Public Health Wales Board
Submission
Month 11 2011/12 Finance Performance Report
Author:Huw George, Director of Finance
Date:15th March 2012 / Version:1
Purpose and Summary of Document:
To report on the financial position of Public Health Wales as at 29th February 2012. It is consistent with the commentary prepared in accordance with the Welsh Government’s ‘Financial Monitoring Guidance 2011-12’.
Sponsoring Executive Director:
Huw George
Who will Present:
Huw George
Date of Board Meeting:
22nd March 2012
Committee/Groups that have received or considered this paper:
Please State if the Paper is for:
Discussion /
Decision
Information /
Date: 2nd December 2011 / Version:1 / Page: 1 of 9
1Purpose
The purpose of this report is to inform the Board of the Trust financial position at29 February 2012 (month 11), highlighting any risks and assumptions made.This report is consistent with the Monitoring Return submitted to the Welsh Government on13March 2012.
2Recommendation
The Board are asked to note the content of the report.
3Timing
Financial position as at 29 February 2012.
4Financial Implications
The reported position at month 11is in line with our current financial plan with a small variance due to operational fluctuations.
This report has identified the current known risks and opportunities that Public Health Wales faces in striving to reduce the deficit. The Trust continues to forecast a breakeven position for the financial year.
5Board Members are asked to:
Consider and Comment on the contents of this report.
6Introduction
The content of this report is consistent with the Director of Financecommentary which was formally submitted to WG on13March by the Trust as part of the full financial monitoring return for month 11. This return was submitted in accordance with the WG deadline.
The report will consider the following key areas:
- Financial Plan(Section 7)
- Income and Expenditure Position (section 8)
- Balance sheet (Section 9)
- Key Financial Indicators (Section 10)
- Capital Programme (Section 11)
7Financial Plan
In April 2011 the Board approved a balanced budget strategy for 2011/12.
In this strategy a funding gap of £2.847m was identified, which needed to be closed in order to balance the budget. This represents 3.5% of the gross budget (£81.452m) or 3.7% of the budget excluding direct grant type funding.
The initial approved budget was for a budget of £81.452m and this is adjusted on a monthly basis for changes to income streams.The overall Public Health Wales budget has increased from a total of £83.806m in month 10, when the position was last reported to the board to £83.982m in month 11. This increase is made up as follows:
£000sMonth 10 Budget / 83,806
Programme Management Unit
Increase in non core Income / 54
121
Month 11 Budget / 83,982
8Income and expenditure position
8.1Year to date position (YTD)
The table below highlights the financial performance to month 7. (Public Health Services are split due to the size of budgets.)
Div / Cat / Annual Budget£000s / YTD Budget £000s / YTD Actual £000s / YTD Variance £000sCorporate / INCOME / -24,099 / -22,104 / -21,525 / 580
NON PAY / 4,639 / 4,262 / 4,502 / 240
PAY / 1,656 / 1,521 / 1,499 / -22
Corp Total / -17,804 / -16,322 / -15,523 / 798
Health Protection / Microbiology / INCOME / -22,719 / -20,696 / -20,952 / -257
NON PAY / 17,146 / 15,719 / 15,673 / -47
PAY / 6,818 / 6,118 / 6,434 / 316
Health Protection / Micro Total / 1,245 / 1,142 / 1,154 / 13
Public Health Development / INCOME / -4,288 / -3,938 / -3,784 / 154
NON PAY / 17,949 / 16,459 / 15,645 / -814
PAY / 3,618 / 3,316 / 3,236 / -80
PH Dvt Total / 17,279 / 15,837 / 15,097 / -740
Screening / INCOME / -32,875 / -29,828 / -30,021 / -193
NON PAY / 12,525 / 11,482 / 11,144 / -337
PAY / 19,630 / 17,686 / 18,075 / 389
SS Total / -720 / -661 / -802 / -141
Grand Total / 0 / -4 / -74 / -71
The Trust has a small under spend (£74k) at the end of month 11. There are no significant variances but explanations for some of the key issues which exist are:
Income (£284k YTD under-recovered against budget)
The main reasons for this variance are:
- an over-recovery of £223k to date on microbiology testing income.
- an under-recovery on WG income of £641k reflecting the fact that we are planning to return £700k by the year end.
- additional income of £126k relating to strategic capital charges funding has been accounted for in month 11, which is offset by a corresponding overspend on depreciation. The budgets will be adjusted in line with actual recharges and income in month 12.
Pay Variance (£957k YTD underspent against budget)
As reported in previous months, there have been underspends across all staff categories due to slippage on new board posts and key consultant posts.
Non Pay (£604kYTD overspent against budget)
The main reasons for this variance are:
- an overspend within Microbiology of £402k on laboratory consumables as a result of additional activity and additional VAT, which is offset by additional income already received. Further income is anticipated to offset this overspend.
- a variance within corporate services on legal fees of £45k as a result of higher than anticipated expenditure. This will be covered from underspends within staff budgets.
- an overspend on Liquid Based Cytology within Screening services of £157kwhich will also be covered from underspends within staff budgets.
The variance to date of £74k underspend reflects the fact that there is brokerage planned.
8.2Savings Plans
The table below gives the savings on All Wales classification. The savings schemes developed fully address the funding gap described in section 7.
Savings by Category / Public Health Services / Public Health Development / Corporate / Total£ / £ / £ / £
Management Costs / 0 / 352,219 / 28,000 / 380,219
Workforce Modernisation / 235,574 / 504,321 / 25,000 / 765,895
Procurement / 416,139 / 14,488 / 0 / 430,000
Shared Services / 0 / 0 / 0 / 0
Energy and Estates / 0 / 30,000 / 62,000 / 92,000
Externally Commissioned Services / 255,000 / 371,688 / 553,000 / 1,179,688
Total / 906,713 / 1,272,716 / 668,000 / 2,847,429
8.3Risk Management
We continue to monitor both risks and opportunities as part of our monthly processes. There are no significant risks that the Board should be aware of at the current time.
8.4Forecast Position
In light of the month 11financialposition, the progress on savings schemes and the management of risks, the Trust continues to forecast a breakeven position.
9Balance Sheet
The major movements in the balance sheet for month 11 (from the 2011/12 opening balance) are shown in the table below.There are no issues which currently give concern in the balance sheet and the Trust forecasts that it will be able to hit its cash targets this year.
£'000 / ExplanationProperty, plant and equipment / 1,191 / Increase in capital schemes of £2.086m (Discretionary Capital additions and Modernisation of Mammography Programme expenditure), offset by depreciation and indexation charged of £895k
Trade and other receivables / 1,080 / This is a result of prepayment adjustments for rent and a number of debtors raised in month 11 (quarter 4 invoices).
Trade and other payables / -11,009 / This includes accruals for NHS recharges not received from other NHS organisations for Screening Services and a large deferred income entry (£5.6m) relating to cash received for March.
Provisions / 163 / Reduction in provisions due to closure of cases.
PDC / -2,197 / Increase in PDC (of the actual cash received, £251k related to 2010/11)
movement in Reserves / 38 / Increase to revaluation reserve, offset by reduction to DA reserve
Increase in Retained Earnings / -74
10Key Financial indicators
10.1Public Sector Payment Compliance
The performance for Non NHS invoices (value and number) is over the 95% target on a cumulative basis and in month. There has been an increase in performance for NHS invoices also, with the cumulative performance increasing to an in month performance of 88.93% for invoices by value and 85.42% by number
10.2Agency Expenditure WTE movementand Management costs
The month 11 agency costs have increased to £20k as a result of additional expenditure being identified that had been wrongly coded to a non pay subjective. A further £20k has been added retrospectively to month 10 (£10k) and month 9 (£10k) figures as a result. However, the year to date percentage (0.4%) remains below the target figure of 0.8% of the total pay expenditure.The management costs have increased slightly to 7.67% of the year to date staff costs but are still below the 2010/11 rate.
There has been an increase in WTEs across all three categories from month 10 and month 11, as follows due to recruitment to non core (new programmes) and core (funded / established) positions.
Mth 10 / Mth 11 / MovementWTE Contracted / 1,094.34 / 1,101.02 / 6.68
WTE Paid / 1,070.93 / 1,083.22 / 12.29
WTE Worked / 1,068.93 / 1,079.60 / 10.67
The movement in contracted WTEs can be further analysed as follows:
Leavers / -4.80New starters (core) – all established and funded positions / 7.82
New starters (AAA and Newborn Bloodspot) / 2.00
New starters (non-core) / 2.50
Temporary Reduction in hours / -0.84
6.68
11Capital Programme
The table below shows the current status of the Trust’s capital programme for 2011/12.
SOURCES OF FUNDS / Total2011/12
£000's
All Wales Capital Funding - Replacement Mobiles / 211
All Wales Capital Funding - Enabling Works / 829
All Wales Capital Funding - Physics QA Equipment / 61
All Wales Capital Funding - PACS / 2,700
Discretionary Capital / 1,000
Discretionary Capital - CRL Transfer to C&V for Specimen Reception Room / (18)
TOTAL SOURCES OF FUNDS / 4,783
APPLICATION OF FUNDS / Total
2011/12
£000's
SCHEMES WHICH HAVE IDENTIFIED CAPITAL FUNDING SOURCES
Screening Services - Replacement Mobiles / 211
Screening Services - Enabling Works / 829
Screening Services - Physics QA Equipment / 61
Screening Services - PACS / 2,250
Sub-Total Schemes Which Have Identified Capital Funding Sources / 3,351
DISCRETIONARY CAPITAL SCHEMES
Outstanding Retentions & Slippage
Health Protection Service - Temperature Monitoring (Swansea) / 8
Screening Services - Cervical Screening Wales Infrastructure Phase 2 / 5
Corporate - Fixed Asset Register / 25
2011/12 Schemes
Health Protection Service - Rotorgene / 20
Health Protection Service - MGIT Analyser / 36
Health Protection Service - MGIT Analyser / 30
Health Protection Service - 2 Bead Retrievers / 25
Health Protection Service - 4 Gravimetric Diluters / 20
Health Protection Service - 2 WASP Spiral Platers / 21
Health Protection Service - 3 Safety Cabinets / 24
Health Protection Service - Freeze Dryer / 11
Health Protection Service - Replacement Van (Carmarthen) / 8
Health Protection Service - 2 CO2 Incubators (Swansea) / 12
Health Protection Service - DNA Extractor (Cardiff) / 29
Health Protection Service - Replacement of 10 Year Old PCR Extraction Platform / 27
Health Protection Service - Safety Cabinet for Mycobacteria Reference Unit at Llandough Hospital / 12
Health Protection Service - 5 Anerobic Cabinets / 90
Health Protection Service - Bench Top Autoclave / 8
Public Health Development - Temple of Peace Electrical Works / 50
Public Health Development - Upgrade/Refurbish NCAC at ToP / 30
Screening Services - HPV Infrastructure Works / 77
Screening Services - BTW Wrexham Telephone System / 12
Screening Services - Faxitron (BTW Cardiff) / 57
Screening Services - Faxitron (Swansea) / 56
Screening Services - Ultrasound (BTW Cardiff) / 94
Screening Services - BTW Swansea Second Floor Building Works / 77
Screening Services - Digital Mammography BTW Cardiff Furniture / 17
Screening Services - BTW Cardiff Lift / 40
IT - Screening Services Virtualised Server Infrastructure Removing Single Points of Failure / 24
IT - Screening Services Data Backup System Replacement / 12
IT - Screening Services Virtual Infrastructure Hardware Replacement Phase 1 / 38
IT - Breast Screening Replacement Servers / 40
IT - Non Clinical Servers / 38
IT - Replacement Desktops, Laptops, Printers / 193
IT - Replacement Servers / 21
IT - Screening Virtualised Infrastructure & Storage Area Network / 66
IT - Data Analysis Servers / 20
IT - Bowel Screening Application Servers - BSIMS application / 35
IT - IT Kit for LIMS / 18
Sub-Total Discretionary Capital Schemes / 1,426
TOTAL APPLICATION OF FUNDS / 4,777
UNDER / (OVER) COMMITMENT / 6
12.Summary
The reported position at month 11 is in line with our current financial plan with a small variance due to operational fluctuations.
This report has identified the current known risks and opportunities that the Public Health Wales faces in striving to reduce the deficit. The Trust continues to forecast a breakeven position for the financial year.
Following the request from WG for all organisations to critically review their spend this year in order to identify means to assist the corporate NHS Wales position, we have been able to identify some expenditure which we can defer into 2012/13 without a major impact on the overall service delivery. This would also mean a final review of all balances inherited from predecessor organisations.
It has formally been agreed that any such amount will be brokered back into April 2012 and used to pump prime key Public Health projects next year. The current planning assumption is a figure of £700k but the final figure will be agreed in the last quarter.
Date: 2nd December 2011 / Version:1 / Page: 1 of 9