NHS Trust Development Authority. 2015/16 Trust Financial Management System (TFMS) Plan Guidance

Transcription

1 NHS Trust Development Authority 2015/16 Trust Financial Management System (TFMS) Plan Guidance

2 NHS Trust Development Authority 2015/16 Trust Financial Management System (TFMS) Plan Guidance Table of Contents Section 1 NHS Trust 2015/16 Plan Form Guidance... Introduction... Capital and cash planning... Structure of the forms... Validations and queries... Recording data and submitting forms... Section 2 TRU Key Data... Section 3 TRU01... Statement of Comprehensive Income (SOCI)... Reported NHS Financial Performance... Additional information... Section 4 TRU02... Statement of Financial Position (SoFP)... Section 5 TRU04... Statement of Cash Flows... Cash flows from operating activities... Cash flows from investing activities... Cash flows from financing activities... Section 6 TRU05... Revenue from patient care activities... Other operating revenue... Section 7 TRU06... Operating expenses... Employee benefits

3 Section 8 TRU14... Analysis of impairments and reversals... Categories of impairment... Section 9 TRU19... Provisions for liabilities and charges... Section 10 TRU20... IFRIC 12/UK GAAP data... IFRIC 12 performance calculation... Capital consequences of IFRS: LIFT/PFI and other items under IFRIC Section 11 TRU54... Continuity of Service Risk Ratings... Section 12 TRU55... Capital tables... Annual capital cost absorption rate... External financing limit... Capital Resource Limit including IFRS impact... IFRS capital expenditure IFRIC 12 and non-ifric Section 13 TRU56... Capital expenditure by project code/name... Summary analysis of total gross capital expenditure (by type) including IFRS impact... Calculation of delegated limits... Additional disclosures for projects identified as requiring NHS TDA business case approval... Additional disclosures for projects above delegated limits... Additional disclosures for centrally funding capital schemes for which NHS Trusts have carried forward limits or capital PDC repayments

4 Section 14 TRU63... Capital cash management plan... Net borrowing requirement... Section 15 TRU64a, TRU64b, TRU64c... Planned and underlying income and expenditure / sources and application of funds - Introduction... TRU64c Summary tables... Links to other tabs... Commissioning for Quality and Innovation (CQUIN)... Deficit support funding... Winter resilience... Referral to Treatment backlog clearance... Transactions... TRU64a Sources of Funds... Memorandum table on income values and deductions arising from national policy... Uplift commentary table... Memorandum table on service / volume change... TRU64b Application of funds... Uplift commentary table... Memorandum table on service / volume change... Section 16 TRU65... Efficiency programme /16 Efficiencies summary information tables /15 Full year effect e efficiencies summary information tables... Section 17 TRU67... Metrics derived from source and application of funds... Efficiency as a percentage of planned expenditure

5 Drivers of efficiency in 2015/16... Normalised position... Section 18 TRU70 and TRU Expected outturn of contract values 2014/15 and planned contract values 2015/ Section 19 TRU_COM1... Key item commentary... Section 20 Validations Appendices Appendix 1 Appendix 2 Appendix 3 Appendix 4 Outline of changes and developments to planning forms Scope of initial planning forms and full planning forms Consultancy Residual interests: assets brought on-sofp under IFRS

6 1. NHS Trust 2015/16 Plan Form Guidance Introduction 1.1 The NHS Trust Development Authority (NHS TDA) planning forms are designed to capture the financial planning information that forms part of the NHS Trusts integrated plans to provide high quality sustainable services within available resources. 1.2 The full planning forms collect current year data for 2014/15 (forecast outturn values) and planning data for 2015/16 profiled for each month of the year. Initial planning forms collect data for 2014/15 (forecast outturn) and planning data for 2015/16. Capital expenditure plans are collected for the five years from 2015/16 to 2019/ This data will provide the NHS TDA with information on all financial aspects of NHS Trusts plans for 2015/16, as well as provide financial monitoring information against which all 2015/16 monthly submissions will be measured. 1.4 Key changes to the forms and the guidance, arising from new data collection requirements and other developments have been summarised in Appendix Entries are to be prepared in accordance with the guidance issued in this document, applying the accounting principles detailed in the 2014/15 NHS Manual for Accounts, available on the Department of Health (DH) FINMAN website. 1.6 From 2014/15, NHS bodies are required to consolidate NHS Charitable Funds in their annual accounts and summarisation schedules under the terms of IAS 27 Consolidated and Separate Financial Statements. The consolidated statements will be presented so as to identify the NHS body s own transactions and the consolidated position in separate columns. NHS bodies performance outturns will be based on the core entity s returns, rather than on the consolidated return. All financial planning submissions should therefore exclude Charitable Funds and should represent the NHS Trusts own transactions. 1.7 The underlying planning assumptions of all NHS Trusts should be consistent with the 2015/16 National Tariff document. NHS Trusts should apply the assumptions within the 2015/16 National Tariff consultation notice until such time as the final 2015/16 National Tariff is issued. 1.8 The governance requirements in relation to the data submitted are as follows: the 2014/15 forecast outturn should reflect the latest reported at each submission date; the 2015/16 plan submission on 10 April 2015 should completely correspond to the plan agreed by the full NHS Trust Board by the 31 March 2015 deadline for agreed budget plans; 1 of 96

7 the planning forms should be in line with the medium term plans presented to the NHS Trust Board. 1.9 It is expected that NHS Trusts will align their plans with those of the wider local health economy. In order to test the alignment of key assumptions NHS TDA, NHS England (NHSE) and Monitor will reconcile provider and commissioner plans as part of the review of the full plan submissions The outputs of the reconciliation will be shared between the assurance teams of NHS TDA, NHSE and Monitor. Every step will be taken not to prejudice the position of any NHS Trust or commissioner and no information will be shared at individual organisation level without first contacting the appropriate party NHS Trusts should ensure consistency between their financial, activity and workforce plans for 2015/16. The review of NHS Trusts planning submissions will include a series of triangulation tests designed to assess the alignment of these plans In order to support NHS Trusts in their review of plans prior to submission, the NHS TDA have designed a spreadsheet tool for NHS Trusts which provides dashboard summaries for each of the finance, activity and workforce plans, and performs a series of triangulation tests to identify how well the finance, activity and workforce returns are aligned. The tool is referred to as the Linked File and has been made available as a pilot within the Trust pigeonholes Supplementary guidance has been provided this year in the form of prerecorded webinars which provide an overview of the Linked File and the new format TRU64 Sources and Application of Funds. The Webex recordings have been made available from a summary schedule saved into the Trust pigeonholes and can be accessed directly at the following web links: Linked File Webex: 348a13ca d1f6 TRU64 Webex: 16b75cb43726e7f1828cb4 Capital and cash planning Capital 1.14 NHS Trusts capital plans will be an update on the plans agreed in 2014/15. The update will need to reflect any changes in overall strategy or affordability since the previous plan submissions. 2 of 97

8 1.15 The NHS TDA will continue to recognise the capital approval decisions made by predecessor organisations but validate those that impact in 2015/16 and beyond to ensure they reflect current circumstances and have an appropriate level of consistency It should be noted that access to Public Dividend Capital (PDC) will be on an exceptional basis when all other available options to finance capital have been exhausted. The availability of such funding will be severely restricted to NHS Trusts that meet the criteria to access capital PDC and can only be accessed by a financing application to the Independent Trust Financing Facility (ITFF). All applications require prior scrutiny and approval by the NHS TDA and will be presented to the ITFF by the NHS TDA on the NHS Trusts behalf It has been agreed that central support for Private Finance Initiative (PFI) contracts should be provided to a small number of NHS Trusts where affordability of PFI is preventing them from achieving financial sustainability. A total of six NHS Trusts have been identified as requiring central support for PFI contracts through direct funding as follows: St Helens and Knowsley Teaching Hospitals NHS Trust; Maidstone and Tunbridge Wells NHS Trust; Dartford and Gravesham NHS Trust; North Cumbria University Hospitals NHS Trust; Barking, Havering and Redbridge University Hospitals NHS Trust; Lewisham and Greenwich NHS Trust The agreed levels of central support should be assumed in the plans of the six NHS Trusts, recognising that passing the four key tests laid down by the DH to release such funding must be evidenced NHS Trusts should also include in their plans any revenue support for capital schemes where there is a formal agreement with commissioners or a predecessor organisation. Cash 1.20 NHS Trusts may require revenue financing for two purposes, either to support operational requirements (i.e. to enable creditors to be paid in a reasonable timeframe) or to strengthen liquidity to deliver the required cash position for a successful Foundation Trust application. 3 of 97

9 1.21 For operational requirements, the financing can be through loan financing or PDC both of which can only be accessed by a financing application to the ITFF. All applications require prior scrutiny and approval by the NHS TDA and will be presented to the ITFF by the NHS TDA on behalf of the NHS Trust Access to PDC will be severely restricted and should be considered only as a final option and exceptional circumstances otherwise lean financing can be made available and where all health economy solutions have been exhausted. Where PDC is included in NHS Trust plans it should not be assumed that this will be available and all cases will be scrutinised during the planning process Please note that where appropriate, NHS Trusts should also refer to the Secretary of State s Guidance under section 42a of the National Health Service Act Structure of the forms 1.24 Planning forms are collected in two stages, with the earlier initial plans submission representing a key subset of the later full plan submission. The initial planning forms contain all primary statements and management information but exclude some of the detailed analysis required in the full planning forms. Details of each of the forms to be completed and the required monthly or annual phasing at initial plan and at full plan are included in Appendix Overview of planning forms and data flow: the flow of data through the forms from input to summary and review has been represented on the diagram overleaf. Related forms have been colour coded and feeder flows of data have been represented with connecting lines and directional arrows; the colour coding used in the diagram has been used to colour the respective tabs on the forms themselves. 4 of 97

10 Diagram 1: Overview of planning forms and data flow Data Inputs - Data Inputs - Primary Summary and Level 1 Level 2 Statements Review Data OVERVIEW OF PLANNING FORMS AND DATA FLOW TRU_ /15 Revenue CCG/AT's TRU_ /16 Revenue CCG/AT's TRU_05 Revenue TRU_06 Expenditure TRU_01 Statement of Comprehensive Income VALIDATIONS TRU_COM1 2015/16 Commentary TRU_14 Impairments TRU_04 Cash Flow Statement TRU_20 IFRIC12 TRU_56 Capital Analysis of Projects TRU_19 Provisions TRU_55 Capital Expenditure Summaries TRU_63 Capital Cash Management TRU_02 Statement of Financial Position TRU_54 Risk Ratings TRU_Key Data Key Metrics Following review of all summary and review schedules; update the required forms until the Key Data Metrics fully reflect your position and all commentary has been completed to further describe all remaining variances TRU_65 Efficiency Programme TRU_64 Sources TRU_64 and Application Sources TRU_64A,B,C of Funds and Application Sources of Funds and Application of Funds TRU_67 Efficiency Metrics Colour Legend: Revenue Efficiency/ S&A Expenditure Primary Statements Provisions Review Data Capital and Cash Summary Data Connecting Line Legend: Solid Lines: reflect data feeds Dotted Lines: reflect data reconciliations 5 of 97

11 1.26 A summary of the full planning forms is provided below: Introduction: Provides NHS Trust contact details to the NHS TDA, a summary of any validation errors still remaining and Director of Finance (or NHS Trust Executive) signature to be evidenced by electronic signature which can be copy and pasted to the left of the box and dragged across it; TRU_index: List of forms with summary contents and hyperlinks to each tab. The diagram of data flows has been included within the index for ease of reference; TRU_RAG_Criteria: Details the risk assessment criteria for the calculation of the planning RAG ratings included within the Key Data tab (see table 1 overleaf); TRU_Key Data: The forms bring together key information in respect of the revenue performance, capital and cash management, efficiencies, Continuity of Service Risk Ratings and other key data for the NHS Trust. The key data fields feed directly from the detailed forms. A number of key data metrics have been RAG (Red/Amber/Green) rated according to a set of criteria designed for planning purposes only and will not replace the in-year risk assessment metrics. The assessment criteria are included in Table 1; the RAG ratings in the planning forms are a desk top review process that are intended to signpost areas that may require further investigation. The overall finance RAG rating can be moderated as a result of detailed discussions at individual organisation level; 6 of 97

12 Table 1: Key data Rating Red Amber Green Overall RAG Rating Criteria Override - assessed as red on indicator P1 OR has 3 or more other indicators assessed as red Maximum of 2 indicators assessed as red from the remaining indicators OR 2 or more assessed as amber from the remaining indicators Maximum of 1 Amber, all other indicators are assessed as Green Indicator Number Indicator description Risk assessment criteria Red Amber Green P1 Bottom line I&E planned position Planned deficit Breakeven or surplus less than Surplus of 1% or greater 1% P2 Is the Trust planning to Yes - No access permanent PDC 'Other' funding? P3 % of efficiency high risk at Over 20% Between 10% and final plan 20% Less than 10% P4 % of efficiency unidentified at final plan Over 20% Unidentified efficiencies of 20% or less P5 Efficiencies as % of total Over 5.4% or less Between 5% and planned spend excluding than 3.8% 5.4% current year efficiencies at plan P6 Underlying position as a percentage of turnover Underlying deficit or more than 2% P7 Continuity of Services Risk CoSRR score of 1 Rating (CoSRR) or 2 Underlying deficit of less than 2% No unidentified efficiencies Between 3.8% and 5% No underlying deficit or an underlying surplus - CoSRR score of 3 or 4 TRU01: The principle table is the Statement of Comprehensive Income (SOCI) and this is supplemented by a further data set which provides key performance information. These are: the reported NHS financial performance table which adjusts the SOCI position for items which the DH has agreed should not be included in financial performance; the Earnings Before Interest, Taxation, Depreciation and Amortisation (EBITDA) which is used as a further performance measure; finally a memorandum included at full plan shows agency/contract staff costs to inform workforce and finance triangulation and in-year data collections; 7 of 97

13 TRU02: The Statement of Financial Position (SOFP) provides an analysis of the key balances for the 2015/16 financial year as well as the opening position at 1 April The table is supported by a memorandum table for further data collection requirements and the analysis of cash balances; TRU04: The Statement of Cash Flows analyses the movements in cash inflows and outflows, which together with the opening cash balances, determines the cash holding at the end of the 2014/15 financial year and for the 2015/16 financial year. The table is supported by a memorandum table that provides further information on other loans received and other loans repaid; TRU05: Analysis of revenue split between income arising from patient care activities and income from other sources. This detailed analysis feeds into the SOCI on TRU01 at full plan. The revenue values from patient care activity from NHSE Area teams and Clinical Commissioning Groups (CCGs) feed from the detailed input forms TRU70 and TRU71; TRU06: Analysis of operating expenses set out in two tables that detail the costs arising from employee benefits and those relating to other expenses. Both tables feed into the SOCI on TRU01 at full plan; TRU14: Provides an analysis of the different categories of impairments arising during the financial year and in summary for the 2015/16 year, that impact on the SOCI. This detailed analysis feeds into the TRU06 at full plan; TRU19: Provisions split by the key headings and expenditure items that are recorded in the annual accounts. A text box below the table requires narrative explanation of material provisions included in the other category. These figures feed into the Statement of Financial Position (TRU02) and the Statement of Cash Flows (TRU04) at full plan; TRU20: Identification of the financial implication of applying the International Financial Reporting Standards (IFRS) requirements relating to service concessions (impacting on Private Finance Initiatives (PFIs) / Local Improvement Financial Trust (LIFT) projects). These (IFRIC 12 costs) are added back to the Retained Surplus/(Deficit) to form part of the Adjusted Financial Performance on TRU01; TRU54: Continuity of Service Risk Ratings (CoSRR) table includes the calculation of key metrics consistent with the format used by Monitor for Foundation Trusts (FTs); 8 of 97

14 TRU55: Details of capital expenditure in four tables. The first three tables analyse the Annual Capital Cost Absorption Rate, the External Financing Limit (EFL) and the Capital Resource Limit (CRL). These are followed by the IFRS capital expenditure table which includes IFRIC 12 and non-ifric 12 expenditure analysis feeding from drop down categories used in the table in TRU56; TRU56: Details of capital expenditure by the key categories planned for the 2015/16 financial year and, in summary detail, for the four subsequent years. These values are then aggregated for the Capital project summary analysis. This is supplemented by a table that requires details of business case approvals for projects that are above the delegated limits for the NHS Trust and a table of centrally funded capital schemes; TRU63: The Capital Cash Management Plan analyses the gross capital expenditure between both the internal and external sources of finance and sets out the Net Borrowing Requirement. This is supplemented by the summary of Capital Programme Funding Sources, Capital Resource Limits and External Funding Limits table, and a table of initial anticipated adjustments at plan; TRU64a, b and c: Provide an analysis of the bridge between the financial position for 2014/15 and the projected position for 2015/16 through sources and application of funds. This is supplemented by a memorandum of 2015/16 forecast values for national policy items such as the emergency marginal rate and emergency readmissions and a bridge summary tracking changes in the net income spend planned between 2014/15 and 2015/16; TRU65: The main elements of the NHS Trusts Cost Improvement Programme (CIPs) are summarised on this table by key categories, and profiled by month for 2015/16. The full year effect of CIPs from 2014/15 is also profiled by month. A table of summary information is shown below for both 2015/16 and the full year effect of 2014/15. This table feeds efficiency values into TRU64a and b; TRU67: Provides further detail regarding NHS Trust efficiency measures detailed in TRU64 and TRU65 and how these impact on the normalised position. This includes a requirement to provide the value of 2014/15 forecast efficiency to be achieved; TRU70 and 71: Provides information on 2014/15 forecast outturn and planned revenue from patient care activities for 2015/16. Revenue is to be analysed by individual CCGs and Area Team and by point of delivery. Additional information relating to the expected contracted revenue is required for 2015/16; 9 of 97

15 TRU_COM1: This provides a summary of key variances in five categories for 2015/16; key data commentary, Continuity of Services finance ratings, governance, significant movements in revenue, expenditure and provisions and contract revenue from patient care activities. The data feeds directly from the detailed forms within the collection and includes a formula driven check. NHS Trusts are required to review any variances highlighted in red and either amend data in the main part of the forms or provide adequate explanations on the reason section of the commentary form; Validations: Validations with links to checks and / or figures required to reconcile in the plan and ensure data quality. Validations and queries 1.27 It is very important for NHS organisations to ensure that any validation errors on the forms have been cleared before they are submitted back to the NHS TDA. If NHS organisations experience any difficulties in clearing validation errors, they should seek advice from their NHS TDA contact in good time; technical queries should be directed to [email protected]. All queries relating to the planning forms should clearly reference Planning in the subject header to ensure these can be distinguished from other types of queries received in this mailbox (for example Q3 and Agreement of Balances queries). Recording data and submitting forms 1.28 All data entered into the forms is important and stringent validation processes should be in place in all NHS organisations to ensure that all data is entered accurately: please check that the contact details on the introduction sheet are correct; avoid dragging and dropping on the forms as this can corrupt the spread-sheet formulae. Corrupted spread-sheets cannot be repaired and may require the NHS Trust to download a blank form from the pigeon hole for complete re-input of data. Please use copy and paste special values for data extracted from other sources; the correct signage and currency must be used, as noted below; you may also notice that on some forms to the side of the main tables, there are several cells containing data. These serve as assistance to any feed-through and validations; please ensure when submitting to the NHS TDA that TFMS files are not password protected or in a shared workbook format or linked to other workbooks; 10 of 97

16 the NHS TDA are operating using Excel 2010, therefore all planning submissions should now be returned in.xlsm format (not xls format) The forms are marked 000 : figures must be entered in pounds thousands; figures must be rounded to the nearest whole figure. You must not enter decimals, or enter your own formulae, as this commonly leads to the creation of validation errors that cannot be easily traced or cleared; where no values are required, cells should be left blank or a zero inserted. Do not write in NIL or N/A The print areas have been set on each form to enable NHS Trusts to print the entire workbook on one sided A4 size paper. A limited number of forms print across a two page width (TRU55, TRU56, TRU65, TRU70 and TRU71) The finance planning forms have been designed using the TFMS tool which is used for in-year collections. This enables finance planning data to be captured using a familiar format and will be used to populate planning data as part of the in-year TFMS finance forms during 2015/16. This tool is not available for other types of planning submissions which should be submitted in accordance with the NHS TDA technical planning guidance available on the NHS TDA website. Completed finance planning forms should be submitted to [email protected] by twelve noon on the submission deadlines detailed in the NHS TDA planning guidance. 11 of 97

17 2. TRU Key Data 2.1 This form provides a summary of the headline financial data provided by the more detailed forms that support it. The key data is presented in a concise format, allowing the user of this form to assess how well the key data elements combine to form an overall coherent financial plan which is in line with the NHS Trusts medium term plans. A number of key data metrics are RAG rated to provide a desktop risk assessment of the plan. The key information summarised is: Statement of Comprehensive Income (SoCI) (sub codes 100 to 160): Comprises details of turnover, retained surplus/(deficit) represented both in absolute terms and as a percentage of turnover; Reported Financial Performance (sub codes 170 to 205): This links the retained surplus/(deficit) and adjusts this for items that should not impact on financial performance, these include impairments, donated assets and Government granted assets, IFRIC 12 items and gains and losses relating to transfers by absorption; Capital Position (sub codes 280 to 330): This provides key data relating to Gross Capital Expenditure, receipts and losses, other adjustments regarding grants, donations and losses on disposal of donated assets. The section also summarises the CRL, the spend against this and the resulting under or over spend; Cash, Funding and Loans (sub codes 340 to 386): This comprises key data relating to cash balances, PDC issued and repaid and loans; CIPs/Efficiencies (sub codes 390 to 445): This summarises the total efficiency programme for the year to date and forecast outturn showing their risk profile, those that are un-identified and those that are recurrent and non-recurrent. This section also provides the measure of efficiencies as a percentage of planned expenditure (sub code 440); Other key metrics (sub codes 450 to 510): This comprises key data relating to the NHS Trusts External Financing Limit (EFL), the Annual Capital Absorption Rate (%), the normalised position and underlying financial position of the NHS Trust; Continuity of Services Risk Ratings (sub codes 530 to 560): This sets out the CoSRR by its component parts of liquidity days (sub code 530) and Capital Servicing Capacity (sub code 540); Key Metrics Overall RAG Rating (sub code 570): This reflects the combined desk top RAG rating for the financial plan, calculated from the individual RAG ratings calculated within the individual key data sections. 12 of 96

18 3. TRU01 Statement of Comprehensive Income (SOCI) (sub codes 100 to 220) 3.1 In the full plan, entries in the SOCI are largely generated from the related notes (especially TRU05 and TRU06). These entries should be prepared in accordance with the guidance in the NHS Trust Manual for Accounts, Chapter 4 and any additional guidance in this document. 3.2 Gross employee benefits (sub code 100) and other operating costs (sub code 110): expenditure feeds from TRU06 in the full plan (see notes relating to the completion of TRU06 below). 3.3 Revenue from patient care activities (sub code 120): income the NHS Trust receives from patient care activities feeds through from TRU05 in the full plan (see notes relating to the completion of TRU05 below). 3.4 Other operating revenue (sub code 130): other operating revenue the NHS Trust receives. The figure feeds through from TRU05 in the full plan (see notes relating to the completion of TRU05 below). 3.5 Operating surplus/(deficit) (sub code 140): total of sub codes 100 to Investment Revenue (sub code 150)/ other gains and losses (sub code 160)/ finance costs (sub code 170). 3.7 Surplus/(deficit) for financial year (sub code 180): total of sub codes 140 to Dividends Payable on Public Dividend Capital (sub code 190): calculated on the basis of average relevant net assets less cash held in paymaster accounts. See NHS Trust Manual for Accounts for more details. 3.9 Net gains/loss on transfers by absorption (sub code 195): represents mergers to be accounted for using the absorption accounting guidance issued in 2014/15. In line with this guidance, this row should be used to record the book value of the net assets transferred at the date of the acquisition. 13 of 97

19 3.10 Retained surplus/(deficit) for the year (sub code 200): total of sub codes 180 to Prior period adjustment (sub code 210): to record any prior period adjustments for 2014/15 only Retained surplus/(deficit) for the year as per the accounts (sub code 220): retained surplus/(deficit) including prior period adjustments; total of sub codes 200 to 210. Reported NHS Financial Performance (sub codes 350 to 390) 3.13 The Reported NHS Financial Performance is a financial measure which recognises the impact of items that are considered to be either one off or outside of the normal running costs of the NHS Trust. These include prior period adjustments, impairments, IFRIC 12 costs, income/expenditure arising from Government grants and/or donated assets and losses or gains relating to mergers accounted for on an absorption basis. These items are added back to the Retained Surplus/(Deficit) to arrive at the Adjusted Financial Performance Retained Surplus/(Deficit): at full plan stage, all of the items that make up this section with the exception of particular 2014/15 entries, feed from other forms The IFRIC 12 Adjustment for 2014/15 (sub code 360, main code 01) is required to be input directly into sub codes 354 and 358, using the principles applying to TRU20 (see TRU20 guidance in section 10). Additional information (sub codes 400 to 570) 3.15 EBITDA (sub codes 400 to 490) is used as a key financial performance measure. The table starts with Retained Surplus/(Deficit) (sub code 400) and adds back depreciation, amortisation, impairments, interest receivable, finance costs, dividends, donated asset income and (gains)/losses relating to disposals and (gains)/losses on transfers by absorption: in the full plan, the majority of the rows feed through from other tables; the rows that require direct input are (gains)/losses on disposal of assets and other (sub code 470 and 480). 14 of 97

20 3.16 Restructuring costs (sub code 500): used to record restructuring costs of an exceptional nature, i.e. this should not be used to record restructuring costs that are within the normal running costs of the NHS Trust. As such, any input to this line should be agreed with the NHS TDA prior to submission. The plan values (per main codes 02 and 14) will be a subset of the restructuring costs reported on TRU64b sub code 640 for 2015/ Normalised EBITDA (sub code 510): total of sub codes 490 to Memorandum of Agency/Contract staff costs (sub codes 550 to 570): memorandum item used in NHS TDA reviews, finance and workforce triangulation analyses and consolidation work; values reported must not exceed the total included in Employee Benefits Expenditure (TRU06 sub code 400); totals to be consistent with the entries in the workforce return on the Workforce worksheet, cell reference R8. 15 of 97

21 4. TRU02 Statement of Financial Position (sub codes 100 to 775) 4.1 NHS Trusts should complete the SOFP in accordance with the guidance to the related notes in the NHS Trust Manual for Accounts, Chapter 4. In some cases, full year figures feed from the respective notes but all other figures must be entered manually. Figures are to be provided on the basis of the planned monthly profile for the 2015/16 financial year. 4.2 Non-Current Assets (sub codes 100 to 150): property plant and equipment (sub code 100) should be stated at fair value in line with the NHS Trust Manual for Accounts; intangible assets (sub code 110) are recognised if it is probable that future economic benefits will flow to, or service potential is provided to, the NHS Trust and the cost of the asset can be measured reliably. EU Emissions Trading Scheme allowances should be included here if they are not expected to be realised within twelve months of the end of the reporting period; investment property (sub code 120): The accounting requirements for investment property are set out in IAS 40. Only those assets which are held solely to generate a commercial return should be considered to be investment properties within the meaning of IAS 40. It should be noted that investment properties that are held for sale but do not meet the IFRS 5 criteria for treatment as assets held for sale should be recorded on this row; other financial assets (sub code 130) is used to record other fixed assets not recorded in sub codes 100 to 120; trade and other receivables (sub code 140) in which the settlement period is anticipated to be over one year. 4.3 Total non-current assets (sub code 150): total of sub codes 100 to Current assets (sub codes 160 to 230). 4.5 Inventories (sub code 160): to record stock and Work in Progress recorded at the lower of cost and net realisable value. Work in Progress should not be used to record partially completed spells. 16 of 96

22 4.6 Trade and other receivables (sub code 170): includes trade receivables net of doubtful debts and includes prepayments and accrued income as well as other receivables, including operating lease receivables and income due from the Compensation Recovery Unit under the Injury Costs Recovery Scheme. 4.7 Other financial assets (sub code 180): stated in accordance with IFRS 7 (Financial Instruments). 4.8 Other current assets (sub code 190): presented in accordance with IAS 1, includes EU Emissions Trading Scheme allowances should be recorded here when they are expected to be realised within twelve months of the end of the reporting period. 4.9 Cash and cash equivalents (sub code 200): in line with the Manual for Accounts, cash and cash equivalents are not deemed to include bank overdrafts, instead these form part of borrowings included in sub code 280. A validation check is included in the planning forms to ensure that cash balances (and bank overdrafts) included in the Statement of Financial Position (TRU02) match the balances included in the Cash Flow Statement (TRU04); additional analysis of cash balances included in sub code 200 is to be recorded in sub codes 685 to 775. Please note that as per the National Health Service Act 2006, NHS Trusts should not hold an average annual cash balance in a commercial account that exceeds 50, Sub-total current assets (sub code 210): total of sub codes 160 to Non-current assets held for sale (sub code 220): assets intended for disposal are reclassified as Held for Sale if the sale is highly probable and if the asset is available for immediate sale in its present condition subject only to terms which are usual and customary for such sales Total current assets (sub code 230): total of sub codes 210 to Total assets (sub code 240): total of sub codes 150 and of 97

23 4.14 Trade and other payables (sub code 250): presented in accordance with IAS 1 Presentation of Financial Statements, paragraph Other liabilities (sub code 260): includes deferred credits relating to PFI projects funded principally by third parties as well as pension liabilities for non-nhs schemes Provisions (sub code 270): provisions that are payable within one year, sub analysed in form TRU19 and annual values feed through from that form Borrowings (sub code 280): In line with the Manual for Accounts, bank overdrafts are not netted off against cash and cash equivalents in sub code 200 but are included in borrowings Other financial liabilities (sub code 290): presented in accordance with guidance on Financial Instruments and Contractual Capital Commitments set out in the Manual for Accounts Liabilities arising from PFIs / LIFT / Finance Leases (sub code 295): all current (within one year) liabilities arising from PFIs / LIFT / Finance Leases should be entered here DH Loans: FT liquidity, revenue support and capital (sub codes 300 to 310): current (within one year) portion of loans repayable at the period end Total current liabilities (sub code 320): total of sub codes 250 to Net current assets/ (liabilities) (sub code 330): total of sub codes 230 and Total Assets less current liabilities (sub code 340): total of sub codes 240 and of 97

24 4.24 Non-current liabilities (sub codes 350 to 410): these rows replicate the rows relating to current liabilities (sub codes 250 to 310) but comprise the element of the total liabilities that are payable in more than one year Total non-current liabilities (sub code 420): total of sub codes 350 to Assets less liabilities (total assets employed) (sub code 430): total of sub codes 340 and Taxpayers equity (sub codes 440 to 490) Public Dividend Capital (sub code 440): the PDC at the start of the year as stated in the prior year accounts adjusted for any agreed additions and repayments planned during each year. A validation test is included to ensure that this agrees to the sums included in Statement of Cash Flows Retained earnings reserve, revaluation reserve and other reserves (sub codes 450 to 480): opening reserves as stated in the prior year accounts adjusted for increases and decreases planned for 2015/ Total taxpayer s equity (sub code 490): total of sub codes 440 to Cash held in Government Banking Service accounts/nlf (sub code 500): closing GBS balances/balances invested with the National Loans Fund (NLF) at the end of each period Memorandum items (sub codes 510 to 555): the memorandum section will be used to facilitate future developments in the Continuity of Services Risk Ratings (CoSRR) as well as providing further analysis required by the DH/HM Treasury. These should be input directly where applicable Analysis of Cash Balances (sub codes 685 to 775): The information required focuses firstly on the overall cash balances (sub codes 685 to 710) and secondly on the commercial bank accounts held (sub codes 720 to 775): Analysis of Total Cash Balances (sub codes 685 to 710): This analyses the total cash balance in sub code 200; 19 of 97

25 Commercial accounts (sub codes 720 to 800): NHS Trusts are required to identify the number of individual commercial accounts held (sub code 720) and separately identify who these accounts are held with and the balances held in each account (sub codes 730 to 770). The values provided here link directly to the cash analysis in sub code of 97

26 5. TRU04 Statement of Cash Flows (sub code 100 to 640) 5.1 The cash flows reported relate to movement in cash and cash equivalents. IFRS requires cash flows to be reported under only three sections: operating, investing and financing. This Statement of Cash Flows should be completed in accordance with Chapter 4 of the NHS Trusts Manual for Accounts and all amounts must be shown gross. Cash flows from operating activities (sub code 100 to 260) 5.2 Operating surplus/(deficit), depreciation and amortisation, impairments (sub codes 100 to 120): feed directly from TRU01 / TRU Other Gains/(Losses) on foreign Exchange (sub code 130): gains/losses on the restatement of year end cash and cash equivalent balances using foreign exchange rates at the year end. 5.4 Donated Assets and Government Granted assets received credited to revenue but non-cash (sub codes 140 to 150): income that is credited to revenue in the SOCI but which does not involve the movement of cash; please note that adjustments here should only relate to revenue that has been recognised on TRU05 sub code 290 to Interest paid (sub code 160): cash payable during the period for interest. 5.6 Dividend (paid) /refunded (sub code 170): cash payable during the period for Dividends (normally in September and March of each financial year). 5.7 Release of PFI /deferred credit (sub code 180): includes the repayment of deferred credits relating to PFI projects funded principally by third parties. 5.8 Cash impact of working capital movements (sub codes 190 to 230): cash generated (or spent) through increases or decreases in working capital. In normal circumstances these can be calculated by deducting the opening balance for each category on the SOFP from the closing balance. 21 of 96

27 5.9 Provisions utilised and movements in non-cash provisions (sub codes 240 to 250): provisions utilised (sub code 240) records cash payments relating to provisions. The categories of provisions are analysed in TRU19 and in the case of the year end balances for 2014/15, 2015/16, the figures feed directly from that form. Direct input is required for the in-year profiling of figures for 2015/16; increase/(decrease) in movement in non-cash provisions (sub code 250) is used to record all other movements on provisions Net cash inflow/(outflow) from operating activities (sub code 260): total of sub codes 100 to 250. Cash flows from investing activities (sub codes 270 to 410) 5.11 Interest received (sub code 270): cash receivable during the period for interest Payments to acquire fixed assets, current assets or investments (sub codes 280 to 320): cash utilised for the purchase of assets by the period in which the cash is due to be spent Cash received from the proceeds of disposals of fixed assets, current assets or investments (sub codes 330 to 370): cash received for the disposal of assets by the period in which the cash receipt is due Rental revenue (sub code 400): cash received for rentals by the period in which the cash receipt is due Net cash inflow/(outflow) from investing activities (sub code 410): total of sub codes 270 to Net cash inflow/(outflow) before financing (sub code 420): total of sub codes 260 and of 97

28 Cash flows from financing activities (sub codes 430 to 580) 5.17 Public Dividend Capital received and repaid (sub codes 430 to 442): receipts and repayments of PDC (capital and revenue) should be included in the period of that receipt / payment. A validation check is included in the forms that tests that this correctly reconciles to the balance sheet values; the amount of capital PDC received is linked directly to the total capital PDC funding recognised on TRU63 sub codes 230 to 260 and a validation checks that this reconciles with capital spend allocated as PDC funded on TRU56; Where a repayment of capital PDC needs to be recognised on sub code 441, further analysis is required on TRU56 sub codes 2090 to 3090 which will feed directly to the total recognised here Loans received/repaid (sub codes 450 to 500): used to record the loans received and repaid from the various sources; repayments recognised on sub code 495 should represent only the capital cash repayments made in relation to PFI/LIFT/Finance Leases and should represent actual cash out-flows; where other capital loans are received e.g. Salix Energy loans these should be recorded under sub codes 650 to 665 which directly feed sub code 470; any repayments relating to other capital loans received e.g. Salix Energy loans, should be recorded under sub codes 690 to 710 which directly feed sub code Cash transferred to NHS Foundation Trusts (sub code 520): the cash payment should be recorded in the period of the transfer Capital grants and other capital receipts (excluding donated/ government granted cash receipts) (sub code 560): the cash payment/receipt should be recorded in the period of the transfer. Please note that only cash in-flows not already recognised on TRU05 sub codes 290 to 295 should be recognised here Net cash inflow/(outflow) from financing activities (sub code 580): total of sub codes 430 to Net increase/(decrease) in cash and cash equivalents (sub code 590): total of sub codes 420 and of 97

29 5.23 Cash and cash equivalents (and Bank Overdraft) at beginning of the period (sub code 600): should include the net of the cash balances recorded in the SOFP (sub code 200) and any bank overdrafts (expected to be rare) that are included in the SOFP under borrowings (sub code 280). The figure for 2014/15 (main code 01) requires populating and all of the other figures (main codes 2 to 15) are automatically generated Opening balance adjustment (sub code 610): expected to be exceptional cases only Restated cash and cash equivalents (and Bank Overdraft) at beginning of the period (sub code 620): sub-total of sub codes 600 and Effect of exchange rate changes in the balance of cash held in foreign currencies (sub code 630): the cash payment/receipt should be recorded in the period of the foreign currency exchange Cash and cash equivalents (and Bank Overdraft) at end of period YTD (sub code 640): the final cash balance for the period should match the net of the cash balance reported on the SOFP (sub code 200) and any bank overdrafts that are included under borrowings (sub code 280) Memorandum items (sub codes 650 to 720): the memorandum section should be used by NHS Trusts to provide analysis of Other loans received/repaid which will be used to directly feed sub codes 470 and 500. NHS Trusts should include a narrative description of the loan source and the amount received/repaid from and to each source. 24 of 97

30 6. TRU05 Revenue from patient care activities (sub codes 110 to 230) 6.1 This section is used to show patient care revenue together with the organisations from which it is sourced. 6.2 NHS Trusts (sub code 110): revenue received from other NHS Trusts. 6.3 NHS England (sub code 115): a detailed analysis of patient care revenue by Area Team should first be populated on forms TRU70 and 71 for each of the years 2014/15, and 2015/16 respectively (please see further guidance in section 17). The totals for each year will then feed through to sub code 115 on TRU05. The total revenue value for 2015/16 should then be profiled for each month of the year in main codes 03 to 14; main codes 16 and 18 should be used to record the element of this revenue that is recognised in accordance with the National Tariff in 2014/15 and 2015/16 respectively. The balancing figures in main codes 17 and 19 will be the non-tariff element. If there is no tariff element to be recorded in main codes 16 and 18 then please enter a 0 as leaving the cell blank will trigger a validation. 6.4 Clinical Commissioning Groups (sub code 120): a detailed analysis of patient care revenue by CCG should first be populated on forms TRU70 and 71 for each of the years 2014/15, and 2015/16 respectively (please see further guidance in section 17). The totals for each year will then feed through to sub code 120 on TRU05. The total revenue value for 2015/16 should then be profiled for each month of the year in main codes 03 to 14; main codes 16 and 18 should be used to record the element of this revenue that is recognised in accordance with the National Tariff in 2014/15 and 2015/16 respectively. The balancing figures in main codes 17 and 19 will be the non-tariff element. If there is no tariff element to be recorded in main codes 16 and 18 then please enter a 0 as leaving the cell blank will trigger a validation. 6.5 Foundation Trusts (sub code 150), Local Authorities (sub code 160) and Department of Health (170): should be used to record only the income from patient care activities received from these organisations. Other operating revenue received from these organisations should be included within the relevant headings on sub codes 250 to of 96

31 6.6 NHS other (including Public Health England) (sub code 180): income from NHS organisations such as Public Health England and NHS Property Services. It also includes income from other NHS bodies e.g. Special Health Authorities. 6.7 Non-NHS private patients (sub code 190): all income for patient care services from private patients. It does not include income payable directly by overseas visitors charged for their treatment under the NHS (Charges to Overseas Visitors) Regulations Non-NHS overseas patients (non-reciprocal) (sub code 200): income payable by overseas visitors liable for charges for NHS hospital treatment and covers payments made directly by overseas visitor patients who have been found to be liable for charges under the NHS (Charges to Overseas Visitors) Regulations (These should not be shown under Non-NHS: Private patients at sub code 190). Income from CCGs for overseas patients exempt from charge should be shown under the CCG heading (sub code 120). 6.9 Injury cost recovery (sub code 210): should be reported in line with the guidance contained in Chapter 4 of the Manual for Accounts Non NHS other (sub code 220): used to record other income from patient care activities that does not fit into any of the categories above Total revenue from patient care activities (sub code 230): total of sub codes 110 to 220. Other operating revenue (sub codes 250 to 360) 6.12 Should be completed using guidance in Chapter 4 of the NHS Trusts Manual for Accounts Recoveries in respect of employee benefits (sub code 250): captures those staff expense recoveries that should be accounted for as income (as opposed to being netted off gross staff expenditure); the total value of employee benefits recorded in TRU06 sub code 420 less the value of recoveries in respect of employee benefits recorded in TRU05 sub code 250 must be consistent with the entries in the workforce return on the Workforce worksheet, cell reference R6. 26 of 97

32 6.14 Patient Transport Services (sub code 260): income should be recorded in the period to which it relates Education and training (sub code 270): income from Health Education England and; other education and training income 6.16 Research (sub code 275): income from National Institute for Health Research and Comprehensive Local Research Networks and; other research related income including research grant and research trial income Charitable and other contributions to expenditure (sub codes 280 and 285): used to record contributions split between NHS and Non NHS, these are recognised as income and taken to the Statement of Comprehensive income in the year of receipt Receipt of charitable donations for capital acquisitions (sub code 290): where a donated asset has been received during the year, the value of the asset should be recorded here. The full amount is now recognised as income and taken to the Statement of Comprehensive income in the year of receipt Receipt of grants for capital acquisitions (sub code 295): where a government granted asset has been received during the year, the value of the asset should be recorded here. The full amount is now recognised as income and taken to the SOCI in the year of receipt Non patient care services to other bodies (sub code 310): income from the provision of services such as laundry, pathology, payroll, internal audit, training to bodies both within and outside the NHS Revenue relating to income generation (sub code 320), rental revenue from leases (sub codes 330 and 340) and other revenue (sub code 350): income should be recorded in the period to which it relates in line with guidance in Chapter 4 of the Manual for Accounts Total other operating revenue (sub code 360): total of sub codes 250 to of 97

33 6.23 Total operating revenue (sub code 370): total of sub codes 230 and Further commentary may be required within the commentary sheets TRUCOM1 to describe material movements for each category of revenue for each year (see section 19). 28 of 97

34 7. TRU06 Operating expenses (sub codes 100 to 430) 7.1 The operating expenses form should be completed in accordance with the guidance in the NHS Trust Manual of Accounts, Chapter Services from Other NHS Trusts/NHS England/CCGs/ Other NHS Bodies and Foundation Trusts (Sub codes 100 to 130): in line with Chapter 4 of the Manual for Accounts, these rows should be used only when services cannot be allocated to other expense lines. Recharges should be shown under the operating cost heading to which it relates rather than under these headings. 7.3 Purchase of healthcare from non-nhs bodies (sub code 140): includes private patient care purchased by the NHS Trust, and expenditure on healthcare from Scottish, Welsh and Irish health bodies. 7.4 NHS Trust Chair and Non-Executive Directors (sub code 150): records the allowances paid to the NHS Trust Chair and non-executive directors. These are not included under the employee benefits table of TRU Supplies and Services clinical (sub code 160 and 380): expenditure on supplies and services for clinical use including occupational and industrial therapy materials, drugs, medical gases, dressings, x-ray equipment, blood and maintenance contracts. The value of drugs included within sub code 160 should be input into sub code Supplies and services general (sub code 170): includes cleaning equipment, materials, external contracts, food contract catering etc. 7.7 Consultancy services (sub code 180): completed based on the guidance at Appendix Establishment (sub code 190): expenditure on administrative expenses such as printing and stationery, advertising and telephones. 29 of 96

35 7.9 Transport (sub code 200): includes all transport-related expenditure including vehicle insurance, fuel, maintenance etc Premises (sub code 210): includes expenditure on rates, electricity, gas, furniture and fittings Impairments and reversals of receivables (sub code 220): includes impairments reversed as well as accrued injury cost recoveries (see Chapter 4 of the Manual for Accounts) Inventories write downs (sub code 230): write down including losses Depreciation and amortisation (sub codes 240 to 255): depreciation and amortisation for the period (depreciation and amortisation of Donated Assets and Government Grants should be disclosed separately) Impairments (sub codes 260 to 290): sub codes 260 to 290 feed directly from TRU Audit fees and other auditor s remuneration (sub codes 310 to 320): costs should be split between those relating to audit and other services as detailed in Chapter 4 of the Manual for Accounts Clinical Negligence (sub code 330): the NHS Trusts contribution to the NHS Litigation Authority Research (excluding staff costs) (sub code 340): costs incurred during the period; all staff costs to be included under employee benefits (sub codes 400 to 410) Education and training (excluding staff costs) (sub code 350): costs incurred during the period; all staff costs to be included under employee benefits (sub codes 400 to 410). 30 of 97

36 7.19 PFI operating costs (sub code 355): relates to PFI costs that fall within operating costs and include facilities management and life cycle costs but not interest (reported on TRU01 sub code 170) Other (sub code 360): includes the movement of provisions for emissions under the EU Emissions Trading Scheme and compensation paid under the Late Payment of Commercial Debts (Interest) Act Total operating expenses excluding employee benefits (sub code 370): total of sub codes 100 to Value of drugs (including gases) already included in sc160 (sub code 380) Memorandum item used in NHS TDA reviews, analyses and consolidation work Employee benefits (sub codes 400 to 420) 7.23 Employee benefits (excluding officer board members)/restated Prior Year Gross Employee Benefit (sub code 400): completed in compliance with the detailed guidance in Chapter 4 of the Manual for Accounts Officer Board Members (sub code 410): exclude the chair and non-executive directors (reported on sub code 150) but include executive board members including those recharged from other NHS bodies. Further guidance is provided in Chapter 4 of the Manual for Accounts Total Employee Benefits (sub code 420): total of sub codes 400 to 410; the total value of employee benefits recorded in TRU06 sub code 420 less the value of recoveries in respect of employee benefits recorded in TRU05 sub code 250 must be consistent with the entries in the workforce return on the Workforce worksheet, cell reference R Total operating expenses (sub code 430): total of sub codes 370 and Further commentary may be required within the commentary sheets TRUCOM1 to describe material movements for each category of expenditure for each year (see section 19). 31 of 97

37 8. TRU14 Analysis of impairments and reversals (sub codes 100 to 960) 8.1 This table collects information for HM Treasury on the causes and values of impairments and reversals. 8.2 Figures recorded should be net of any reversals against the relevant category. Any impairments arising from the transition to MEA (Modern Equivalent Assets) valuation should be included in other at sub codes 160 or 340, as appropriate. 8.3 Impairments score in the Department of Health Resource Budget alongside the depreciation charge, but are separately identified. Further, impairments need to be identified by type of asset and reason for impairment, as some score to DEL (Departmental Expenditure Limits) and some to AME (Annually Managed Expenditure). 8.4 Each section is split according to the type of impairment; these are described in paragraphs 8.5 to 8.11 below. Categories of impairment 8.5 Loss or damage resulting from normal business operations: all losses of and damage to tangible non-current assets that reduce the recoverable amount to below its book value other than those caused by a catastrophe (see below). Normal business operations covers all loss and damage to assets that results from management and staff action (or inaction), or the actions of third parties. This category includes theft; scores as DEL as the department has a choice about how it manages assets to reduce the risk of damage, accident and theft. 8.6 Over specification of assets (gold plating): gold plating is the unnecessary over-specification of assets at the point at which the asset is first constructed or purchased. Care should be taken not to impair assets as being gold plated where they are of a high specification by necessity. The key is that the higher specification must be justifiable; if it is not, an impairment should be taken; scores as DEL as this is the unnecessary over-specification of assets which could be prevented through improved control processes. Construction to a necessarily high standard for legitimate reasons (security for example) should not be considered gold plating. 32 of 96

38 8.7 Abandonment of assets in the course of construction: the impairment of assets in the course of construction as a result of a management decision to abandon the construction process, i.e. management decides that it no longer requires the facility under construction and the construction costs to date are completely written off or substantially written off to reflect reduced facility. This category includes the abandonment of software assets in the course of construction; scores as DEL as abandonment results from managerial decisions, and can be an indicator that a stronger project approval process and business case evaluation process are necessary. 8.8 Unforeseen obsolescence: all assets are subject to obsolescence. However, the rate of obsolescence tends to be category specific, e.g. IT assets suffer a faster rate of obsolescence than buildings do. NHS bodies will take account of foreseeable obsolescence when establishing asset lives. Unforeseen obsolescence will generally only occur either as the result of the introduction of a completely new technology or a change in legislation rendering the asset illegal. As such events are exceptionally rare DH should be contacted prior to the use of this category; scores as AME, as the obsolescence is unforeseeable and there seems little benefit in trade-offs with other current spending. Where the asset has been rendered obsolete by the acquisition of a new technologically advanced asset the investment appraisal of the new asset should have covered the option of continuing to use the old one. Unforeseen obsolescence can also arise as a result of changes to legislation. When a department believes an impairment should score as unforeseen obsolescence it should first contact the relevant authority. 8.9 Loss as the result of a catastrophe: this is damage to tangible non-current assets as a result of a catastrophe. A catastrophe is defined as: such events as will be generally easy to identify, they include major earthquakes, volcanic eruptions, tidal waves, exceptionally severe hurricanes, droughts and other natural disasters; acts of war, riots and other political events; and technological accidents such as major toxic spills or release of radioactive particles into the air. For the avoidance of doubt, the following are not catastrophes within the meaning of this definition. Prison or street riots; loss or damage due, for example, to an ingress of water that could have been avoided by better maintenance; and relocation to a site where flooding is likely, these are all examples of losses resulting from management action or inaction. Events that fall into the category of catastrophe are expected to be very rare; 33 of 97

39 scores as AME. This sort of loss is outside the normal experience of a department, so the only trade-offs that should be made are between the capital cost of replacing this asset and doing other capital work. Where a department believes an impairment should score as catastrophic loss it should first contact the relevant authority, as these are rare events Other impairments: includes impairments that cannot be scored to another impairment category with the exception of downward movements due to change in market prices (see below), should be scored as AME and include: write downs of development land; this occurs where land is purchased for some form of social development. The cost of the land and any cleanup cost can be greater than the disposal value resulting in an impairment; changes in use; this usually occurs where specialised assets no longer required for their original purpose are put to a non-specialised use (e.g. an aircraft hangar used as a store). However, impairment can result from the change of use of any asset including non-specialised assets; disposals; write downs to open market value where an asset is available for sale. This includes write downs of specialised properties which are written down to open market value from depreciated replacement cost immediately prior to sale; uncompensated seizures; the seizure of assets by governments or institutional units, other than for the settlement of fines or taxes, for which full compensation is not provided Changes in market price: any impairments arising from change in market price not posted against the revaluation reserve but instead charged to the income and expenditure accounts should be recorded here. 34 of 97

40 8.12 Total impairments (sub codes 910 to 920): total impairments charged to the SOCI (sub codes 910 and 920) provides a sub total of the categories of impairment that are posted to the SOCI, sub divided between those posted to DEL/AME Total impairments (sub code 930): total of sub codes 910 to Donated and Government Granted Assets (sub codes 950 and 960): these two rows require further analysis of any impairments that relate to donated and Government Granted assets and which are included in sub code 930 above. 35 of 97

41 9. TRU19 Provisions for liabilities and charges (sub codes 114 to 280) 9.1 IAS37 Provisions, Contingent Liabilities and Contingent Assets should be followed when accounting for provisions. 9.2 A table is to be completed for 2015/16 planned provisions. 9.3 The table of provisions for 2015/16 (sub codes 114 to 220) gives an analysis of provisions using the headings in the main codes 03 to The opening and closing balances at sub codes 200 to 220 feed directly to the current and non-current provisions shown on the statement of financial position (TRU02). 9.5 Provisions for emissions under EU ETS: These amounts should be recorded under the other column. 9.6 Provisions must be shown gross, but discounted where required under IAS37. Any amount expected in reimbursement against a provision (and included in receivables) should be disclosed in the annual accounts. 9.7 Balance at Year End 2015/16 (sub code 190): total of sub codes 114 to Expected Timing of Cash Flows 2015/16 (sub codes 200 to 220): this splits the total provision at the period end between sums that will fall due within one year, between one and five years and over five years. 9.9 Any provisions included in the other category in which the movements in year are material (over 1 million) must be disclosed in sub code 250 to Further commentary may be required within the commentary sheet TRUCOM1 to describe material movements for each category of provision for each year (see section 19). 36 of 96

42 10. TRU20 IFRIC 12/UK GAAP data (sub codes 510 to 1140) 10.1 This table identifies the additional costs/ (revenues) that arise as a result of the application of IFRIC 12 to service concession arrangements, such as PFI and LIFT schemes, in the NHS. Virtually all arrangements that fall within the scope of IFRIC 12 fall to be accounted for as on Statement of Financial Position items The table is split into three parts the first table (sub codes 510 to 620) is for the 2 List A schemes which scored against the DH budget in their year of completion as set out on sub codes 980 to These are: Buckinghamshire Healthcare NHS Trust South Bucks PFI (Wycombe and Amersham); Torbay and Southern Devon Health and Care NHS Trust Newton Abbot Community Hospital (previously Teignbridge PCT) These cells are un-editable for all NHS Trusts with the exception of those two set out in point 10.2 above The second table (sub codes 630 to 705) is for all other schemes. Further detailed guidance for accounting for service concession arrangements and imputed leases is dealt with in Appendix 4 of the NHS TDA TFMS Plan Guidance The third table (sub codes 710 to 785) represent a total of all sub codes 510 to Summary of guidance: properties that are on SoFP under IFRIC 12 should be included in the PFI disclosures in TRU20; properties that are on SoFP by virtue of IFRIC 4 (i.e. where an IFRIC 12 service concession does not exist) should not be included within the TRU20 but should be included within the normal leasing disclosure notes; where a new transaction creates a legal charge over property and IFRIC 4 or IFRIC 12 requires recognition of the asset on the SoFP, NHS Trusts should refer to the DH guidance document Accounting Under IFRS for properties where a body holds a legal charge ; where a legal charge exists in respect of an on SoFP asset, that charge cannot be disposed of without accounting for the transaction as a disposal; the guidance on PFI disclosures applies equally to LIFT. 37 of 96

43 10.7 Depreciation charges (sub codes 510 and 630): annual depreciation of all non-current assets within the relevant arrangements. The depreciation charged on an arrangement reported as on SoFP under IFRIC 12 must be calculated in accordance with the NHS Trusts accounting policy for recording depreciation on Property, Plant and Equipment Interest expense (sub codes 520 and 635): annual finance lease interest and contingent rent for relevant arrangements. These items should be identified within the accounting model the NHS Trust should have completed to enable it to account for the on SoFP arrangement Impairments AME (sub codes 530 and 640) and DEL (sub codes 540 and 645): annual impairments to all non-current assets within the relevant arrangements. The impairment charged on an arrangement reported as on SoFP under IFRIC 12 must be calculated in accordance with the NHS Trusts accounting policy for impairments. AME (Annually Managed Expenditure) and DEL (Departmental Expenditure Limit) are terms applied in Central Government accounting; DEL impairments are those caused by loss or damage resulting from normal business operations, abandonment of projects (indicating that better managerial decisions might have avoided the need for impairment) or over-specification / gold plating leading to write downs; AME impairments are those caused by catastrophe, unforeseen obsolescence, write-downs of development land to market value, writedowns where the asset is to be used for a lower specification than originally intended, write-downs of specialised properties held at DRC to market value prior to sale or write-downs of newly constructed specialised properties to DRC; see section 8 (TRU14) for further guidance on other categories of impairments Other expenditure (sub codes 550 and 650): annual revenue expenditure incurred in relation to relevant arrangements. This cell must include operating costs and net off from this figure any deferred income in relation to third party revenues (see paragraph 5.7 for further detail on third party income) released to the Comprehensive Income and Expenditure Statement. 38 of 97

44 10.11 Revenue receivable from subleasing (sub codes 560 and 655): annual revenue income due from subleasing contained within relevant arrangements, excluding payments that reduce any finance lease receivables associated with the subleasing Impact on PDC dividend payable (sub codes 570 and 660): the increased PDC dividend payable following the recognition of on SoFP items Total IFRS expenditure (IFRIC 12) (sub codes 580 and 665): total of sub codes 510 to 570 and 630 to Revenue consequences of LIFT/PFI schemes under UK GAAP/ESA95 (net of any sublease income) (sub codes 590 and 670): the net revenue costs for all relevant arrangements accounted for under Treasury Taskforce Technical Note 1 for projects that reached financial close prior to 1 April 2009 or ESA95 for projects that reached financial close from 1 April For the avoidance of doubt, this is net of the annual build up in the residual interest where the Treasury Taskforce Technical Note 1 has been applied and includes annual amortisation of any capital contributions and the annual release of relevant deferred assets. Net revenue costs of LIFT/PFI schemes under UK GAAP should be input as a negative value. IFRIC 12 performance calculation (sub codes 605 to 614 and 680 to 695) IFRIC 12 adjustments including IFRIC impairments (as reported in TRU01 sub code 360): During 2012/13 there was a change in the performance measurement, in relation to the IFRIC 12 adjustment for NHS Trusts. This is to ensure that in cases where IFRIC 12 costs are below UK GAAP costs, the NHS Trust performance is not adversely affected. Therefore, where IFRIC 12 costs are lower than under UK GAAP, the shortfall will not be an additional charge included within reported financial performance. It remains the case that where IFRIC 12 costs are greater than UK GAAP costs, the NHS financial performance will be adjusted appropriately. As such, the figures that automatically feed sub codes 605 to 612 and 680 to 690 reflect this amendment. The figures generated on sub code 614 and sub code 695 together with the impairments on sub code 608 and sub code 685 represent the total of this adjustment that feeds sub code 360 of TRU of 97

45 Capital consequences of IFRS: LIFT/PFI and other items under IFRIC Capital expenditure 2015/16 (sub codes 620 and 700): capital expenditure 2015/16 (sub codes 620 and 700): annual additions under IFRS to non-current assets relating to the relevant arrangements. These figures are linked to the total capital expenditure categorised on TRU56 as arising from arrangements accounted for under IFRIC 12, which will include any capitalised lifecycle costs; only NHS Trusts with List A schemes are required to manually input the 2015/16 capital expenditure figures on sub code 620. For all other NHS Trusts, this row will be un-editable. The total IFRIC 12 capital expenditure on sub code 780 is automatically linked to TRU55 sub code 500 with TRU20 sub code 700 being a calculated balancing figure UK GAAP Capital expenditure (sub code 705): information is required in this form in respect of the equivalent UK GAAP costs of arrangements accounted for as on SoFP under IFRIC 12. This is because the National Accounts normally account for arrangements accounted for as on SoFP under IFRIC 12 as off balance sheet. Provision of the equivalent UK GAAP costs in the TRU forms therefore enables this information to be captured for the National Accounts; for cases that are judged to be off SoFP for Departmental budgetary purposes, Departments (including DH) are required to score the reversionary interest that would have applied under UK GAAP against the Departmental capital budget. NB: This applies to the arrangements accounted for under Treasury Taskforce Technical Note 1 for projects that reached financial close prior to 1 April 2009 or ESA95 for projects that reached financial close from 1 April These figures feed the UK GAAP/reversionary interest expenditure recognised on TRU55 sub code 530 see the further explanation of UK GAAP accounting in the bullet points below; where newly constructed PFI assets were due to pass back to the NHS body at the end of the PFI contract, NHS Trusts would have been required to create a Residual Interest in their accounts. The estimated fair value on reversion of the residual interest is based on the DV s professional estimate at the start of the concession period; existing assets passed to the PFI contractor that were due to pass back to the NHS body at the end of the PFI contract would normally be described as a reversionary interest ; however, we note that historically, the use of the terms residual interest and reversionary interest were interchangeable. 40 of 97

46 10.18 The DH document Land and Buildings in PFI Schemes (Version 2) dated 16 January 2003 includes detailed guidance on the accounting methodology required for calculating the residual interest. This document is available in the following link: et/dh_ pdf Memorandum table on PFI/LIFT Schemes List A : provides numbers of schemes captured on TRU20 that should be classified as List A (sub codes 980 to 1000); these are; Buckinghamshire Hospitals NHS Trust South Bucks PFI (Wycombe and Amersham); Torbay & Southern Devon Healthcare NHS Trust Newton Abbot Community Hospital (previously Teignbridge PCT) Memorandum Scheme Descriptions (sub codes 1010 to 1060): provides numbers of schemes captured on TRU20 (sub code 1010); requires Trusts to input the name descriptions of the IFRIC 12 Schemes that are included within the information on TRU20 and identify those schemes as either List A or Other. Please note that only those two schemes identified as List A in sub codes 980 to 1000 should be classified as List A ; requires Trusts to input the Year of Inception for each of the IFRIC 12 schemes included within the information on TRU20; and requires Trusts to input the total value of the capital assets at the inception of any IFRIC 12 schemes included within the information on TRU20; requires Trusts to input the implicit interest rate for each individual IFRIC 12 scheme recognised on sub codes 1020 to Memorandum Unitary Payments (sub codes 1090 to 1140): this memorandum table is split between the various elements of the Unitary Payment. Cells 1105, 1120 and 1130 require a manual entry by NHS Trusts. The total value in sub code 1140 should be consistent with the total Unitary Payments required for any IFRIC 12 schemes by the NHS Trust in the 2015/16 financial year. 41 of 97

47 11. TRU54 Continuity of Service Risk Ratings (sub codes 371 to 379) 11.1 The introduction of the Continuity of Services Risk Ratings (CoSRR) into the NHS TDA planning process is intended to measure financial risk in a way that is aligned to the methodology used by Monitor in reviewing Foundation Trusts as described in Monitor s Risk Assessment Framework, which replaced the Compliance Framework on 1 October The CoSRR ratings will be collected at plan stage and the performance against plan will be measured by the quarterly collections during the financial year Continuity of Services Ratings: calculated to assess the level of risk to the on-going availability of key services, the CoSRR rating is on a straight average of two key metrics and ranked on four rating categories ranging from 1, which represents the most serious risk, to 4 representing the least risk; the continuity of services risk rating incorporates two common measures of financial robustness; liquidity: days of operating costs held in cash or cash-equivalent forms, including wholly committed lines of credit available for drawdown; and capital servicing capacity: the degree to which the organisation s generated income covers its financing obligations; the calculation of the CoSRR rating is split down line by line on this form so that it is transparent and easy to follow. Column E contains the form reference for where the figures are linking from Please see Monitors website for detailed information about the Continuity of Services Risk Rating. The risk rating is part of the overall Risk Assessment Framework which can be found here: 42 of 96

48 12. TRU55 Capital tables (sub codes 100 to 530) 12.1 Should be completed in accordance with the detailed guidance on the financial performance targets in the NHS Trust Manual for Accounts, Chapter 4. Annual capital cost absorption rate (sub codes 100 to 220) 12.2 Provides a breakdown of the calculation of dividends payable on Public Dividend Capital included in TRU01 sub code 190 for 2015/16 (main code 01) The majority of data feeds from other forms, the exceptions being: opening and closing adjustments (sub codes 120 and 170); opening and closing net book value of donated assets (sub codes 130 and 180); adjustments for significant disposals/acquisitions (sub codes 185 and 216); average forecast daily cleared balances in GBS/NLF (sub code 214) The capital cost absorption rate is calculated in sub code 220 which is then validated against the required percentage rate of 3.5% (acceptable range is between 3.495% and 3.504% as per DH year end validations): NHS Trusts whose average net relevant assets are lower than the level needed to hit this threshold should contact the NHS TDA in order to agree an approach for completion Please see the guidance issued to NHS Trusts in October 2013 for further information about the PDC Dividend Calculation. External financing limit (EFL) (sub codes 230 to 280) 12.6 The EFL controls cash expenditure by NHS Trusts. It encompasses all sources of financing available to an NHS Trust, whether internal, external or from DH External financing limit (sub code 230): the NHS Trusts planned EFL for each period. At plan stage this equals an NHS Trusts External Financing Requirement (EFR) as calculated on sub code of 96

49 12.8 Cash flow financing (sub code 240): calculated from TRU04 sub code Net cash inflow/(outflow) before financing Finance leases taken out in the year (sub code 250): value at which assets acquired under finance leases during the year are capitalised in the asset register at the inception of the lease. This includes IFRIC 4 schemes only and is fed automatically from capital expenditure categorised as IFRIC 4 on TRU Other capital receipts (sub code 260): value of capital receipts from other sources; calculated from TRU04 sub code 560 Capital grants and other capital receipts (excluding donated / government granted cash receipts already captured on TRU05) External financing requirement (sub code 270): total of sub codes 240 to Under/(over) spend against EFL (sub code 280): calculates EFL (sub code 230) less EFR (sub code 270). At plan stage this variance is always zero. Capital Resource Limit including IFRS impact (sub codes 290 to 370) Gross capital expenditure including IFRS impact (sub code 290): feeds from the analysis total on TRU56 sub code Asset transfers to NHS Trusts (sub code 294): profile for the total book value of assets received from NHS organisations across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to 17; feeds from the analysis total on TRU56 sub code Gross capital expenditure including IFRS impact including asset transfers (sub code 296): total of sub codes 290 and of 97

50 12.16 Less: Net book value of assets disposed of to NHS organisations (sub code 300): profile for the total book value of assets disposed of to NHS organisations across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to Less: book value of assets disposed of to non-nhs organisations (sub code 310): profile for the total book value of assets disposed of to non-nhs organisations across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to Less: book value of Financial Instruments (Investments) disposed of to NHS / non NHS bodies (sub code 314 and 316): net book value of Financial Instruments split between NHS and non NHS bodies across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to Plus: loss on disposal of donated assets (sub code 320): total value of loss on disposal of donated assets, profiled across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to Less: capital grants received (sub code 330)/less donations (sub code 340): as for the lines above, these should be profiled across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to Charge against the CRL including IFRS impact (sub code 350): total of sub codes 296 to Capital Resource Limit (CRL) including IFRS impact (sub code 360): notified/planned CRL; feeds from sub code 350 to equal the charge against CRL for the plan submission Under/(over) spend against CRL (sub code 370): total of sub code 360 less 350; there will be no under/(over) spends against CRL within the planning form. 45 of 97

51 IFRS capital expenditure IFRIC 12 and non-ifric 12 (sub codes 500 to 530) The impact of IFRS on net capital expenditure should be entered for both IFRIC 12 schemes (sub code 500) and non-ifric 12 schemes i.e. IFRIC 4 schemes (sub code 510), these should be profiled across 2015/16 in main codes 02 to 13 and for 2016/17 to 2019/20 under main codes 14 to 17: only positive figures will be recorded. The form is designed to recognise only the IFRS impact on any additional capital spend planned; feeds from the analysis of gross capital expenditure analysed as IFRIC 12/IFRIC 4 on TRU56 sub codes 500 and UK General Accepted Accounting Practice (UK GAAP) capital expenditure (sub code 530): total impact on the SOFP under UK GAAP accounting rules i.e. for a PFI scheme, this would be the build-up of the residual interest that would be charged to the SOFP in each planning period. It is important that this figure is accurately recorded as it is used to help determine the overall level of resource available to fund the cost of IFRIC 12 schemes and it is the residual interest that is charged to HM Treasury s Capital Departmental Expenditure Limit control; feeds from the analysis of UK GAAP/Reversionary Interest recognised on TRU20 sub code 705 for 2015/16, with manual input required for 2016/17 onwards in the full planning forms. Input all values manually in the initial planning forms. 46 of 97

52 13. TRU56 Capital expenditure by project code/name (sub codes 100 to 490) 13.1 It is particularly important that the gross capital expenditure and capital disposals are broken down to individual schemes to allow complete analysis of capital plans NHS Trusts should provide as much detail as space allows and avoid excessive aggregation of schemes. All individual schemes with a value of over 1 million should be entered on a separate line. A full breakdown of schemes is essential to achieving sign-off of the Capital Cash Management Plan (TRU63) NHS Trusts should identify whether the capital expenditure scheme or capital disposal is over the NHS Trust delegated limit and will require NHS TDA business case approval or whether the scheme will need only internal NHS Trust approval. sub codes 100 to 225 are for capital expenditure schemes that do not require business case approval by the NHS TDA; sub codes 280 to 380 are for capital expenditure schemes that will require NHS TDA business case approval; sub codes 420 to 427 are for recognising assets that have been transferred into NHS Trusts; sub codes 431 to 440 are for capital disposals that do not require business case approval by the NHS TDA; sub codes 441 to 450 are for capital disposals that will require NHS TDA business case approval; sub codes 470 to 484 are for capital grants and donations Capital expenditure plans need to include in year on-going capital costs for asset transfers including TCS assets Capital expenditure should be analysed using the categories defined in main codes 01 to 04 described below. Summary analysis of total gross capital expenditure (by type) including IFRS impact (sub codes 500 to 710) 13.6 This analysis continues to be required by HM Treasury colleagues total gross capital expenditure including asset transfers must be captured across these headings before deducting any disposals and transfers, grants and donations. This is to enable HM Treasury to report to Parliament as appropriate. 47 of 96

53 13.7 Type of Expenditure options (main code 01): new build (sub code 550); designed to capture the gross capital amounts allocated and spent on new buildings. NHS organisations should therefore include capital projects funded through Procure 21 and other publicly financed schemes as well as Private Finance Initiative and LIFT projects and any expenditure on maintaining and refurbishing existing buildings; maintenance routine non-backlog locally funded (sub code 560); gross capital expenditure and expenditure on routine maintenance (i.e. non-backlog) should be shown separately. This is to capture all capital expenditure on healthcare facilities, which is not associated with the provision of new buildings/new facilities; backlog maintenance (sub code 562); gross capital expenditure that has been classified as Backlog Maintenance. equipment (sub code 570); designed to capture new equipment purchases treated as capital either for existing or new buildings. Again, gross capital expenditure must be used here; information technology (sub code 580); all gross capital expenditure, including any central budget expenditure, on Information Technology to arrive at total gross capital expenditure for this category. other (sub code 590): all other gross capital expenditure including any central budget expenditure to arrive at total gross capital expenditure Breakdown of total gross capital expenditure by DH programme drop down options (main code 02): Technology Fund for Nursing (sub code 641), Integrated Digital Care Fund (sub code 646), Improving Maternity Care Settings (sub code 648); to be completed if agreed with DH policy/budget holder. 48 of 97

54 other central programmes i.e. gross capital expenditure funded via any of the other DH central programme budgets should be recognised as below (sub codes 650 to 657); other central programmes funded from centrally issued capital PDC should be recognised on sub code 650 and should be used only when no other programme allocation would be appropriate; planned non-programme capital schemes i.e. large preapproved schemes funded from PDC should be recognised on sub code 651; non-central programmes funded from exceptional PDC should be recognised on sub code 655; any capital PDC funding that is issued via an application to the Independent Trust Financing Facility (ITFF) and is not expressly related to a transaction agreement should be recognised here. As noted in section capital PDC will only be issued where a NHS Trust has a zero or low PBA (Prudential Borrowing Assessment) and/or where a major capital scheme forms part of the financial recovery of the NHS Trust and requests will be subject to review and challenge on a case-by-case basis; non-central programmes funded from transaction PDC should be recognised on sub code 657; any capital PDC funding that is issued via an application to the Independent Trust Financing Facility (ITFF) that is expressly related to a transaction agreement should be recognised here; If an NHS Trust is in any doubt as to the categorisation of any PDC funding that you wish to recognise in your TFMS plan, please contact the NHS TDA Capital and Cash team for guidance as soon as possible on [email protected]. non-central programme (sub code 660); all non-central programme funded expenditure i.e. locally funded expenditure. It should cover all other expenditure not included in the categories above Breakdown of total gross capital expenditure by whether it qualifies as IFRS Expenditure (Y (IFRIC 12 or 4) / N) (main code 03) the charge to CRL and the gross capital expenditure under both the expenditure by type and by programme analyses need to include the impact on the SOFP of IFRS schemes as selected on main code 03. further guidance is included within section 10 - TRU20 with regard to categorising assets under IFRIC4 or IFRIC of 97

55 13.10 Breakdown of total gross capital expenditure by PDC cash funding drop down options (main code 04): all centrally funded expenditure i.e. schemes that NHS Trusts will receive either PDC/Loan funding for need to be analysed by funding method category into those schemes where; PDC cash has been received in previous years, has not been spent by the NHS Trust and has been carried forward into 2015/16 Cfwd PDC. This relates only to actual PDC cash which has been drawn down and not spent. Unspent limits only do not need to be recognised here (see sub codes 2090 to 3050 below); PDC cash is anticipated to be drawn down to fund the central scheme in the year in which expenditure is planned PDC; scheme is non-central and will not be funded from PDC cash Non- PDC ; capital expenditure is on a central scheme but is required to be funded locally i.e. NHS Trust providing matched funding to centrally allocated PDC Matched scheme is to be funded via a Capital Investment Loan Loans this analysis of spend by scheme on TRU56 feeds the PDC/Loan funding recognised on TRU63 and cash in-flow on TRU04 and is therefore key for NHS Trusts to record accurately. Calculation of delegated limit Turnover as per 2013/14 accounts (sub code 720): this should be taken from the last available published accounts (in this case 2013/14). Additional disclosures for projects identified as requiring NHS TDA business case approval (sub codes 760 to 789) Additional disclosure is required for those capital schemes and capital disposals which the NHS Trust has identified will require NHS TDA business case approval: for each expenditure scheme/disposal, the NHS Trust should recognise whether or not there are any whole life costs which would contribute to the approval level of the individual scheme and the value of these costs. This is mostly applicable for schemes involving I.T., Leased Equipment, Leased Property, Managed Equipment and Managed Service scheme and NHS Trusts should refer to the NHS TDA Capital Regime and IBC Approvals Guidance for further information; 50 of 97

56 for each expenditure scheme/disposal, the NHS Trust should recognise the dates at which each scheme has had NHS Trust Board Approval, planned SOC submission date (for schemes over 10 million), planned OBC submission date, planned FBC submission date. Additional disclosures for projects above delegated limits (sub codes 860 to 2070, with reference to sub codes 720 to 750) The additional disclosure calculation fields (sub code 720 to 750) and project analysis (sub codes 860 to 2070) are to determine the NHS Trusts capital projects/disposals in which the total anticipated expenditure is above the delegated limit Please note that when including projects in this section, consideration should be given to any schemes which may have whole life costs which would take the project over the NHS Trust delegated limit (see section above). Where this is the case, the project should be included in sub codes 280 to 380 to flag that NHS TDA approval will be required Capital projects that are above the relevant limits will automatically populate the corresponding cells in the additional disclosures table (sub codes 860 to 2070). NHS Trusts are required to provide details relating to each scheme/disposal over this limit and note if each scheme is either: an aggregate scheme which comprises a number of smaller schemes of which none is over the NHS Trust delegated limit, or; a scheme which is over the NHS Trust delegated limit but which has been previously signed off by the SHA prior to 2013/14 or the NHS TDA Where a scheme has been included here which is over the NHS Trust delegated limit and has been flagged as either an aggregated scheme or preapproved scheme, additional explanation will be required on TRU_COM1. Additional disclosures for centrally funded capital schemes for which NHS Trusts have carried forward limits or capital PDC repayments (sub codes 2090 to 3095) The additional disclosure required in sub codes 2090 to 3095 is for NHS Trusts who have agreed carried forward limits with the DH for any of the centrally funded schemes or where NHS Trusts are anticipating making a repayment of capital PDC: DH PDC Limit carried fwd 2014/15 - NHS Trusts may/may not have already drawn down the PDC cash for this limit but if cash has been carried forward from previous years, NHS Trusts should ensure this is recognised as Cfwd from the drop down option on main code 04 when completing the analysis of gross capital expenditure in sub codes 100 to 380 (please see 13.8 above); 51 of 97

57 Capital PDC Limit repaid in 2015/16 - NHS Trusts may have recognised a repayment of Capital PDC on TRU04 sub code 441 and additional analysis should be provided here as to what kind of capital PDC the repayment represents. The analysis provided here feeds into the capital funding breakdown on TRU63 sub codes 230 to 256 and sub codes 475 to 500; Summary PDC Programme Spend In-Year and Cfwd - The additional columns here summarise data provided on sub codes 100 to 490 and are required for NHS TDA reporting purposes only. No manual input is required by NHS Trusts. 52 of 97

58 14. TRU63 Capital cash management plan (sub codes 100 to 460) 14.1 This table identifies the sources of cash, distinguishing between internally generated or external funds, to finance the capital programme set out on forms TRU55 and TRU56. Additionally, it calculates the Net Borrowing Requirement (NBR), which represents the net financing needed from DH by the NHS Trust to fulfil its capital plan. Capital investment loans are the primary source of external financing from the DH. Capital cash management plan (sub codes 100 to 330) 14.2 Gross capital expenditure including IFRS impact (sub code 100): total value of capital schemes to be financed in each year. The figure feeds through from form TRU56 sub code Less IFRS impact (included above at sub code 100) (sub code 110): feeds from TRU55 sub code Gross capital expenditure (excluding IFRS impact) (sub code 120): Total of sub code 100 and sub code Planned depreciation non-ifric 12 related (sub code 130): total depreciation and amortisation recognised by an NHS Trust for non-ifric 12 assets. This figure requires manual input but a validation checks that when combined with sub code 140, it equals the total level of depreciation and amortisation recognised on TRU Planned depreciation IFRIC 12 related (sub code 140): depreciation for IFRIC 12 assets should be entered here. This is part of the total depreciation charge, the other element being the non-ifric 12 element and is linked to IFRIC 12 depreciation recognised on TRU Less planned depreciation IFRIC 12 that forms part of the PFI unitary payment and is recognised as not available to fund capital expenditure (sub code 150): the purpose of this adjustment is that NHS Trusts with arrangements accounted for as on SoFP under IFRIC 12 (such as PFI and LIFT schemes), will have less funding available for their capital programme due to the cash commitments arising from the obligation to pay off the finance lease creditor as part of the Unitary Payment: there is not a depreciation element in the unitary charge. NHS Trusts therefore have three options on how to complete this cell; 53 of 96

59 (I) the capital element of the unitary charge, being equal to the amount of the finance lease creditor repaid in the year; (II) the Depreciation charge calculated for the assets on the SoFP recognised as a result of the application of IFRIC 12 (which will be the same figure as recognised in sub code 140), or; (III) if an alternative method is proposed, Trusts must contact the NHS TDA to discuss and agree it; where an NHS Trust receives third party income, the amount amortised to the Comprehensive Income and Expenditure Statement in the year should be netted of the entry made into sub code 150; the aim of these entries is to eliminate the element of overall depreciation charge that is required to fund the relevant part of the unitary charge, to arrive at a total amount of depreciation that is available for non-ifric 12 related investments Income and expenditure surplus attributable to financing of capital expenditure (sub code 160): the element of any income and expenditure surplus, which the NHS Trust intends to use to finance capital expenditure. The use of income and expenditure surplus is discretionary; hence the cell requires data entry. Ensure that only income and expenditure surplus that has not been committed elsewhere e.g. for funding working capital loan principal repayments, is included here. This figure must be positive. Deficit figures cannot be used Net Book Value (NBV) of non-current assets disposed of to NHS and non- NHS organisations (sub code 170): it is the NBV of assets disposed of that must be put back into capital investment and is linked to asset disposals recognised on TRU Unspent Capital PDC drawn down in previous years that will be used to fund capital expenditure in 2015/16 (sub code 175): cash previously drawn down by NHS Trusts in previous years which is unspent and will be used to fund capital expenditure in 2015/16. This is linked to the analysis provided on TRU56 (main code 04). 54 of 97

60 14.11 Unspent Capital PDC drawn down in previous years that is anticipated to be repaid to the Department of Health (sub code 177): cash previously drawn down by NHS Trusts in previous years which is unspent and is anticipated by the NHS Trust to be repaid to the Department of Health. This may be repaid as part of a Department of Health clawback exercise or a separate agreement between the NHS Trust and the Department. This is linked to the analysis provided on TRU56 sub codes 2090 to Movement in payables/receivables including unspent capital cash from previous years attributable to financing of capital expenditure (sub code 180): the element of any cash released by movements in receivables and payables which the NHS Trust intends to use to finance capital expenditure. Note that it is not acceptable to sacrifice performance against the Better Payment Practice Code, including the guidance on ten day payments, in order to fund capital expenditure. This should also include depreciation and the NBV of asset disposals that was not reinvested in capital expenditure in previous years. PDC drawn in prior years but not spent on capital should not be included here as this will be captured under sub code 175; this will be repaid through a separate exercise. Similarly, requests for new PDC in 2015/16 should not be included here; they should be included in sub code 250 below Grants and donations (sub code 190): calculated from TRU55 (sub codes 330 and 340) Unspent revenue cash from previous year(s) attributed to financing of capital expenditure (sub code 210): the element of any cash held at the start of the year (excluding unspent capital cash from previous years) that the NHS Trust intends to use to finance capital expenditure New Public Dividend Capital central DH programme (policy) budget allocations agreed/anticipated (sub code 230): where a NHS Trust has been allocated or is expecting to be allocated PDC that is part of a centrally managed policy initiative, such as Technology Fund for Nursing/Integrated Digital Care funding, the relevant amount should be included here. figures feed from TRU56 sub codes 641 to of 97

61 14.16 New PDC exceptions to the capital regime (sub code 250): where a NHS Trust has a zero or low PBA (Prudential Borrowing Assessment) and/or where a major capital scheme forms part of the financial recovery of the NHS Trust, a request for exceptional PDC may be made. Such requests will be subject to review and challenge on a case-by-case basis; figures feed from TRU56 sub code Total for projects funded from capital PDC allocated as part of Transaction funding (sub code 255): to include the yearly total only for all capital projects funded specifically through transaction funding. Figures feed from TRU56 sub code Total for projects funded from pre-approved allocations for major schemes which are not covered by centrally agreed programmes (sub code 256): figures feed from TRU56 sub code Asset received from other NHS Trusts, CCGs and NHS Foundation Trusts i.e. non-tcs related asset transfers (sub code 260): PDC will be allocated to fund asset transfers between NHS organisations, as part of the circular flow arrangements. PDC funding to cover these transactions should be identified here. figures feed from TRU55 sub code Asset disposed to other NHS Trusts, CCGs and NHS Foundation Trusts i.e. non-tcs related asset transfers (sub code 270): PDC will be recovered to reflect asset transfers between NHS organisations, as part of the circular flow arrangements. The amount of PDC recovered in respect of these transactions should be identified here. In the case of retained estate an invoice will be used as a mechanism to enable cash transfers between the NHS Trust and DH, therefore associated amounts should not be included here. figures feed from TRU55 sub code New capital investment loans (sub code 280): to include proposed new loans required to fund capital investment during 2015/16 and beyond. Loans must be demonstrable as affordable, and this will be reviewed on a case by case basis before loan financing is approved. 56 of 97

62 14.22 Other loans received (sub code 290): to include any other loans, including Salix loans, that are not covered in the other categories of loan Loans repaid to DH - Capital Investment Loan (sub codes 295 and 297): planned principal repayments on DH capital investment loans. This is split between repayments on new and existing DH capital loans on sub codes 295 and 297 respectively; any proposed advance payment of principle should be included in these figures split between those relating to new and existing loans. Please note actioning of such an advance payment of principle will be subject to conditions in the loan facility agreement Repayment of Other Capital Investment Loans Received e.g. Salix (sub code 300) planned principal repayments on Other Capital investment loans e.g. Salix. The values for 2015/16 feed from the TRU04 sub code 500 and should be manually input for subsequent years As capital expenditure must be deemed approved and affordable at NHS TDA and overall DH level when plans are approved, the CRL associated with the inclusion of loans need will be considered primarily within the capital plan sign off. Should it be later determined that the loan cannot then subsequently be made on the grounds of affordability, alternative funding arrangements may need to be sourced requiring support from NHS TDA / DH if the capital expenditure is agreed to be essential CRL allocations that are related to new capital investment loans are actioned as part of the loans approval and authorisation process. The total CRL requirement of the NHS Trust, including that linked to new capital investment loans is nonetheless considered as part of the plan sign off process. In essence, the fact that the financing of the capital investment is planned to be via a loan is immaterial at the plan assessment stage. Managing total capital expenditure within the resources voted by Parliament is the primary concern If the planned expenditure is not challenged as part of the plan sign off process, NHS Trusts should assume that CRL allocations can be made (i.e. are affordable). This does not however indicate that a capital investment loan will be approved. If there is any doubt about the affordability of the planned loan, including the impact on LTFMs, this should be addressed immediately following plan sign off. The agreement to cover the CRL allocation does not commit DH to finance the capital expenditure regardless of the ability to secure a loan. If the capital expenditure is deemed to be essential, but otherwise unaffordable, the financing issue needs to be raised with the NHS TDA as soon as possible. For the full plan, this figure reported in this cell would be fed through from TRU04, however in the initial plan, direct input is required. 57 of 97

63 14.28 External capital cash requirement total (sub code 310): sum of sub codes 230 to 290 above Total capital cash financing available (sub code 320): sum of sub code 220 and sub code 310. Must be greater than, or equal to, sub code Total capital cash financing available minus gross capital expenditure (sub code 330): equal to sub code 320 minus sub code 120. Net borrowing requirement (sub codes 340 to 370) External capital cash requirement (sub code 340): the NHS Trusts total requirement for externally sourced cash to finance capital investment, fed through from sub code 310 above Loans received from DH FT Liquidity Loan (sub code 350): any new working capital loans expected to be required to be drawn in each period related to achieving the cash and liquidity requirements contained within Monitor s Compliance Framework in order to allow NHS Trusts to have sufficient cash to satisfy the requirements of the FT application process. Availability of these loans is subject to DH approval based upon affordability and need on a case by case basis and approval by the Independent Trust Financing Facility. Drawdown will be subject to confirmation of the NHS Trusts authorisation as an FT and any surplus cash generated through a drawdown of these loans must be held in the NHS Trusts Bank account with the Government Banking Service. For 2015/16 plans, the figure reported in this cell is fed through from TRU04 sub code 460, however for subsequent years, direct input is required Loans received from DH - Revenue Support Loan (sub code 355): any new working capital loans expected to be required to be drawn during 2015/16 related to revenue working capital requirements. Loans must be demonstrable as affordable ahead of the loan being let and approval by the Independent Trust Financing Facility. The values for 2015/16 feed from the TRU04 sub code 465 and should be input for subsequent years. 58 of 97

64 14.34 Loans repaid to DH - FT Liquidity Loan (sub 358): planned principal repayments on new working capital FT Liquidity loans. Any proposed advance payment of principle should be included in these figures. Please note actioning of such an advance payment of principle will be subject to conditions in the loan facility agreement. The values for 2015/16 feed from the TRU04 sub code 490 and should be input for subsequent years Loans repaid to DH Revenue Support Loans (sub code 360 and 362): planned principal repayments on working capital revenue loans. Any proposed advance payment of principle should be included in these figures split between those relating to new and existing loans. Please note actioning of such an advance payment of principle will be subject to conditions in the loan facility agreement. The total repayments shown under sub code 360 and 362 feed from figure recognised on TRU04 sub codes 492 and Net borrowing requirement (sub code 370): total of sub code 340 to sub code 362. This shows the net financing requested from/(due to be repaid to) DH Summary of capital programme funding sources (sub codes 380 to 450): this is a summary of the relevant information in TRU63 linked by formula Capital programme funding sources less gross capital expenditure (sub code 460): sub code 460 shows the formula; total capital sources (sub code 450) less gross capital expenditure (sub code 120) Capital Resource Limits (CRL) and External Finance Limits (EFL) (sub code 470): this sets out the indicative initial CRL/EFL limits that NHS Trusts will see as part of their in-year reporting. These initial limits have had all external funding sources removed and will be used to populate the inyear reporting limits schedules (typically seen on TRU57 in the in-year TFMS returns) Initial Anticipated Adjustments to Capital Resource Limits (CRL) and External Finance Limits (EFL) (sub codes 475 to 690): this sets out the anticipated adjustments to NHS Trust s initial CRL/EFL limits set out in sub code 470 and replicates the in-year TRU57 limits return that NHS Trusts are required to complete; 59 of 97

65 most entries are linked to other inputs in the form but manual entry is required on 3 cells; sub codes 530 to 540 NHS Trusts need to input the NBV of any assets disposed of/received from Retained Estate; sub code 650 NHS Trusts need to identify the proportion of any IFRIC 12 adjustments that relate to LIFT schemes. If no input is made here, then it is assumed that all IFRIC 12 is in relation to PFI schemes. please note that for sub codes 475 to 500, the EFL impact may not always equal the CRL impact for Trusts who are anticipating repayments of capital PDC in the 2015/16 financial year. 60 of 97

66 15. TRU64A, TRU64B AND TRU64C Planned and underlying income and expenditure/sources and application of funds (sub codes 100 to 1710) Introduction 15.1 The purpose of the sources and application of funds is to assess the NHS Trusts planned total and underlying income and expenditure for 2015/16, using the 2014/15 position as the base year Throughout the source and application of funds all income and expenditure totals and changes will need to be split between recurring and non-recurring to provide assurance on the underlying position of the NHS Trust The source and application of funds is split across three tabs. Tabs TRU64a and TRU64b are data entry tabs. TRU64c pulls data from the other two tabs and summarises this into two tables. Within this section of the guidance sub code references will apply to either TRU64a, b or c, unless they specifically reference other tabs within the planning form TRU64a shows the total income from 2014/15 to 2015/16. TRU64b shows the total spend from 2014/15 to 2015/16. For both tabs NHS Trusts should break down the total movement from base to plan years into the component changes and show each of these against a relevant sub code Both tabs have mandatory commentary triggers where NHS Trusts should describe each of the material changes in the plan. NHS Trusts should ensure that the commentary provided explains the reason for the change. Where the sub code includes multiple items please ensure that the commentary describes and provides values for the most material items. Where commentary remains optional NHS Trusts can still add narrative in order to explain an element of the plan that is below the trigger for materiality NHS Trusts can expect to receive requests for additional information where data entry in the Source and Application of Funds makes limited use of sub codes and / or provides insufficient commentary detail Both TRU64a and b include a sub code cross reference column (column M) which shows the links made between Source of Funds and Application of Funds sub codes where applicable. NHS Trusts should ensure that net values reflect the correct net change NHS Trusts should be aware that the financial position shown on TRU64a, b and c should exclude impairments, IFRIC 12 and the impact for the change in accounting for donated assets and government grant reserves. Therefore, any income or expenditure associated with these should not be included. 61 of 96

67 TRU64c Summary tables 15.9 The first summary table shows planned and underlying positions The planned surplus/deficit position shown on sub code 1300 should match the Adjusted Financial Performance Retained Surplus/Deficit shown in TRU01 sub code 390 and the income shown on sub code 1298 should match the turnover in KeyData sub code Sub code 1301 underlying income and sub code 1302 underlying expenditure are derived from the recurrent income and expenditure columns in TRU64a and TRU64b respectively The table shows both the Adjusted Financial Performance Retained Surplus/Deficit and the Underlying positions as a percentage of turnover The second table is the Review summary which shows the net income and expenditure by category. The categories thematically group sub codes from the TRU64a Source of Funds and TRU64b Application of Funds tables The table enables the main drivers of financial change to be seen clearly and is a useful tool for review The categories are presented in two different splits, firstly as income, pay, non pay, and total net, then secondly as recurrent net and non recurrent net The grouping of sub codes from TRU64a and TRU64b are shown on the right in the column headed sub code cross reference Please sense check all values to ensure these are as expected before submission The table is used within the NHS TDA to create a graphical bridge or waterfall chart as a visual representation of the Sources and Application of Funds data. NHS Trusts can use the Linked File referred to in paragraph 1.12 to access the graphical bridge that the NHS TDA will use to review the financial plan. Our expectation is that the Linked File will form an integral part of the NHS Trust review process prior to submission to the NHS TDA. Links to other tabs The first table on TRU64c sub codes 1310 and 1315 link to the Key Data tab key metric P6 RAG rating. (See Table 1 for Metric details) The completion of the Sources and Application of Funds feeds into TRU67, which provides: details of the CIP as a percentage of spend; a breakdown of what is driving the planned efficiency requirements for 2015/16 and; 62 of 97

68 a view of the normalised positions for the base and planning years The population of Efficiency programme values is fed from TRU65 as follows: the FYE of prior year savings is fed from TRU65 s Full Year Effect from 2014/15 Efficiencies summary information table (TRU64a sub code 155 and TRU64b sub code 460); in year savings is fed from TRU65 s 2015/16 Efficiencies Summary Information table (TRU64a sub code 220 and TRU64b sub code 610 and 620) On the validations tab data entry is reconciled to TRU01 at the following points: TRU64a sub code 100 main code 09; TRU64a sub code 400 main code 09; TRU64b sub code 410 main code 09; TRU64b sub code 680 main code 09; TRU64c sub code 1300 main code 01; TRU64c sub code 1300 main code 04; These points are validated so the Source and Application of Funds must match the correct TRU01 gross values and Adjusted Financial Performance Retained Surplus/Deficit values. Commissioning for Quality and Innovation (CQUIN) The TRU64a memorandum table on income values and deductions includes CQUIN base income values for 2014/15 split between recurrent and non recurrent. 2015/16 values are derived from this base year data plus the data entered in the relevant sub code in the Source of Funds table above Treatment of CQUIN in the source and application of funds should be consistent with the NHS Trusts internal budget assumptions: if the NHS Trust has treated all CQUIN as non-recurring then it should all be removed from the adjusted underlying income as at 31 March 2015 and all treated as CQUIN income (sub code 300) ; if all or some of the CQUIN has been treated as recurring in the NHS Trust budget setting then just the change in income should be recorded in CQUIN income (sub code 300) On the expenditure side of the Source and Applications the same approach should be taken i.e. spend to deliver CQUIN should be recorded in line with the NHS Trusts internal budget setting. 63 of 97

69 15.27 The more CQUIN income that has been treated as recurring, the greater the financial risk in the plan, as NHS Trusts will need to manage the expenditure consequences of delivering CQUIN schemes. Deficit support funding During 2014/15 central funding was provided to assist NHS Trusts in deficit who met certain performance improvement tests. Where NHS Trusts received such funding it should be treated as non recurrent and included in sub code 100 main code /15 funding should then be removed using sub code 120 to arrive at the underlying income In accordance with the national planning guidance, there will be no in year allocations during 2015/16 to provide non recurrent funding for deficit support. Therefore please do not use sub code 360 within the planning form. Winter resilience During 2014/15 central funding was passed out to assist NHS Trusts with winter (operational) resilience. Where NHS Trusts received such funding it should be treated as non recurrent and so should be included in sub code 100 main code /15 funding should be removed using sub code 122 to arrive at the underlying income In accordance with the national planning guidance, there will be no in year allocations during 2015/16 to provide non recurrent funding for winter (operational) resilience. Section 6 of the national planning guidance for 2015/16 states that capacity and demand plans should reflect operational resilience funding at the same level as received in 2014/15. This will be funded from baseline allocations and should be included in 2015/16 contracts and reflected on sub code 362. Referral to Treatment backlog clearance During 2014/15 central funding was passed out to assist NHS Trusts with clearing the RTT backlog. Where NHS Trusts received such funding it should be treated as non recurrent and so should be included in sub code 100 main code /15 funding should be removed using sub code 124 to arrive at the underlying income In accordance with the national planning guidance, there will be no in year allocations during 2015/16 to provide non recurrent funding for Referral to Treatment backlog clearance. Provider and commissioners should agree contracts that reflect anticipated volumes of activity and should therefore not use sub code 364 within the planning form. 64 of 97

70 Transactions When an NHS Trust has entered into or is expected to enter into a transaction as defined by the NHS Transactions Manual during either the outturn year or 2015/16, the Sources and Application of Funds may need to identify the resulting change to income and expenditure Sub codes to record changes arising due to a transaction are locked and hidden to avoid misuse. If anticipating a transaction in the outturn year, the NHS Trust can [email protected] to unlock and unhide the relevant rows. The NHS Trust should provide details of the financial impact on gross income and expenditure, both in the outturn FYE and planning year and a copy of their finance form Applications will be dealt with on a case by case basis and evidence and opinion will be sought from the relevant Business Support lead for the NHS Trust. If approved, the form will be returned with the required sub codes unhidden and unlocked For the transaction to be shown in the Sources and Applications of Funds the transaction must: be carried out according to the NHS Transaction Manual and the NHS TDA Assurance Framework and any future guidance should these documents be superseded; have a project plan approved by the appropriate NHS TDA responsible officer, with a timing for completion that necessitates inclusion in the planning form, and; have progressed through Gateway 3 as defined in the NHS TDA Assurance Framework, and; have been approved by the Secretary of State for Health or be reasonably certain to receive approval in early TRU64a Sources of Funds /15 prior year total income (sub code 100): equates to the total forecast outturn income for 2014/15; sub code 100 main code 09 feeds from TRU01 sub codes 120, 130 and 465, so is consistent with Turnover shown on KeyData sub code 100; therefore, excludes any income associated with technical adjustments that are below the line in terms of performance assessment. In this case, it would exclude any income associated with the change in accounting for donated asset and government grant reserves, and; 65 of 97

71 requires data entry to analyse the main code 09 value into recurrent and non recurrent so the Sources of Funds underlying position can be properly analysed The income movement from 2014/15 income to underlying income should be broken down into component changes providing as much detail as possible. Sub codes provided for income changes are as follows: Income from commissioner 2.5% non recurrent resources including income for redundancy and other restructuring costs (sub code 110): removal of any non-recurrent income received by the NHS Trust from commissioner s non recurrent resources including that used to resource redundancy and other restructuring costs Non-recurrent deficit support funding (sub code 120): remove all deficit support funding received in 2014/15 from commissioners; Non-recurrent funding for winter resilience (sub code 122): remove all winter resilience funding received in 2014/ Non-recurrent funding for Referral to Treatment backlog clearance (sub code 124): remove all RTT backlog clearance funding received in 2014/ Contractual income deductions in 2014/15 according to contract terms, including contractual sanctions (sub code 130): removal of the effect of any non-recurring income deductions in 2014/15 and in particular any deductions actioned by commissioners as a result of sanctions in accordance with the NHS Standard contract Transactions acquisitions or divestments - Full year effects for transactions completing up to 31/03/15 (sub code 140): locked and hidden row; See paragraph for information on the required criteria and contact details for applying to unlock this row; this is the income equivalent of expenditure sub code Service changes transfers or developments - Full year effect of changes up to 31/03/15 (sub code 149): feeds from data entry in the memorandum table on service / volume change; 66 of 97

72 this is the income equivalent of expenditure sub code Full year effect of prior year income generation schemes up to 31/03/15 (sub code 155): the full year effect of income generation saving plans instigated during 2014/15. For example, a savings plan that started on 1 July 2014 would have a full year effect of a further three months above the figure in the outturn income. feeds from TRU65 sub code 350 main code 07 and 08 for recurrent and non recurrent respectively Acute prescribed Specialised services stated baseline adjustment (sub code 156): the impact of setting the 2015/16 stated base value for the 50:50 default gain and loss sharing for acute prescribed specialised services Other changes not reflected in the categories above (sub code 160): any other income effects not covered in the more specific rows above; changes shown here should be below 10% of the total changes; where changes are more than 10% of the total movement to underlying commentary is required in main code 14, and; commentary must describe and provide values for the most material items; this is the income equivalent of sub code Adjusted underlying income as at 31/03/15 (sub code 170): total of the total forecast income for 2014/15 adjusted for non-recurring and full year effects; as all non-recurring income should have been removed to arrive at the underlying position, the non-recurring total in main code 05 should be zero; this is the income equivalent of expenditure sub code The income movement from underlying to total income should be broken down into component changes providing as much detail as possible. Sub codes provided for income changes are as follows Gross inflationary uplift (1.93%) (sub code 180): the 2015/16 National Tariff Consultation Notice set the tariff uplift for inflationary pressures at 1.93% for 2015/16; 67 of 97

73 NHS Trusts should use the hyperlink in main code 14 and check the uplift commentary table sub code 1800, providing commentary if required Efficiency in tariff (sub code 190): the 2015/16 National Tariff Consultation Notice set the tariff efficiency at 3.8% for 2015/16; NHS Trusts should use the hyperlink in main code 14 and check the uplift commentary table sub code 1810 providing commentary if required Gross commissioner efficiency (QIPP reductions in excess of tariff deflator) (sub code 200): as part of contract negotiations commissioners may agree efficiency or QIPP schemes in excess of the tariff deflator. NHS Trusts should record the income deductions associated with such schemes in this row; where commissioners have agreed to invest resources in one area to deliver savings in another the total gross saving should be reported on this row with the investment on sub code 210; cross reference is made to income sub code 210 and expenditure sub code 590 which record other elements of the efficiency Commissioner efficiency investments (QIPP investments by commissioners) (sub code 210): as described above in sub code 200 any investment by commissioners to deliver services differently should be recorded here. Income from commissioner non recurrent 1% resources should not be recorded on this row; cross reference is made to income sub code 200 and expenditure sub code 590 which record other elements of the efficiency Efficiency - income generation (sub code 220): feeds from data entry in TRU65; cross reference is made to expenditure sub codes 610 and 620 which record other elements of the efficiency Service changes - transfers or developments with effect from 1 April 2015 (sub code 229) feeds from data entry in the memorandum table on volume / service change; 68 of 97

74 this is the income equivalent of sub code Volume changes (sub code 239): feeds from data entry in the memorandum table on volume / service change; this is the income equivalent of sub code Better Care Fund (sub code 245): impact of the Better Care Fund on income; this is the income equivalent of sub code Marginal rate emergency tariff (sub code 250): impact of the marginal rate emergency tariff on the expected contract value in 2015/16 taking into account the change in the marginal rate to 50% proposed in the 2015/16 National Tariff consultation; please note that the volume changes in sub code 239 need to be assessed at full value and then the impact of the marginal rate assessed in this sub code Emergency re-admissions (sub code 260): change in income from the 2014/15 outturn associated with the nonpayment for emergency readmissions as outlined in the 2015/16 National Tariff Payments System guidance Market Forces Factor (MFF) (sub code 270): any changes from the 2014/15 outturn income associated with a change to the MFF of the NHS Trust in 2015/ Tariff Price changes not included elsewhere (sub code 280): impact on NHS Trusts income from price changes to the tariff or charging arrangements that are not part of another specific row Pass-throughs - income for drugs and devices excluded from the tariff (sub code 290) change in income from the 2014/15 outturn in 2015/16 associated with drugs and devices excluded from the tariff; this is the income equivalent of expenditure sub code 520; as a result of the 50/50 gain/loss share on acute prescribed specialised services in the 2015/16 National Tariff Consultation Notice, this income may not be equal the expenditure on sub code of 97

75 15.68 CQUIN income (sub code 300): increase in total CQUIN above the figure included in the 2014/15 outturn. See paragraph to for an explanation of the treatment of CQUIN in the financial planning forms; this is the income equivalent of expenditure sub code Health Education England s Education and Training tariff and non-tariff income changes (sub code 310): relates specifically to changes to Health Education England (HEE) funding: either education and training tariff prices, transitional relief for moving to tariff or funding provided for training and education outside of the scope of the tariff; includes funding provided by Local Education Training Boards; this is the income equivalent of sub code Education and training (not including HEE tariff or non-tariff funding) (sub code 320): change in income in 2015/16 relating to education and training where income is not from Health Education England or a Local Education Training Board; this is the income equivalent of sub code Research (sub code 330): change in income from the 2014/15 outturn associated with research and development in 2015/16; relevant income includes research grant income or income from the National Institute of Health Research, and; this is the income equivalent of sub code Commissioner non recurrent resources for pump priming QIPP/contribution to fixed/semi fixed costs (sub code 340): change in the value of any agreements reached with commissioners to resource pump priming costs or make a contribution to fixed and semi fixed costs for a limited period of time. 70 of 97

76 15.73 Income from commissioner 1% non-recurrent income including income for redundancy and other restructuring costs (sub code 350): any agreed non-recurring income in 2015/16 funded from commissioner 1% non-recurrent resources including that used for redundancy or restructuring costs; this is the income equivalent of sub code Non recurrent deficit support funding (sub code 360): include non-recurrent transitional income / support in excess of that shown in sub code 350; only non recurrent data entry is possible as funding should be treated as non recurrent; non-recurring support agreed for 2015/16 not directly associated with patient activity or QIPP schemes; see paragraph to for an explanation of the treatment of deficit support funding in the financial planning forms Non recurrent funding for winter resilience (sub code 362): only non recurrent data entry is possible as funding should be treated as non recurrent; see paragraph to for an explanation of the treatment of winter resilience funding in the financial planning forms, and; this is the income equivalent of sub code Non recurrent funding for Referral to Treatments backlog (sub code 364): only non recurrent data entry is possible as funding should be treated as non recurrent; see paragraph to for an explanation of the treatment of referral to treatments backlog funding in the financial planning forms; this is the income equivalent of sub code Expected Transactions (sub code 370): locked and hidden row; See paragraph for information on the required criteria and contact details for applying to unlock this row; this is the income equivalent of sub code of 97

77 15.78 Mental Health Access Standards (sub code 374): change in income due to funding for Mental Health Access standards, and; this is the income equivalent of sub code Other (sub code 380): any other changes to income between 2014/15 and 2015/16 not suitable for capture on a separate row should be included here; changes shown here should be below 10% of the total changes; where changes are more than 10% of the total movement to underlying commentary is required in main code 14, and; commentary must describe and provide values for the most material items; this is the income equivalent of sub code Total change in income for 2015/16 (sub code 390): sum of the income changes from sub codes 180 to 380; this is the income equivalent of sub code Total income 2015/16 (sub code 400): total expected income for the NHS Trust in 2015/16; validated to match TRU01 sub code 120, 130, and 465 main code 02. Memorandum table on income values and deductions arising from national policy The memorandum table (sub codes 1340 to 1380) highlights the impact on the adjusted underlying income as at 31 March 2014 of certain policies such as the impact of emergency readmissions /15 base year values are entered into main codes 01 and 02, splitting into recurrent and non recurrent, thereby properly identifying the underlying values for these policy items All 2015/16 values are then populated using a formula feed from the changes detailed in the Sources of Funds table above Total values for the policy for 2015/16 should be sense checked to ensure these are as expected before submission. 72 of 97

78 15.86 Value of income deductions for mandatory fines (sub code 1380) records the value of income deducted on a non-recurring basis from NHS Trusts in respect of mandatory fines in 2014/ In accordance with the NHS TDA planning guidance, no NHS Trust should be planning for any mandatory fines in 2015/16, main codes 05, 09 and 12 which relate to the 2015/16 planning year are therefore greyed out. Uplift commentary table This footnote table provides additional information on the inflationary changes entered by NHS Trusts, comparing these to the indicative change calculated using the rules from the Monitor s published Tariff for 2015/16. If the difference is outside the lower and higher thresholds shown in columns M and N, this is indicated by the YES/NO flag in main code 12 and an explanation is required in main code In each case calculated values are driven from Forecast Outturn Revenue from Patient Care Activities (TRU01 sub code 120 main code 01). Memorandum table on service / volume change This table provides five sub codes to break down the service and volume changes. The net total for each group of five sub codes feeds the relevant sub codes in the Sources of Funds table If more than five increases and decreases occur, the fifth row should be used to show the net position of the least material increases and decreases and explanation in the commentary column should be provided to explain this Service changes - transfers or developments - Full year effect for changes up to 31/03/15 (sub codes 150 to 154) should include: feeds sub code 149; any full year effects of service developments with commissioners that started or are starting part way through 2014/15; any full year effects of service transfers or tenders that started or are starting part way through 2014/15. This includes services won, lost or not contested by tender; do not use this sub code for changes occurring on 1st April These should be entered in sub codes 230 to 234; relevant changes include providing to a new locality or a new population, providing a new service or an existing service in a new way which materially changes income; service change might involve service redesign for an NHS Trust if this is not part of the agreed QIPP programme; 73 of 97

79 service change might involve a change in commissioner make up for a NHS Trust; as a basic principle the NHS Trust should use this sub code for changes in the service model where a service started /starts or ceased / ceases on or before 31st March 2015; Service changes - transfers or developments - (sub codes 230 to 234) should include: feeds sub code 229; service changes that commissioners are starting on or after 1 April 2015 but before 31 March 2016; include any service transfers or tenders starting on or after 1st April 2015 but before 31 March This includes services won, lost or not contested by tender; relevant changes include providing to a new locality or a new population, providing a new service or an existing service in a new way which material changes income; service change might involve service redesign for an NHS Trust if this is not part of the agreed QIPP programme; service change might involve a change in commissioner make up for a NHS Trust; as a basic principle the NHS Trust should use this sub code for changes in the service model where a service started / starts or ceased / ceases on or after 1 April 2015 but before 31 March 2016; Volume changes (sub codes 240 to 244) should include: feeds sub code 239; the changes to income from commissioner plans associated with changes in the volume of activity commissioned typically demographic change and other changes in demand; sub code 240 is only for change relating to prescribed specialised services volume changes excluding the price effect of the 50:50 gain and loss sharing; sub code 241 is specifically for the price effect of the 50:50 gain and loss sharing; data entry on this sub code must relate to current contracts with current commissioner. Changes due to new services and / or new commissioners should be shown under sub code 230 service changes; 74 of 97

80 QIPP schemes should not be included on this row but on sub code 200 and 210; changes to emergency activity should be costed at full price with the impact of the marginal rate and readmissions captured separately on sub codes 250 and 260; these code are the income equivalent of sub codes 540 to 544. TRU64b Application of Funds /15 Prior year total expenditure consistent with adjusted financial performance retained surplus/(deficit) in TRU01 sub code 390 main code 01: derived from the formula adjusted financial performance surplus/(deficit) in TRU01 sub code 390 main code 01 less Turnover in TRU01 sub codes 120, 130 and 465 (sub code 410); forecast spends for the NHS Trust in 2014/15 before impairments, IFRIC 12 or the impact for the change in accounting for donated assets and government grant reserves. These should all be excluded so that the total income and spend on TRU64 agrees with the surplus/(deficit) for financial performance on TRU01 sub code 390 main code The movement from 2014/15 expenditure to underlying expenditure should be broken down into component changes providing as much detail as possible. Sub codes provided for expenditure changes are as follows: Redundancy and restructuring costs (sub code 420): non-recurring costs associated with redundancy and restructuring in 2014/15; in the summary review bridge table on TRU64c (sub code 1410) this sub code is offset to income sub code Brought forward impact of non-delivery of recurring prior year savings (sub code 430): any savings delivered on a non-recurring basis in 2014/15 will affect a NHS Trusts underlying financial position. The value of any savings delivered non-recurrently in 2014/15 should be recorded on this sub code with the appropriate split between pay and non-pay Transactions acquisitions or divestments - Full year effects for transaction completing up to 31/03/15 (sub code 440): locked and hidden row; See paragraph for information on the required criteria and contact details for applying to unlock this row; this is the expenditure equivalent of sub code of 97

81 Service changes transfers or development - Full year effect for changes up to 31/03/15 (sub code 449): feeds from memorandum table on volume / service change this is the expenditure equivalent of sub code 149; Full year effect of prior year savings (sub code 460): the full year effect of saving plans instigated during 2014/15. For example, a savings plan that started on 1 July 2014 would have a full year effect of a further three months above the figure in the outturn expenditure; this will be compared with sub code 430 to see the net brought forward impact of the 2014/15 savings plans Other (sub code 470): any other changes not covered in the more specific rows should be recorded here; changes shown here should be below 10% of the total changes; where changes are more than 10% of the total movement to underlying commentary is required in main code 14, and; commentary must describe and provide values for the most material items; this is the expenditure equivalent of sub code Adjusted underlying expenditure as at 1 April 2014 (sub code 480): total forecast expenditure for 2014/15 adjusted for non-recurring and full year effects; as all non-recurring spend should have been removed, the nonrecurring total will be zero; this is expenditure equivalent of sub code The movement from underlying to total expenditure should be broken down into component changes providing as much detail as possible. Sub codes provided for expenditure changes are as follows Pay inflation / incremental drift (sub code 490): planned cost of the pay settlements in 2015/16 plus the planned cost of incremental drift should be recorded on this row; 76 of 97

82 the planning assumption was not available in the 2015/16 National Tariff Consultation Notice as the figure was subject to negotiation; data entry is only possible in main code 01 and 02 as this is a pay only cost, and; in the summary review bridge table this is grouped with sub codes 495, and Pensions (sub code 495): planned cost of pensions in 2015/16; the planning assumption was not available in the 2015/16 National Tariff Consultation Notice as the figure was subject to negotiation; data entry is only possible in main code 01 and 02 as this is a pay only cost, and; in the summary review bridge table this is grouped with sub codes 490, and Service Development Uplift Element 1 (sub code 500): for initial plan this row is locked and hidden as NHSE s Mandate was not yet published for full plan this row may be unlocked and unhidden if needed to collect the additional costs to NHS Trusts of an initiative in NHSE s Mandate Service Development Uplift Element 2 (sub code 501): as for sub code Service Development Uplift Element 3 (sub code 502): as for sub code Service Development Uplift Element 4 (sub code 503): as for sub code Drugs inflation (sub code 510): drug inflationary costs in 2015/16 should be recorded on this row; the planning assumption was not available in the 2015/16 National Tariff Consultation Notice; in the review summary bridge table this sub code is grouped with other inflationary expenditure sub codes 490, 495, and of 97

83 The initial plan uses the 2015/16 National Tariff Consultation Notice uplift assumptions, which groups pay and drugs costs with a weighted average uplift of 1.40% to the total cost base This affects the following sub codes: Pay inflation / incremental drift (sub code 490); Pensions (sub code 495); Drugs inflation (sub code 510) CNST inflation (sub code 511): CNST inflationary costs in 2015/16 should be recorded on this row; The 2015/16 National Tariff Consultation Notice uplift assumptions is 35% of CNST costs on average Cost of capital inflation (sub code 512): Cost of capital inflationary costs in 2015/16 should be recorded on this row, and; The 2015/16 National Tariff Consultation Notice uplift assumptions is 0.16% to the total cost base Other non pay inflation (sub code 513): Other non pay inflationary costs in 2015/16 should be recorded on this row, and: The 2015/16 National Tariff Consultation Notice uplift assumptions is 0.35% to the total cost base Pass-throughs - Investment in drugs and devices excluded from the tariff (sub code 520): expenditure side of sub code 290 and should record the expected growth in expenditure on drugs and devices excluded from the tariff; as a result of the 50/50 gain/loss share on acute prescribed specialised services in the 2015/16 National Tariff Consultation Notice, this expenditure may not be equal the income on sub code Service change - transfers or developments with effect from 01/04/2014 (sub code 529): feeds from data entry in the memorandum table on volume / service change, and; this is the expenditure equivalent of sub code of 97

84 Volume changes (sub code 539): feeds from data entry in the memorandum table on volume / service change, and; this is the expenditure equivalent of sub code Better Care Fund: anticipated expenditure increases due to commissioning for the Better Care Fund; the impact of any reductions in income from the Better Care Fund will be one of the drivers for NHS Trust efficiency programme and so will not form part of the this sub-code NHS Trusts are not required to anticipate expenditure reductions arising from the Better Care Fund plan, and; this is expenditure equivalent of sub code Health Education England (HEE) s Education & Training tariff and non-tariff spend changes (sub code 550): changes in expenditure funded by Health Education England, either funded by the education and training tariff, any transitional relief for moving to tariff, or any funding provided for education and training outside of the scope of tariff; includes funding provided by Local Education Training Boards; this is the expenditure equivalent of sub code 310; Education and training (not including changes arising due to HEE s income changes) (sub code 560): Changes to education and training expenditure where the spend is not related to income from Health Education England ; this is the expenditure equivalent of sub code Research (sub code 570): change in research expenditure arising from either national funding change, grants, patient activity levels or other research spend changes; this is the expenditure equivalent of sub code Investment to deliver CQUIN (sub code 580): change in investment to deliver agreed CQUIN schemes; 79 of 97

85 see paragraph for an explanation of the treatment of CQUIN in the financial planning forms; this is the expenditure side of sub code Investments to deliver commissioner QIPP (sub code 590): change in investment required to deliver commissioner QIPP schemes Investments to deliver other efficiencies (sub code 600): investments the NHS Trust may make to help it deliver efficiency requirements that are not part of a commissioner QIPP scheme; investments to generate savings should be shown on TRU64 sub code 600 only. No netting off of investments should be made in TRU Efficiency - pay (sub code 610), efficiency - non-pay (sub code 620): feeds from data entry in TRU65; cross reference is made to the income element of efficiency (sub code 220) Seven Day Services (sub code 630): costs of pilots and implementation for Seven Day Service. Providers of acute care should agree service delivery and improvement plans with commissioners, setting out how they will make further progress in 2015/16 to implement at least 5 of the 10 clinical standards for seven day services, within the resources available (recognising that the tariff for 2015/16 does not include specific additional resources for seven day working) Redundancy and restructuring costs (sub code 640): costs of any redundancy or other restructuring costs planned for in 2015/16; this is a broader definition of the expenditure than applied in TRU01 sub code 500 (please see section 3.16 for the narrower definition for TRU01) Expected transactions (sub code 650): locked and hidden row; See paragraph for information on the required criteria and contact details for applying to unlock this row; this is the expenditure equivalent of sub code of 97

86 Contingency (sub code 655): change in funds set aside for contingency from outturn to plan, and; links to contingency value table sub code 1315 where 2014/15 forecast outturn value is required; this calculates the 2015/16 total value percentage of turnover (as defined in KeyData sub code 100 main code 100) Non recurrent expenditure relating to Referral to Treatment backlog funding (sub code 654): change in non recurrent spend arising due to Referral to Treatment funding Non Recurrent expenditure relating to Winter resilience funding (sub code 656): Change in non recurrent spend arising due to winter resilience funding Mental Health Access Standards (sub code 658) change in spend due to funding for Mental Health Access standards, and; this is the expenditure equivalent of sub code Other (sub code 660): any other changes in expenditure that cannot be more appropriately categorised elsewhere should be captured on this row; changes shown here should be below 10% of the total changes; where changes are more than 10% of the total movement to underlying commentary is required in main code 14, and; commentary must describe and provide values for the most material items; this is the expenditure equivalent of sub code Total change in expenditure for 2015/16 (sub code 670): total of changes to expenditure expected for 2015/16 and is the sum of sub codes 490 to of 97

87 Total spend in 2015/16 consistent with retained surplus/(deficit) in TRU01 sub code 390 main code 02 (sub code 680): total expected expenditure for 2015/16 analysed between pay and nonpay and recurring and non-recurring and is the sum of the adjusted underlying expenditure as at 1 April 2014 in sub code 480 and the total change in expenditure for 2015/16 (sub code 670). Uplift commentary table This footnote table provides additional information on the inflationary changes entered by NHS Trusts In each case inflationary changes entered by NHS Trusts in the table above are compared to the indicative value calculated using the figures from the Monitor s published Tariff for 2015/16 where these are available Where a rule applies if the difference is outside the lower and higher thresholds shown in columns M and N, this is indicated by the YES/NO flag in main code 12 and an explanation is required in main code 14. Where no rule applies the NHS Trust should provide commentary to clarify the approach taken to calculating the inflationary change In sub code 1818 pay inflation values can be entered so that NHS Trusts can split pay inflation from incremental drift In each case calculated values are driven from an appropriate base: at full plan this is opening underlying pay costs or the forecast outturn spend from the relevant sub code on TRU06, but at initial plan data entry is allowed to set the appropriate base as TRU06 values are not available. Memorandum table on service / volume change This table provides five sub codes to break down the service and volume changes. The net total for each group of five sub codes feeds the relevant sub codes in the Application of Funds table If more than five increases and decreases occur, the fifth row should be used to show the net position of the least material increases and decreases and explanation in the commentary column should be provided to explain this Service changes transfers or development - Full year effect for changes up to 31/03/15 (sub codes ): feeds sub code 449; the expenditure full year effects of any service developments started part way through 2014/15; any full year effects of service transfers or tenders that started part way through 2014/15. This includes services won, lost or not contested by tender; 82 of 97

88 relevant changes include providing to a new locality or a new population, providing a new service or an existing service in a new way which materially changes expenditure; service change might involve service redesign for an NHS Trust if this is not part of the agreed QIPP programme; service change might involve a change in commissioner make up for a NHS Trust; as a basic principle the NHS Trust should for a change in the service model where a service started / starts or ceased / ceases on or before 31 March 2015, and; do not use this sub code for changes occurring on 1 April These should be entered in sub code 530 to Service change - transfers or developments with effect from 01/04/2015 (sub codes ): feeds sub code 529; service changes that commissioners starting on or after 1 April 2015 but on or before 31 March 2016; include any service transfers or tenders starting on or after 1 April 2015 but on or before 31 March This includes services won, lost or not contested by tender; relevant changes include providing to a new locality or a new population, providing a new service or an existing service in a new way which materially changes income; service change might involve service redesign for an NHS Trust if this is not part of the agreed QIPP programme; service change might involve a change in commissioner make up for a NHS Trust; as a basic principle the NHS Trust should use this sub code for a service change where a service started / starts or ceased / ceases on or after 1 April 2015 but on or before 31 March 2016; do not use this sub code for costs associated with the Service Development Uplift Element (sub codes ) or the introduction of Seven Day Services (sub code 630) Volume changes (sub codes ): feeds sub code 539; 83 of 97

89 sub code 540 is only for change relating to prescribed specialised services volume changes excluding the price effect of the 50:50 gain and loss sharing sub code 541 is specifically for the price effect of the 50:50 gain and loss sharing and is greyed out as no expenditure change is anticipated; change in pay and non-pay expenditure associated with changing planned volumes resulting from commissioner plans typically demographic change; data entry on this sub code must relate to current contracts with current commissioner. Changes due to new services and / or new commissioners should be shown under sub code 529 service changes; the expenditure side of QIPP plans should not be included on this row but in sub code of 97

90 16. TRU65 Efficiency programme 16.1 The purpose of TRU65 is for NHS Trusts to describe details of the actions they will be taking to deliver their efficiencies in 2015/ Full year effect of the 2014/15 programme in 2015/16 should be entered in the second table which is totalled on sub code 310. This is monthly profiled but requires no status or risk rating 16.3 The totals from this tab feed into the source and application of funds tabs, TRU64a and TRU64b NHS Trusts must list all major schemes on at least one separate line and use the rows available to breakdown the efficiency programme as fully as possible The final rows for each year s data should be used to group together less major schemes but care should be taken when grouping items to ensure this is not material to the overall efficiency programme. As a general rule schemes grouped under a generic heading such as other should not be more than 10% of the efficiency programme Please ensure that for each row used all main codes 01 to 04 are completed for 2015/16 and main codes 02 and 03 are completed for the 2014/15 full year effect Main code 01 status definition must be one of the following: fully developed - New identified and fully implemented schemes, where budget holder sign off has been completed, savings may have already been removed from budgets, scheme has been approved by CIP committee and QIA has been checked; plans in progress; scheme has been identified but one item is outstanding from the following list: either; budget holder sign off has not been completed, or; scheme has not been approved by CIP committee, or; QIA has not yet been checked; in order to fit into this category schemes must therefore be almost ready to be implemented. Two examples are; a staffing reconfiguration where the restructure has been agreed by unions, or; 85 of 96

91 procurement savings where final negotiations on price are in progress and are on track; opportunity; where a scheme has been identified either based on; a high level possibility for savings identified e.g. via benchmarking, reference cost analysis, supplies costs data warehouses, or; where an initial exploration of a proposed saving has commenced, for example e.g. opening contract negotiations expected to lead to cost reductions; and in either case the actual mechanics or source of savings is still to be worked up; unidentified; where no opportunity has yet been identified; The target held centrally or allocated to a department or service line, however if no opportunity is yet attached to the savings then the value must be shown in TRU65 as unidentified Main code 02 must be one of the following: recurrent continuing; non recurrent one off Main code 03 category must be one of the following: Pay (Skill Mix), Pay (WTE reduction), Non Pay or Income where; Pay (Skill Mix) should be used where the saving is not WTE related. Entries will relate to all pay savings schemes or elements of pay savings schemes where savings arise from changes other than the number of WTE s. Examples include: savings relating to price reductions of agency rates achieved through agency contract negotiation or reductions in the cost of a recruitment and retention premium; Pay (WTE reduction) should be used where the saving is related to WTE change. Entries categorised in this way should relate to pay WTE reductions; as Pay (WTE Reduction) is the element of pay efficiency relating to reducing numbers of WTE s, it will be used for checking the triangulation of submissions between 86 of 97

92 finance and workforce. It is vital that the pay schemes are correctly sub-analysed into the Pay (Skill Mix) and Pay (WTE reduction) categories; Bank and Agency efficiency schemes can relate to either Pay (Skill Mix) or Pay (WTE reduction) depending on the nature of the saving. Entries should be properly analysed out to separate WTE related and Skill Mix changes; Note that one pay efficiency scheme may be a mixture of Pay (Skill Mix) and Pay (WTE reduction). If this is the case then the scheme will need to be sub-analysed into Pay (Skill Mix) and Pay (WTE reduction); Non Pay should be used where the saving relates to expenditure other than pay; income should be used where the saving relates to income generation Main code 04 select from the following: High, Medium or Low Risk where: High risk is either due to concern arising from QIA or anticipated issues for QIA assessment which is still outstanding, or concern relating to delivery; Medium risk is either due to some minimal concerns following QIA or some potential for minor QIA issues on completion of assessment, or some concern relating to delivery; Low risk is either due to no concerns following QIA or no prospect of QIA identifying concerns, and no concerns relating to delivery Note it is possible to have any combination of status and risk rating, except where saving are unidentified, in this case risk must always be classified as high As a result of the breakdown required in TRU65 the same efficiency scheme may need to be reported on a number of lines, e.g. if the scheme has pay and non-pay savings and some are non-recurring then the scheme will need to be broken down into its constituent parts and reported over the appropriate number of rows The expectation of the NHS TDA is that schemes will be appropriately profiled and actions will not be back loaded to the second half of 2015/ of 97

93 16.14 TRU65 should show the gross savings and therefore there should be no netting off of investments in arriving at the numbers shown. Any investments to generate efficiencies should be shown in TRU64b. 2015/16 Efficiencies summary information tables (sub code 130 to 210) All values are driven by formulae based on data entry in the table above Sub codes 130 to 190, main codes 07 and 08 feed the total recurrent and non-recurrent efficiency requirements shown in TRU64a and TRU64b source and application of funds. 2014/15 Full year effect efficiencies summary information tables (sub code 320 to 370) All values are driven by formulas based on data entry in the table above Sub codes 320 to 350, main codes 07 and 08 feed the total recurrent and non-recurrent efficiency requirements shown in TRU64a and TRU64b source and application of funds. 88 of 97

94 17. TRU67 Metrics derived from source and application of funds (sub codes 100 to 310) 17.1 The only data entry required in this tab is for sub code 100 main code 01 where the forecast outturn 2014/15 total efficiency is required. This is the gross value, and no net off should be made for the investments made to generate efficiencies The remaining metrics on TRU67 are all calculated and are driven from the source and application of funds (TRU64a and TRU64b). They should be used for review and sense checking the data entry before submission. Efficiency as a percentage of planned expenditure (sub codes 100 to 120) 17.3 This table calculates the value of efficiency as a percentage of expenditure excluding current year efficiencies. The percentage will be used to determine which NHS Trust plans will require additional scrutiny around the relationship between efficiency savings and quality of patient care. Drivers of efficiency in 2015/16 (sub codes 130 to 260) 17.4 This table uses information from the source and application of funds to determine the value of the main drivers for the NHS Trusts efficiency requirement. The first section sub codes 130 to 210 assesses the extent to which price changes are driving efficiency requirements with other categories identified in sub codes 220 to 250, arriving at total efficiency in sub code Main code 01 calculates the main drivers of efficiency for 2015/ Main code 02 compares the value of each driver to sub code 110 total planned expenditure for 2015/16 excluding current year efficiencies as a percentage. Normalised position (sub codes 270 to 310) 17.7 This table uses the source and application information to calculate the normalised position of the NHS Trust for outturn and plan years The starting point is the Adjusted Financial Performance Retained surplus / deficit which is then adjusted for: restructuring/redundancy costs fed from TRU01 sub code 500 and non-recurrent deficit support funding fed from TRU64a sub codes 120 and of 96

95 18. TRU70 and TRU71 Expected outturn of contract values 2014/15 and planned contract values 2015/ It is expected that NHS Trusts will align their plans with those of the wider local health economy. In order to test the alignment of key assumptions NHS TDA, NHSE and Monitor will reconcile provider and commissioner plans for the full plan submission review phase The outputs of the reconciliation will be shared between the assurance teams of NHS TDA, NHSE and Monitor. Every step will be taken not to prejudice the position of any NHS Trust or commissioner and no information will be shared at individual organisation level without first contacting the appropriate party Once all returns have been received, they will be amalgamated into a national matrix to identify any significant differences in contracts reported between Providers and Commissioners. This will provide vital information to understand the risks within local health economies. The information that will feed the national matrix will be the expected contract revenue as reported in main code 12 on TRU70 and TRU Data is being collected for 2014/15 and 2015/16. TRU70 collects data for 2014/15, TRU71 for 2015/16. Revenue data is collected by CCG/Area Team and by point of delivery. These figures should only include revenue from patient care activities. All other revenue should be recorded separately on TRU A de-minimis level of 5 million should be applied in order to reduce inputs required by the user and still cover the vast majority of NHS Trusts income. Please do not report total contract values less than this level against individual commissioners. Instead include the income on the line 'Other CCGs (Individually less than 5 million)' or 'Other LATs (Individually less than 5 million)' 18.6 There is a separate line for NHS Trusts to record all patient care revenue for Non Contract Activity (NCA) We recognise that in a limited number of circumstances NHS Trusts may be required to adjust the planned revenue value to arrive at the expected contract value. This should only be the case in exceptional circumstances and it is to be accompanied by narrative describing any arbitration or dispute resolution. All adjustments required should be recorded in main code 13 with an accompanying narrative in main code 14 on TRU of 96

96 18.8 Income received from CCGs for overseas visitors exempt from charge under the NHS (Charges to Overseas Visitors) Regulations 2011 should be shown on these schedules against the relevant CCG. Such charge exempt overseas visitors include those covered by reciprocal healthcare agreements, including European Economic Area visitors, or those exempt in another way, e.g. state pensioners resident overseas. Income payable directly by overseas patients who have been found to be liable for charges under the regulations should be shown under TRU05 sub code 200, 'Non-NHS: Overseas patients (nonreciprocal)' Where an NHS Trust has expected/contracted revenue with a CCG or Area Team the following data must be completed: if over de-minimis threshold, find the commissioning organisation name from the list in column C, ordered alphabetically by region then organisation name; record the associated revenue value against the relevant point of delivery; by exception, adjust planned revenue to get the contracted revenue in column Q (main code 13). TRU71 only; Indicate if the contract has been signed using the drop down boxes in column T (main code 16). TRU71 only. Please note that No should only be selected in exceptional circumstances where the contract has not been agreed and therefore is part of the dispute resolution process; provide the date contract was signed, or date it is expected to be signed in the format of DD/MM/YYYY in column R (main code 17). TRU71 only The TRU70 and TRU71 forms include the most current commissioner structure at the time of publication of the planning guidance. Any subsequent changes to the structures will be recognised in our central analysis by mapping the data submitted to new commissioning structures as required The revenue reported should be net of contractual penalties that might be incurred, for example the non-elective income value should include the revenue reduction from the 50% marginal rate emergency tariff for activity over the baseline Each contract should be split as far as possible by the point of delivery which are as follows: Elective inpatients (main code 01), Elective day cases (main code 02), Non-Elective (main code 03), Outpatients first attendances (main code 04), Outpatients follow-ups (main code 05), A&E (main code 06), Excluded Drugs and Devices (main code 07), Community Services (main code 08), Mental Health (main code 09), Ambulance (main code 10) and, for any revenue outside of these categories, Other (main code 11). 91 of 97

97 18.13 The total expected revenue value (main code 12 sub code 100 for CCGs and sub code 200 for Area Teams) will feed through to the revenue worksheet TRU05. The codes on TRU05 that will be fed are main code 01 (2014/15), and 02 (2015/16) sub code120 and sub code115 for CCGs and Area Teams respectively. 92 of 97

98 19. TRU_COM1 Key item commentary 19.1 These forms contain six sections which focus on key areas where variances have been noted. These require organisational review and explanation where the indicators are highlighted in red TRU_COM1 provides an overview of 2015/16 key metrics Section 1 Key Data Commentary: shows each of the seven key RAG rated data metrics calculated on the TRU_KeyData form. A narrative explanation is required for each key data metric flagged with a Red or Amber Rating Section 2 Continuity of Service Finance Ratings: shows the Liquidity Ratio and Capital Servicing Capacity Ratio calculated on the TRU54 form. A narrative explanation is required for each data metric flagged with a Red for a ratio of one or two Section 3 Governance: confirmation is required to ensure adequate governance arrangement are in place at the NHS Trust with regard to the financial planning data provided in the forms Section 4 Significant Movements; compares the 2014/15 Adjusted Retained Surplus/(Deficit) included within the planning return with the 2014/15 Forecast Outturn value included within the 2014/15 Month 7 TFMS submission for initial plan. shows movements from one financial year to the next for each category of: revenue; expenditure; provisions. the tables of movements enable organisations to review all reported movements for reasonableness. Narrative is required for all material movements, where indicated with a red flag. 93 of 96

99 19.7 Section 5 Contracts (for full plan submission): a narrative explanation is required for selected elements of contract revenue flagged as Red. The selected elements will flag as requiring narrative where they form a significant proportion of overall reported contract revenue Any further comments: we have also provided an open commentary section at the foot of TRU_COM1, to enable organisations to provide narrative relevant to the overall financial position of the NHS Trust that may not have been fully captured by the metrics detailed above. 94 of 97

100 20. Validations 20.1 The validations are designed to maintain the integrity of the planning forms; by providing a series of data entry checks throughout the forms that are summarised on the validations tab Individual validation checks are shown in each tab on the right in columns AE onwards. If any of the relevant cells in these columns show a 1 value, then a validation failure has been flagged The validations tab further identifies the validation checks that have failed and provides a description of the rule being tested, as well as a hyperlink back to the source of the error All of the validation tests included in the forms can be categorised as follows: validations to flag data that has been input with the incorrect signage; validation tests to compare two separate data sets that should agree/correlate to each other; validation tests to ensure that data input follows specific principles described in the technical guidance; validations to flag incomplete data input; 20.5 The following validation rules check for the use of correct signage during data input: TRU01-01, TRU01-02, TRU02-01, TRU02-02, TRU04-01, TRU04-02, TRU05-01, TRU06-01, TRU19-01, TRU19-02, TRU20-01, TRU20-02, TRU55-01, TRU55-02, TRU56-01, TRU56-02, TRU63-01, TRU63-02, TRU64a-01, TRU64a-02, TRU64b-01, TRU64b-02, TRU65-01, TRU70-01, TRU71-01; these tests are only possible where data inputs should be only positive (or only negative) for a particular sub code as indicated in the Sign field on each form The following validation tests compare two separate data sets that should agree/correlate to each other: TRU01-03 checks that the memorandum values entered for agency spend on TRU01 do not exceed the total value of employee benefit costs entered on TRU06; TRU02-03 checks that the Statement of Financial Position balances; 95 of 96

101 TRU02-04 and TRU02-05 checks that the breakdown of cash balances provided in the memorandum table on TRU02 agreed to the cash balance reported in the Statement of Financial Position; TRU04-03 and TRU04-04checks that the cash flow entries for cash balances, borrowing and PDC in TRU04 reconcile to the balances reported in the Statement of Financial Position in TRU02; TRU05-02 checks that the sum of the monthly profiled CCG and LAT revenue values reported on TRU05 agree to the respective totals reported on TRU71 for 2015/16; TRU19-03 checks that the sum of the profiled opening balances for provisions on TRU19 for 2015/16 agrees to the total closing balance for 2014/15; TRU55-03 and TRU55-04 check that the two separate analyses of capital entries that are provided on TRU55 and TRU56 respectively correlate to each other; TRU55-05 checks that the dividends payable on PDC entered in TRU01 are within an acceptable range for the required capital cost absorption rate calculated on TRU55; TRU56-06 and TRU56-07 check that the analyses of backlog maintenance and PDC cash draw-downs are reported consistently throughout TRU56; TRU63-03 check that the values reported for depreciation and amortisation on TRU63 are consistent with the values reported in TRU06; TRU63-04 and TRU63-05 check that the values reported for financing repayments on TRU63 are consistent with the values reported in TRU04; TRU64c-01 and TRU64c-02 check that net value of income and expenditure reported for each year within TRU64c is consistent with the Adjusted Retained Surplus/(Deficit) reported in sub code 390 of TRU01; TRU64a-03 and TRU64a-04 check that value of income reported for each year within TRU64a is consistent with the value of Turnover reported in sub code 100 of TRU_Key Data, which is derived from TRU01 sub codes 120,130 and 465; TRU64b-03 and TRU64b-04 check that value of expenditure reported for each year within TRU64b is consistent with the Adjusted Retained Surplus/(Deficit) reported in sub code 390 of TRU01, less the value of Turnover described above. 96 of 97

102 TRU64a-07 and TRU64b-07 check that the recurrent and non-recurrent splits equal the overall total The following validation rules ensure that data input follows specific principles described in the technical guidance: TRU64a-05 and TRU64b-05 checks that the underlying positions reported on TRU64a and TRU64b reflect only recurring income and expenditure ; TRU65-05 checks that all efficiency saving schemes that have been categorised as Unidentified are also correctly categorised as High Risk The following validation rules check for incomplete data input: TRU01-04, TRU05-03, TRU06-02, TRU20-03, TRU56-03, TRU56-04, TRU56-05, TRU56-08, TRU64a-6, TRU64a-8, TRU64b-6, TRU64b-8, TRU65-02, TRU65-03, TRU65-04, TRU65-06, TRU65-07, TRU67-01, TRU71-02, TRU71-03, TRU71-04, TRUCOM1-01, Intro-01; many of these validations will only trigger errors where data has been partially input and serve to highlight any missing data entry for the NHS Trust Please ensure that you have cleared all validation errors before returning the forms. If you are experiencing difficulty in resolving a validation rule, please contact the NHS TDA by forwarding your query to the address [email protected] with clear reference to the planning forms in the subject header. 97 of 97

103 Form Introduction Index Key Data Outline of changes and developments to planning forms Appendix 1 Description of changes and developments Clarification of requirements for approval of the planning form by Director of Finance or Executve For ease of navigation, a hyperlink at the the top of each tab returns the user to the index page The index page includes hyperlinks to each tab in the planning form The diagram of data flows illustrates the design of the 2015/16 TFMS plannng form Planning RAG ratings have been updated as follows: Removal of metric testing for a Working Capital Support loan The Continuity of Service Risk Rating has been incorporated as key metric P7 all I&E forms 2 years of data 14/15 Forecast Outturn 15/16 Plan all capital forms 5 years of data 15/16 to 19/20 Analysis categories have been updated to reflect current reporting requirements all forms TRU05 TRU06 TRU54 TRU64A,B,C TRU65 Validations 15/16 Plan data is profiled monthly Various data entry lines and validations have been updated to reflect in-year developments (e.g. Q3) Revenue from NHS England and CCG's for patient care activities: to be profiled between tariff revenue and non-tariff revenue Value of drugs spend is now a mandatory input field which is included within validation checks The analysis of the Continuity of Services ratings has been expanded to clearly show all component values and calculations The Source and Application of Funds Statement has been split into three separate tabs: TRU64A Revenue TRU64B Expenditure TRU64C Summary New analysis codes reflect current developments New columns incorporating: Technical guidance extracts Commentary field Additional rows to provide a breakdown of service changes and volume changes Uplift commentary sections (these were previously incorporated in TRUCOM1) The full year effect of 2014/15 schemes which are delivered in 2015/16 are to be profiled monthly Further development of section 6 relating to the Source and Application of Funds to improve visibility of calculated values

104 Planning Forms 2015/16 Scope of Initial and Full Plans Appendix /16 INITIAL PLANS 2015/16 FULL PLANS 2014/15 FOT Profiling 2014/15 FOT Profiling 2015/16 Plan of 15/ /16 Plan of 15/16 Performance Statements TRU_KeyData Key metrics fed automatically from other forms Annual Key metrics fed automatically from other forms Quarterly Primary Statements TRU01_CNE Statement of Comprehensive Income Monthly Statement of Comprehensive Income Monthly Reported NHS Financial Performance Monthly Reported NHS Financial Performance Monthly Earnings Before Interest, Taxation, Deprn. and Amortisation (EBITDA) Monthly Earnings Before Interest, Taxation, Deprn. and Amortisation (EBITDA) Monthly Memorandum - Agency/Contract Staff Analysis Monthly Memorandum - Agency/Contract Staff Analysis Monthly TRU02_SFP Statement of Financial Position Annual Statement of Financial Position Monthly Memorandum Items Annual Memorandum Items Monthly Analysis of Cash Balances Annual Analysis of Cash Balances Annual TRU04_CF Statement of Cash flows Annual Statement of Cash flows Monthly Memorandum Items Annual Memorandum Items Monthly Notes to the accounts TRU05_REV Revenue from Patient Care Activities Monthly Other Operating Revenue Monthly Tariff / Non-Tariff Revenue Split Annual TRU06_EXP Analysis of Gross Operating Expenses (excluding employee benefits) Monthly Employee Benefits Monthly TRU14_IMP Analysis of Impairments & Reversals Monthly TRU19_PRV Provisions Annual Explanation of Provisions in the "Other" Category TRU20_PFI IFRIC12/UKGAAP DATA Monthly Revenue Costs of IFRS Monthly Capital consequences of IFRS Monthly Memorandum Items Management Information TRU54_MI Continuity of Services Ratings Annual Continuity of Services Ratings Quarterly TRU55_MI Trust Annual Capital Cost Absorption Rate Annual Trust Annual Capital Cost Absorption Rate Annual External Financing Limit (EFL) Annual External Financing Limit (EFL) Annual Capital Expenditure by Programme and Type Annual Capital Expenditure by Programme and Type Monthly IFRS Capital Expenditure IFRIC12 and Non IFRIC12 Annual IFRS Capital Expenditure IFRIC12 and Non IFRIC12 Monthly Key Expenditure Items Annual Key Expenditure Items Monthly TRU56_MI Capital Analysis of Projects Annual Capital Analysis of Projects Monthly Memorandum - Business Cases for NTDA Approval Annual Memorandum - Business Cases for NTDA Approval Annual Non Business Cases over Trust Delegated Limit Annual Non Business Cases over Trust Delegated Limit Annual Centrally Funded Capital Schemes /16 Annual Centrally Funded Capital Schemes /16 Annual TRU63_MI Capital Cash Management Plan Annual Capital Cash Management Plan Annual Net Borrowing Requirement Annual Net Borrowing Requirement Annual Capital Resource Limits (CRL) and External Financing Limits (EFL) Annual Capital Resource Limits (CRL) and External Financing Limits (EFL) Annual TRU64_MI Sources and Application of Funds Annual Sources and Application of Funds Annual Surplus Position and Underlying Position Annual Surplus Position and Underlying Position Annual Memorandum Items Annual Memorandum Items Annual Source and Application of Funds Review Summaries Annual Source and Application of Funds Review Summaries Annual TRU65_MI Efficiency Programme Monthly Efficiency Programme Monthly Efficiency Summary Tables Annual Efficiency Summary Tables Annual TRU67_MI Efficiency / Sources and Application metrics Annual Efficiency / Sources and Application metrics Annual Normalised Position Annual Normalised Position Annual TRU70_MI 2014/15 FOT Revenue from Patient Care Activities with CCGs and LATs Annual TRU71_MI 2015/16 Planned Revenue from Patient Care Activities including Contract Position with CCGs and LATs Annual TRU_COM1 Key Item Commentary 2015/16 Annual Key Item Commentary 2015/16 Annual VALIDATIONS Validation checks Validation checks

105 Consultancy Appendix 3 The provision to management of objective advice and assistance relating to strategy, structure, management or operations of an organisation in pursuit of its purposes and objectives. Such assistance will be provided outside the business as usual (BAU) environment when in-house skills are not available and will be of no essential consequence and time-limited. Services may include the identification of options with recommendations and/or assistance with (but not delivery of) the implementation of solutions. The consultancy category will include areas such as: Strategy: The provision of objective advice and assistance relating to corporate strategies, appraising business structures, value for money reviews, business performance measurement, management services, product design and process and production management; Finance: The provision of objective advice and assistance relating to corporate financing structures, accountancy, control mechanisms and systems. This does not include auditor s remuneration, this is reported separately. It will include: Strategic Finance: Providing specialist services and support in the form of financial, legal, insurance advice to develop a Public Private partnership/private Finance Initiative deal for procurement requirement; Operational Finance: Procurement advice on risk management and internal control systems including audit arrangements. Advice on the commercial viability of grant recipients, suppliers and partners; solvency checks. Organisation and Change Management: Provision to management of objective advice and assistance relating to the strategy, structure management and operations of an organisation in pursuit of its purposes and objectives. Long range planning, re-organisation of structure, rationalisation of services, general business appraisal of organisation; IT/IS: The provision of objective advice and assistance relating to IT/IS systems and concepts, including strategic studies and development of specific projects. Defining information needs, computer feasibility studies and making computer hardware evaluations. Including consultancy related to e-business; Property and Construction: The provision of specialist advice relating to the design, planning and construction, tenure, holding and disposal strategies. This can also include the advice and services provided by surveyors and architects; Procurement: the provision of objective advice and assistance when establishing procurement strategies;

106 Appendix 3 Legal Services: The provision of external specialist legal advice and opinion in connection with the policy formulation and strategy development particularly on commercial and contractual matters; Marketing and Communication: The provision of objective advice, assistance and support in the development of publicising and the promotion of DH s Business Support programmes, including advice on design, programme branding, media handling and advertising; Human Resource, training and education: The provision of objective advice and assistance in the formulation of recruitment, retention, manpower planning and HR strategies and advice and assistance relating to the development of training and education strategies; Programme and Project Management: The provision of advice relating to on-going programmes and one-off projects. Support in assessing, managing and or mitigating the potential risks involved in a specific initiative; work to ensure expected benefits of a project are realised. Technical: The provision of applied technical knowledge. To aid understanding, this can be sub-divided into; Technical Studies: Research based activity including studies, prototyping and technical demonstrators; Project Support: Project based activities including technical consultancy, concept, development and in-service support activities; Engineering Support: Task based support including Post Design Services, repair, calibration, analysis testing and integration.

107 Appendix 4 Residual interests: Assets brought on-sofp under IFRS IFRIC 12 Service Concessions and residual interests in property deemed to be on- Statement of Financial Position The FAQ published on the Finance Manual (FINMAN) website on 26 August 2009 outlines the Audit Commission s view of the required accounting where an entity retains a charge over property. IFRIC 12 Service Concessions and IFRIC 4 Determining whether an arrangement contains a lease provide the relevant IFRS accounting guidance. The Treasury FREM also contains detailed guidance in this area. This guidance supplements the FAQ and clarifies the disclosures required in TFMS forms and in the Annual Accounts. Summary properties that are on-sofp under IFRIC 12 should be included in the PFI disclosures; properties that are on-sofp by virtue of IFRIC 4 (i.e. where a IFRIC 12 service concession does not exist) should be included within the normal leasing disclosure notes; Property brought onto the SOFP in the course of IFRS re-statement is recognised by crediting the income and expenditure reserve; where a new transaction creates a legal charge over property and IFRIC 4 or IFRIC 12 requires recognition of the asset on the SOFP, no accounting transactions are required; where a legal charge exists in respect of an on-sofp asset, that charge cannot be disposed of without accounting for the transaction as a disposal. Asset is on-sofp following a review under IFRIC 12 Where it has been established that the following conditions apply: the infrastructure (i.e. the property) is used to deliver public services; the public sector grantor (the NHS body) specifies the services to be provided by the operator (the housing association or other voluntary body), when and at what price; and the public sector grantor (the NHS body) controls the residual interest in the asset. The property will be recorded in the SOFP, together with an associated liability. The unitary payment stream is separated into: the interest element; the capital creditor repayment element; and the service element.

108 Appendix 4 While the required accounting mirrors that for a finance lease, and techniques for apportioning the payments as above may also be the same as used for finance leases, the arrangement is not reported as a finance lease. IFRS make a distinction between finance lease arrangements and IFRIC 12 arrangements. The arrangement should instead be included in the PFI disclosures, as the FREM places both PFI and IFRIC 12 arrangements within the category of Public-Private Partnerships. TFMS forms have therefore been re-worded to make it clear that PFI disclosures include IFRIC 12 service concession arrangements. Entities should adjust the wording of the PFI disclosure in local accounts as necessary to avoid mention of PFI or IFRIC 12 if they do not have any such arrangements. Asset is on-sofp by virtue of IFRIC 4 Where the following conditions apply: the fulfilment of the arrangement is dependent on the use of a specific asset; and the arrangement conveys the right to use the asset. And IAS 17 tests require the recognition of a finance lease; the NHS body will be required to account for the transaction as a finance lease. In such cases, disclosure is within the finance lease notes to the SOFP in accordance with IAS 17. IFRS restatement requires recognition of asset on the seller s SOFP under IFRIC 12 or IFRIC 4 The 26 August FAQ details the required accounting when an IFRIC 12 asset falls to be recognised in re-stated IFRS accounts where the original transaction occurred prior to Essentially, the recognition transaction is dr PPE, cr Retained Earnings Reserve. Subsequently, the normal rules on non-current asset accounting are followed: normal revaluation, depreciation and cost of capital are calculated and disclosed in line with other assets of the type. Sale of asset that subsequently requires recognition on the seller s SOFP The IFRICs do not specifically address this situation, but the arrangement is similar to a sale and leaseback arrangement which is dealt with by IAS 17 Leases. This guidance therefore follows the principles set out in IAS 17. The transaction is considered as a financing transaction: the seller or lessee never disposes of the risks and rewards of ownership of the asset and so should not recognise a profit or loss on the sale. Any apparent profit (i.e. the difference between carrying amount and sale proceeds) should be deferred and amortised over the lease term. (IAS 17, para 59).

109 Appendix 4 New transactions funded by s256 and s64 grants Where a grant for the purchase of a NHS asset is made in the current year, and the arrangement results in the retention of the asset under IFRIC 12 or IFRIC 4 it is important to identify the substance of the transaction. Cash is granted by (usually) the NHS Trust to the purchaser. The purchaser buys the asset from the NHS Trust, but the NHS Trust retains the asset on its SOFP by virtue of IFRIC 12 or IFRIC 4. A circular flow of cash has taken place: from NHS Trust to purchaser and then back to the NHS Trust; and the asset has remained on the NHS Trust SOFP. Assuming no profit or loss has been made (in which case the IAS 17 sale and leaseback principles outlined above come into play) the economic and accounting reality is that no substantive transactions have taken place. At the completion of the series of transactions there should be no net impact either on the revenue account or SOFP. This means that there will be no expense recognised in the NHS Trust SOCI as the circular flow of cash neither generates expenditure nor a capital receipt. In this situation there is therefore no need to record the issue of a capital grant and there is no need for the Department to effect a budgetary transfer from capital to revenue. While no accounting entries should therefore be made, a narrative disclosure of the nature of the transaction should be provided in the accounts. Asset held on SOFP NHS body intends to terminate the arrangement by surrendering residual interest or control over service delivery NHS bodies that have found themselves, on IFRS restatement, in possession of an IFRIC 12 or IFRIC 4 asset may have considered disposing of elements of control over the asset such that it should no longer be recognised in the SOFP (by terminating the legal charge over property for example). Such a decision would be, in effect, the disposal of an asset for no consideration, and the required accounting would be to record a loss on disposal, charged to the revenue account. The transaction would not be an impairment, as it involves the asset being relinquished and written out of the balance sheet entirely rather than any diminution of its service potential. Simply put, this arrangement would merely gift the asset to the operator. It would not be possible for a NHS body to issue a further s256 or s64 grant to enable the operator to purchase the residual interest or IFRIC 12 asset as: (a) no new asset would be created and (b) the process would necessarily involve the issue of a grant without protecting the NHS interests by retaining a charge.