Financial Planning & QUIPP Scheme Delivery 2011/12
1. Objectives of the paper
Building on the significant progress made by BCHC over the last 2
years, the objectives of this paper are to:

Put into context the savings (QUIPP / CRES) agenda and the
2010/11 delivery of savings

Identify the likely QUIPP / CRES target for 2011/12.

Confirm an outline timetable for 11/12 financial planning and more
specifically the identification, challenge and sign off of 2011/12
QUIPP plans.

Confirm outline monitoring arrangements for 2011/12.

Outline the challenge for future arrangements - the wider
relationship required between savings and impact on service and
quality.
2. Context
Cash releasing efficiency savings (CRES) has historically been driven
through financial channels. The development of the QUIPP agenda at a
national and local level has shifted the emphasis of savings plans away
from finance and into the wider realms of quality and service
transformation (QUIPP).
Historically, significant attention has been paid to the identification and
delivery of QUIPP savings in the monthly NHS financial monitoring for
Trusts. This emphasis will only increase as we move through the
Foundation trust application process.
BCHC previously recognised that a move away from a culture of
‘cutting of budgets’ was required and further development of a culture
of lean thinking, service redesign and reconfiguration was needed. It
also highlighted the need to build longer term planning through a
culture of continual improvement.
However, whilst this change of emphasis is being introduced,
the basic requirement to deliver recurrent savings of £10m in
2011/12 remains the foremost requirement.
3. 2010/11 QUIPP / CRES delivery
The savings target for SBCH (£160m turnover) was £4.021M in
2010/11
Reported monthly by the finance department, the plan and actual
position by directorate at month 8 is as follows:
Table 1- Board Extract - CRES 2010/11 FOT by Division
Looking forward to reporting in future, the current analysis is also
produced using the QUIPP headings the NHS expects to be used.
Table 2- Board Extract - CRES 2010/11 FOT by QUIPP category
It can be noted that the small recurrent shortfall (£252k as at month 8
10/11) from 2010/11 will need to be added to the 2011/12 target.
4. Likely QUIPP / CRES target for 2011/12
The NHS sets an annual CRES target as part of the NHS
operating framework. Published in December 2010 this confirmed
that the target for 2011/12 has been set at 4% of BCHCs expected
£250m annual SLA income, around £10m. Trusts can expect a
similar requirement annually from 2011-2014.
BCHC will be expected to demonstrate detailed plans and delivery of
QUIPP / CRES of 4% per annum if it is to stay on course to achieve
Foundation Trust status.
The outline targets for 2011/12 by directorate are provided below.
Table 3- combined (including service transfers) 11/12 QUIPP targets
BCHC
4% 11/12
Target
£10m
Add 10/11
Shortfall
£0.25m
11/12 Total
£10.25m
In the 2011/12 contracting round, the expectation is that the Trust will
once again be able to demonstrate how CRES schemes link to QUIPP
principles. To address the £10m target for 2011/12, the Executive team
have drawn together outline indicative savings ‘themes’ created by use
of a QUIPP / themes for 2011/12, shown below.
Table 4- 2011/12 initial indicative cross cutting QUIPP themes and targets
Savings Initiative
E-rostering roll-out generating savings on bank
and agency staffing
Service Redesign generating reduced staffing
requirement / skillmix, maintaining quality
Introduction of new IM&T systems and mobile
working solutions
Lease cars: review scheme
Procurement: reductions in revenue expenditure
Estate rationalisation
Shared Service Agency: reduction in BCHCT
costs
Outgoing Mail Solutions
Danwood Business Case
Drug expenditure reduction in costs
Total Savings
Estimated
Value
Lead
£1.5m Stephen Hildrew
£4m Divisional Directors
Lorraine Thomas
£2m Vicki Gledhill
Divisional Directors
£0.35m Procurement
Finance
£0.8m Procurement
£0.25m Estates Manager
£0.25m Peter Axon
£0.05m Julie Ravenhall
£0.075m Pater Axon
£0.72m David Harris
£10m
Whilst the above approach gives a ‘high level prompt’ to the areas
where PIDs for savings may be developed by the Directorates /
Divisions, the default position will need to remain to identify 4% of
budget as savings, with a working assumption that this is delivered by
all Directorates / Divisions. Over coming months major redesign
schemes will be finalised to ensure that longer term financial targets
have allocated savings plans. However the 2011/12 savings target will
be delivered through a mix of local schemes and cross cutting major
schemes.
To ensure delivery of the savings target in 11/12 and to ensure
that sufficient time is allotted to the development of robust
redesign plans, a 4% target is set for each directorate / division
for 2011/12, with the relevant element of the cross cutting
themes allocated to directorates as schemes develop.
Therefore, corporate and technical leads may be highlighted for
individual schemes however, ultimate delivery of the financial
plan (and QUIPP target) remains with the budget holders within
the Divisions / Directorates.
The risk of not adopting such an approach is that sufficient saving
schemes may not be delivered in time for sign off of budgets and
business plans by the Trust Board in March 2011. To that end a list of
further areas for future QUIPP savings is shown at appendix 1.
5. Timetable for 2011/12 – Finance & Contracting
This section will confirm an outline timetable for overall 11/12 financial
planning and then specifically the identification, challenge and sign off
of 2011/12 QUIPP plans.
Overall BCHC business plans
The overall timetable for business plans currently sees:

December 2010 – Divisions confirm likely activity levels for
2011/12

End of December 2010 – initial capacity models (including WTE
assumptions / projections) and price matrixes developed

January 2011 – initial price activity matrices sent to
commissioners for discussion and negotiation

End January 2011 – revisions to price activity matrices agreed
with commissioners

End February 2011 – following negotiations, stage 2 activity /
price matrix signed off

Mid February 2011 - following negotiations, stage 3 activity /
price matrix signed off

1st March 2011 – national deadline – final price activity matrix
and heads of agreement signed internally by Divisional Directors

March 2011 - Outline 2011/12 financial budgets, activity, income
and QUIPP savings sent to board (as previously signed off by
Divisional Directors).
QUIPP timetable:
To meet the key dates for the sign off of the Trust business plan and
budgets, the proposed timetable for QUIPP savings schemes is as
follows:

Initial targets allocated to directorates / exec ‘themes’ cross
division schemes – week commencing 4th January 2011

Brainstorming with clinical and management colleagues to lead
to Project initiation documents (PIDs) prepared for each
proposed scheme, reviewed and agreed by Directorate lead /
clinical lead / Directorate accountant w/c 10th and 17th January.
NB: an example PID based on the 2010/11 is included at appendix 3. A
list of leads is attached at appendix 4.

Confirm and challenge to schemes w/c 24th January

First cut to the Exec team w/c 31st January

Confirm and challenge to schemes w/c 21st February

Second cut to the exec team w/c 28th February

Sign off for use in Financial plans at March Trust board meeting.
Risk assessment - ‘Risk scoring’ featured in the financial appraisal of
QUIPP schemes in 2010/11.
For 2011/12 it is proposed that risks flagged by clinicians or managers
for confirmed savings schemes will need to be formally added to the
Trust risk register. The ‘scoring’ will need to be regularly reviewed
during the year to determine if concerns have been realised (KPMG
recommendation).
Communication – Although initially the collation of schemes will mirror
the spreadsheet based approach in 2010/11, the intention moving
forward will be to transfer the process of creating and reviewing PIDs
onto the Trust ASPIRE product, to increase the clinical access and
ownership of the proposed schemes.
6. Outline monitoring arrangements
During 2010/11 the performance management of the QUIPP savings
programme was undertaken by the Finance and Performance
Management Group, jointly chaired by the Deputy Director of Finance
and the Associate Director of Performance. In addition, during 2010/11
the Managing Director attended the group on a quarterly basis.
The delivery of the CRES / QUIPP programme was also used as a
major part of the Divisional Performance Reviews chaired in year by
the Managing Director in 2010/11.
The basis of the reporting gives wide ranging analysis of plans, delivery
of schemes, and a risk assessment of likelihood of outcome. A small
subset of these has been used to illustrate the year end outturn
position at section 3 above.
(KPMG) Concern has been expressed that clinical engagement could
be improved, and a forum in which CRES can regularly feature is
needed.
(KPMG) Concern has been expressed that the financial reporting
needs to reflect ‘actual savings’ not just budgets removed, in case this
is disguising an underlying issue. Use of the Risk register may be the
way of doing this without major change to monitoring in the short term.
Communication - It is intended that the ‘platform’ for disseminating this
information will change during the year to the ASPIRE system used
elsewhere within the Trust. The perceived advantage of this approach
will be to allow all clinicians and managers to see the progress made
against the CRES plans, without waiting for the current formal lines of
communication.
In year QUIPP savings monitoring will need to pay particular concern to
the achievement of the recurrent savings, and in year monitoring will
need to reflect the extent to which this is actually being achieved, so
that where necessary remedial action can be taken
For 2011/12 it is proposed that the QUIPP savings monitoring
continue on this basis, but is also added to a clinical forum.
7. Going forward - the relationship between the Savings and Quality
agendas
The Quality, Innovation, Productivity and Prevention (QUIPP) agenda
aims to ensure that high quality health care provision continues in a
tighter economic climate. Over the last two years, the national QUIPP
work-streams have focused on improving quality and productivity
across pathways such as long term conditions, urgent care and end of
life care.
Looking to the future, one way of improving the quality of CRES bids, is
by linking the proposed savings to Service Line Reporting (SLR). This
allows a clearer identification of which part of the cost base is
generating the savings. The savings projections can also be ‘modelled’
to see how resilient the proposed savings will be to changes in
assumptions.
As mentioned previously within this report, BCHC has to build bigger
and longer term savings - themes across the whole organisation, or
between BCHC and other organisations. The TCB has a lead role in
identifying and building momentum in these areas. This will need to be
developed during the first 6 months of 2011 to create the basis for the
future savings required for Foundation trust status.
8. Summary
Whilst the BCHC has been both successful and innovative in its
approach to date, the paper has identified the size of the challenge in
terms of level of savings and linking of savings to QUIPP facing the
Trust in 2011/12 and likely the next 3 years.
This paper has sought to confirm the initial steps to be taken in
delivering this goal.
9. Recommendations
The Board are asked to:
 Note the 2010/11 progress and likely 2011/12 target.
 Note the requirement to express 2011/12 savings in a QUIPP
context and how this will be supported by the finance
directorate.
 Note the outline timetable for identification, challenge and sign
off of 2011/12 QUIPP / CRES plans including Board sign off.
 Note the outline monitoring QUIPP savings arrangements for
2011/12.
Prepared by K Henderson
January 2011
Appendix 1
QUIPP Savings Programme 2011/12
Potential Schemes for review as contingency and 2012/13 initiatives
Discussion 9th December 2010
Savings Initiative
Estimated
Value
Lead
Assistive Technology
Lorraine Thomas
Divisional Directors
Purchase of annual leave scheme
Beth Evans
Review of moving away from agenda for change after becoming a FT
Beth Evans
Archiving: destruction of records beyond retention date to save storage costs
Archiving: scan archive records and store electronically to save storage costs
Appendix 2 – example PID
Appendix 2
continued