Report to Public Trust Board – 26 July 2017 Report title Monthly financial performance for month 3 – June 2017 Report from Steven Davies, Chief Financial Officer Prepared by Jenny Greenshields, Deputy Chief Financial Officer Damien O’Brien, Head of Financial Management Assad Choudry, Financial Controller Previously discussed at Management Executive Attachments None Brief summary of report • The Trust reported a £0.77m surplus in June, £0.17m ahead of the budgeted plan. The YTD position now stands at a surplus of £0.45m, £0.49m ahead of plan. • The Forecast position for 2017/18 is a £0.5m surplus. The bottom line is planned to fluctuate as the year progresses based on seasonal activity variations, CIPs being implemented and service developments progressing, however across the remaining 9 months of 2017/18 the Trust is broadly planning to breakeven. • The surplus position in June is driven by planned high levels of NHS income, whilst costs have largely been maintained at trend coupled with a strong financial performance from Commercial Trading Units. • Commercial Trading Units reported a surplus of £0.24m in month, which was higher than planned levels by £0.07m. YTD Commercial Trading Units are now slightly above plan by £0.09m. The full year forecast position is for a surplus of £3.77m. • Efficiency schemes delivered £0.36m of savings in June, £0.14m behind plan as a result of slippage on a number of schemes. Fortnightly meetings are scheduled with divisions to assure progress of efficiency schemes. The forecast is maintained at £8.20m. 65% of total efficiency savings are currently planned for the second half of 2017/18, however it is anticipated that savings will be brought forward as schemes are developed and implemented. • We are currently working with NHSI to ascertain the correct accounting treatment of the additional £0.42m STF monies relating to 2016/17, that we were notified of in June. • Cash balance was £38.51m at the end of June, £2.32m behind plan. • Use of Resources Risk rating for the trust is 1 for June with all individual metrics also scoring 1. Action Required/Recommendation. The board is asked to consider and discuss the attached report. For Assurance x For decision For discussion To note Item 9
16
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Report to Public Trust Board – 26 July 2017
Report title Monthly financial performance for month 3 – June 2017
Report from Steven Davies, Chief Financial Officer
Prepared by Jenny Greenshields, Deputy Chief Financial Officer
Damien O’Brien, Head of Financial Management
Assad Choudry, Financial Controller
Previously discussed at Management Executive
Attachments None
Brief summary of report
• The Trust reported a £0.77m surplus in June, £0.17m ahead of the budgeted plan. The YTD position now
stands at a surplus of £0.45m, £0.49m ahead of plan.
• The Forecast position for 2017/18 is a £0.5m surplus. The bottom line is planned to fluctuate as the year
progresses based on seasonal activity variations, CIPs being implemented and service developments
progressing, however across the remaining 9 months of 2017/18 the Trust is broadly planning to
breakeven.
• The surplus position in June is driven by planned high levels of NHS income, whilst costs have largely
been maintained at trend coupled with a strong financial performance from Commercial Trading Units.
• Commercial Trading Units reported a surplus of £0.24m in month, which was higher than planned levels
by £0.07m. YTD Commercial Trading Units are now slightly above plan by £0.09m. The full year forecast
position is for a surplus of £3.77m.
• Efficiency schemes delivered £0.36m of savings in June, £0.14m behind plan as a result of slippage on a
number of schemes. Fortnightly meetings are scheduled with divisions to assure progress of efficiency
schemes. The forecast is maintained at £8.20m. 65% of total efficiency savings are currently planned for
the second half of 2017/18, however it is anticipated that savings will be brought forward as schemes are
developed and implemented.
• We are currently working with NHSI to ascertain the correct accounting treatment of the additional
£0.42m STF monies relating to 2016/17, that we were notified of in June. • Cash balance was £38.51m at the end of June, £2.32m behind plan.
• Use of Resources Risk rating for the trust is 1 for June with all individual metrics also scoring 1.
Action Required/Recommendation.
The board is asked to consider and discuss the attached report.
For Assurance x For decision For discussion To note
Item 9
2
Monthly Finance Report For June 2017
Prepared by:
Damien O’Brien
Head of Financial Management
Assad Choudry Financial Controller
Jenny Greenshields
Deputy Chief Financial Officer
Presented By:
Steven Davies Chief Financial Officer
Board of Directors Meeting 26
th July 2017
Date produced 18 July 2017
Action for Board:
For information
For consideration
For decision
3
Contents of Main Report
Page Number
Executive Financial Summary 4 Detailed Income and Expenditure Position 5 Variance analysis 6 Divisional Financial Performance 7 NHS Income 8
NHS Operating Expenditure 10
Efficiency Scheme Performance 12 Research & Development and Commercial Trading Position 13 Cash flow & Capital 14 Debtors Management and Credit Control 15
4
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
0.60 0.77 0.17 (0.04) 0.46 0.50 0.50 0.50 0.00
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
12% Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
100% 1.34 0.96 (0.38) 8.20 8.20 0.00
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
0.02 0.05 0.03 0.06 0.13 0.07 0.92 0.92 0.00
Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M) Plan (£M) Actual (£M) Var (£M)
0.17 0.24 0.07 0.74 0.83 0.09 3.77 3.77 0.00
M3 YTD YE Forecast1 1
Liquidity 1 1
I&E Margin 1 1
1 1
Agency Spend 1 1
1 1
2016/17
Year End
May
Actual
June
Actual
June
Variance
39.00 35.37 38.51 (2.32)
Annual PlanExpenditure
Year to Date
Annual
Forecast
Var to Plan
Forecast
30.87 0.40 30.87 0.00
3-5 Mths 2 Mths Total Last Month
(£M) (£M) (£M) (£M)
3.57 0.41 6.89 8.35
0.53 0.28 3.05 3.18
0.82 0.31 2.65 2.64
4.92 1.00 12.59 14.17
Use of Resources Rating
Efficiency Scheme
PerformanceFull Year % forecast
% Full Year achieved
Executive Financial Summary
Trust Underlying
Overall Position -
Surplus / (Deficit)
In Month Year to Date Key Risks and Actions RequiredFull Year Forecast
Research &
Development
Position
(exc. R&D)
YTD % achieved Year to Date
In Month Year to Date
IncomeExpenditure
Overall Position
Full Year ForecastNHS In Month Year to Date
Full Year Forecast
Full Year Forecast
0.22
1.27
Use of Resources
Rating
Cash FlowJune
Plan
Capital
Expenditure
Commercial
Trading Unit
Position
In Month Year to Date
I&E Margin Variance
0.46
IndicatorCapital Service Cover
Year End
Plan
5.40
40.83
Expenditure
Committed
42.20
Capital Expenditure (£M)
1.30
Cash Balance (£M)
Full Year Forecast
Debtors
Overdue Debts
NHS Contract Debts 2.15 0.76
Commercial Debts 1.95 0.29
Other
TOTAL
(£M) (£M)
6 Mths + 1 Mth
Income and Expenditure • The Trust reported a £0.77m surplus in June,
£0.17m above the budgeted plan. • The full year forecast is to achieve a surplus of
£0.50m which includes £0.90m Sustainability and Transformation Funding, and assumes full achievement of the Trusts CIP program of £8.20m.
• NHS income is above plan in month by £0.32m in part due to a YTD correction related to Bedford and also due to high activity across Moorfields South.
• Commercial Trading Units reported a surplus of £0.24m in month, which was above planned levels by £0.07m.
• Efficiency schemes delivered £0.36m savings in June, £0.14m behind plan, and are now £0.38m behind plan YTD. The full year forecast continues at £8.20m.
Use of Resources Rating • Use of resources rating for the Trust in June is 1. Cash flow and Balance Sheet • Cash balance was £38.51m at the end of June,
£2.32m behind plan. • Capital plan for the year is £30.87m with
expenditure YTD at £0.40m. • Overdue debt has decreased by £1.58m in June
YTD ActualBudget Actual Variance Budget Actual Variance Budget ActualOverall Trust I&E Summary
In Month Year To Date Full Year Forecast
Detailed Income and Expenditure Position - Surplus / (Deficit)
6
01,0002,0003,0004,0005,0006,0007,0008,0009,000
Medical Nursing STT A&C Ancillary R&D
Exp
en
dit
ure
£'0
00
Category
YTD Pay variance
Budget
Actual
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Drugs Clinical Supplies Premises Other R&D
Expe
ndit
ure
£'00
0
Category
YTD Non-pay variance
Budget
Actual
Variance Analysis
Commentary
• NHS Clinical Income and Commercial Trading income variances are explained in more detail elsewhere within this report.
• Other income has underachieved by £120k (2%) in June and by £654k (7%) YTD in part (£330k) due to the underachievement of planned CIPs. A further £87k is due to lower R&D income than planned, for which there are offsetting underspends within R&D pay and non-pay costs. Some minor overachievements elsewhere have helped to partially mitigate the position.
• Nursing Pay costs are £82k (4%) underspent in June and
£177k (3%) underspent YTD. Significant vacancies in a number of areas, including Theatres and A&E at City Road have contributed to the position.
• STT Pay costs are £205k (17%) underspent in June and £422k (12%) YTD. The vacancy rate stands at 11% in May, with a significant level of vacancies within Ophthalmic services at City Road.
• Admin and Clerical Pay costs are £228k (11%) overspent in June and now stand £230k (3%) overspent YTD. This continues a worsening trend month-on-month with Admin and Clerical Pay costs. The overspend in month is driven by a number of Corporate areas and high temporary staff expenditure in the Booking centre at City Road and at St Georges.
• Drugs have overspent by £165k (7%) in June and now stand £305k (5%) overspent YTD. Much of the overspend is related to high cost injection activity.
• Other expenditure is £175k (6%) underspent YTD. There are under-spends across a number of areas with no single material issue.
City Road is behind its contribution target by £305k in June and now stands £742k behind plan YTD. The
poor performance is entirely due to an income under-performance, both in month and YTD. Day cases
now stand £500k behind plan YTD and all Elective and Outpatient activity is materially behind plan.
Delays in implementing the Theatre util isation CIP has exacerbated the income under-performance
further. A Pay underspend (£131k month/ £464k YTD) has helped to partially mitigate the financial
performance. High levels of nursing vacancies (Theatres) and across STT disciplines has led to the Pay
underspend.The Access division is £27k behind its contribution target in June and £126k behind YTD. The adverse
position is equally attributable to YTD overspends in Pay (£63k) and Non-Pay (£64k). The Pay
overspend is due to high temporary staffing costs within the Validation team, Health Records and the
Booking office. The Non-pay overspend is largely due to external consultancy costs.
Moorfields North had a positive month in June delivering a variance of £104k above its contribution
target meaning the YTD under-performance has reduced to £42k behind plan. The positive month was
due to Income over-performing by £181k relating to a YTD correction to the Bedford contract and the
removal of RTT fines that Bedford had cross-charged. Income remains behind plan YTD, by £121k, due
to a shortfall of Elective activity and delays in implementing CIPs. Pay costs are £99k underspent YTD
largely due to Junior Doctor vacancies. The adverse Non-pay position in June is related to the activity
levels delivered.Moorfields South is £36k behind its contribution target in month and now stands £158k behind plan
YTD. The adverse variance from plan is due to Pay costs being overspent by £109k in June and £176k
YTD. The Pay overspend is related to high temporary staffing costs within Admin and Clerical staff, due
to senior management vacancies, and further vacancies and high sickness in the Booking centre at St
Georges. There are further material overspends within Medical and Nursing staff, largely due to
temporary staff covering vacancies. Income is above plan in month due to high elective activity at St
Georges but remains behind plan YTD due to low levels of Outpatient activity across the division.Estates is £28k behind its contribution target in June but remains favourable YTD; £283k ahead of plan.
The in-month overspend was largely due to a Non-pay overspend of £31k due to high Electricity and Gas
charges, which are being investigated. YTD there is a Non-pay underspend of £265k which is expected to
partially equalise as the year progresses.
City Road
Access
Moorfields
North
Moorfields
South
Estates &
Facilities
Corporate
Corporate is on plan in June and £421k ahead of plan YTD. The favourable YTD position is due to Below
the line (BTL) costs being £333k underspent and Non-pay costs being £142k underspent. The BTL
underspend is related to interest costs associated with Project Oriel which have yet to be incurred. The
Non-pay underspend is related to a number of areas with the largest underspends within IT and HR,
although there is no single driver of this favourable position.
The favourable YTD variance is due to central reserves.
Discussed elsewhere in this report
Discussed elsewhere in this report
Divisional Financial Performance
8
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Actual Monthly Income against Budget by Point of Delivery
Other Income
Education
Research & Development
Other Main SLA Income
Bedford Activity
High Cost Drugs
Outpatient
Non-Elective Income
Elective Income
A&E
Total Budget
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Actual Monthly Income against Budget by Directorate
R&D
Moorfields South
Moorfields North
Corporate Departments
City Road
Access
Total Budget
NHS Income
Commentary
• A&E activity has over-performed in month by 215 (2.6%) attendances leading to an income over-performance of £26k.
• Elective activity is 252 spells (7.3%) below plan in month, underperforming by £0.24m. Although the most material under-performance was at City Road (186 spells/ £0.24m), there was also a significant under-performance against plan at Moorfields North. This was partially mitigated by a favourable performance at Moorfields South
• High cost drug injection activity is 148 injections (4.7%) above plan in month, giving a favourable income variance of £0.12m. The over-performance is spread across all divisions.
• Outpatients under performed by 1,782 (3.6%) attendances leading to an income under-performance of £0.27m. YTD there is now an under-performance in Outpatients of £0.49m.
• Sustainability and Transformation funding (STF) of £0.04m has been included within the position, in line with our allocation as advised by NHSI. In 2017/18 NHSI have weighted STF monies more heavily towards the end of the year. We will include an additional £0.42m STF monies in our position in M4, relating to 2016/17. NHSI notified us of the additional allocation in June.
9
19 17 21 21 19 21 20 17 15 21 20 19
156 194 169 0 0 0 0 0 0 0 0 0
134 181 159 0 0 0 0 0 0 0 0 0
(22) (13) (10) 0 0 0 0 0 0 0 0 0
20 17 21 21 16 22 22 21 17 20 20 21
232 295 260 0 0 0 0 0 0 0 0 0
213 297 251 0 0 0 0 0 0 0 0 0
(19) 2 (10) 0 0 0 0 0 0 0 0 0
Workings Days
Target per working day (£'000)
Actual per working day (£'000)
Variance (£'000)
Workings Days Inc. adjustments
Target per working day (£'000)
Actual per working day (£'000)
Variance (£'000)
2,000
2,200
2,400
2,600
2,800
3,000
3,200
3,400
3,600
3,800
Inco
me
(£'0
00)
NHS Elective/Daycase Income
2016/17 Actual
2017/18 Budget
2017/18 Actual
2017/18Forecast
3,900
4,100
4,300
4,500
4,700
4,900
5,100
5,300
5,500
5,700
5,900
6,100
Inco
me
(£'0
00)
NHS Outpatient Income
2016/17 Actual
2017/18 Budget
2017/18 Actual
2017/18 Forecast
Elective Activity Analysis (Inpatients and Outpatients)
• June elective income was below planned levels by
£0.24m.
• Average elective income was £159k per working day,
below the plan of £169k. Although City Road
accounted for much of the under-performance, all
sites with the exception of St Georges and Potters
Bar were behind plan in June.
• Cataract (£94k) and External disease (£111k) were
the services with the highest levels of
underperformance, as with both April and May.
• May outpatient income was below planned levels
across all directorates, with the exception of
Moorfields North, specifically the Eastern sites.
• Average May outpatient income was £251k per
working day, £10k below the plan of £260k.
• Key areas driving the in-month under-performance
were most City Road sub-specialities.
10
NB. Research and Development Pay is excluded from the tables above and shown as part of the Research and Development position on page 11.
Staff Group & Directorate Staff Group & Directorate
MedicalYear to Date Current Month
Increase /
(Decrease)Nursing
Year to Date Current Month
Increase /
(Decrease)
Moorfields North 366 378 (12) Moorfields North 510 515 (5)
Moorfields South 416 426 (10) Moorfields South 347 362 (15)
City Road 1,771 1,847 (76) City Road 1,092 1,052 40
Achievement YTD is £241k against a target of £310k, slippage is due to delays in starting a number of schemes across different
areas; especially Catering, Hybrid Mail and Interpreting services. CIP schemes have been identified YTD that total £1,271k, albeit
those schemes identified are at various stages of development and implementation.
Directorate / Corporate
Department
Actions on Shortfall and Unidentified Amount
Achievement YTD is £73k against a target of £95k, slippage is largely related to 2 schemes; capturing diagnostic imaging income and
reducing the DNA rate at the St Georges sites. CIP schemes have been identified YTD that total £487k. . Other schemes identified
are at various stages of development and implementation.
Achievement YTD is £575k against a target of £779k, slippage is largely due to delays in progressing a scheme to improve Theatre
utilisation . CIP schemes have been identified YTD that total £3,602k, which has slipped due to delays in schemes such as Theatre
utilisation as aforementioned, and various Optometry schemes.
Achievement YTD is £60k against a target of £146k, and slippage is due to delays in starting a number of schemes, especially Darrent
Valley and Laser Business Case schemes. CIP schemes identified YTD total £629k. There are a few schemes identified as
opportunities, but are awaiting on business case authorisation in order to confirm the final saving figures.
Achievement YTD is on target at £7k; the other schemes have been phased to start towards the latter part of the year.
-
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
Am
ou
nt
(£'0
00
)
Period
Efficiency Schemes Profile and Forecast
Target
Actual
Forecast
Summary of Performance:
- CIP achievement in June was £0.36m vs a plan of £0.50m. The shortfall against target is £0.14m.
- Full year forecast is to deliver the target of £8.2m.
- The Trust is continuing to identify further schemes to bridge the gap that currently exists within the CIP program.
- Fortnightly meetings for each directorate have been initiated to ensure deliverability against identified schemes and to continue to identify new schemes.
1%
9%
25%
30%
35%
Breakdown of Forecast Achievement
Agency & Consultancy
Drugs
Clinical Supplies
INCOME
Pay
13
Budget Actual Variance Budget Actual Variance Budget Forecast Variance
In Month Year to Date Full Year Forecast Prior Year YTD
Forecast Variance Actual VarianceBudget Actual Variance Variance BudgetBudget Actual
Research and Development Position
Commercial Trading Unit Position
In month R&D income is £0.1m below plan. Expenditure was also below plan in month.
Overall financial performance in month is £0.03m above plan, and YTD contribution now stands at £0.13m, £0.08m above plan.
The forecast for the full year is on plan at £0.92m contribution.
Commercial income in month is behind plan by £0.12m. Forecast for the full year is to achieve the planned income level of £29.44m. Expenditure in month is below planned levels by £0.16m. Full year expenditure is expected to be on plan at £24.15m. In month performance was a £0.24m surplus, £0.07m above plan, YTD the surplus now stands at £0.83m, £0.09m above plan. Full year forecast is to deliver a surplus of £3.77m.
14
Cash Flow
Cash balance was £38.5m at the end of June, £2.3m below plan. This is primarily due to delay in receipt of STF incentive funding which is expected to be received in July.
Forecast cash balance at year end is largely on plan after taking into account capital expenditure, PDC dividend and interest payments.
Capital Expenditure
Total capital expenditure year to date is £0.40m. In addition a further £0.46m has been committed through approved orders.
Capital plan for the year is £30.87m and incorporates investment in Trust clinical estate, medical equipment, IT and strategic schemes.
Planning for strategic schemes will be reviewed over the coming months and forecast will be updated accordingly.
Please note: Values shown in the above tables are for the stated types of debt only, and exclude UAE.
Additional items not included above comprise overall debt for the Trust, including provisions and accruals.
Comments
Total debt has decreased by £1.9m in June to £14.0m (£15.9m May). As a result of expected underperformance in April against SLAs due to bank holidays and 2016-17 year end reconciliations with commissioners, credit notes have been issued in June.
Total overdue debt has decreased by £1.6m in June to £12.6m (£14.2m May) due to commissioners, mainly NHSE and SWL, settling overdue debt as part of 2016-17 year end reconciliations.
Key debtors over 4 months overdue
Welsh Health Bodies £1.1m
NWL Group £0.7m
NELC Group £0.4m
Barts Trust £0.3m
St Georges Trust £0.2m
Key debtors 1-3 months overdue
SWL Group £1.1m
NELC Group £0.7m
NWL Group £0.4m
Type of Debt 6 Mths + 5 Mths 4 Mths 3 Mths 2 Mths 1 Mth Overdue Current Total
Dec 16 Jan 17 Feb 17 Mar 17 Apr 17 May 17 Jun 17 Jun 17 Jun 17