Apologies 2. Apologies were accepted from non-executive directors Shaun Clee, John McIvor and Colm McKenna.

NHS Confederation Group Co Corporate Board meeting 24 July 2013 50 Broadway, London Notes of the Meeting Directors in attendance Michael O Higgins (Chair) Mike Farrar (Chief Executive) Sheila McKenzie (Director of Finance and Resources) Mike Parish (Non-executive Director) Dean Royles (Director, NHS Employers) Heather Strawbridge (Non-executive Director) Steve Warburton (Non-executive Director) Director apologies Shaun Clee (Non-executive Director) John McIvor (Non-executive Director) Colm McKenna (Non-executive Director) Also in attendance Helen Birtwhistle (Director, Welsh Confed) Edward Colgan (Independent Trustee) Jo Cubbon (Independent Trustee) Stephen Dalton (Chief Exec, Mental Health Network) Johnny Marshall (Director of Policy) Heather Moorhead (Director, NI Confed) Lisa Rodrigues (Independent Trustee) Phil Taylor (Chair of Audit) Matt Tee (Chief Operating Officer) Sarah Walter (Head of Corporate Management) David Worskett (Chief Exec, NHS Partners Network) Welcome 1. The Chair welcomed everyone to the meeting. Apologies 2. Apologies were accepted from non-executive directors Shaun Clee, John McIvor and Colm McKenna. Declarations of interest 3. There were no additional declarations of interest. Paper 1 Notes of the meeting held on 20 March 2013 4. MP highlighted the discussion outlined in paragraph 33 relating to workforce mobility as a consequence of contract change. This is becoming a bigger issue, and organisations seem to be leaving it as late as possible to provide workforce data. This can lead to new providers starting a contract with inadequate knowledge about the workforce that they are inheriting. MP queried whether there was something the NHSC could do provide a leadership position. 5. DR said that same organisations may not want to share data in case it provides others with a competitive advantage. However, the data is important for 1

continuity of care, and this should be the key driver. MP noted that we can't oblige people to share data at an early stage, but we could set a standard to support continuity of care which could then be used by commissioners. JM suggested that this could sit within the national contract. Action - JM to pick up with NHS commissioners. 6. PT raised a query on paragraph 19 and the need for a plan to control costs and improve efficiency. MF confirmed that this was a management action to ensure that a contingency plan was in place if income is not secured. SM confirmed that work has started, but this hasn't yet been formalised into a plan. Action MF 7. The notes were agreed. Paper 2 Action tracker 8. The Corporate Board noted progress on all complete and outstanding actions. Paper 3 - Chief Executive's report 9. MF provided an overview of the context for this Board meeting. The NHSC has been trying to set the public debate to support a sustainable future for the NHS, in the context of a severe financial challenge, increasing demand, problems in A&E, and a lack of progress in moving spend towards prevention and supporting care outside hospitals. 10. There is a continued debate about the NHS' culture and leadership, and the transparency agenda is exposing variations and poor care. The lack of political backing creates a risk to the fundamental values of the NHS and its basis as a public service. The NHSC is trying to create a narrative that is more balanced, but which does not stand in the way of transparency and accountability. 11. MOH said that we should be able to provide examples of good practice, but also be open about failings and be clear on what the NHS is doing about it. MP said that the NHSC should seek a high level of engagement with CQC to ensure that their approach remains balanced and proportionate. LR suggested that we may be reaching a tipping point, where the public understand that there are variations in care, and we have an ambition to improve which will involve changing the way that we provide care. MT noted that NHS England is about to initiate a big conversation on strategy with the public, and this is something that the NHSC should seek to influence. 12. MOH asked how the situation compared with that in Wales and Northern Ireland. HB said that there are many of the same issues with huge change in Wales, but in a different system with no internal market or planning system. The same quality issues exist, and the Welsh Confed are trying to highlight examples where service change can bring about improvements. HM noted that in Northern Ireland there is political support for the direction of travel, but the change programme has been set back. 13. MOH suggested that we need to continue with the narrative that major change is needed to address current weaknesses but also to deal with the changing demographics. JC suggested that the NHSC could have a role in supporting 2

senior leaders to have discussions at a local level, and adopt a more open set of behaviours. 14. MP raised a query about the political approach the NHSC should take in the next period. MF said that we have already had some successes, most notably with the joint publication with the Academy of Medical Royal Colleges and National Voices before annual conference. We want to create a coalition of the service and manifesto that comes out of the NHS, and there is interest in the NHSC facilitating this. We should tell the political parties that we will be doing this so that they engage with us as they develop their manifestos. 15. LR noted the positive feedback from this year's annual conference, and asked about plans for 2014. MT said that he would share the detailed feedback from this year's conference with the Board. We have now commissioned a piece of work to review our events management function and consider whether we are running the right kind of events. We will share the outcome of this review and any actions arising with the Board later this year. Action MT. LR said that the event had been very effective, and asked MT to pass on his thanks to all those involved. 16. PT confirmed that the review of the conference would be really important, and we need to look at the way that we run the event and how we can maximise the income and outcome. MP raised a query about the surplus of the event. SM confirmed that this year's conference generated 72k less than the budget, but the net surplus was marginally better than last year due to a significant reduction in the cost of the venue. MF noted that the conference is enormously valuable as part of the NHSC's offer and fulfils an important function as the place where the whole service comes together. 17. HS raised a query about AACE membership, and sought confirmation that the reserves from the Ambulance Service Network would be ringfenced for ambulance trusts. SM confirmed that this was the case, in line with the organisation's reserves policy. Paper 4 - Integrated performance report 18. SWalter presented the latest performance report. Data is not yet available for some of our key performance measures, but we have now met our membership targets for representing the whole sector and having market share. We have seen an improvement in our influence rating, and are not far off the target. The measure for the quality of our products and services is new, and we exceeded our original target. We have seen an overall drop in the percentage of our members who rate the NHSC as good or excellent value for money. 19. SWalter noted that the business plan report focuses on deliverables that were due to be complete by the end of June. Performance varies across the three strategic objectives, with some slippage in strategic objective one. This is partly due to staff waiting until new directors were in post before initiating important discussions, and new work which proved more complex than originally envisaged. 3

20. The risk register has been updated to distinguish between short and long-term risks, and to provide an overview of changes in risk scores. Some changes to risk scores have been made following a review with the new Directors. The short-term risk relating to representing the whole sector has been closed as we have met our membership targets for 2013/14. 21. JC raised a query about the target for the percentage of members who rated the NHS Confederation's products and services as good or excellent quality. SWalter confirmed that this is the first time that we have measured this, and the response was more positive than we had anticipated. We will now set a stretch target for this measure. Action SWalter 22. PT welcomed the report, and said that it would be useful to also know which organisations are not in membership. MOH suggested that the list of nonmembers by sector could be attached to the report. Action SWalter 23. MF noted that the NHSC has a resignations process with a series of stages, including Directors contacting the Chief Executive to find out why they are resigning. Previously we did not systematically ask organisations that had resigned to rejoin, but the Head of Membership is creating a new approach for non-members. 24. MP welcomed the transparency about the current position and said that he recognised the impact of the management transition. MP suggested that the executive team should review the business plan and targets to ensure that we are pursuing the right ones. SWalter confirmed that we planned to undertake a refresh of the business plan. 25. SM presented the finance report. The consolidated position is that we are currently doing better than budget. Within that, NHSE has started the year well and the forecast for the full year is slightly higher than budget. The charity is underperforming due to some one-off spends, but we believe it will return to budget levels by the year end. 26. Group Co includes the 'core' Confederation, networks and countries. Both the networks and countries are performing better than budget, however the core Confed is forecasting a deficit by the end of the financial year. Although the core Confed has a signed contract with HEE and is close to agreement with NHS England and the TDA, these contracts are not at the value that we had hoped for. The bureaucracy project is projecting a contribution to existing costs of 166k, but we are forecasting an overall deficit of 200k for the full year. There is an expectation that we will gain more work, but we will keep the position under review and are talking to department heads about potential cost savings. 27. The balance sheet is positive with total cash held of 8m. Our investments have dipped slightly, but are still ahead of what was invested originally and we are receiving a good income. Debtors are under control, and we have no concerns related to creditors. Reserves are mainly on target, with all component parts on track with the exception of the core Confed. The issues relating to cash flow will be addressed as part of the governance restructure. 4

28. MOH raised a query about debtors over 90 days old. SM confirmed that most of these relate to membership payments, which are managed on a weekly basis. Paper 5 - Financial statements 29. SM presented the financial statements for Group Co and the consolidated statements for the charity. 30. The Group Co company accounts are a fairly basic profit/loss account, and we have not seen a great deal of movement between the two years. Expenditure is up slightly as we are doing more (previous surpluses were due to underspends). Group Co has an operating surplus of 190k which is gift aided to the charity, so there is no net surplus/deficit. Group Co has negative net assets as the taxable profit and accounting profit can be different, and the amount of gift aid to be paid can exceed the operating profit that we have. Debtors are close to what they were last year, and cash is down slightly. 31. The Board approved the Group Co financial statements. 32. SM confirmed that the consolidated financial statements are prepared under the charity SORP and a greater level of detail is required. The first part includes a trustees' report; the second provides the financial statements. The income and expenditure statement is set out as required for charities, with restricted and unrestricted funds identified separately. The overall outturn is 320k NHSE generated a surplus of 700k, and the NHSC asked for a draw down of reserves of 200k. We also released reserves in relation to the move of the Research Network to Universities UK. The unrealised gain relates to the increased value of the charity's investments at the year end. 33. The balance sheet shows an increase in tangible fixed assets due to a number of capital projects, including the fit-out and design of the London office, costs of the CRM project, and investment in our IT server bank. 34. SM confirmed that the reserves include a designated reserve for the Flexiplan pension scheme. This relates to a staff pension scheme which is now closed to new members, but has deferred beneficiaries.. The scheme is in deficit, and as an employer the NHSC is required to fund the deficit. There has been some uncertainty about the value of this deficit, but following a recent court case the position is clearer.. This is a multi-employer scheme involving 200 employers, and there is no requirement to include our share of the assets and liabilities of the scheme on our balance sheet. However, as it is a significant liability it is important that trustees have sight of it and so a designated reserve has been created. 35. LR asked about the nature of the scheme, and SM confirmed that it is a 'last man standing' scheme. This means that if other employers become insolvent, we would pick up the costs. The overall liability is 17m. HS asked if this is based on an actuarial valuation. SM confirmed that this was the current valuation, but it could go up or down in the future. The NHSC has approximately 40 former or existing staff in the scheme. 5

36. MP asked about the status of other employers involved in the scheme. SM confirmed that they are all charities, and many are private schools. The pension fund administrators are collecting the debt through annual payments, and are currently managing to collect 85-90% of the overall debt. 37. PT said that he did not like the accounting treatment, but this has been discussed with the external auditors and they have confirmed that it is correct. SM said that we may need to treat it differently next year as the charity accounting Statement of Recommended Practice (SORP) is being revised.. 38. PT confirmed that the Audit Committee has gone through the financial statements in detail, and had made only minor suggestions of changes. The Committee discussed the accounting treatment for the flexiplan liability, and the need for Board appraisals. The Committee also discussed the Director salary declaration contained in note 7. The charity does not have to declare salaries in accordance with the SORP, but the Board had wanted to declare them and the Committee had made some suggestions about how these are presented. 39. SM noted that HM was not currently included on the list of Directors, and the start dates for JM and MT were the wrong way round. The Board suggested that a note should be added to confirm that the Director salary figures include termination payments. Action SM 40. The Board agreed to recommend approval of the consolidated financial statements to the Board of Trustees. 41. PT noted that Grant Thornton had fed back that the process for finalising the accounts was much smoother this year, and passed on his thanks to Ed Browne and the finance team for their hard work. Paper 6 - NHS Confederation 3-5 year strategy 42. MT presented the proposed strategy for the NHS Confederation. This builds on the discussion at the trustee away day. The draft strategy has been circulated to staff and feedback has been positive. MT said that the strategy was presented as a near final document, and would be updated following feedback form the Board and staff before formal sign off at the October Board meeting. 43. HS noted that the NHSC used to provide an important role in supporting non executive directors and this has helped to drive membership. There is a risk that we lose this ground to the FTN. JC suggested that as the only organisation that brings the whole sector together, the NHSC could provide better support, facilitation and challenge on issues like local integration and collaboration. LR agreed that a greater focus on non execs would be important, and the NHSC should look at how it can support local conversations. Now that SHAs no longer exist, there is a gap in local leadership of the system. EC suggested that given the comment in the strategy on the generational change in NHS leadership, we may want to make a firmer statement about supporting the development of senior management. HM suggested that it would be good if the strategy could say more about working across the different countries. 6

44. MOH suggested that the strategy should be updated to include: a greater emphasis on communication and support for non execs and governors; support for senior management; greater emphasis on working with Northern Ireland and Wales; and facilitation of more local conversations. 45. MP said that we need to continue to reflect on the fundamental purpose and risks for the NHSC and bring a more holistic perspective. EC suggested that we should think about public health commissioning, as well as social care and health. Paper 7 - Total assurance framework 46. PT confirmed that the role of this board is make sure that there is reliable assurance on the management of major risks, and the Audit Committee supports this function. Following a recent away day, the Committee is recommending that the organisation goes through a risk and assurance mapping exercise. The Board confirmed its support for this proposal. Paper 8 - Commercial relations, partnerships and sponsorship 47. MT presented a short update on the organisation's commercial arrangements. The organisation has seen a decline in partnership/sponsorship income. Work is underway to look at why this is the case, and what we should be planning for. 48. MOH noted that there are lots of organisations that want to work with the NHSC, and it would be good to be clear about what options are available to these companies. This might involve creating value by negotiating better deals for our members. Paper 9 - Contracts - confirmation of inter-meeting decisions 49. The Board noted the decisions that had been made by correspondence since the last meeting. NHS Employers board meeting 50. MOH provided some feedback from the NHSE Board meeting that morning. The main agenda item related to discussions with key groups of staff and the need to make sure that we recognise the reality of the fiscal situation. DR is going to bring a brief paper on this to the next trustee meeting. As salary costs form a significant part of total spending, it will be important for trustees to be involved. AOB 51. SWalter confirmed that the next meeting will take place on Thursday 3 October. 7