Financial Planning Templates 2014/15 to 2018/19 - Guidance for CCGs

Transcription

1 Financial Planning Templates 2014/15 to 2018/19 - Guidance for CCGs Contents 1. Introduction Cover Financial Plan Summary Revenue Resource Limit Planning Assumptions Financial Plan Detail QIPP Risk Investment Better Care Fund (BCF) Contract Value Triangulation Cash flow and Statement of Financial Position Capital Appendix A: Suggested Approach Appendix B: Financial Planning Business Rules

2 1. Introduction Planning templates have been constructed to provide sufficient granularity for NHS England to assess CCG plans for the five year period from 2014/15 to 2018/19. Due to the need to develop comprehensive plans for a full five year period, templates have been adjusted from the 2013/14 planning round. Each financial year has its own expenditure plan. Rather than having to enter values for all five years, the later years are open to a degree of pre-population by adjusting assumptions on key factors such as levels of activity growth. The financial information included in the templates should reflect the assumptions set out in the wider plans for CCGs. All financial values should be entered in 000. Cells in light yellow should be completed by CCGs where appropriate; those in blue are calculated, and those in light green will be pre-populated. The sections below give more detailed guidance on each sheet within the workbook. Appendix A also gives a suggested approach to completing the template. Please submit completed plans to the Financial Performance (NHS England) mailbox at NHSCB.financialperformance@nhs.net in line with the submission date on the instruction. Please also direct any queries on template completion to this mailbox. 2. Cover Input is required on this tab. Firstly select your CCG from the drop down list. This will then populate further information on this sheet as well as your allocation for 2014/15 and 2015/16 on the Revenue Resource Limit tab. Thereafter, please complete all of the boxes shaded red in order to demonstrate sufficient ownership and sign off of the financial plan. Once you have finished completing the template please ensure that the box for quality checks is showing as cleared before submitting the plan. Further detail on the checks can be found in the quality checks tab further on in the template. 2

3 3. Financial Plan Summary The majority of numbers on the Financial Plan Summary tab will be pre-populated from the other input sheets within the template, it is therefore suggested that this sheet is completed once data has been entered into all of the other sheets. The only numbers that do need to be input on this sheet relate to 2013/14. Column J requires commentary on the CCG s financial position to be entered. It is recommended that financial performance is linked to wider strategic and operational plans over the five year period. 4. Revenue Resource Limit This tab will be pre-populated with the CCG s allocation for 2014/15 and 2015/16 in order to prevent the difficulties that were faced in 2013/14 reconciling resource limits. Therefore if the CCG thinks the allocation is incorrect they need to raise this with their Area Team immediately. CCGs should enter their assumptions for the years 2016/ /19. Values are shown for the non elective, headroom and 70% non elective collection. These funds should be taken from the notified allocation and employed non recurrently with the plans for their investment detailed on the Investment and Financial Plan Summary tabs. 5. Planning Assumptions In order to populate future years, an Assumptions tab has been added in in order to better link assumptions and costs. Percentage growth assumptions should be added where relevant for each financial year for recurrent costs. The growth percentages ought to be year on year growth, for example the percentage increase in cost against a service compared to the previous year. Costs in the financial plan will be prepopulated with recurrent costs based on the % assumptions added in this tab. Assumptions should be added for demographic and non-demographic activity growth, gross provider efficiency and inflation. Demographic growth must be derived from a published source (e.g. ONS). Non-demographic growth includes pressures arising from technological developments, increased prevalence etc. 3

4 This assumptions sheet allows a CCG to link financial planning with other operational and activity plans, and use this information to drive future year financial plans. 6. Financial Plan Detail This is designed to capture all of the CCG s resource and spend. The table separates recurrent and non-recurrent items in order to calculate the CCG s underlying position. Rows 2 and 3 detail the resource limit. The figures feed from the revenue resource limit sheet and therefore do not need to be populated. This is for information while completing the template and supporting the calculation of surplus or deficit while the plan is being completed. The remaining rows detail the expenditure as follows; Column B - 13/14 Forecast Outturn this column should be populated with the latest FOT position. Columns C - E - Adjustments to expenditure baseline - These columns are designed to account for any adjustments in order for the CCG to get back to a recurrent opening budget position. The adjustments that reflect the underlying position should reflect what the organisation has submitted on the non-isfe underlying position return. o Any non recurrent expenditure incurred in 2013/14 should be entered in Column C. o Column D would include the full year effect of any QIPPs achieved in 2013/14, or of any investments o Column E is for any other full year effects not covered in Column D adjustments. Column F This column is calculated and outlines the recurrent underlying expenditure position for the CCG, and is used to calculate the underlying surplus. Columns G - I - Demonstrates the provider efficiency requirement delivered (min 4%) and the inflation funded to show net price deflation / inflation. These numbers will be calculated from the assumptions sheet. The % change is not expected to be applicable to exclusions/cost per case, but CCGs can enter values if appropriate. Column J - Demographic Growth uplift reflecting population change (Must be derived from a published source e.g. ONS). These numbers will be calculated form the assumptions sheet. 4

5 Column K - Non-demographic growth pressures arising from other population changes, technological developments, increased prevalence etc. These numbers will be calculated from the assumptions sheet. Column L - Cost pressures. These are free cells to enter costs as financial values directly onto the expenditure template (i.e. they are not driven by the assumptions sheet). This would include any recurrent cost pressures not adequately captured by the headings in columns G to K. Columns M & N These cells capture the information entered onto the QIPP sheet. All QIPP schemes will need to have an expenditure type selected from the drop down box on the QIPP sheet for the information to flow through to the Financial Plan and reconcile. Column O - Investment which is not QIPP related, but relating to other service quality/developments. As above, this is pre-populated once the CCG has completed the investments worksheet within the template. All costs entered on the investments worksheet need to be allocated to a cost category on the drop down menu for the workbook to reconcile. Column Q - CCGs need to enter any non-recurrent pass through costs here that the CCG has received and has been assumed in the allocation. Column R - Non-recurrent pressures, investments (incl. CQUIN where relevant). Non-recurrent items all at 2014/15 prices. Column S Non Recurrent Investments. As with the recurrent investments this will be captured from the Investments tab Columns T & U Non Recurrent QIPPs. As with the recurrent QIPPs, these will be captured from the QIPPs sheet. Include Learning Disability costs under Mental Health (hospital-based) or Community Services. The CCG s total Programme Resources should be matched across the expenditure categories, the difference being its surplus or deficit (shown in the Financial Plan Summary). Where reserve budgets are expected to be used to fund other programme expenditure, e.g. the use of reablement funding for community services investment, this should be shown netting off in the investments column (i.e. reducing reserves line and increasing service expenditure). Running costs have been split between CCG pay costs, CSU re-charge, NHS Property Services Recharge and other non-pay. The Financial Plan Summary will match the total expenditure to the running costs allocation to check to see whether the CCG is within target allocation. Columns Y - AJ - Monthly expenditure profile. Please enter the correct monthly profile into these columns. The March figure will calculate automatically to ensure that the monthly totals match the annual plan in column V. 5

6 The template for 2015/16 replicates the 2014/15 sheet requiring the same level of detail. For the following three years the information requirement is reduced. 7. QIPP There is a separate QIPP sheet for each year with the first two years requiring further detail. The QIPP table splits QIPP into two headings: Transactional & Contract efficiencies relate to savings made from providers from purchasing activity more efficiently, i.e. re-procurement of diagnostics, contract conditions such as new to follow up ratios. Transformational & Pathway changes relate to savings from decommissioning, more effective service provision, new models of care. Under each heading the QIPP is broken down into separate work streams. The QIPP plan will need to be split between recurrent and non-recurrent schemes. Column A requires the local name of each scheme over 0.5m. All schemes that are under 0.5m should be grouped together under the balance of schemes under 0.5m section. In order that the QIPP tab feeds the financial plan detail tab column B requires the area of spend to be selected. Therefore, more than one line would be needed for each local scheme. For example, a transformational QIPP scheme for a cardiology pathway redesign might require the following: In Columns C and D please enter the expected full recurrent annual value of savings and investment. In the above example the scheme is expected to generate recurrent savings of 4.5m (Col C) with recurrent annual investment of 1.5m (Col D). Column E calculates the net annual recurrent saving, in this case 3m. In Columns F & G please enter how much of that saving/investment will occur in 2014/15. In the above example the investment of 1.5m was needed up front, but the savings came in half way through the year generating a 2.25m saving and an overall net saving of 0.75m. 6

7 Columns I and J calculate the full year effect of the scheme; that is, the difference between the total recurrent annual saving and the 2014/15 saving. This will be used to calculate the recurrent underlying surplus. In Columns L and M please enter the value of any non recurrent savings in that year. The QIPP sheets for all five years are identical with the exception that for years 2014/15 and 2015/16 the QIPP savings profile is required (columns Q to AB). For later years the schemes are not expected to be as detailed, but strategic intentions are expected to be outlined and there are consequently fewer areas of spend to choose from. Please note On each worksheet only enter new schemes anticipated to be effected that year. Do not include the full year effect of schemes begun in prior periods as this will be calculated automatically. Unidentified QIPPs needs to be entered on rows with the spend category chosen from the drop down box to ensure the figures feed through to the overall financial plan. Levels of unidentified QIPP will be reviewed during the assurance process. If there are risks to the achievement of the QIPP programme please enter these onto the Risk sheet. QIPP schemes may require investment by other parties, for example by an Area Team within Primary Care. If your CCG s QIPP requires external investment please complete the section at the end of the QIPP form external investment supporting QIPP. 8. Risk The format for risk assessment follows a similar format to that used for non-isfe reporting throughout For the first two years, CCGs are required to enter their full risk value and percentage probability of risk being realised which automatically populates a potential risk value amount. Please note that risks entered here ought to be anything in addition to what has been incorporated in the planned position. As a general rule of thumb, if there is a very high chance that a risk will materialise (over 90%) it would be expected to be shown in the expenditure tabs as part of the planned surplus or deficit position. Only include additional risks in this tab which put the achievement of your planned position at risk. CCGs are also asked to provide meaningful commentaries against each risk figure entered, providing specific detail as to what is driving the risk and avoiding general terminology as much as possible. 7

8 CCGs are then asked to enter any mitigations that can be used to offset this risk. This is split between Uncommitted Funds and Actions to Implement. Uncommitted funds ought to include any funds available that have not been committed in the plans. Again CCGs should enter the full mitigation value and the probability of success of the mitigation working as a percentage and the expected mitigation value will automatically populate. A commentary box is provided to show detail of what these mitigating actions are. For the final three years of the five year plan, CCGs are only required to enter the potential risk value and expected mitigation value as net figures already, and provide a commentary to add detail where possible. The key figure produced by these assessments is the net risk/headroom position which is used to drive a risk adjusted planned surplus/ (deficit) position in the Commetary sheet. 9. Investment The table requires a high-level analysis of where CCGs propose to apply their investments. Each development should be named in Column A with the category of spend selected from Column B in order that the detail feeds through to the financial detail tab Recurrent Column C Investment the CCG will incur in the financial year. Please enter the part year effect for the year that is being completed. Column M Enter the total value of the investment needed. Column O This will calculate the full year effect of the investment (the difference between Columns M and C) and feed through to the underlying surplus calculations. Non Recurrent Column E - Bought forward Surplus - how and where the brought forward surplus is being spent Column F - Non-Recurrent Headroom - application of the funds will be subject to Business Case approval by ATs and no funds should be committed at plan stage unless the AT has specifically approved the scheme. Column G - 70% Threshold Column H - Readmissions Credit 8

9 There may be circumstances where expenditure that should have been committed non-recurrently has been committed recurrently. Where this has happened this should be recorded as an over-commitment under the recurrent section of the investment tab. In the example below; the CCG has planned to invest both the non-recurrent headroom ( 4m) and the 70% threshold ( 1m) in non recurrent schemes. However, only 1m of the 2.5m bought forward surplus is planned to be spent nonrecurrently. Effectively, 1.5m has been invested recurrently and therefore appears in column C. 2014/15 Recurrent resource (underying and in-yr surplus) B/F surplus NR Headroom Non-Recurrent 70% Threshold Readmission Credit Available to Invest ,500 NR Total Total Recurrent Description Area of Spend (select from drop down) Admission Prevention Schemes (b/fwd Surplus) Other Programme Services ,500 Sub-total recurrent 1, ,500 Non-Recurrent Description Area of Spend (select from drop down) Admission Prevention Schemes Other Programme Services ,000 Acute Re-investment Acute contracts -NHS (includes Ambulance services) ,000 Contingency Contingency ,000 Sub-total Non-Recurrent - 1,000 4,000 1,000-6,000 6,000 Total planned Investment 1,500 1,000 4,000 1,000-6,000 7,500 Remaining Funds (1,500) 1, , Better Care Fund (BCF) CCGs are required to detail investment in the Better Care Fund for 2014/15 and 2015/16. The top two rows in the worksheet outline the funding available and will be calculated from elsewhere in the template; the Notified BCF Allocation will be prepopulated in the Revenue Resource Allocation worksheet; and Transfers from other Pooled Budgets will be calculated from within this worksheet where additional funds have been identified for investment into the BCF. In the Expenditure section CCGs are required to firstly state where the Notified Allocation will be spent and secondly identify any additional funding that is being invested into the BCF. Within both expenditure sections CCGs are asked to detail how the funding will be spent: which organisation will hold the pooled fund and which Health and Wellbeing Board will oversee the allocation of funds. 9

10 Any benefits expected from this fund should be shown on the QIPP sheets. 11. Contract Value Triangulation This information is being collated to provide more detailed analysis for planning purposes and to provide an overall position of contract values reported between Commissioners, NHS Trusts and Foundation Trusts. It is expected that organisations will align their plans with those of the wider local health economy. In order to test the alignment of key assumptions Monitor, NHS England, and NTDA will reconcile provider and commissioner plans both for the two and five year submission review phases. The outputs of the reconciliation will be shared between the regional teams of Monitor, NHS England and NTDA. Every step will be taken not to prejudice the position of any trust or commissioner and no information will be shared at individual organisation level without first contacting the appropriate party. There are separate sheets for each year detailing the significant contracts (over 5m) for acute, mental health and community. The sheet breaks the contracts down in to value and activity over the relevant headings. For all contracts under 5m, the total value should be included within the other contract line. All contract spend across the headings should reconcile back to the value on the financial plans elsewhere on the templates. Therefore, for 2013/14 please enter the forecast performance for each provider rather than values contained within service level agreements. And for subsequent years please enter the anticipated value of activity with providers inclusive of any QIPP schemes. Please also outline the QIPP per provider as a memorandum, as well as the value of CQUIN per provider. The contracts data tab requires information to be split by point of delivery. If you are in doubt as to what category activity falls into please refer to the NHS Data Model and Dictionary ( ). Entries on this sheet will be compared with provider submissions via Monitor or the TDA. 10

11 12. Cash flow and Statement of Financial Position The cash draw-down profile for the CCG and a projected Statement of Financial Position will be required for the first two years of the model. 13. Capital The table captures direct CCG capital plans and those that it is expecting to be made within its area by other organisations such as NHS Property Services and the NCB (predominantly Primary Care related). For 2014/15 the information provided should be in line with the Capital Planning Returns submitted to your Area Teams and approved by your Region. 11

12 Appendix A: Suggested Approach This section offers a suggested approach to completing the planning templates. As the worksheets are linked, it is recommended that the workbook is completed in the suggested order below to ensure information is meaningful during completion. CCGs should adhere to the guidance for the relevant worksheets as above. 1. Select the appropriate CCG in the Cover sheet. 2. Next go to the Revenue Resource Limit tab. Enter values for 2013/14. The following two years will be pre-populated. Entries for 2016/ /19 can be entered at this stage or returned to once plans for 2014/ /16 have been completed. 3. In the Financial Plan Detail 1415 worksheet populate the FOT position against the cost categories provided in column B, further stripping out nonrecurrent costs in column C and adding full year effects in columns D and E in order to reach the recurrent underlying starting position. It is important that expenditure is entered correctly to generate a surplus in column B that corresponds with the latest forecast outturn position for 2013/ Complete the Contract 1314 worksheet. The sum of the contracts on this sheet must match back to the financial plan detail As such, please record the level of cost with each provider rather than the signed SLA value. 5. In the Assumptions sheet enter appropriate values for inflation, efficiency and growth. On the Financial Plan Detail sheet this will calculate the cost implication of those assumptions; 6. In the Financial Plan Detail 1415 worksheet enter any other recurrent non-activity related cost pressures as required on the template that are not driven by assumptions (columns J & K); 7. Complete the 2014/15 sections on QIPP (including the monthly profile), investments and NR fund proposals worksheets, in line with the guidance for these worksheets above. This will automatically update these areas of the expenditure plan; 8. Ensure all extra non-recurrent costs are entered on the expenditure plan for application of pass through and any other cost pressures (in columns P & Q) 12

13 9. On the same tab, complete the monthly profile of spend for 2014/15, ensuring that in total this balances back to the overall 2014/15 plan; 10. Complete the Contract 1415 worksheet. As with 1314 these values must tie back to the financial plan detail sheet. 11. Complete the Capital worksheet for 1415 for any planned additions; 12. Complete the SoFP and Cash sheets for 2014/15. A monthly profile is needed and it will be expected to match information provided in the other planning sheets. 13. Once all expenditure plans are complete, the Risk worksheet needs to be completed to assess any additional risk on top of the planned surplus or deficit positions; 14. Complete plans for the Better Care Fund. 15. The 2014/15 Financial Plan should now be complete. Move onto Financial Plan Detail 1516 worksheet and populate the template in same way. For 2015/16 the same level of detail is required as for 2013/14, but this reduces for the third, fourth and fifth years of the plan. 16. Run through the Quality Checks worksheet to ensure that all information entered in monthly profiles and against contracts, QIPP, investments and non-recurrent headroom, ties back to the expenditure plans. Ensure that any validation errors are fixed before proceeding; 17. Review the Financial Plan Summary worksheet to ensure the five year plans accurately reflect the CCG view of planned financial performance. 18. Complete the Financial Plan Summary worksheet to add context and narrative to the financial performance as required; and 19. Complete the Cover sheet in order to demonstrate ownership and sign off. 13

14 Appendix B: Financial Planning Business Rules The Financial Plan Summary sheet is formula driven, pulling in information from the detailed sheets in order to RAG rate financial performance in line with business rules for CCGs. This section defines how the criteria have been calculated. 1% Surplus Target. CCGs are required to make a cumulative 1% surplus. The calculation driving this on the planning templates is as below: Surplus (includes non-recurrent allocation and non-recurrent expenditure) Total allocation (recurrent and non-recurrent including b/f surplus) RAG criteria: Green = 1% or greater; Amber = Between 0% and 1%; Red = Less than 0% Risk Adjusted 1% Surplus Target. Net (risk)/headroom is brought into the surplus calculation to show a risk adjusted surplus or deficit position before recalculating the surplus target percentage: Surplus+ Net (Risk)/Headroom Total allocation (recurrent and non-recurrent including b/f surplus) RAG criteria: Green = 1% or greater; Amber = Between 0% and 1%; Red = Less than 0% Underlying Surplus. Commissioners should also be planning to be in 2.5% underlying (recurrent) surplus at the end of 2014/15 and 2% underlying surplus from 2015/16 to 2018/19, calculated as follows: Surplus Non Recurrent Expenditure Non Recurrent Allocation Recurrent Notified Allocation RAG criteria (2014/15): Green = 2.5% or greater; Amber = Between 0% and 2.5%; Red = Less than 0% RAG criteria (2015/16 onwards): Green = 2% or greater; Amber = Between 0% and 2%; Red = Less than 0% 0.5% Contingency. CCGs should be setting aside at least 0.5% contingency for each year in their financial plans. This is calculated as below: Contingency Total allocation (recurrent and non-recurrent including b/f surplus) RAG criteria: Green = 0.5% or greater; Red = Less than 0.5% Non-recurrent headroom. The requirement % for non-recurrent headroom is calculated as a % of recurrent notified allocation. For 2014/15 the target is 14

15 2.5% of recurrent notified allocation and 1% from 2015/16 to 2018/19. The plans show the difference between what has been committed and the full % that is available to be used as part of the recurrent notified allocation: Agreed plans in place for non-recurrent fund Recurrent notified allocation QIPP. There are no specific targets for QIPP plans at this stage built into the planning templates. These figures will be used to draw up comparative data during consolidation of the submitted financial plans. The formula works as follows: Net QIPP (including recurrent and non-recurrent) Recurrent notified allocation 15