment Manchester FT 0-1,000-1,000 1,000 System Risk Reserve 1,501 0-1,501 In-year (Surplus) 1,552 0-1,552 Total reserves incl borrowing 15,484-1,000-16,484 10,006 In- year Forecast (Surplus) / Deficit 352,159 360,791 8,633 Brought Forward (Surplus) 4,731 0-4,731 Cumulative Forecast (Surplus) / Deficit 356,890 360,791 3,902 Table 2 *CCG reserves are expenditure budgets comprising both recurrent and non-recurrent commitments and non-recurrent contingency
2.2 NHS PROVIDERS Further analysis at point of delivery level is provided in appendix 2, showing actual activity and cost with the CCG s local contracted NHS acute providers for the 11 months to February 2018. As reported in previous months the key areas of over performance against plan are non-elective admissions specifically at Manchester FT and Salford Royal FT ( 2.7m and 1.1m respectively), outpatients appointments ( 1.18m) excluded drugs and devices ( 1m) and rehabilitation bed days ( 0.7m). In the year end settlement discussions with Manchester FT, the CCG was successful in gaining agreement to 0.8m of challenges raised in year and also a further 1m of non-recurrent support which is repayable in 2018-19. Trafford CCG also led on the year end settlement discussion with The Christie on behalf of GM CCGs and was successful in gaining 0.2m share of the contract risk share with Specialist Commissioners and a further risk share agreement across GM CCGs to manage the total CCG commissioned contract over spend based on weighted population share. This resulted in a non-recurrent benefit to Trafford of 0.3m. 2.3 NON NHS PROVIDERS As reported in previous months the budget over spend is a combination of independent sector acute provider contract plan over spend, in particular activity provided by Manchester Surgical Services ( 0.7m) and Mental Health short term out of area placements ( 1.1m). A detailed review of continuing healthcare cases has resulted in a budget underspend of 0.4m. 2.4 PRESCRIBING The favourable movement in the prescribing outturn variance compared to the previous month forecast reflects the release of the Category M generic drug price savings by NHS England of 385k. 2.5 PRIMARY CARE Primary care budget overspend relates to the cost of Quality Outcomes Framework (QOF) payments for 2016-17 performance within the delegated budgets and the combined contract over spend for services provided by Mastercall. 2.6 QIPP EFFICIENCY SAVINGS The CCG had a total of 10.9m of its required QIPP savings which were unallocated and had no delivery plan. This is a significant contributory factor to the CCG s deficit position.
2.7 GM CONTROL LIMIT The CCG has failed to meet its statutory duty of break-even in year. Regular meetings have taken place with the Chief Finance Officer and senior finance colleagues at GM H&SCP to review the anticipated outturn and risks within the financial forecast resulting in a revised control total of 10.5m deficit before the release of the system risk reserve and category M price savings. Given the level of borrowing in 2017-18 to deliver the revised control total and the requirement to repay 7m in 2018-19 meetings are scheduled for week commencing 23 April to assess the viability of the plan for 2018-19. A formal recovery plan is required to be produced by the CCG. 3.0 CONTRACTING 2017/18 Contracts have been settled as fixed and final values for the majority of our Payment by Results contracts to mitigate the risk of further over performance being carried forward and impacting adversely on the financial position in 2018/19. In terms of 2018/19 Contracts, finance and activity plans have been agreed for the majority of our main acute and mental health providers ahead of the new financial year, with Manchester Foundation Trust at 156.7m and Greater Manchester Mental Health, 17.9m. For Trafford s Community Services, a Heads of Agreement has been signed with Pennine Care for 29.7m ahead of a new two year contract being in place by 30 th June 2018. 4.0 SUMMARY The CCG will submit draft accounts reporting an in-year deficit of 8.6m for 2017-18 after borrowing 7m. The implications of the borrowing on the 2018-19 plan and required efficiency savings will be discussed with GM H&SC Partnership executives in the week commencing 23 April 2018. 4.1 RECOMMENDATIONS The NHS Trafford CCG Governing Body is asked to note the contents of this paper.