Joint Locality Executive Board 23 09 2015
Agenda Item: 7.1
Financial Performance Report, August 2015 (Month 5)
Sponsor: Rob Robertson
Members of the Joint Locality Executive Board are asked to
1. Consider the CCG financial position as at 31 August 2015.
2. Consider the key risks to achieving the CCG financial plan and agree mitigating
actions.
1
Purpose
1.1
The purpose of this document is to report on the financial position for the period to 31
Aug 15, highlighting any areas of pressure.
1.2
The following appendixes refer:
Appendix 1 – year to date income and expenditure report and forecast outturn
Appendix 2 – allocation breakdown
Appendix 3 – statement of financial position
Appendix 4 – better payment practice code
Appendix 5 – cash flow forecast
Appendix 6 – summary contract performance
1.3
Appendix 1 shows the financial allocation of the CCG broken down across the relevant
areas of expenditure. The CCG’s main contracts, prescribing and running costs are
identified separately, as they cross all domains, with delegated domain budgets also
shown.
2
Financial Position
2.1
Appendix 1 also shows the financial performance of the CCG for the year to date to Aug
15. The CCG is forecasting a break-even position at the year-end (c£300k surplus).
2.2
A forecast overspend is shown against Northumbria HCFT Community Services (£890k)
which relates to community IT and NHS Property Services charges that are funded
within the CCG’s running costs. A corresponding underspend is shown in running costs.
2.4
A year to date and forecast overspend is shown on the Planned Care line which mainly
relates to expenditure on the CCG Practice Activity and Engagement schemes, which
are to be funded from the Quality Premium payment. Anticipated income for the Quality
Clinicians commissioning healthcare
for the people of Northumberland
1
Premium is shown within the Commissioning Reserves line, which offsets the planned
care overspend.
2.3
Appendix 2 shows the total confirmed 2015/16 allocation for programme and running
costs as at August is £450.05m, additional allocations have been received in August for:
-
Initial allocation eating disorders & planning in 2015/16
Offender health – secondary care
Northumberland health & care system – PACS Q2 funding
£187k
£182k
£5,200k
3
Areas of risk
3.1
The following risks within the CCG financial plan require action if they are to be
mitigated.
3.2
Acute over performance: The CCG faces increased uncertainty of patient flows due to
the new Northumbria Specialist Emergency Care Hospital (NSECH) which opened in
June. The CCG has agreed a risk share and a revised set of business rules with
Northumbria Healthcare to limit exposure to increased activity, but have also retained
the 0.5% contingency to offset some risk. Information flows regarding Newcastle
Hospitals are still being resolved, and seemingly high levels of activity in daycases and
high cost drugs/devices are being investigated further.
3.3
Prescribing: The medicines management programme is anticipated to deliver
significant savings and help manage to budget. Any slippage in the programme
represents a risk to the overall CCG financial position. It has been agreed that
prescribing will be the substantive agenda item at the next CCG business meeting in
October. An extended programme of savings is being developed by the prescribing
domain leads, in order to bring prescribing expenditure back into line.
3.4
Mental health and learning disabilities: The CCG faces additional pressure due to:


Mental health placements from NHS England specialised commissioning being
repatriated to Northumberland without a commensurate transfer of funding. A
number of high cost packages originally allocated to the CCG have been reviewed
and alternative host commission arrangements agreed, mainly outside of the NE&C
area.
The disproportionate financial impact of patients discharged under S117 in
Northumberland, as a result of the high number of beds located within the county.
The NE&C CCG CFOs have agreed in principle a S117 risk share, which is to be
discussed in more detail at a future CFO meeting. A template has been shared, to
be completed by all local CCGs, which will indicate current S117 expenditure and
where host commissioning arrangements need to be reviewed between CCGs.
2
4
QIPP
4.1
The CCG Domain Directors and Heads of Commissioning have produced detailed work
plans for each area of QIPP saving. These are monitored weekly and are scrutinised by
our NHS England area team as part of the assurance of our financial recovery.
4.2
The monthly work plan monitoring will continue, and detailed monthly monitoring of the
impact of each of the schemes will be undertaken at the CCG’s ‘14th working day’
contract and performance meeting. Any issues that require escalation will be discussed
at the CCG’s business meeting on a bi-monthly basis.
4.3
The table below shows the summary QIPP performance to date.
QIPP Plan FYE
Recurrent
Non
Recurrent
YTD Tracker
Total
Profile
QIPP Programme
Lead Director
1. Running Costs
2. Review of LD/S117 contracts
Julie Ross
Julie Ross
3. MH OOA Packages
4. Medicines Management
Julie Ross
Graham Syers
800
5. Non PbR Contracts
Rob Robertson
500
500
6. MSK
John Warrington
1,500
7. IFR
John Warrington
8. Practice Activity Scheme
John Warrington
9. Primary Care at Scale NEL Savings
David Shovlin
Total 2015/16 CCG QIPP Programme
£000's
FY Forecast
YTD Savings YTD Savings
YTD
YTD Variance
Plan
achieved
achievement
FY Forecast
Savings Plan
FY Forecast
Variance
FY
achievement
£000's
£000's
£000's
£000's
£000's
%
£000's
£000's
%
500
500
1,000
Month 5
Month 5
205
222
102
100
-103
-122
50%
45%
500
501
0
-499
100%
50%
800
1,100
Month 5
Month 3*
330
200
330
61
0
-139
100%
31%
800
500
0
-600
100%
45%
Month 5
205
205
0
100%
668
168
134%
1,500
Month 4*
496
791
295
160%
1,500
0
100%
500
500
Month 4*
168
87
-81
52%
350
-150
70%
360
360
Month 4*
120
-50
-170
-42%
360
0
100%
765
Month 5
765
0
100%
84%
5,944
-1,081
85%
1,000
1,100
765
5,425
1,600
7,025
£000's
£000's
Better Care Fund Programme
Lead Director
£000's
10. Acute services BCF QIPP
Hilary Brown
4,100
4,100
Total 2015/16 CCG BCF QIPP
4,100
0
4,100
Total 2015/16 CCG TOTAL QIPP
9,525
1,600
11,125
Month 3**
0
0
0
0
1,946
1,627
-319
£000's
£000's
£000's
%
£000's
£000's
%
1,023
-608
-1,631
-59%
2,000
-2,100
49%
1,023
-608
-1,631
-59%
2,000
-2,100
49%
2,969
1,019
-1,950
34%
7,944
-3,181
71%
Month 4* profiled lines are activity based, reliant on data to measure which is only available for month 1-4.
Month 3* Prescribing data is 2 months behind.
Month 3** BCF is monitored to SUS freeze deadlines, 2 months behind.
Key % achievement
% range
Fully achieved
Partially achieved
Not achieved
100%
50-99%
0-49%
Plans are in place to bring running costs savings back into line by the end of the year.
Any shortfall in achievement against the IFR scheme is offset by over achievement of
savings in non PbR contracts. The key areas of risk are outlined in section 3 above.
3
5
Contract Performance
Detailed contract performance information for the CCG’s two main acute providers is at
Appendix 6.
5.1
Northumbria Healthcare FT contract is overspent at month 4 by £775k (£454k including
WIP estimate of -£321k). The key variances are:
-
Non-Electives
Ambulatory Care
Electives and Daycases
Critical Care beddays
Direct Access
Drugs
Other
£352k overspent
£174k overspent
-£276k underspent
£112k overspent
£270k overspent
£250k overspent
£67k overspent
The CCG is disputing an amount claimed by the FT as part of the non-elective cap and
collar arrangements of £510k. This is not included in the reported overspend above.
5.2
High level Newcastle Upon Tyne Hospitals FT contract performance for month 4,
produced by NECS, shows that the CCG is overspent by £1.1m. The key variances are:
-
Drugs and Devices
Non-Electives
Daycases
Other
£367k overspent
£242k overspent
£200k overspent
£311k overspent
The CCG continues to work with NECS to investigate the cause of the increased
expenditure in high cost drugs/devices and daycase activity.
5.3
Contract baselines have been set with the expected impact on non-elective admissions
of the Better Care Fund (BCF) removed. Under our BCF agreement, this funding is held
centrally and either paid to the Local Authority if the reduction in admissions occurs, or
to the FT if not. A further BCF risk share has now been agreed which ensures that
neither party ‘lose out’ if no savings materialise.
The total expected reduction is £4.05m split between the two main providers as follows:
-
Northumbria HCFT
Newcastle UTHFT
£3.2m
£0.9m
(£1.1m to month 4)
(£0.3m to month 4)
The level of non-elective over performance shown in sections 5.1 and 5.2 is therefore
covered by the BCF agreement, and the risk to the CCG is minimal.
4
6
Statement of Financial Position
6.1
The Statement of Financial Position (Appendix 3) shows the closing positions at the end
of August 2015 together with a comparison to the previous month.
6.2
The CCG is expected by NHS England to proactively manage the cash it draws down
each month and the amount it actually spends. The CCG is expected by NHS England
to proactively manage the cash it draws down each month and the amount it actually
spends. The target is to have no more than 1.25% of the monthly drawdown of cash left
in the main bank account each month. The cash balance at the end of August 2015 was
£0.58m (Appendix 5) which equates to 1.16% of the August draw down, and meets the
target level.
7
Better Payment Practice Code for year to 31 August 2015
7.1
The Better Payment Practice Code requires that all valid invoices should be paid by
their due date or within 30 days of receipt, whichever is later. The CCG is measured
against a target of 95% achievement.
7.2
Appendix 4 shows the cumulative value of NHS invoices paid within 30 days at 31
August was 99.66% as a percentage of invoice value and 98.73% by invoice count. The
cumulative value of Non NHS invoices paid within 30 days at 31 August was 98.66% as
a percentage of invoice value and 94.37% by invoice count.
In July an issue within SBS, relating to a GP enhanced service payment file which
contained 90 invoice lines of relatively low value, led to under achievement against the
95% target for the number of invoices paid. Cumulative performance is expected to
improve during the course of the year to offset this one-off issue.
5