Meeting / Bexley Formal Clinical Cabinet
Agenda Heading / STANDING ITEMS – for information or discussion if required
Enclosure / K 161/11
Date of Meeting / 15 December 2011
Title of report / Month 7 Finance report
Recommendation / NOTE the month 7 Finance report headlines outlined
Executive summary
The Cluster nowprepares the Bexley Finance report for the Care Trust Board. The monthly position is discussed and agreed between the cluster and the BSU before finalisation, and the BSU is now tailoring the report to meet the needs of the Clinical Cabinet. This brief report provides headlines for the Clinical Cabinet in respect of the financial position as reported at month 7 and needs to be read in conjunction with the full Month 7Bexley Finance report (Appendix 1).
Organisational implications
Financial / The Care Trust has been requested to plan for £2,245k surplus in 2011/12.
To achieve this position, identified QIPP had to be delivered, SLAs needed to be agreed within the current financial envelopes, with expected KPIs, and over-performance must be kept to a minimum.However, as a result of substantial over-performance on acute SLAs, Bexley Care Trust is now only forecasting a breakeven position at the end of month 7. Everything possible will be done to achieve breakeven in 2011/12. However, This position will only be achieved non-recurrently.
Equality and Diversity / n/a
Risk (governance and/or clinical) / There is a high risk that Bexley Care Trust will not achieve the required control total set by NHS London.
Patient impact / n/a
NHS constitution / n/a
Which objective does this paper support? / Insert Tick ()
Improve choice and access to integrated health services for Bexley patients
Reduce the level of health inequalities across Bexley
Improve care for patients with long term conditions & increase the range of services offered within the community
Improving the health & wellbeing for people in Bexley
Maximizing the opportunities of joint working (APoH, JSNA, Wellness agenda etc)
Using our resources in the most efficient & effective manner (organisational & financial) / 
Report Author / Theresa Osborne
Date / 5thDecember 2011
Contact Details /
0208 298 6238
Executive sponsor / Theresa Osborne

Bexley Care Trust

Month 7 Finance report headlines

1. Introduction

The Cluster nowprepares the Bexley Finance report for the Care Trust Board. The monthly position is discussed and agreed between the cluster and the BSU before finalisation, and the BSU is now tailoring the report to meet the needs of the Clinical Cabinet. This brief report provides headlines for the Clinical Cabinet in respect of the financial position as reported at month 7 and needs to be read in conjunction with the full Month 7 Bexley Finance report (Appendix 1).

2. Main points to note

1)Bexley Care Trust was reported as being breakeven at month 7 against a plan of £593k surplus.To meet this position, assumptions were made by cluster on the level of challenges to data and activity, likely to be successful, as well as the effect of KPIs in providercontracts. Additionally, six months of the contingency, surplus andSLA reserve was factored into the position.

2)The month 7 position is based on the latest available information. Although information was more robust at month 7, on which to base forecasts, acute data was based on month 5 frozen, validated data and unvalidated month 6flex information which is driven by ‘SUS’ systems and timetables.The month 7 information is therefore based on month 6 reports, projected to month 7 and year end, adjusted for month 5 information relating to challenges, and commissioner judgement of the position. No adjustment has been made for contract penalties or for additional activity that may be required to meet 18 week targets. Prescribing data is based on month 5 reports.

3) At month 7 and forecast outturn, the Care Trust is reporting significant over-performance

on all of its main acute providers, offset by underspends in other acute providers. The month 7 reported overspend on acute SLAs is £6,474k, an increase of £2,779k, primarily as a result.of the inclusion of the emergency threshold adjustment and patient transport costs, previously shown against reserves. The Forecast outturn on acute spend isanoverspend of £12,979k, an increase of £5,556k, for the same reasons. Detailed information has now been provided in respect to the SLA with Dartford & Gravesham NHS Trust.Details of the main areas of over-performance follow.

a. At month 6 a detailed review has been undertaken,at SLHT, down to HRG level so as to identify the drivers behind over performance at both point of delivery (POD) and specialty level. Adjustments made to the 2011/12 baseline to reflect QIPP planning assumptions have also been considered in relation to current levels of reported over performance. The detailed review has resulted in the identification of a significant number of areas where there is some evidence of apparent coding or counting changes that are significantly impacting the Care Trust’s reported position. These will require further investigation and queries raised with the Trust. No adjustment has been made to the financial position in this respect.

b. Performance against the Lewisham contract has marginally improved. As with previous months the key areas remain electives, emergency and non-electives. However, there has been a shift with first outpatients which has moved from being under plan to being over plan by £15k. Further work is required to understand if this relates to catch up from August holidays or a sustained shift.

  1. The King’s over-performance continues to be largely driven by elective inpatients within vascular surgery, clinical haematology and neurosurgery; and an apparent change in case mix, where the financial over-performance (7.8%) is far greater than the corresponding activity increase (1.8%).
  1. The over-performance within Guy’s has remained relatively unchanged at 5.2%. Radiotherapy, high cost drugs and outpatient procedures areover-performing. Emergencies and critical care have decreased in the month.
  1. The Dartford & Gravesham contract is significantly over-performing in most areas with the exception of emergency admissions. However, there was a small decrease in the over-performance trend from last month.The most significant areas of over-performance are critical care, electives, day cases, maternity and outpatient first attendances.Over-performance in cardiology and anti-coag. need to be investigated as community services are in place for both services.

4) Bexley Care Trust reported a forecast outturn of breakeven for month 7, against its

£2,245k surplus and everything possible will be done to achieve this in 2011/12.However, it is important to note that this position is non-recurrent and that the Care Trust does have an underlying recurrent deficit as a result of the non-recurrent support used in 2011/12 to support the financial position. The forecast outturn position already includes an expected return of £5,989k from the 2% non-recurrent topslice (£6,814k). A further £250k is expected from the 2% to support the Healthcare campus development. Furthermore, the surplus was previously reduced by £1,800k in lieu of the balance of historic deficit to be repaid. A further £40k has been received to pump prime a medicines management sector QIPP on enteral feeds. The uncommitted balance is £535k. It is expected that this will be available to support the Care Trust’s position and has been factored in to the forecast outturn position.

5)The budgets managed locally are expected to breakeven overall, although continuing

care is expected to overspend, which will be offset by non-recurrent underspends elsewhere; and prescribing is expected to overspend which will be offset by a specific prescribing reserve. The budgeted surplus is now being used to offset expected acute SLA over-performance and expected overspends on Non-Contracted activity, which are both managed by the cluster team.

6)The current and forecast overspend in prescribing is expected to continue unless there is further investment in BSU resources to support GPs with the delivery of the QIPP scheme.

7)Achievement of the 2011/12 control total, or breakeven, is reliant on a number of factors:

  1. Monitoring of the South London Healthcare Trust SLA within the financial envelope set, including defined KPIs.
  2. Control of acute activity to prevent over-performance by:
  3. GP referrals (use of PMC). However, it should be noted that when benchmarked these are low;
  4. Data validation and challenges;
  5. Appropriate performance management of KPIs, and implementation of emergency readmission guidance.
  6. Delivery of identified QIPP schemes including KPIs;
  7. Managing all other budgets to prevent overspends and apply corrective action if necessary; reduction of budgets where possible; and reducing or limiting spend non-recurrently wherever possible.

8)Bexley QIPP for month 7 is shown as £523k below plan. This is primarily because of a shortfall from specific KPIs and performance metrics in the SLHT acute contract. This under-performance is reflected in the acute over-performance position,The forecast outturn is an under-performance of £2,204k.Prescribing savings and PEARS are also under-achieving against plan. However, a specific reserve is held to cover the prescribing cost pressure. Monitoring information of all schemes should improve as the year progresses. The unidentified QIPP of £4,572k, included in planning, has now been found through a thorough review of budgets and reductions in expenditure and investments.

9)The main risks to the position are as previously stated but are primarily:

i. Negotiation and over-performance of acute SLAs;

ii. Delivery of QIPP;

iii.Extensive use by Bexley residents of acute provision outside of contracted areas – Non contracted activity;

iv.Unpredictability of continuing care and retrospective reviews and constant budget pressure as a result, despite negotiation of lower prices and regular case review;

v. Cost pressures from other areas of government;

vi. Unidentified cost pressures at the time of planning, e.g. Patient transport costs and enteral feeds;

vii. Independent Funding requests if not scrutinised before approval.

10)The financial services hosting arrangement for Bexley Care Trust (and therefore the

BSU) transferred from Oxleas to Shared Business Services with effect from 1st October 2011.However, for month 7 no budget holder reports are available due to problems with the system. In addition the Care Trust’s Better Practice Payments Code (BPPC) dropped below the required 95%. It is hoped that this is a transitional issue due to teething issues with the system, and that the performance will reverse in future months.

3. Recommendation

BCCC members are asked to NOTE the month 7 headlines outlined above.

Theresa Osborne

Chief Financial Officer

Bexley BSU

5thDecember 2011

0208 298 6238


Chair: Caroline Hewitt Chief Executive: Andrew Kenworthy

Appendix 1

NHS South East London Cluster



1.1.This report sets out the 2011/12 financial position for Bexley Care Trust as at month 7 and the year-end forecast. The report also sets out the position on contracts with Trusts, QIPP savings initiatives and PCT financial management targets and duties.

2.Profiling and Assumptions

2.1.The month 7 year to date position is based on the latest available financial monitoring information. As at the time of this report, month 5 data is frozen and validated whereas month 6 remains flex. Month 7 information is not yet available, so the month 7 financial position for acute contracts are based on month 6 reports projected to month 7 and year end.

2.2.A contract monitoring and claims management system is in place and contractual terms and conditions have been specified within this system for each provider contract. This allows the automation of queries and challenges against Trust data. However, acute positions are driven by data provided via the national SUS system and information is therefore subject to national timetable limitations. Given the level of outstanding data challenges, primarily at SLHT, it is likely that these positions will move as the data becomes more robust. The aim is to resolve challenges within the national SUS timetable; however it has not been possible to resolve challenges with some providers within these timescales. Work is ongoing to attempt to resolve these but until this is achieved, forecasting is based on the commissioner judgement of the position.

Headline Financial Performance

2.3.Year to date and forecast financial performance assessments for the Care Trust are highlighted below:
Table 1: Headline Financial Performance - Bexley

Bexley Care Trust
Year to Date (Month 7)
Expenditure Position / Acute / Client Groups / Primary Care / Corporate Budgets / Other Budgets and Reserves / Total
£'000 / £'000 / £'000 / £'000 / £'000 / £'000
Month 7 Budget / 106,736 / 39,530 / 43,298 / 6,474 / 7,628 / 203,666
Month 7 Expenditure / 113,209 / 40,230 / 43,523 / 6,307 / 396 / 203,666
Month 7 (over)/ Underspend / (6,474) / (700) / (226) / 168 / 7,232 / 0
Planned Underspend / 593
Variance Against Plan / (593)
QIPP Savings Initiatives / Total
Planned QIPP Savings / 7,226
Actual Savings / 6,703
QIPP Savings (Over)/ Underspend / (523)
Forecast Year End
Expenditure Position / Acute / Client Groups / Primary Care / Corporate Budgets / Other Budgets and Reserves / Total
£'000 / £'000 / £'000 / £'000 / £'000 / £'000
Full Year Budget / 182,976 / 67,466 / 74,295 / 13,506 / 12,488 / 350,730
Forecast Year end Expenditure / 195,955 / 68,601 / 74,705 / 13,246 / (1,776) / 350,730
Forecast year-end (over)/ Underspend / (12,979) / (1,135) / (411) / 261 / 14,263 / (0)
Planned Underspend / 2,245
Variance Against Plan / (2,245)

2.4.As at month 7, the Care Trust is reporting a breakeven position year to date and at forecast outturn and so meeting its statutory financial duty of no overspending against its resource limit.

2.5.This is an adverse position against the Care Trust’s planned surplus target of £593k year to date and £2,245k at year end.

2.6.The ability of the Care Trust to meet its forecast breakeven position is predicated on the receipt of the all the remaining 2% non-recurrent funds from NHS London and assumptions on the use of penalties levied on Trusts for not meeting 18 week referral targets. In addition to this, the month 7 position does assume a level of support from the rest of the SE London cluster. However further work is being undertaken by the Cluster and Bexley BSU to minimise this requirement.

2.7.The key area of overspend relates to acute activity, particularly at the Care Trust’s two main providers, SouthLondonHospitals and Dartford & Gravesham. Outside the acute portfolio, BSU managed budgets, which include non-acute commissioning, prescribing and corporate expenditure is forecast to breakeven overall through the use of recurrent and non-recurrent savings and contingencies.

2.8.There are still significant risks to the position which will need to be managed closely by the Cluster and Bexley BSU to ensure that the PCT meets it statutory duties.

2.9.The reported year to date and forecast expenditure position includes the year to date and forecast delivery of QIPP savings initiatives.

3.QIPP Delivery

3.1.In 2011/12, QIPP savings initiative plans total £10.2 million for Bexley. The reported position shows a month 7 shortfall of £523k and a year-end forecast shortfall of £2,204k as below:

Table 2: QIPP Delivery

Year to Date QIPP savings initiatives
Planned QIPP Savings / 7,226
Actual Savings / 6,703
QIPP Savings (Over)/ Underspend / (523)
Forecast Year end QIPP savings initiatives
Planned QIPP Savings / 10,203
Forecast Savings / 7,999
QIPP Savings (Over)/ Underspend / (2,204)

The £10,203kQIPP schemes included unidentified QIPP of £4,572k of unidentified QIPP at the beginning of the year, which has since been met through a thorough review of budgets and reductions in expenditure and investments. The majority of the shortfall relates to expected savings from specific KPIs and performance metrics in the SouthLondonHospital acute contract which through the negotiation process and subsequent challenge process have not reached the original targets set. These now reflect the latest forecast position as reflected in the acute budget position.

The other significant shortfall in QIPP relate to prescribing, where the shortfall is met through the use of prescribing contingency and the cancer network savings, which have been delayed until 2012/13

3.2.Any further shortfalls will have an impact on the Care Trust’s ability to meet its breakeven duty unless met by further savings and CIPs.

4.Update on PCT Resource Allocations and Budgets

4.1.PCT budgets are based on both confirmed and anticipated Resource Limit allocations, as set out in PCT Operating and FIMS plans for 2011 and updated to reflect additional information received since the submission of plans. A number of resource assumptions for 2011/12 are to be confirmed, particularly relating to access of the 2% Non-Recurrent Funds.

4.2.PCT expenditure budgets are based on agreed Operating Plans and updated to reflect confirmed contract values with Trusts. It should be noted that a small number of contracts are still to be agreed for 2011/12.

Service Financial Positions

4.3.Further details of expenditure positions by service area are set out in sections 5 to 9 below:

5.Acute Services
A summary of the acute sector position is set out below. Further details are included in a separate acute sector finance and contract monitoring report.

5.1.Expenditure Position – Acute Services – Methodologies
The year to date and forecast year end expenditure position for acute services is set out below. The year to date positions and forecast trust contract positions are based on:

  • month 6 flex information from Trusts, including adjustments to month 5 information relating to Trust challenges
  • Assessments of uncoded activity that are not yet included in flex data from trusts
  • Adjustments have been made to forecasts to reflect an assessment of the proportion of month 5 claims management challenges that will be successful. Local intelligence on this will improve as the year progresses.
  • Adjustments relating to trust-led QIPPs and KPIs not reflected in trust monitoring returns.
  • Adjustments have been made to reflect a view of phasing of contracts to reflect seasonality as not all trust contract monitoring information does so.
  • The Month 7 year to date expenditure position is based on up-scaling of Month 6 information, adjusted to reflect the above.
  • It should be noted that the separate cluster Acute Contract Monitoring report is based on Month 6 trust monitoring information, adjusted for uncoded activity and for trust-led QIPPs and uncoded activity as above. However, adjustments have not been made in the Acute Contract Monitoring report for month 7 up-scaling.
  1. Year to Date Expenditure Position – Acute Services
    The month 7 year to date expenditure and forecast year-end position is set out below in tables 3 and 4. As at Month 6 acute budgets are overspent by £6,474k and the forecast is that acute budgets will overspend by £12,979k at year-end, based on the methodology set out above. The cluster is experiencing significant pressures at its local trusts which is being closely monitored. The increase from month 6 is primarily as a result of the inclusion of the emergency threshold adjustment and patient transport costs, previously shown against reserves.

In order to improve consistency in reporting, costs pressures associated with the emergency baseline funding transfer to NHS London, patient transport services and arbitration costs have now been included within acute services. In month 6, these costs were charged against reserves and allocations.