NHS COVENTRY AND RUGBY CCG
Report to:
Governing Body – 11th March 2015
Report Author:
Chris Lonsdale, Head of Finance
Presented by:
Clare Hollingworth, Chief Finance Officer
Title of Report:
Finance Report – Month 10
(1st April 2014 to 31st January 2015)
Purpose of the Report:
To advise members of the financial position of the CCG up to the 31st January 2015
(Month 10 – 2014/15) and to advise of any other financial issues likely to impact in
the current financial year.
Key Points:
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The CCG is now reporting a year to date revenue surplus in excess of plan at
£5.16m compared to a plan of £4.52m. This is due to a national underspend
against CHC Retrospective claims risk share which NHS England have required
CCGs to reflect as an improvement against their original surplus plan. Phasing
of the plan has been kept consistent with that monitored by NHS England.
The CCG is reporting that it will exceed its 1.0% control total surplus due to this
requirement but there remain risks to achievement of this position, primarily
related to CHC, Individual Placements and Prescribing.
The UHCW contract is reported as expected to over-perform by £13.5m for the
year as per the year-end agreement.
The 0.5% contingency and other reserves have been deployed to offset over
performance on the UHCW contract (as highlighted in main body of report).
A level of QIPP under-achievement has been forecast based upon performance
to date and the status of project plans.
It is anticipated that the CCG will be able to achieve its running costs target.
Recommendation(s):
Members are asked to:
 To note the reported financial position which shows a £5.16 m surplus at month
10 of the financial year compared to a plan of £4.52m.
 To note that whilst the CCG currently anticipates being able to achieve its
statutory financial duties in 2014/15 and delivery of the revised control total
surplus set by NHS England, there do remain a number of risks that could
impact in the final months of the year.
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Approved by:
Committee / Meeting
Date
Performance Committee
2nd March 2015
Implications:
Financial:
Achievement of financial duties for 2014/15
HR / OD:
None directly
Board Assurance
AF Risk Ref N refers – QIPP Delivery.
VfM Opinion
Risk Rating:
Contributes evidence to Use of Resource Key Line of
Enquiry 1.1 - Financial Management which informs
External Audit’s annual Value for Money opinion.
Medium –The CCG is currently forecast to achieve its
statutory financial duties and exceed the 1.0% control
total surplus required by NHS England. There is still a
level of risk within the system that could effect that
position.
Equality & Diversity:
None directly
PPI:
None directly
Health Strategy:
The CCG’s revenue and capital budgets underpin
delivery of its commissioning priorities.
Section 17:
None directly
Framework of
Excellence Domain:
Area 4 – Robust Governance Arrangements
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NHS COVENTRY AND RUGBY CCG
Report to:
Governing Body
Report from:
Clare Hollingworth, Chief Finance Officer
Title:
Finance Report – Month 10 (1st April 2014 to 31st January 2015)
____________________________________________________________
1.0
Introduction
1.1
The purpose of this report is to inform Members of the CCG’s financial position
as at the end of January 2015 and to advise of any other financial issues likely to
impact during 2014/15.
2.0
Statutory Financial Duties and Targets
2.1
Table 1 summarises the CCG’s current performance against financial duties,
NHS England monitoring (for RAG basis see end of report) and other targets:
Table 1
Description
Duty/Target
Revenue Resource
Limit
Capital Resource
Limit
Surplus
Expenditure
QIPP
Running Cost
Public Sector
Payment Policy
(PSPP)
Maintain expenditure within limit
Achieve
ment
YTD
Yes
Achieve
ment
FOT
Yes
Maintain expenditure within limit
Yes
Yes
0.14%
-0.14%
0.23%
-0.23%
67%
Under
98.4%
66%
Under
98.5%
99.0%
99.0%
Variance to plan as % of allocation
Variance to plan as % of net
expenditure budget
% of plan
Running Cost allowance
Pay 95% of non-NHS
YTD By
invoices within 30 days
number
YTD By
value
2.2
The QIPP position being reported reflects current RAG rating of individual
schemes. Further details are contained within section 4 of this report.
2.3
The PSPP position has remained on target. Work is continuing to ensure that
target performance is maintained throughout the remainder of the year.
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2.4
The forecast Surplus remains £1.2m above the 1% surplus target representing
the CCG’s rebate in respect of the national Retrospective CHC claims risk share
fund, which will significantly underspend in 2014/15. The CCG has recorded
£0.6m over Surplus year to date.
3.0
Revenue Position
3.1
CRCCG’s anticipated allocation for 2014/15 remains at £553,113k with details
appearing in Appendix 2.
3.2
The Summary Revenue Statement at Appendix 1 shows the Month 10 revenue
position as a surplus of £5,159k, which is £637k above plan as outlined above.
There are a number of variations at individual service line which are highlighted
in the next sections. Phasing of the plan has been kept consistent with that
monitored by NHS England. The CCG is reporting itself as forecast to exceed its
planned position of a 1% surplus, as per previously outlined. There remain
however, a range of risk factors that could effect this position in the final months
of the year.
Acute
3.3
The UHCW position reflects the negotiated year end settlement. The level of
over-performance is £1.3m higher than previously reported, but mitigates a
significant number of the risks around the year-end position.
3.4
The remainder of the In-County SLAs now show a £0.6m year to date and
£0.6m forecast out-turn over performance although further contract validation is
needed. There is some uncertainty regarding the GEH contract where contract
data has fluctuated widely, possibly linked to the Trust’s implementation of a new
activity monitoring system. The CCG is working with the Trust and WNCCG, the
host commissioner, to resolve outstanding queries.
3.5
Out of County SLAs show an increasing level of over performance at this stage
of the year with a combined £2.4m over spend forecast by year-end.
Independent Sector contracts account for the majority of the over spend and is
in the main due to the current focus on the 18 week Referral to Treatment and
the need to divert additional activity from UHCW to help meet this key target
Non Contracted Activity forecast underperformance of £3.1m will offset over
performance elsewhere. There is £0.5m forecast over performance on the
remaining areas within the Acute portfolio.
3.6
Non-Acute Healthcare
3.7
The Non-Acute contract portfolio has an under spend of £1,130k year to date and
a forecast £1,106k under spend. Uncommitted Re-ablement monies, unbudgeted
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transitional relief funding from NHSE in respect of the local personality disorders
service and the CHC position account for the majority of the variance.
3.8
The two main contracts, with Coventry & Warwickshire Partnership NHS
Trust (for Mental Health and Community services), are predominantly block
funding agreements. In-year financial variances are being validated based on
the cost per case elements of the contract and anticipated contract variations
contribute to the forecast £862k over performance.
3.9
The Continuing Healthcare (CHC) budget is reported as an under-spend to the
value of £852k year to date. The profile has been set on the basis of last year’s
expenditure profile and a resultant £1,087k under-spend forecast for the year.
There are, however, a large number of claims for CHC funding assessments that
have yet to be assessed. An early estimate of the potential costs is incorporated
into the forecast but this will need to be refined as reviews are completed. This is
then partly offset by an expected over-spend of £840k on Mental Health and LD
Individual Treatment Packages. Expenditure in both areas will continue to be
kept under close review.
3.10 There remains an under spend on the Physical Disabilities expenditure line
offsetting over performance within Community Services contracts. Variances on
other budgets within the Non-Acute portfolio are negligible.
Primary Care
3.11 GP Prescribing: The current Prescribing data continues to show that there is
likely to be an under performance for the budget overall with a forecast figure of
£97k. Volume levels to date continue to be well managed, however, a number of
prescribed drugs have been subject to price rises due to scarcity. It is now
anticipated that the QIPP target will be almost met as ad hoc initiatives are being
progressed by Medicines Management to improve the overall financial position of
the Prescribing budget. Prescribing expenditure is subject to month on month
fluctuation and the forecast may be subject to further change prior to the financial
year end.
3.12 Home Oxygen: Figures show a £43k under-spend to date which has been
projected forwards as a £53k under performance by the end of the year.
3.13 Other: The remaining budgets are performing broadly in line with plan at this
stage in the financial year.
Other Programme Costs
3.14 Other Programme costs show a £324k under-spend predominantly due to staff
vacancies. The forecast under-spend is anticipated as £276k based on budget
holder expectations for expenditure in the remainder of the financial year.
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3.15 Work is ongoing with NHS Property Services to validate proposed accommodation
charges. It is possible that the final costs could be lower than those currently
reported.
Corporate Services / CCG Running Costs
3.16 Total corporate budgets show a £689k under-spend to date and £710k forecast
to year end. This predominantly reflects staffing vacancies earlier in the year.
Reviews continue to be undertaken with Budget Holders to validate forecasts and
ensure that unplanned spending is not undertaken to utilise budget underspends
which are contributing to the overall CCG position.
Reserves
3.17 The majority of CCG Reserves have been used to offset over performance on the
UHCW contract. The net reported expenditure represents known commitments
less anticipated income. It is anticipated that the full level of Resilience funding
will be utilised by the end of March.
4.0
QIPP Programme
4.1
The QIPP monitoring report along with other sources of information has been
utilised to produce an expected position (Appendix 7 summarises).
4.2
The QIPP Programme still has a number of schemes rated Red and these will
continue to impact upon overall achievability of the £13.4m target. Currently a
£4.5m under-delivery is forecast. The specific assumptions are as outlined
below:
4.2.1 Acute High Cost Drugs – Estimates have been based on locally calculated
savings / cost avoided rather than on a comparison of actual spend to
available budget. Whilst there is evidence that the prior approval process
(Blueteq) has successfully reduced non NICE compliant prescribing, this
appears to have only reduced rather than reversed the rate of growth in
specialised prescribing. The overall position is further complicated by the
introduction of unbudgeted treatment pathways in-year. Work is ongoing to
improve the Wet AMD referral routes to ensure that the maximum number of
patients are able to access the Avastin pathway.
4.2.2 Low Priority Procedures –. The level of LPP saving has been assumed within
the CCGs forecast that was used to negotiate the contract year-end with
UHCW. The forecast position assumes no savings will be achieved this
financial year as a result of reviewing Surgical Thresholds. The CCG is
currently reviewing the scope of Prior Approval for 2015/16 and whether some
of the criteria need to be made more robust.
4.2.3 GP Referral Management – New out-patient rates are significantly higher than
the same period last year although there is no evidence to suggest
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4.2.4
4.2.5
4.2.6
4.2.7
4.2.8
4.2.9
inappropriate referral behaviour. Local audits are being conducted to
investigate the rise in Rugby referrals which are higher than the CCG average.
COPD/Heart Failure – there has been some reduction in activity year to date
for COPD, but not Heart Failure. Work is ongoing with the service provider to
agree how these community teams can best support the reduction of
secondary care activity.
Mental Health Liaison – Whereas MH admissions are currently higher than the
activity plan, the data provided by the team and verified by UHCW shows the
scheme to be successfully reducing admissions.
CHC Reviews – whilst recent reporting shows an improvement for the QIPP
position, it is not thought that this will allow for a full catch up to the target
position this financial year.
Prescribing – The forecast saving has been affected by the national change on
Category M drugs. Additional ad hoc initiatives have been implemented by
Medicines Management that bring the overall savings closer to plan.
Urgent Care –new initiatives implemented in December have led to a revised
forecast position.
Other – Schemes have been forecast based on the current RAG status.
5.0
Financial Outlook / Risk Management Plan
5..1
As outlined above, whilst the CCG is reporting achievement of the 1.0% surplus
required by NHS England (plus the £1.2m benefit from the CHC Retrospectives
rebate) risks remain that this will not be achieved in full. The primary risk relating
to the UHCW contract settlement has now been resolved, but there remain
volume related risks that may still impact over the remainder of the year:
Continuing Healthcare, Individual Placements, 18 weeks RTT catch-up,
Emergency activity and Prescribing.
6.0
Capital Programme
6.1
The CCG has planned expenditure in line with the allocations for GP IT and
corporate capital.
7.0
Recommendations
7.1
Members are asked to:
 To note the reported financial position which shows a £5.16 m surplus at month
10 of the financial year compared to a plan of £4.52m.
 To note that whilst the CCG currently anticipates being able to achieve its
statutory financial duties in 2014/15 and delivery of the revised control total
surplus set by NHS England, there do remain a number of risks that could impact
in the final months of the year.
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