Trust Board Finance Report as at 31 st January 2014

Transcription

1 Trust Board Finance Report as at 31 st January 2014 L O Neill Director of Finance February 2014 Produced by Director of Finance Trust Board Financial Position 31 st January

2 Table of Reports Report 1: Summary of Month-end Forecast Positions 2013/ Report 2: Trust Board Financial Report January Report 1 Summary of Month End Financial Positions 2013/14 3

3 Report 1: Summary of Month-end Forecast Positions 2013/14 Month Position Best Estimate 31 st January 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May million million 9.176million 9.896million 8.28million 7.107million 8.216million 5.9million 3.901million 6.969million million million million 9.438million 9.175million 9.414million 8.819million 8.545million Best Estimate (after Sensitivity Analysis) 31 st January million million million million million million million N/A N/A 2012/13 Year end Financial Position Out-turn Surplus 87, Report 1 Summary of Month End Financial Positions 2013/14 3

4 Report 2: Trust Board Financial Report January 2014 Section 1: Executive Summary The current Trust deficit after 10 months is 7.393million. The year-end outturn is projected to be 6.969million. This is an improvement on the December 2013 projected outturn position by 4.753million. The majority of this improvement is related to additional funding provided by HSCB against a range of cost pressures. Directorates are continuing to be monitored against control totals to constrain expenditure. Section 2: Forecast Outturn A best estimate forecast outturn based on the underlying month 10 position, and taking into account an assessment of the TYC/QICR proposals and potential additional savings plans, is shown below: Best Estimate Forecast January 2014 Best Estimate (Sensitivity Analysis) Forecast January s 000 s Opening GL (projected) 13,821 13,821 Less Contingency measures to be delivered (1,175) (324) Less TYC/QICR to be achieved (411) (311) Add Risks Anticipated Income (5,266) (5,266) Projected 6,969 8,641 Anticipated (HSCB agreed) 6,562 6,562 Gap at End January 407 2,079 The best estimate projected deficit assumes full achievement and delivery of the remaining contingency measures including a range of QICR saving proposals. It should be noted that, contingency proposals risk rated as RED have been removed from the estimations. 5

5 HSCB have confirmed that the Trust is required to contain its deficit to 6.562million in 2013/14 (effectively a control total.) This is a reduction of 4.363million on the control target reported last month. HSCB have made funds, up to this level, available to the Trust to cover a range of cost pressures. The Commissioner is instructing where these funds are to be allocated. This target is non-negotiable for the Trust and must be met. As can be seen above there is a gap at the end of January ranging from 0.407million to potentially 2.079million and the Trust will need to take further action to get to the target figure. The best case is also dependent on full delivery of the remaining savings targets A number of contingency measures previously identified by PCCOPS and Nursing/User Experience directorates (totalling 851,000) are considered to be a high risk of non-achievement. In addition a further 100,000 of Corporate overhead QICR schemes have been highlighted not to achieve on their In-year target. Consequently, the best estimate (sensitivity analysis) assumes that these schemes will not deliver by 31 March This presents a considerable challenge to both Directors in maintaining spend against their assigned control target. Two further risks have been identified this month; inability of the Trust to drawback 340,000 of costs associated with waiting list initiatives unfunded, and 381,000 associated with pharmacy recharge costs to other Trusts not being honoured The projections take account of costs known to the Trust currently; however the full impact of winter pressures has yet to surface in the financial systems. There are a number of costs in the position which are externally influenced and are outside the Trust s control. These are: 319k of clinical excellence awards (note this projection has decreased slightly as further clarification on the awards is sought) The financial position this month includes estimated costs in relation to the recent Clinical Excellence Awards. The Trust has been instructed to commence the process of award, backdated to 1 st April Whilst recycled clinical excellence awards help to mitigate the costs arising, there is no creditor to cover arrears pertaining to 2012/13. Furthermore, DHSSPS have indicated that a formula of 0.25pa per eligible consultant should be paid. The cost of this from 1 st April 2013 significantly out strips the funding of recycled awards available. The Director of HR continues to liaise with DHSSPS on this issue. The Trust may be forced to set aside departmental instructions and fund only to the level of recycled awards available in the Trust. 255k systems maintenance (BSTP) (slight reduction against December reported figure) 200k loss of health centre income These are costs imposed on the Trust directly via DHSSPS instructions.. 6

6 Directorate Directorate Performance Forecast Outturn Variance before QICR/ Contingencies Outstanding QICR/ Contingencies/al locations to be delivered Transitio nal funding Revised Forecast Position 000 s 000 s 000 s 000 s Acute 17, (3,400) 14,113 PCCOPS 3, (250) 2,775 Children s 5, (2,700) 2,452 Mental Health & Learning Disability Medical & Pharmacy Planning, Performance & Management (1,321) 0 (1,321) (1,169) 0 (1,169) Corporate 1, ,271 Overheads Nursing & User Experience Governance Finance HR Senior Directors Outstanding (14,051) - 6,350 (7,701) Allocations Additional income (5,266) Totals 13,821 1,586 6,350 6,969 The best estimate projection is presenting a 6.969million deficit. The additional income form the Board remains to be allocated. This estimate may be skewed due to the straight line projection applied to ten month s figures; however this is likely to be marginal as we progress towards yearend. In the Acute directorate the position has deteriorated by 140k as a result of a number of costs across a variety of variances. There has been an improvement in medical and nursing costs but not at the previous rate, probably due to the December pressures. The PCCOPS directorate has worsened this month by around 290k mainly in Domiciliary Care. The directorate continues to indicate a risk of non-achievement of 759,000 of contingencies. (Further analysis of the position is ongoing). Mental Health Directorate has deteriorated by 500k across a number of headings including medical staff agency costs of 90K, bank costs increase of 58k, People First pressures 283K, Travel increase 32K and Domiciliary Care increase of 59K (including Direct Payments). 7

7 The Children s directorate has improved by 472K mainly due to delivery for further contingency and easement on some expenditure lines.. The Nursing and User Experience has had an accrual this month of 28,000 for annual leave outstanding. It continues to experience difficulty in delivering on contingencies. The Planning Performance Management position has improved as a result of capitalisation of posts, and there are also improvements in HR, Governance and Finance which all offset the negative variances. Corporate Overheads has also improved by around 27k. A detailed review of all budget positions is taking place as part of the monthly financial accountability and performance review process. Section 3: Key Assumptions used in the Best Estimate Forecast The key assumptions used in constructing the best estimate forecast year-end outturn are: The underlying trend at the end of January 2014 will continue pro-rata to the yearend and may improve. That the remaining QICR/contingency proposals outstanding of 1.586million will deliver the assessed savings before the end of the year. That financial control will be maintained and expenditure controlled within agreed budgets. That a range of existing acute funding requests will continue to be supported by the Commissioner. Consequently our best estimate, at this stage in the year, projects a significant deficit against the statutory break-even requirement. Section 4: Key Risks associated with Forecast targets A key risk impacting on the Forecast Targets relates to the deliverability of the TYC/QICR and Contingency measures proposed by Directors, totalling 1.586million 0.411million relates to ongoing QICR targets confirmed by Directors as likely to deliver by 31 March recurrently. A further 1.175million is contingency proposals. It is likely that these contingency measures will have to remain in force going into 2014/15. The Trust cannot achieve a breakeven position in this financial year without support from the Health and Social Care Board, and this has been confirmed as a Control Total of 6.562million. This is dependent on the Trust delivering proposed TYC/QICR and contingency measures and not worsening in the remaining months of 2013/14. There is significant risk attached to achievement of this. At the end of January the position by Directorate is shown in the table below: 8

8 Directorate TYC/QICR to be achieved Achieved to date TYC/QICR outstanding Contingency targets to be achieved Exclude red schemes/gaps Revised contingency targets to be achieved Contingency schemes achieved to date Contingency outstanding Acute (750,000) 596,000 (154,000) (2,496,000) 2,069,000 (427,000) 362,000 (65,000) PCCOPS (1,389,000) 275,000 (1,114,000) 151,000 (963,000)* Childrens (600,000) 497,000 (103,000) (857,000) 640,000 (217,000) 204,000 (13,000) Mental Health/ Disability (1,534,000) 728,000 (806,000) 806,000 - Medical & Pharmacy (108,000) 3,000 (105,000) 103,000 (2,000) Performance Management (275,000) - (275,000) 275,000 - Corp Overheads (350,000) 196,000 (154,000)* Director of Nursing (295,000) 175,000 (120,000) 28,000 (92,000)* Governance (13,000) 13, Finance (154,000) 6,000 (148,000) 108,000 (40,000) Human Resources (75,000) - (75,000) 75,000 - Senior Directors & Trust Board (11,000) - (11,000) 11,000 - TOTAL (1,700,000) 1,289,000 (411,000) (7,207,000) 3,909,000 (3,298,000) 2,123,000 (1,175,000) 9

9 Whilst this is the position at the end of January there is clearly pressure on directorates to deliver the targets and a number of proposals are currently at high risk of non-delivery. Those directorates with * in the contingency outstanding column indicate where QICR/contingency proposals are at risk of non-achievement as previously noted. Section 5: Key Risks (Other than those associated with Forecast Targets) The following areas have significant elements of estimation, and could thus impact on our year-end estimates. a) Agenda for Change: The Trust has been funded 1.1million recurrently for staff who under AFC Clustering are entitled to a banding uplift. However, based on the current level of requests, it is not yet feasible to determine if this funding will be sufficient. As a consequence, a pragmatic approach to budgetary uplift has been adopted which is currently resulting in a number of directorates experiencing difficulties in the funding required. b) Elective Care Reform: The Commissioner has released funding for approved services under this banner. The financial position previously assumed that Elective Care Access works will break-even. It has emerged that a range of diagnostic tests carried out on IS patients will not be funded by the Commissioner. As a result a pressure of 340,000 has been included in the financial position. The Director of Strategic Planning & Performance is reviewing procedures and protocols associated with Elective Access IS work. c) Sanctions for the under delivery of core activity may be imposed on the Trust at a level greater than estimated in the financial position. Currently only quarters 1and 2 (April-September) has had a financial penalty notified to the Trust of 287,000. Indications are that the Trust continues to underperform against core hospital based volumes. A prudent approach has been adopted regarding the remainder of the financial year, similar to the levels currently imposed. Discussions are being held with HSCB and Directors of Acute and Strategic Planning & Performance. d) The Trust has implemented in early September, the Hepatitis C Look Back Project. In the region of 34,000 costs to date have been incurred. At present no funding stream has been identified despite approaches to the Finance directorate in HSCB. This has been referred to the Trust s Governance section to pursue a funding source with the Commissioner. e) Winter pressures for 2013/14 where costs have arisen and funding provided, this has been factored into the position ; however there are concerns that the 600,000 funding provided will not be sufficient to cover the costs of the recent additional beds and Emergency department escalation issues. Significant impact on Nursing/User Experience, PCCOPS and MHD directorates is also expected as a result of this. f) Auto Enrolment: The mandatory requirement to register all new staff onto the Trust s superannuation pension scheme will result in increased employer s contributory costs, which might previously have been avoided (due to the individual electing not to join the scheme). An exercise to assess the cost of this legal requirement is currently underway. 10

10 g) The Trust is currently the lead on the regional Pharmacy procurement savings using software sourced from a company called Digitalis. The cost of this software and licence has to be shared between all Trusts. However, there is a risk that this will not be accepted by these Trusts and the Northern Trust forced to carry the full cost of the charge. This equates to 381,000. h) The Trust has been instructed by DHSSPS to proceed with allocating clinical excellence awards to medical staff; backdated to 1 st April This will potentially incur a further 319,000 cost on the Trust; of which 88,000 will be recurrent. i) In December 2013, Business Services Organisation (BSO) commenced shared services centres with the Payments function going live on 16/12/13. However, this has impacted on a number of invoices not processed through the Trust. The full value of these is some 1.3m. Whilst account has been taken of the value, it is not yet possible to determine which directorates these costs lie with. Consequently, directorate performance may be understated. Discussions are ongoing with BSO. j) A number of savings proposals are at this stage non-recurring and will need to be replaced by recurrent items by year-end. Section 6: Conclusion The January forecast position is a deficit of 6.969million. A need for continuing action to deliver savings plans and contain and reduce spending has been communicated to all Directorate teams. Regular updates on both 2013/14 and 2014/15 TYC plans are being submitted to the Commissioner along with a review of cost pressures. 11