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Annual Report and Accounts

2009/10


Welcome Welcome to the fourth – and final – annual report of NHS West Hertfordshire. This report gives us the opportunity to reflect on our achievements as well as the chance to look ahead to what our new organisation – NHS Hertfordshire – will need to achieve in the coming year. Starting in April and continuing throughout the year, we took to the streets and brought a series of community health roadshows to supermarkets and shopping centres around the county encouraging people to ‘choose well’ when using NHS services. ‘Choose Well’ is a campaign to let people know about the wide range of health services available to them locally and when and how to use them. Here in Hertfordshire these services include two new pilot urgent care centres in Hertford and Cheshunt to complement the urgent care centre which has been working successfully in Hemel Hempstead since 2008. As part of a national programme to improve access to GPs, we launched a new type of medical centre – West Herts Medical Centre in Hemel Hempstead that is open 8am to 8pm, every day of the year. It offers services to patients living or working in West Herts (not just Hemel Hempstead) who are registered there and those who choose to use it in addition to their own surgery. We are pleased to report that in this area 83% of GP surgeries also open for longer, including some early morning, evening and weekend appointments. Whilst on our roadshows, patients told us about their experiences of local health services. We were glad to learn that many people were very satisfied with the wider range of services now on offer from their GPs, including minor surgery, phlebotomy and clinics for those with long-term health conditions such as diabetes. Where people had queries, questions and constructive feedback about other services we were able to pass these back to the services for them to act on. We were also able to explain about the new legal rights for patients established under the NHS Constitution together with the responsibilities which the public, patients and staff owe to one another to ensure that the NHS operates fairly and effectively. Also this year, Hertfordshire, like the rest of the country, was affected by the swine flu pandemic although thankfully it didn't affect the numbers that were initially predicted. For most people, swine flu was a mild to moderate illness, but for some vulnerable patients, especially those with underlying health conditions, swine flu was much more serious and caused hospitalisations and unfortunately some deaths. Throughout the pandemic, the PCT led the local NHS’ response to swine flu, ensuring that antivirals and vaccines were available to all who needed them. At the same time, all existing services were kept running whilst under sustained pressure. As well as rising to the challenge during swine flu, we were proud that NHS staff in Hertfordshire continued to deliver important frontline services to patients despite the prolonged period of bad weather we had during the winter. We would like to take this

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opportunity to once again thank them for their commitment and flexibility during the period of disruption. Our programme of improvements to our clinical buildings continued during the year. Our focus was on ensuring that we were able to achieve the highest standards of hygiene and to keep the risk of infection to an absolute minimum. So our refurbishments included upgrades to wards that made best use of furniture and fittings that comply with the latest infection control guidelines. We refurbished inpatient wards at Gossoms End in Berkhamsted and Langley House in Watford. We also completed the external redecoration of Potters Bar Community Hospital and refurbished clinics in Borehamwood, South Oxhey and Garston. Together with these upgrades we were pleased to announce this year that all hospitals and other places where patients stay overnight, such as mental health and specialist learning disability services, now provide patients with same sex accommodation. Finding yourself in mixed-sex hospital accommodation can make many patients feel very uncomfortable for a variety of personal and cultural reasons. The NHS understands this, so treating all our patients in privacy and with dignity remains high on our list of priorities. Other activities undertaken during the year include a consultation on the future of the Hemel Hempstead birth unit. We spoke to a great many people - all of whom were representing a variety of viewpoints - about the future of the unit. Having received the views of women, clinicians, community organisations and individuals, the Board of NHS West Hertfordshire accepted the recommendation of the 2008 TempletonCanning report in respect of the unit and concluded that it should not be reopened. The transfer of acute services from Hemel Hempstead to Watford took place in April 2009 and an independent report shows that this is working well. Where improvements needed were highlighted by the report follow up action has been taken to address them. A new purpose-designed outpatient department opened at Hemel Hempstead Hospital in September 2009. This new department is part of West Hertfordshire Hospitals NHS Trust’s £7m programme of investment to improve services for patients on the Hemel Hempstead hospital site. NHS West Hertfordshire also contributed £1m to the development. Whilst the main focus of media coverage and conversation remains around hospitals and other health buildings and services, it is important to remember that we are responsible for doing all we can to help our residents to keep out of hospital and away from their GPs by staying well! There are also lots of things that people can do to help themselves including taking regular exercise, eating a balanced diet and drinking alcohol in moderation and there is some very helpful advice on how you can do this on the NHS Choices website. Perhaps the best thing that people can do for their health is to stop smoking. We offer an excellent range of free services in numerous places around the county to help you and your family to quit. Evidence shows that you are four times more likely to become smokefree if you use our service. It is also a key priority for us to look after the sexual health of our population by ensuring our young people can take a

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test for the most common sexually transmitted infection – Chlamydia. Throughout the year we ran a number of campaigns designed to encourage people aged 15-24 to be screened. Looking to the future, along with all other public sector organisations around the country, we are facing a period of tough financial challenges. For some time now we have been seeing very much higher than expected activity and spend in our major hospitals. We managed to achieve financial balance in 2009-10 by underspending in other areas but will not be able to do this again. So whilst we are pleased that the NHS will continue to see real term growth in funding we know that this will not be at the level we have experienced in the past so it is really important that we do things differently now. The steps we took to reduce levels of acute hospital activity during the year did have a positive impact but they were not sufficient and we continue to see higher than expected levels of activity in our major hospitals. Much more needs to be done to ensure the health service in Hertfordshire is able to meet ongoing financial challenges and care for patients most appropriately. In 2010/11 we will continue to work with our partners – particularly GPs and those working in and running the acute hospitals – to ensure that expenditure is contained and that resources are directed in the right way. We will also focus on effective communications so that people who live in Hertfordshire have a better understanding of which services to use; the Choose Well and new "Let’s Use it Right" campaigns will support this. So we will be explaining to people the importance of accessing health services in the right place for their condition - GP instead of A&E for example - and the financial implications for the NHS if this doesn't happen. At the same time we will also focus on reducing running costs within our new PCT, NHS Hertfordshire. We have implemented a system to encourage and support staff wishing to work fewer hours and this will help reduce our payroll bill and we are leaving the majority of our vacant posts unfilled. We are also closing some of our office bases and relocating staff to a central location. The savings that these activities achieve will mean that we can spend more money on frontline services. In addition we will continue to work towards delivering our agreed strategic direction by increasingly providing health services in places that are nearer to where people live and in places other than hospitals. We are working with doctors and other clinical staff to generate new ideas and ways of doing this. And we are looking forward to the opportunities that the new government's priorities around strengthening the role of GPs in commissioning will present. One of our priorities for 2010/11 is to look at providing care in a more convenient way for people who have a long-term condition, such as diabetes, and a new service for diabetes patients was launched on 1st April 2010. The new way of looking after people with diabetes in Hertfordshire means that they will now have a good deal of their care – check-ups and certain other appointments – at their own GP practice or a practice nearby, rather than having to attend a hospital appointment. The Care Closer to Home programme is also looking at developing better ways to help people who have an orthopaedic condition, such as problems with knees and so

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on. Again the PCT is working with doctors, including specialists, to introduce ways of working that involve GPs getting specialist advice for their patients before they have to start attending hospitals. This need to find ways of maintaining high quality services whilst reducing our spending is common to the public sector as a whole and this makes it ever more important that we work with our partners, such as Hertfordshire County Council, the local authorities and other NHS organisations to ensure that we jointly get the best value for money and deliver efficient and high quality public services to residents. On 1 April 2010 the two former PCTs in Hertfordshire merged to form NHS Hertfordshire. Seven non executive directors - some existing and some new – who live in different towns and villages across the county and who bring a range of experience from within the voluntary and commercial sectors have been appointed. They join Stuart Bloom who is now Chair of NHS Hertfordshire. We would like to take this opportunity to thank the former non executive directors of NHS West Hertfordshire for their hard work and achievements. As the newly formed single PCT for the county – NHS Hertfordshire - we look forward to reporting our progress to you via our new website www.hertfordshire.nhs.uk, in the local media and at a series of community lunches that we plan to hold alongside our Board meetings during the year. Perhaps we may see you there.

Anne Walker Chief Executive

Stuart Bloom Chair

Dr Mike Edwards Joint Chair, Professional Executive Committee

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About us Our history and background Although primary care trusts have existed since 2000, our organisation came into being on 1 October 2006 with the merger of four predecessor organisations. There are now approximately 150 PCTs in England, generally linked to county/unitary council boundaries to ensure better joint working with social care. How we are managed We are managed by a board of non executive and executive directors and share a single management team with NHS East and North Hertfordshire. The executive directors on the board are employed by the PCTs. The non executive directors are independent people who work on a part time basis, to make sure that we act in the best interests of the public. (The names of the board directors can be found further on in this report). The board is responsible for ensuring we meet our performance targets and also oversees the work of the Professional Executive Committee (PEC) that covers the whole of Hertfordshire. In 2009-2010 the PEC was made up of GPs and other clinical staff who advised us on clinical matters. Non executive directors: Stuart Bloom, Chair Femi Adewole (to November 2009) Dr Diane Bailey Mark Gainsborough Eliza Hermann Anne McPherson Paul Smith Dr Mike Edwards, Joint Chair, Professional Executive Committee Executive directors: Anne Walker, Chief Executive Gloria Barber, Director of Workforce and Communications Beverley Flowers, Director of System Management Dr Jane Halpin, Director of Public Health/Deputy Chief Executive Clare Hawkins, Interim Director of Nursing and Quality Gareth Jones, Director of Strategic Planning (to January 2010) Heather Moulder, Director of Nursing (to August 2009) Pauline Pearce, Director of Public Involvement and Corporate Services (to November 2009) Andrew Parker, Director of Primary Care Development Alan Pond, Director of Finance and Commercial Development Simon Rouse, Director of Strategic Planning (from January 2010) Lesley Watts, Director of Innovation (from February 2010)

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Our role as local leaders of the NHS With NHS East and North Hertfordshire, we hold the vast majority of the NHS budget locally and are the lead health commissioning organisation in the county. Commissioning means that we assess the health needs of our population then use our resources to buy services from hospitals and other providers such as mental health trusts, GPs and dentists to meet those needs. By doing this we can have a positive impact on the health and wellbeing of the local population. We also fund the cost of medicines and treatments prescribed by GPs and nurse prescribers. We commission services in a number of different ways:    

Directly with providers such as hospitals Practice based commissioning (PBC) – where GPs, nurses and therapists can design services that meet the needs of their patients in a particular area Primary care commissioning – this involves services provided by GPs, community pharmacists, dentists and optometrists Sharing the commissioning of services - this means that we join together with Hertfordshire County Council and we both contribute some of our budgets to a partnership who then arrange mental health and learning disability services in the county. We use the majority of this money to commission services from Hertfordshire Partnership NHS Foundation Trust and from Adult Care Services.

Providing care On 1 April 2009 our frontline clinical staff together with their support teams became an arms length organisation from NHS West Hertfordshire. This organisation is now known as Hertfordshire Community Health Services (HCHS). This move is in response to national guidance which required that all PCT direct provider organisations moved into a contractual relationship with their PCT commissioning function by April 2009. In addition we will be applying for HCHS to become a Community Foundation Trust (CFT). A CFT is a ‘Public Benefit Organisation’ authorised to provide goods and services to the NHS. It is an independent legal entity, accountable to local people who can become members and governors. Initially NHS West Hertfordshire has to ensure that HCHS can operate effectively as an arms length organisation. A detailed action plan has been followed to ensure robust internal organisational arrangements were in place to deliver this organisational change. This separation has meant that the PCT can concentrate on becoming world class commissioners.

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Location and type of facilities provided The main facilities and community hospitals from which we provide services and at which our clinical staff are based include:                          

Bushey Health Centre Elstree Way Clinic, Elstree Garston Clinic, Watford Gossoms End Rehabilitation Unit, Berkhamsted Grove Clinic, Harpenden Grovehill Clinic, Hemel Hempstead Harpenden Memorial Hospital Hemel Hempstead Hospital Jacketts Field Rehabilitation Unit, Abbots Langley Langley House Rehabilitation Unit, Watford London Colney Clinic Mandeville Clinic, St Albans Marlowes Clinic, Hemel Hempstead Oxhey Drive Primary Health Care Centre, South Oxhey Potters Bar Community Hospital Principal Health Centre, St Albans Skidmore Way Clinic, Rickmansworth St Albans City Hospital The Avenue Clinic, Watford The Isbister Centre, Hemel Hempstead The Peace Children’s Centre, Watford Tring Clinic Victory Road Clinic, Berkhamsted Watford General Hospital West Hertfordshire Wheelchair Service, Shenley Windmill House Rehabilitation Unit, Bushey.

In addition, services are also provided in other locations such as GP practices and in people’s own homes. This year saw the implementation of a comprehensive Estates Strategy. The strategy clearly sets out the objectives for the development of the estate which include:  

Improving the quality of the therapeutic environment Improving value for money from estate services

In 2009-10, the PCT spent £4m of capital monies to improve buildings and facilities. These projects included:  

Creation of a new GP led health centre, therapy unit and intermediate care ward at Hemel Hempstead Hospital. Refurbishments of the inpatient wards at Gossoms End in Berkhamsted and Langley House in Watford.

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 

External redecoration of Potters Bar Community Hospital Refurbishment of Elstree Way Clinic in Borehamwood; South Oxhey Clinic and Garston Clinic in Watford.

In addition, a further £0.5m of revenue monies was spent on smaller works improvements such as redecorating and repairing local health care facilities. This has concentrated on improving the patient environment and is reflected in improved Patient Environmental Action Team assessment scores. Working with partners Key to developing appropriate health and social care services are partnerships with the public, carers, other health service organisations, county council, district councils, voluntary organisations, housing providers, colleges and employment services. This year we have further strengthened these partnerships, especially those with users and carers and have developed ways to enable more people to have their say and so influence our work. We work with a large number of partners including:       

Hertfordshire County Council All Hertfordshire District/Borough Councils Hertfordshire Constabulary and Police Authority University of Hertfordshire A number of Hertfordshire voluntary organisations Hertfordshire Fire Service Utility organisations relating to Hertfordshire

The ways in which we work with these partners are described below. Hertfordshire Forward – the countywide LSP Hertfordshire Forward is the countywide Local Strategic Partnership (LSP) which brings together key agencies which have an interest in improving the quality of life and wellbeing of local people. As a full partner the PCT has played a large part in assisting in the development of the sustainable Community Strategy. ‘Hertfordshire 2021: a brighter future’ is the county’s Community Strategy. It identifies an ageing population, and health and wellbeing as key areas of concern for improvement and describes both long-term objectives (2008–2021) and short-term actions (2008–2011). The ‘ageing population’ long-term objectives are:  A focus on prevention of illnesses  Helping older people to maintain their independence  Ensuring older people have the opportunities to be active members of their communities. The short-term actions include:  Strengthening intermediate care provision

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 

Supporting independent living Increasing physical activity.

The ‘health and wellbeing’ long-term objectives include improving health and wellbeing, life chances and access to health care. The short-term actions include:  Increasing levels of physical activity across all age groups  Reducing smoking and obesity in areas of deprivation  Providing greater support to carers. Hertfordshire’s Sustainable Community Strategy is being refreshed commencing September 2010 and as a key partner we will assist in the development of the refreshed strategy. The Local Area Agreement (LAA) Hertfordshire Forward is responsible for coordinating the Local Area Agreement (LAA). The LAA is a contract between central and local government designed to improve services to the public by bringing organisations together locally to focus on the issues that matter most to local people. Hertfordshire’s LAA2 was signed off by the Government Office East of England (GOEast) in June 2008. The target runs for three years. Five of the National Indicators chosen by Hertfordshire are being delivered under the Healthier Communities and Older People’s (HCOP) theme, which is aligned with the ‘Health and Wellbeing’ and ‘An Ageing Population’ themes of Hertfordshire’s Sustainable Community Strategy, Hertfordshire 2021: ‘A Brighter Future’ and with the PCT’s Health Inequalities Plans. The five HCOP indicators are:  NI 8 Physical activity  NI 123 Stopping smoking  NI 125 Achieving independent living for older people  NI 135 Carers receiving needs assessment  NI 141 Percentage of vulnerable people achieving independent living End of Year Two Update  NI 8 Physical Activity The target for year two was 24.7% of residents aged 16+ achieving 3 lots of 30 minutes of physical activity per week. The current level is 21.67%. Participation has remained static. Herts Physical Activity Framework has been developed. Projects such as Active Together (intergenerational physical activity programme) and Livewire (targeting young people who do not do any physical activity outside of school) have been successful. Work is being undertaken to secure additional funding to increase capacity and develop community outreach initiatives. The focus will be to increase participation 9


with population groups that currently participate less, eg older people, women and those living in areas of deprivation.  NI 123 Stopping Smoking The target for year two was 684 four week quitters per 100,000 of the population in West Hertfordshire. We achieved 757 four week quitters per 100,000. This strong performance in the final quarter meant that in West Hertfordshire an additional 315 people over target successfully quit smoking. Local action plans to support tobacco control, including smoking cessation, are being developed with each Local Strategic Partnership. Increasing referrals into the NHS stop smoking service is still the key challenge facing Hertfordshire Stop Smoking Service. Capacity has been increased significantly in 2009-10 and the service now has capacity to meet the year three target.  NI 125 Achieving independent living for older people The target for year two was for 78% of older people over the age of 65 who had had an inpatient hospital stay followed by a discharge into intermediate care to be living independently at home 91 days after discharge from hospital. The current level for NHS Hertfordshire is 78.4%. Improved data collection is reflecting a more accurate figure as all providers are now included in the monitoring of this indicator. Providing detailed evidence of the benefit that intermediate care provides has been a challenge and it has also been recognised that intermediate care needs to improve admission avoidance activity, a key aim of the service. Actions to address these problems include: 

Development of an integrated discharge team with membership across a range of organisations to help ensure people leave hospital at the right time with the appropriate level of care.

Measuring the use of ‘estimated discharge dates’ when people are admitted to hospital as this clarifies discharge intentions.

Use of an outcome measurement tool to record the benefit of intermediate care by taking readings at the beginning and end of the referral.

Requirement that a percentage of caseload is on admission avoidance.

 NI 135 Carers receiving needs assessment The target for year two was 25% of people caring for a recipient of services provided by Adult Care Services receiving a needs assessment. The current level for NHS Hertfordshire is 25.4%. This year we held six carers awareness training events using funding from the Department of Health. Libraries and Job Centre Plus are now using the Carers Passport. Carers receiving breaks from services funded by NHS Hertfordshire have

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completed pre- and post questionnaires relating to their health and wellbeing. 71 carers (33%) were at risk of depression prior to receipt of a service, falling to 17% afterwards. We are currently addressing practice issues with Adult Care Services operational teams around falling end-user satisfaction and patchy contingency planning practice and are looking at the use of the Carers’ Grant to address Carers’ Forum concerns about lack of access to ‘night sits’. We are working to ensure Adult Care Services' operational teams are fully aware in Stevenage, North Herts and Hertsmere of the potential of the Book Your Own Breaks service.  NI 141 Percentage of vulnerable people achieving independent living The target for year two was 68% of vulnerable people successfully moving from temporary into permanent accommodation. The current level for NHS Hertfordshire is 74.6%. Performance above target has now been sustained throughout 2009-10. Night shelter services overall have reported a greater proportion of planned move-on (69.6% overall in Q4), partly as a result of increased move-on being made available, but also as result of reduced turnover. There are potential pressures that could affect 2010/11 performance such as reduced availability of lettings to newly developed social housing property, and pressure on availability of move-on for benefit claimants into the private sector (exacerbated by problems in housing benefit administration in some Districts). Working with the voluntary sector The voluntary sector plays an important role in promoting healthy lifestyles, disease prevention, supporting the elderly and disabled to live healthy lives in their own homes and in a variety of ways. The PCT commissions a number of services from the voluntary sector such as Carers in Herts, Age Concern Herts, Herts Health Action for the Homeless, The Crescent and Herts Hearing Advisory Service. Funding is also available through the Joint Commissioning Team for initiatives such as Viewpoint and other mental health and learning disability groups. Community safety partnerships Community safety partnerships are linked to the LAA ‘Safer and Stronger’ strand and set additional local targets based upon the findings of their strategic assessments. In addition to targeting crime and anti-social behaviour, community safety partnerships seek to address the underlying societal problems caused by alcohol and drugs, and the various elements that cause fear of crime in communities. Reducing both crime and fear of crime has an impact on physical and mental health, which helps to promote independent living for vulnerable groups of people and helps to build social cohesion. Children and young people’s partnership Hertfordshire Children’s Trust Partnership, supported by District Children’s Trust Partnerships (DCTPs) supports delivery of the five Every Child Matters outcomes.

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Working with vulnerable groups The PCT recognises the importance of access to services for vulnerable people, minority ethnic communities, travellers, homeless people, migrants (including asylum seekers) and people with learning disabilities or mental health issues. We work closely with partnership groups on their specific issues and link closely with relevant communities. We are a member of the Hertfordshire Migrants Multi Agency Forum which is a partnership that seeks to improve services for groups of migrant workers and asylum seekers. A key part of the work of this group is delivering a multi agency action plan which works towards meeting the health needs of these communities. We are also working closely with local black and minority ethnic community groups such as the Watford Muslim Project and Watford African Caribbean Association to ensure their health needs are addressed. Our prison health care team at The Mount in Bovingdon work with partners including prison officers, Hertfordshire LINk and prisoner representatives to ensure that prisoners receive equity of access to health services. Equality, diversity and human rights Over the past year we have: 

Continued to build on the partnership with Hertfordshire County Council, Hertfordshire Constabulary and Community Development Association to support the development of Hertfordshire Equality Council. This will assist with and enhance the development of current direct partnership work with local communities and help to improve relations within the county Heightened awareness of the Interpreting Service and information available in different languages and formats such as large print, Braille and audio. To date, the Interpreting Service has provided services in over 50 languages with a total of 2,186 face to face sessions to community health services throughout Hertfordshire Continued to develop close links with local disability organisations such as MIND Hertfordshire and with black and minority ethnic communities. Events were held to engage the Muslim community in Watford to listen to their experience of accessing health services and with lesbian, gay, bisexual and transgender (LGBT) communities through a series of ‘Health Summit’ meetings. These meetings have helped us to identify key issues such as funding to promote an LGBT event and to establish further links with the LGBT community in Hertfordshire.

A three-year action plan has been developed to address health inequalities within the 25 most deprived areas in the county, including people with learning disabilities, people in contact with the criminal justice system and the traveller community through the Traveller Play Bus initiative. We have been closely involved with the Homeless Strategy Group in developing the Homeless Action Plan working with the homeless community in Hertfordshire.

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The public health team has also been working with localised communities on specific health issues to tackle smoking prevalence and adult obesity. We jointly commissioned chartered surveyors to carry out Disability Discrimination Act (DDA) compliance surveys of the majority of our leasehold and freehold premises. As a result, we have prioritised the issues identified by the audit and allocated £60,000 for adaptations to premises. This led to the creation of a ‘DisabledGo’ page on our website giving information on matters such as distance to travel to and from health facilities, choice and accessibility of the facility and the availability of accessible parking spaces for patients and staff with a disability. Environmental matters, including policies The estate contributes significantly to the local NHS’ carbon footprint and this year began the process of reducing carbon emissions by developing a 5 year carbon management plan in partnership with the Carbon Trust. The plan commits the PCT to reduce our carbon emissions by 20% by 2015. Social and community issues The PCT actively engages with local communities, patients and service users in planning, developing and making decisions about local health services. We also work closely with local partners across the public and voluntary sector to both understand and meet the health and social care needs affecting our population. We regularly attend and make submissions to Hertfordshire County Council’s health scrutiny committee and health panel groups working at local authority level. We have also fostered good relationships with Hertfordshire Local Involvement Network (LINk) and have developed patient groups aligned with practice based commissioning boundaries in St Albans and Hertsmere. Persons with whom the PCT has contractual or other essential arrangements       

70 GP practices 117 dental practices 129 pharmacies 89 optician practices acute hospital providers (with the main ones set out in note 33 of the accounts) East of England Ambulance Service Trust Hertfordshire Partnership NHS Foundation Trust

and various voluntary and independent providers of health care.

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Our performance Our strategic objectives and progress The PCT’s Strategic Plan had three strategic priorities:   

Keeping Hertfordshire healthy Enhancing the patient experience Commissioning high quality health care

The priorities are to be delivered through 9 workstreams. Mapped below are the workstreams and the achievements the PCT has made in relation to these. Number Workstream

Achievement

1

Staying Healthy

 2

Acute Care

 

3

Planned Care

  

4

Mental Health, Learning Disability and Substance Misuse

   

The PCT has significantly increased the number of people it has helped to quit smoking The PCT has increased the number of people screened for Chlamydia Supported the two local Trusts to establish dedicated assessment services for people who are suspected of having had a stroke Commissioned acute services that continue to provide short waiting times for operations Improved access to Choose and Book, thereby making the arranging of appointments more efficient Supported GP practices to improve access for their services Ensure GP referrals are appropriate and best meet the defined clinician need Hertfordshire has achieved 100% adult population access to psychological therapy services Hertfordshire is in the top quartile nationally for drug users successfully completing their treatment Hertfordshire is piloting a new initiative to streamline referrals for alcohol users in two localities As part of implementing the national dementia strategy, Hertfordshire has developed a new countywide memory assessment service model that will be implemented in 2010 14


Number Workstream

Achievement  GP services for people with learning disabilities have improved significantly with 80% of practices signed up to the Learning Disability Direct Enhanced Service and providing annual health checks. All practices now have a link community learning disability nurse

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Maternity and Newborn

Improved the reported prevalence of breastfeeding at weeks 6-8 The number of women booking (ante natal care) by 12 completed weeks of pregnancy has improved, as the message about the importance of early booking has become known in Hertfordshire. This is important because screening both mum and baby at this early stage can improve outcomes later on We have developed a service specification for maternity services, which will allow us to monitor the performance of hospitals providing maternity services to women in Hertfordshire

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Children’s Health

 

Sustained high rates of MMR immunisation Continued a successful programme of HPV vaccination to protect against cervical cancer

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Long-term Conditions

Start of new community based Diabetes service

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End of Life

 

24 hour nursing care Macmillan Clinical Nurse Specialists available over the weekends to provide specialist advice for patients, carers and GPs 7 days a week Rapid response Marie Curie nurse at night time to respond to palliative care emergencies service is working well An independent report on the transfer of acute services from Hemel Hempstead to Watford shows that this is working well

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Patient experience

Key performance indicators In addition to finance, performance in the NHS is judged by measuring a large number of non-financial targets. In the 2009-10 Operating Framework, the Department of Health (DH) confirmed that there would be no new national targets, but that the five key priority areas which had been developed through listening to 15


what patients and the public believe are the most important issues would remain. The DH re-emphasised that in delivering ‘High Quality Care for All’, PCTs should make quality the organising principle of the NHS, with this covering the three areas of safety, effectiveness and patient experience. Performance or progress on measures which contribute to delivery of the key priority areas is shown below. The national key priority areas continued for 2009-2010 were: 1    

Improving access, eg: maximum 18 weeks waiting time for referral to treatment improving access (including at evenings and weekends) to GP services better access to genito-urinary medicine (GUM) clinics maintaining 98% operational standard for accident and emergency departments

2 Keeping adults and children well, improving their health and reducing health inequalities, eg:  helping people to stop smoking  tackling childhood obesity  increased screening for chlamydia  reducing waiting times for cancer treatment 3 Improving cleanliness and reducing health care associated infections, eg:  Methicillin Resistant Staphylococcus Aureus (MRSA)  Clostridium Difficile (CDiff) 4

Improving patient experience, staff satisfaction, and engagement

5 Preparing to respond in a state of emergency, such as an outbreak of pandemic flu

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Performance in these priority areas 1 Improving access Maximum 18 weeks waiting time for referral to treatment Throughout 2009-10 the PCT worked with service providers to continue to reduce the length of time patients wait for treatment in consultant-led services. For the year 2009-10 the targets were:  for patients needing admission, 90% to wait no more than 18 weeks from referral by their GP to treatment  for patients treated without admission, 95% to wait no more than 18 weeks from referral by their GP to treatment. For the year 2009-10 NHS West Hertfordshire achieved these targets, with 93% of patients requiring admission being seen and treated within 18 weeks; and 98% of non-admitted patients being seen and treated within 18 weeks. On 1 April 2010 achieving 18 weeks waiting time for referral to treatment became a right under the NHS Constitution. Improving access (including at evenings and weekends) to GP services In NHS West Hertfordshire 58 GP practices (84.06%) operated extended hours, as at 31 March 2010 exceeding both the national target of 50% of practices and the East of England target of 75%. Better access to genito-urinary medicine (GUM) clinics The national target is to ensure 100% of patients are offered an appointment to be seen within 48 hours by GUM services. For the year 2009-10 performance was 99.9% - this is close to target and an improvement from previous years. This figure incorporates performance across a high number of GUM clinics, some of which are local, others further afield. Maintaining 98% operational standard for accident and emergency departments The standard for A&E performance is that 98% of people should not have to wait for more than four hours before being admitted or discharged. NHS West Hertfordshire narrowly missed the operating standard, achieving 97.9% for the year. For 2010/11 the revised Operating Framework has reduced the A&E operational standard to 95%. Quality of Stroke Care (Patients spending 90% of their time on a Stroke Unit) One of the key measures of the national stroke strategy looks at the percentage of stroke patients who spend 90% of their stay in hospital on a stroke unit. This is to ensure swift and appropriate access to rehabilitation and therapies within the critical time after a stroke. For the year ending 2009-10 the target was 70% of stroke patients achieving this indicator. NHS West Hertfordshire achieved 62.5% across the whole of 2009-10. The national stroke strategy is being implemented over a period of time and these figures represent performance over the whole year and do not reflect in-year improvements in performance. In March 2010 performance was in excess of

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60% for NHS West Hertfordshire and the PCT is working closely with the local stroke network and hospitals in order to deliver the more challenging target of 80% by the end of 2010/11. Delayed Transfers of Care (Rate per 100,000 population) The East of England target was to reduce the average number of delayed transfers of care to a maximum of 4 per 100,000 population aged 18 and over in each PCT. NHS West Hertfordshire has struggled with this target throughout 2009-10 with an average rate of 11.2 across the year. It is recognised that to improve performance will require whole system actions across Hertfordshire and that there are many contributory factors. The action plans are being developed by the emergency care network and will be implemented during 2010/11. 2 Keeping adults and children well, improving their health and reducing health inequalities Helping people to stop smoking Our target for NHS West Hertfordshire was to achieve 2,944 four-week quitters. By the end of March 2010 we had reached 3,126. Tackling childhood obesity The national objective for the NHS and its partners is to halt the year-on-year rise in obesity among children under 11 years. At a local level, the PCT is expected to deliver the National Child Height and Weight programme to at least 85% of children in reception and year 6. Under this programme, every child is measured, with the data used to help the PCT forward plan health provision and provide more tailored health services for local children. In West Hertfordshire 86.0% of children were weighed and measured. Locally we aim for no more than 9% of reception age children and no more than 14.5% of year 6 children to be overweight or obese. During 2009-10 we met this target for reception aged children (7.9%) and slightly underachieved the target for year 6 children (14.7%). Increased screening for chlamydia The target was to screen 25% of 15-24 year olds. During 2009-10 we screened 17.7% in NHS West Hertfordshire. Performance improved from 2008-09, with a number of initiatives introduced during the last quarter to encourage uptake of the target population. If the number of screens undertaken in the last quarter of 2009-10 had been replicated across the whole year, the PCT would have achieved the target. Reducing cancer waiting times NHS West Hertfordshire achieved two ‘areas’ of performance covering seven of the eight individual targets across the whole year. The one target that was missed was the ‘urgent referral to first outpatient appointment for breast symptoms. The PCT is working with the main provider in West Hertfordshire to improve this position in 2010/11, although report that the majority of patients not meeting the two week standard is due to patient choice.

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3

Improving cleanliness and reducing health care-associated infections

The further reduction of methicillin resistant staphylococcus aureus (MRSA) and clostridium difficile (CDiff) rates remained key targets for 2009-10. NHS West Hertfordshire just missed the CDiff ceiling by two cases, reporting a total of 212 cases. This is a reduction in cases across the health economy. The local acute Trust met both their MRSA and CDiff targets with 7 MRSA infections reported to the end of the year against a ceiling of 18, and 57 CDiff cases against a ceiling of 165. 4

Improving patient experience, staff satisfaction, and engagement

NHS West Hertfordshire is committed to developing a strategic approach to patient and public engagement, to ensure that involvement is linked to both national and local NHS priorities; and to provide an opportunity for patients to have a say in their health services. The PCT is a partner in a public engagement partnership with the county and district councils, and Hertfordshire Police. A countywide stakeholder forum of local authority and voluntary sector partners continues to advise the PCT on the implementation of health service changes from a stakeholder perspective. The PCT regularly engages with carers, black and minority ethnic communities, people who are homeless, Travellers, Gypsy and Roma communities; and young people, through the Health Care Ambassador programme. Members of the Hertfordshire Local Involvement Network (LINk) serve on many of the PCT’s committees, and play an active part in PCT activities. The PCT has an observer on the LINk Board. During 2009-2010 a number of patient groups have been established affiliated to practice based commissioning locality groups. 5 Preparing to respond in a state of emergency, such as an outbreak of pandemic flu The PCT has continued to work closely with partner agencies via the Hertfordshire Resilience Forum. This ensures the PCT and NHS as a whole is represented and involved in all aspects of emergency planning. Through the workings of Hertfordshire Resilience we are able to share information about emergency planning, jointly test plans as well as ensuring a coordinated approach to emergency planning across the county. Much of the year has been involved in responding to the pandemic flu outbreak. The emergency planning team have worked closely with colleagues from all directorates within the PCT as well as with our partner agencies to ensure that an effective and efficient response was given. This has included assisting with the setting up of anti viral collection points, coordinating the distribution of consumables to clinics and GP practices as well as the sharing and gathering of information. During the past year two new plans have been produced. These detail the response to a Chemical Biological, Radiological or Nuclear (CBRN) incident and the response to severe weather (both hot and cold). The PCT’s Suspect Packages Policy has also been reviewed and updated. Exercising of emergency plans continues to be an area of great importance. This ensures that the PCT has robust plans and that we are able to effectively work with

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colleagues from other NHS trusts and partner agencies to provide a coordinated response across Hertfordshire should the need arise. The PCT has participated in several emergency planning exercises throughout the year with staff from director level downwards attending events often with multi agency colleagues to test emergency planning arrangements across the county, these have included testing arrangements in response to scenarios such as flooding, power outage and setting up reception centres.

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World Class Commissioning World Class Commissioning (WCC) is about improving health outcomes and reducing health inequalities. At the heart of this is the need for PCTs to commission outcomes that deliver high quality health care and give value for money. The second year of World Class Commissioning Assurance required the PCT to undertake a self assessment against 11 competencies; submit a range of documents detailing the process and outcomes from commissioning and identify health outcomes that we would concentrate on improving. The PCT has received a positive set of results, with the report stating that NHS West Hertfordshire “has made substantive progress” during 2009-10. The improvements are across a range of activities and our ratings have increased on the vast majority of the criteria that are assessed. WCC assessors see the Delivering Quality Health care for Hertfordshire programme as “a cutting edge project”. We have performed better than 2008-09 and reached targets on a number of key issues, including increasing the numbers of people who quit smoking. The report states that the PCT has done much to respond to the findings of the previous WCC report. Annual Health Check The Annual Health Check, published by the Care Quality Commission in October each year, is the system for assessing and rating the performance of NHS organisations in England. The results published in October 2009 (covering the period April 2008 to March 2009) gave the PCT a ‘fair’ rating in both quality of commissioning and quality of financial management for the second year in a row. Since then significant improvements have been made and the performance on individual indicators is highlighted in the table below.

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Care Quality Commission Performance data 2009-2010 National Commitments Indicator A&E waiting times (maximum 4 hour wait)

Target 2009-2010 98%

Performance 97.94%

Access to Genito-Urinary (GUM) clinics within 48 hours

98%

99.90%

Category A calls responded to within 19 minutes (East of England Ambulance Trust performance) Category A calls responded to within 8 minutes (East of England Ambulance Trust performance) Category B calls responded to within 19 minutes (East of England Ambulance Trust performance) Commissioning of crisis resolution/home treatment services

95%

96.03%

75%

75.67%

95%

93.96%

807

Commissioning of early intervention in psychosis services

73

Delayed transfers of care (rate per 100,000 population) Diabetic retinopathy screening Data quality on ethnic group (percentage of HES records with valid code) Inpatients waiting longer than the 26 week standard

4 per 100,000 population (Average 14.7) 95% 85% <0.03%

Outpatients waiting longer than the 13 week standard

<0.03%

Reperfusion waiting times

68%

Revascularisation waiting times (13 week standard)

<0.5%

964 (Plan 807) 119% 99 (Plan 73) 136% Actual rate: 11.248 (Average number: 47) 94.84% 90.90% 0.055% (28) 0.015% (12) Thromb - n/a PCI - 89.6% 0.000% (0)

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23 National priorities Indicator Breast cancer screening for women aged 53 to 70 years All Cancers: one month diagnosis to treatment waiting times All Cancers: two week urgent referral to first outpatient appointment waiting times All Cancers: two month urgent GP referral to treatment waiting times Cervical screening of women aged 25 to 49 (Part 1) and 50 to 64 (Part 2) Commissioning a comprehensive child and adolescent mental health service (CAMHS) Quality of stroke care (patients who spend at least 90% of their time on a stroke unit) PCT Staff satisfaction score Teenage conception rates per 1,000 females aged 15 to 17 Number of women who have seen a midwife or maternity health care professional by 12 completed weeks of pregnancy 18 week referral to treatment times Access to primary care Access to primary dental services (proportion of population visiting an NHS dentist in previous 24 months)

Target 2009-2010 70% First 96% Surgery 94% Drug 98% All 93% Breast 93% First 85% Screening 90% Upgrade n/a Part 1 70% Part 2 75% Achieve Level 4 70%

Performance 70.80% First 98.2% Surgery 97.1% Drug 99.7% All 93.1% Breast 88.7% First 88.4% Screening 97.2% Upgrade 98.4% Part 1 74.5% Part 2 79.8% Q1 3, Q2 4 Q3 4, Q4 3 61.82%

Dependent upon all PCT scores Planned rate: 23.7 Planned rate: 79.85%

3.63

Admitted 90% Non-Admitted 95% 85%

Admitted 93.4% Non-Admitted 98.1% 48 Hours 82.4% Booking 76.5% Open Hours 81.8% 292,119 (89.4% Plan)

326,400

Actual rate: 24.3 Actual rate: 62.46%

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National priorities Indicator Prevalence of breastfeeding at 6 to 8 weeks from birth Reduction in cancer mortality rate Reduction in cardiovascular disease (CVD) mortality rate Childhood immunisation rates by recommended ages

Childhood obesity rates Chlamydia screening (15-24 year olds) Incidence of Clostridium difficile infection Four week smoking quitters All age all cause: male and female standardised mortality rates Number of drug users in effective treatment Patient experience

Target 2009-2010 Prevalence: 53.3% Status: 90% Planned rate: 105.0 Planned rate 67.1 DTaP/IPV/Hib Aged 1: 95% PCV Aged 2: 90% Hib/MenC Aged 2: 90% MMR Aged 2: 90% DTaP/IPV Aged 5: 95% MMR Aged 5: 90% HPV Aged 12/13: 85% Participation: 85% Reception: 9.0% Year 6: 14.5% 25% of target population 210 2944 Dependent upon all PCT scores Hertfordshire 1630 65%*

Performance Prevalence: 52.0% Status: 90% Actual rate: 102.9 Actual rate 57.5 DTaP/IPV/Hib Aged 1: 93.8% PCV Aged 2: 86.9% Hib/MenC Aged 2: 91.7% MMR Aged 2: 85.0% DTaP/IPV Aged 5: 84.0% MMR Aged 5: 79.6% HPV Aged 12/13: 78.6% Participation: 86.0% Reception: 7.9% Year 6: 14.7% 17.7% 212 3126 Males 583.8 Females 432.8.6 1689 Achieved (77%)

*The patient experience indicator is taken from the annual GP patient survey and measures patient satisfaction across 5 domains (access and waiting, safe and high quality, better information, building relationships, clean, comfortable and friendly). The percentage achieved is the average of the results from the 5 domains.

Key Achieved

Close to achieving

Not achieved

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Disclosure of serious untoward incidents involving data loss or confidentiality breaches In line with the Information Governance Strategy the PCT has assigned responsibility for information governance. Risks are managed, monitored and reviewed by the Information Governance Sub-Committee which reports through the Joint Integrated Governance Committee to the Board. Any personal data related incidents and breaches are published within the PCTs annual report in line with Department of Health directives. In light of the level of interest in potential data loss, all PCT laptops and portable devices such as memory sticks have been encrypted. Policies and procedures incorporating information governance have been reviewed, ratified and approved. Established reporting lines with associated risk assurance measures are assigned which now incorporate a more stringent scoring mechanism. There were 2 personal data related incidents reported to the PCT classified as serious untoward incidents. Summary of personal data related incidents 2009-2010 Category

Nature of Incident

Total

I

Loss of inadequately protected electronic equipment, devices or paper documents from secured NHS premises Loss of inadequately protected electronic equipment, devices or paper documents from outside secured NHS premises Insecure disposal of inadequately protected electronic equipment, devices or paper documents from outside secured NHS premises Unauthorised disclosure Other

0

II III IV V

1 0 1 0

Information governance (IG) training The IG E-Learning modules are now available to all staff running alongside workshops and Inductions. Freedom of Information (FOI) requests There have been two requests relating to FOI statistics and process, one associated with e-mail encryption and one linked to compromise agreements related to PIDA (Public Interest Disclosure Act) claims. Principles for remedy The PCT follows the six principles set down by the Parliamentary and Health Service Ombudsman in â&#x20AC;&#x2DC;Principles for Remedyâ&#x20AC;&#x2122; (October 2007). The aim of these principles is to ensure that instances of injustice or hardship as a result of poor service or maladministration are redressed.

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The principles are:  Getting it right  Being customer focused  Being open and accountable  Acting fairly and proportionately  Putting things right  Seeking continuous improvement. How have we met these principles?      

We have incorporated the NHS complaints procedures into our own policy The Chief Executive takes a personal interest in all complaints and the quality of investigation and response We have a responsive Patient Advice and Liaison Service (PALS) which can resolve many problems or concerns without the need for a formal complaint We have in place a ‘losses and compensations’ procedure Regular reporting to the Board of complaints received and PALS issues as part of the PCT’s performance monitoring Applying Department of Health published best practice guidance on NHS Continuing Health care Redress, in response to the Parliamentary and Health Service Ombudsman’s report ‘Retrospective Continuing Care Funding and Redress’.

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Engaging with our staff Staff engagement is a high priority for the PCT and communication with staff continues to improve. The response rate to the national NHS staff survey for NHS West Hertfordshire was 58.07% which places the PCT slightly below the national PCT average (median nationally of 60%). Although the response rate was lower than last year, overall the results show an improvement. For example the number of staff who said they have considered leaving the organisation has dropped by 10%. 90% of staff said they felt trusted to do their job, 84% believed their role makes a difference and 83% said they found their jobs interesting. Once detailed analysis of the staff survey is complete we will identify what actions will be taken to address areas in need of improvement. PCT employees, including policies The PCT is fully committed to supporting all staff to develop and enhance their skills ensuring they can provide and support the best patient care. Our staff undertake training to make sure they can deliver safe care, for example infection control and hand hygiene, health and safety and fire training. This year, as part of the PCT response to the flu pandemic, we ran a success programme to train many more of our registered nurses to undertake vaccination, including ensuring their Basic Life Support skills were up-to-date. We have also sought to make certain that clinical skills are up-to-date by providing a range of in-house training sessions covering subjects such as continence and intravenous therapy. The University of Hertfordshire has provided other courses. We continue to increase the professional skills of our staff so that patients can be treated at home. This has included skills in non medical prescribing and assessment of patients with heart disease. Where training cannot be provided locally, we have funded individuals to train at specialist centres, for example, training for our podiatrists on treating patients with diabetes. During 200910 we developed and implemented a number of other policies, all of which can be viewed on our website at www.hertfordshire.nhs.uk and clicking on ‘Resource Centre’. As well as training the PCT offers staff the opportunity to join the NHS pension scheme, details of which are set out in note 7.4 of the Accounts on page 94. We have a range of mechanisms that encourage two-way dialogue within the PCT. These include:    

A monthly team brief - comprising key messages from the executive team - that is cascaded throughout the organisation Regular team meetings A very successful intranet that receives many hits per day containing a wide range of corporate information such as policies, training courses and information on forthcoming events. It also contains a social zone Regular Chief Executive briefings that give staff the opportunity to learn about progress with our priorities and to raise issues or ask questions.

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New values for NHS Hertfordshire staff With the merger of the two PCTs from April 2010 we felt that the time was right to review our values to make sure they reflect the needs of our organisation and to support us in meeting the challenges facing NHS Hertfordshire. Using initial thoughts from the executive team we held conversations with groups of staff and agreed a new set of values for the organisation. These are: Care - My work leads to better health, patient experience and health care Confident - I know, I can, I will Challenge - I check, question and challenge constructively Complete - I take personal responsibility and follow things through with urgency We believe that these words encapsulate what we expect from everyone who works at NHS Hertfordshire. Absence due to staff sickness Days lost (long-term) Days lost (short-term) Total days lost Total staff years Average working days lost

2009-10 Number 210 199 409 155 2.65

Total staff employed in period (headcount) Total staff employed in period with no absence (headcount) Percentage staff with no sick leave

349 283 81.1%

Note: Days lost (long-term) are those of 21 working days or 29 calendar days or more. Days lost (short-term) are less than 21 working days or 29 calendar days. Total staff years - a full time person working for the full year is equivalent to 1. Average working days lost is calculated as total days lost divided by the number of staff years. Total staff employed is the current staff number plus leavers during the year.

Single Equality Scheme The PCT has a Single Equality Scheme which aims to ensure that all employees are supported to develop their full potential. NHS West Hertfordshire, and NHS Hertfordshire going forward, is determined to ensure that we practise a culture of equality, diversity and human rights in the heart of the organisation. We are also committed to improving relations with our diverse population and to identify and address health inequalities among our patients. We have an action plan to embed equality in our employment practices and service delivery. The PCT retains the positive (or two ticks) symbol from Jobcentre Plus and actively supports the employment of staff with disabilities. We work hard to support, retain and develop employees with disabilities. A Disability Staff Network Group was launched in March 2009 and a member of this group is also a member of the Equality and Diversity Steering Group.

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The PCT also has the following staff network groups: ď&#x201A;ˇ Black and minority ethnic staff (BME) ď&#x201A;ˇ Lesbian, gay, bisexual and transgender staff (LGBT) We have confirmed our commitment to improving access to services for all through publication of our Single Equality Scheme and through the workstreams identified in our action plan.

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Our objectives for 2010-2013 Our ambition is to be a high performing PCT recognised by our people, patients and partners as commissioning outstanding  care and improving the well being of all

Primary care 

Goal 2

Enhancing patient experience

Pathway redesign 

Contracting  Goal 3 

Commissioning high quality care Stimulate the market  Efficiency & effectiveness 

Patient experience Patient safety Shifts to primary care GP Services Dentistry Optometry Pharmacy Cancer services  COPD CVD & Stroke Dermatology Diabetes Intermediate Care Local General Hospitals Maternity & Newborn Musculo‐skeletal conditions Urgent care  Acute Children's health Community services End of life Mental Health & Learning Disability Non consultant led services Patient choice Savings initiatives Investment & disinvestment

ORGANISATION GOVERNANCE

Patient experience

Tackling inequalities Smoking Childhood obesity Alcohol consumption Sexual Health Screening Immunisation Falls prevention

COMMUNICATION & PATIENT INVOLVEMENT

Staying healthy 

ENABLERS

INFORMATION COMMUNICATION TECHNOLOGY

Keeping Hertfordshire healthy

WORKSTREAMS

ESTATES

Goal 1 

INITIATIVES

WORKFORCE

GOALS

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In March 2009 the two Hertfordshire PCTs published their first five-year strategic plan in the form of a single document which set out a shared vision for health care provision for the residents of Hertfordshire. In January 2010 this strategy was reviewed and refreshed to take stock of progress made so far and the major change in the economic position which was affecting prospects for public sector expenditure and investment. While there is no major change in our strategy from the previous version, there is a significant shift in focus. Our strategy remains based upon three strategic goals:   

Keeping Hertfordshire healthy Enhancing the patient experience Commissioning high quality care

Underpinning these goals is a series of workstreams each of which has specific outcomes and action plans whereby achievement and progress are measured. These include the key clinical priorities in Towards the Best Together, the East of England response to the national Next Steps Review. Many of these workstreams were reviewed by the Boards during 2009-10 – for example, our Health Inequalities Action Plan which focuses on 30 selected local areas which experience the greatest health and social challenge. At the heart of the refreshed strategy, however, remains Delivering Quality Health Care for Hertfordshire (DQHH), a whole systems approach to future service design and delivery, agreed following public consultation in 2007. A key objective throughout is to move appropriate aspects of health care provision closer to home, away from acute hospitals to delivery in more local facilities and in some cases in people’s homes. This rationale has been further strengthened by its alignment with the national Quality Innovation Productivity and Prevention (QIPP) challenge set out by the Department of Health. The last two years have seen successful delivery of many of the changes outlined in DQHH, including investment in urgent care, local general hospitals and chronic disease pathways. However despite this strategy acute activity in Hertfordshire has increased over the last two years leading to significant financial problems. The priority is therefore to focus now on the Care Closer to Home policy and improved management of acute demand, integral to DQHH. PCT commissioning intentions for 2010/11 set out our ambition to reach DQHH target levels of acute activity by 2012/13. This will be reflected in the contracts we agree. The PCT is keen to work with the entire health economy in finding the best way to deliver the overall strategy, developing the infrastructure to support the activity shift from acute hospital care. We anticipate that different ways of working will include exploring the development of clinical pathways with treatment protocols and guidelines, the use of consultant advice for GPs provided by phone or email, embedding low priority treatment regimes, consultant outreach clinics, use of

31


community nurses, Allied Health Professionals (such as therapists), GPs with Specialist Interests, pooling of practice expertise and a range of other approaches at GP practice, local general hospital or locality level. The PCT also is keen to promote innovative approaches to delivering change, including risk sharing and integrated models of care across primary and secondary provision. We recognise that this is a challenging strategy but, as set out in DQHH, one that will improve overall quality and productivity of services.

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Quality report from Hertfordshire Community Health Services (HCHS) As part of their arms length status, HCHS have set a strategic objective: ‘to provide services which people recommend for patient safety, clinical effectiveness and patient experience.’ For the year 2009-10 the quality priorities were set by the two Hertfordshire PCTs for both commissioning and provider functions. HCHS’ priorities were:   

Delivering care in same sex accommodation in all inpatient units. Reducing both Clostridium Difficile and MRSA infection rates in inpatient units. Ensuring that our Newborn Hearing Screening and Audiology services were delivered to national quality standards and, where possible, recognised as an exemplar service.

Delivering Same Sex Accommodation (DSSA) HCHS met the NHS East of England 31 December 2009 deadline for achieving compliance with DSSA within inpatient units. The initial key focus was to identify those areas where the facilities required updating and improvement to comply. Once achieved the focus moved to maintenance and continued compliance. Modern Matrons continue to work with staff to embed a culture of respecting privacy and dignity within services which will underpin ongoing delivery of DSSA.

Reducing Clostridium Difficile and MRSA infection rates 

The MRSA bacteraemia process Progress was made in ensuring a robust follow up of MRSA bacteraemia cases. The aim is to identify the main cause of the bacteraemia and to reduce the risk by acting on recommendations and monitoring the implementation. We require each case to be followed up with a formal meeting to attain the root cause of the bacteraemia, and identify lessons to be learnt. An action plan is drawn up for the service involved and the process is further supported by the distribution of a summary report to all services across HCHS identifying the main concerns and actions to be taken across the organisation.

Upgrade of clinical environments to improve infection prevention and control During 2009-2010 there has been a significant drive to improve the environment in which HCHS provides inpatient services. A number of inpatient facilities have been upgraded to a high standard. Carpets have been removed and replaced with high quality vinyl flooring. Hand wash basins have been upgraded, with sensor taps. Sluices have been upgraded across the majority of the inpatient sites to a high specification with the implementation of non-touch opening macerators. This programme was commended by NHS East of England who considered the environments inspected to be immaculate, with staff showing a good knowledge of infection control requirements and a strong commitment to those standards. 33


Embedding the community hospital performance framework reporting 2009-2010 has seen further embedding of the infection Prevention and Control performance framework and further development to extend the areas that are being assessed. This gives us assurance that the community hospitals are compliant with best practice. The framework at the beginning of the year monitored the following; 1. 2. 3. 4.

Hand hygiene Environment and safety audit Essential steps urinary catheter care insertion and ongoing monitoring Commode audits

The framework has provided a system to build upon and further audit information on peripheral vascular catheters, enteral feeding (Essential Steps) and the cleaning audits are now included. The Modern Matrons/Clinical Services Leads for the community hospitals are engaged in ensuring that the data required is produced by the sites as a minimum monthly and that concerns identified are acted upon. Newborn Hearing Screening Programme and Paediatric Audiology Children’s Hearing Services are assessed for their quality against national standards by the NHS Newborn Hearing Screening Programme. The Newborn Hearing Service and Children’s Audiology Service in West Hertfordshire were re-assessed in September 2009 and were found to be overall of a well above average standard, with the national assessment team describing them as an exemplar service giving “excellent care and attention to families”. These services were chosen by HCHS as a prioritiy for improvement because the screening element had achieved poor coverage in the previous year. The reassessment confirmed the continued and sustained improvement in the quality of services provided from their first assessment in March 2008.

Patient Safety Patient Safety Incidents (PSIs) HCHS reported a total of 2,382 incidents during 2009-10. There is a consistent reporting pattern with patient accident (including slips/trips and falls), medication (including administration error/incorrect dosage) and admission, discharge and transfer incidents being the most reported type of incident, and making up over 50% of incidents reported. Whilst the vast majority of these incidents were minor we do of course take each one very seriously. During 2009, work has focused on ensuring that the PCT and HCHS successfully reported PSIs to the National Patient Safety Agency (NPSA), National Reporting and Learning System (NRLS) and that incident data is used to improve safety and underpin HCHS’ quality priorities.

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Serious Untoward Incidents (SUIs) In April 2009, responsibility for the management and co-ordination of HCHS SUIs passed from the PCT to HCHS. 29 SUIs were reported in 2009-10, compared with 24 in 2008/2009. This increase is not an indication that more serious incidents are occurring; rather that services are better at identifying serious incidents, national and local promotion of the reporting of some infection control incidents, and HCHS’ general improvement in the management of the process. SUI investigations for 2009-10 highlighted the following:  Lack of compliance/understanding of HCHS policies (inappropriate transfer of patient records)  Poor communication systems (in teams, cross working with agencies)  Inadequate administration systems (care plans, patient risk assessments) During the year work has been undertaken in a range of areas to implement the learning from these. Central Alert System (CAS) During 2009-10, HCHS received 117 alerts via the PCT CAS Liaison Officer. Co-ordination of alerts distributed as part of CAS was transferred from the PCT to HCHS on 11 March 2010. Systems and processes have been revised to ensure that HCHS continue to meet the requirements of CAS which include assurance that all actions and recommendations detailed in alerts applicable to HCHS are undertaken in a timely manner.

Patient Experience Complaints HCHS received 173 complaints for which investigations and responses were coordinated through the Patient Experience Team. The most frequent themes were communication, staff attitude, access and standards of care. HCHS committed to improving the response times to complaints and whilst a slight improvement was achieved response times remained unacceptable and the improvement was not sustained. This is a priority area for improvement in 2010/11. Patient Advice and Liaison Service (PALS) PALS was provided by the PCT in 2009-10 and they received 416 enquiries about HCHS services during the year, the majority of which related to access to services and signposting to services and other agencies. Patient Surveys introduction Patient Experience Surveys have been undertaken in Sexual Health and Family Planning Services (October and November 2009) and in Human Papilloma Virus (HPV) vaccination clinics and with diabetic patients (March 2010). 1,500 patients participated in the paper-based surveys undertaken during this period and the results showed an overall highly positive experience. Methodological learning from these pilot surveys have informed the surveys now being undertaken in the other identified services - in particular, the wording of

35


questions to target a younger population and the collection of completed surveys whilst maintaining confidentiality and avoiding bias in multi-service clinics.

Clinical Effectiveness The majority of work to address this has been carried out as part of the clinical audit process, or to review service specifications or care pathways. One example is the audit of the way the Childrenâ&#x20AC;&#x2122;s Physiotherapy service manage their interventions with children with cystic fibrosis. During 2009-2010, 63 clinical audit projects were undertaken, focussing on high risk and concern areas, including patient feedback, legislation requirements, contract commitments and national audits. The majority of audits spanned the three dimensions of quality, with 31 (49%) audits linked to clinical effectiveness, 26 (41%) to patient safety and 6 (10%) directly to patient experience. HCHS participated in 3 of the 4 available national audits during 2009-10, which covered falls, continence and pain management.

36


Financial Review An overview The year ended 31 March 2010 was successful on many fronts. The PCT again achieved financial balance, recording an underspend of £0.5m, whilst at the same time further improving performance on key service targets. However, the year was much more challenging financially. From early on the PCT saw significant increases in activity within acute hospitals leading to a large in-year overspending. In September 2009, the Board formally recognised the severity of the financial position, which was forecast to reach £12m by the end of the year if expenditure remained unchecked. The Board agreed a financial recovery plan, with the aim being to bring the PCT back into financial balance by the end of the financial year. The main thrust of the financial recovery plan was to reduce the volume of acute hospital activity, as this had increased significantly and was at unsustainable levels, both for the PCT and its main acute hospital providers. A re-invigorated approach to driving delivery was initiated, building upon the strengths of the previous recovery processes. Meetings led by PCT Directors were held with all Practice Based Commissioning Groups (PBCs) and their constituent practices. The purpose being to ensure the wider GP community was aware of the seriousness of the financial position and to enlist their help and support in addressing this. Engagement of PBCs and GPs was seen to be vital and the PCT improved its communication and information sharing. Meetings were already taking place between clinicians in primary care and those in West Hertfordshire Hospitals NHS Trust to discuss clinical pathways and improvements to services. Over the last six months of the financial year these meetings were particularly focused on identifying and implementing areas of joint benefit eg. where volumes had increased the most or where there were capacity constraints and difficulties in meeting the demand for services. The financial recovery plan contained many actions which fell into four main themes: 

Improving information to support clinical engagement and decision making, including the provision of benchmarking and comparative information over time

Monitoring and managing contracts tightly, particularly validating recorded activity, to minimise payment and pathway errors/changes

Challenging existing practice and clinical pathways and implementing the changes in service models set out in Delivery Quality Health care for Hertfordshire (DQHH).

Spreading medicines management good practice

37


As the accounts demonstrate, the PCT was successful in reducing expenditure and recorded a small underspend against its budget. However, the financial recovery plan was not completely successful and the planned reduction in acute hospital spending was only partially achieved. The PCT achieved financial balance through additional measures, some of which were non-recurrent. The PCT also had to seek the return of £2m deposited earlier in the year with the East of England Strategic Health Authority, which was intended to be invested in later years and now will not be available in those years. In addition some other actions have just delayed expenditure into 2010/11. Taken together, these have increased the financial pressure on 2010/11 by £7.2m or the equivalent of about 0.9% of the PCT’s 2010/11 budget of £846m. Financial Duties and Targets There are four main financial targets, and performance on these in 2009-10 is detailed below. 1) Costs not to exceed revenue resource limit The PCT’s revenue resource limit was £817.3m and net expenditure was £816.8m. The duty was achieved. The PCT had planned to underspend by £576,000 in the year and this was not quite reached with expenditure being below the agreed resource limit by £478,000. This underspend will be returned to the PCT by the Department of Health, who will increase the PCT’s resource limit by £478,000 in 2010/11. (Accounts – Note 3.1) 2) To remain within cash limit All PCTs are set a cash limit. This is the amount of cash that can be drawn from the Department of Health. PCTs are not allowed to be overdrawn and are expected to end the year with minimal cash balances. The PCT drew down its full cash limit and retained no cash at 31 March 2010. The duty was therefore achieved. (Accounts – Statement of Financial Position as at 31 March 2010) 3) Capital costs not to exceed capital resource limit

The PCT’s capital resource limit was set at £4.1m and capital expenditure incurred was £3.7m. The PCT achieved this duty, underspending by £453,000. (Accounts – Note 3.2) 4) To recover the full cost of provider services NHS West Hertfordshire both commissions services and also provides them directly. The PCT has to demonstrate that it has received income to cover the full costs of the services it directly provides. In 2009-10 the net cost of services provided was £37.5m and the funding provided from the PCT’s own allocation was £36.9m. The PCT provider service was overspent by £658,000 and failed to meet the target.

38


(Accounts – Note 3.3) Management costs Although no formal national targets had been set for PCTs, a concerted effort was made to keep costs to the minimum while still ensuring the smooth running of the PCT and achievement of its objectives. Management costs recorded in the accounts are only a small part of ‘headquarters’ costs and are defined nationally. In 2009-10 management costs made up less than 1.3% of total spending. The total for the year was £10.7m or £22.41 per head of weighted population. This was a reduction on 2008-09 in part because the provider services transferred to NHS East and North Hertfordshire included an element of management cost overheads. Collectively across the two Hertfordshire PCTs management costs reduced as a percentage of the PCTs’ overall costs from 1.6% to 1.4%. The pay rise for staff and managers in 2009-10 was 2.25% and was the second year of a three-year agreement on pay. This was in line with the guidance from the Department of Health. Staff on the lowest pay points (1-12) received higher awards, with a flat rate increase of £420 equating to between 2.3% and 3.2%. The pay rise for Very Senior Managers in 2009-10 was 1.5%. (Accounts – Note 7.5) Public Sector Payment Policy The PCT has an obligation to pay non-NHS creditors within 30 days of receipt of goods or a valid invoice (whichever is later), unless other payment terms have been agreed. This is monitored during the year. The PCT paid 93% of invoices from nonNHS organisations within this target. This is an improvement on performance in 2008-09 (87%), but is still short of good practice. By value, 94% of invoices were paid within target, an improvement on 2008-09, but again just short of the target for good practice. On invoices from other NHS organisations, the PCT paid 84% of invoices (99% by value) within 30 days. In both cases this is an improvement on 2008-09. Performance on all measures steadily improved during the year and the PCT expects performance in 2010/11 to be at least maintained. (Accounts – Note 8.1) Related party transactions In the year to 31 March 2010, a number of local GPs sat on the Board and Executive Committee of the PCT. Payments amounting to £6.8m were made to these GPs’ practices, in their capacity as providers of primary care services. Payments for similar services were made to other GP practices within the PCT. The GPs on the Board and Executive Committee had no direct control over how these funds were allocated.

39


All Board members and senior managers are required to complete a declaration setting out any outside interests. In the year to 31 March 2010, there were no payments made by the PCT to organisations included in the register of interests. The Department of Health is regarded as a related party. During the year, the PCT had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. Further details of the amounts and the parties involved are included in the accounts. (Accounts – Note 33) Where the money was spent As mentioned above, the PCT is both a commissioner of services and a provider. The majority of the PCT’s funding was spent on commissioning services from other NHS and non-NHS organisations. The majority of acute hospital activity is charged to PCTs under “Payment by Results” using a national tariff which is published each year by the Department of Health. To reflect unavoidable cost differences across the country, the Department of Health also publishes market forces indices, with providers being paid this percentage in addition to the tariff. In previous years the Department of Health has made these additional market forces payments to providers, reducing PCT allocations accordingly. In 2009-10 the Department of Health changed the route that these market forces payments were made, with PCTs making the payments instead. PCT allocations were therefore not reduced in 2009-10 and the costs recorded against categories of acute services are therefore higher than in previous years. As an example the market forces index and the top-up applicable to West Hertfordshire Hospitals NHS Trust, the PCT’s main acute provider, was 17.7532%. The largest single element of spending was on general and acute services (45.3%). Next came primary care general medical services (9.9%), mental health (9.5%) and prescribing (8.6%). Around 4.5% of total spending went on services provided directly by the PCT, with a further 3.1% on services provided by other PCTs. A more detailed analysis of where the money was spent is shown in the pie chart on the next page.

40


Analysis of 2009-10 Net Expenditure Other healthcare 4.6%

Administration 0.7%

PCT provided services 4.5%

Services provided by other PCTs 3.1%

Mental health 9.5%

Prescribing 8.6%

Learning disabilities 2.7%

General medical services 9.9%

A&E 2.1%

Other family health services 5.4%

General and acute 45.3%

Maternity 3.8%

Other Noteworthy Issues International Financial Reporting Standards In 2009-10 the accounts have for the first time been prepared using International Financial Reporting Standards. Comparators for 2008-09 have been stated based on these standards. Note 41 to the accounts sets out the movements on balances associated with this change. Modern Equivalent Asset Valuation Previously buildings used for health services have been included in the accounts at fair value, which has been assessed using a technique called depreciated replacement cost. This had previously assumed an exact replacement in the current location. From 1 April 2008 HM Treasury has adopted a new approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the services being provided, an alternative site can be valued. HM Treasury required all organisations to apply these new valuation methods before 1 April 2010. In view of this change, the PCT instructed an independent firm of chartered surveyors to undertake valuations in line with this new guidance. As a result, land values in the accounts reduced by £2.6m and building values reduced by £1.7m. Losses arising from revaluations are charged to the Revaluation Reserve, to the extent that a balance exists in relation to the revalued asset. Losses in excess of that amount are charged to the current year’s Operating Cost Statement. As a result of the revaluation to modern equivalent assets £3,330,000 was charged to the Operating Cost Statement in 2009-10, although this was covered entirely by additional funding from the Department of Health and had no impact on the PCT’s financial performance.

41


Financial Outlook Achieving financial balance in the last three years has been a major success. Growth funding for 2010/11 has been set at 5.1%. However, it is clear that growth funding in the following years will be considerably less, with the real prospect of no growth at all beyond 2010/11. This financial outlook is significantly worse than when the PCT prepared its 5-year Strategic Plan at the beginning of 2009. Therefore in January 2010 the PCT Board received a Strategy Refresh taking into account the lower level of resources. Alongside assuming a significantly worse financial settlement, the Refresh increased the size of the contingency reserve to 1% of funding and also included a specific transformation reserve of 1%. This latter funding will be utilised to drive through changes in services to make them more effective, efficient and responsive to the needs of patients. So, whilst the PCT can still look forward with some confidence, the current economic climate is more challenging. For the PCT to maintain financial balance and its track record of continuous improvement in both services and the health of the people of Hertfordshire, it must continue to strive to achieve value for money across all of its spending. A summary of the budgets planned for 2010/11 is included in the table below. Description Expected Funding

ÂŁ000 846,233

Spending Plans:Acute Services Mental Health Services Community Services Other Non Acute Services GP Services Prescribing and Pharmacy Services Dental Services Corporate Costs Costs previously met centrally by Department of Health Earmarked Investments Transformation Reserve Contingency Reserve Planned Expenditure

428,875 81,476 57,372 47,310 79,562 82,873 25,038 16,528 3,163 6,279 8,413 9,344 846,233

Policy on managing principal risks The Assurance Framework provides a comprehensive method for the effective management of the principal risks that arise in meeting the key strategic objectives agreed by the PCT Board. It identifies objectives which are at risk, gaps in control and insufficient assurances. It also provides a structure for evidence to support the â&#x20AC;&#x2DC;Statement on Internal Controlâ&#x20AC;&#x2122; and facilitates reporting key information regularly to the PCT Board. Directors are responsible for the continual updating of the Assurance Framework including evaluation of the risk score, updates on progress and identification of actions against gaps in control and assurance. The Assurance 42


Framework is monitored by the Joint Integrated Governance Committee and PCT Board. Role of the Joint Integrated Governance Committee The committee is responsible for the management of risk including organisational and that related to the delivery of health care. It also provides assurance to the Board on the systems and processes by which the PCT achieves organisational objectives, and the safety and quality of clinical services. The core membership of the committee includes representatives from the Audit Committee. This provides a mechanism for the Audit Committees together with management reporting to oversee the detailed monitoring of progress against the Assurance Framework. Role of the Audit Committee The committeeâ&#x20AC;&#x2122;s principal function is to advise the Board on the adequacy and effectiveness of the PCTâ&#x20AC;&#x2122;s systems of internal control and its arrangements for risk management, control and governance processes. In order to fulfil this function, the audit committee prepares an annual report for the Board and accountable officer. This report includes information provided by internal audit, external audit and other assurance providers. The opinion of the audit committee was that adequate assurance can be given to the Board on the effectiveness of the risk management and control processes in place during 2009-10.

43


Remuneration Report Members of the Remuneration Committee are non executive directors only, and membership during the year was:      

Phil Picton, Non Executive Director, NHS East and North Hertfordshire, (Chair and member of the Committee for part year) Pam Handley, Chair, NHS East and North Hertfordshire (to July 2009) Linda Farrant, Non Executive Director, NHS East and North Hertfordshire Stuart Bloom, Chair, NHS West Hertfordshire Diane Bailey, Non Executive Director, NHS West Hertfordshire, (Chair of the Committee for part year) Elaine Fox, Non Executive Director, NHS East and North Hertfordshire, (part year to replace Phil Picton).

The remuneration of senior managers is determined by national terms and conditions – Very Senior Manager Pay Framework. The framework includes the ability to pay performance related pay and in 2009-10 this was applied. The senior managers are employed under the nationally agreed contractual arrangements, all having been employed on permanent contracts which include a six month notice period. There is no provision in the contracts for termination payments save any contractual entitlements to redundancy compensation which would be calculated using the agreed NHS formula. The majority of senior manager contracts commenced on 1st October 2006, are not fixed term so do not have any unexpired term, and include a six month notice period.

44


45

Remuneration report Salaries and allowances Salary/ fees (bands of £5,000)

2009-10 Other Remuneration (bands of £5,000)

£000 Stuart Bloom, Chair

Name and title

2008-09 Other Remuneration (bands of £5,000)

Benefits in kind (Rounded to the nearest £000)

Salary/ fees (bands of £5,000)

£000

£000

£000

£000

£000

35-40

0

0

35-40

0

0

Anne McPherson, Non Executive Member

5-10

0

0

5-10

0

0

Dr Diane Bailey, Non Executive Member

5-10

0

0

5-10

0

0

Mark Gainsborough, Non Executive Member Paul Smith, Non Executive Member and Chair of West Herts Audit Committee

5-10

0

0

5-10

0

0

10-15

0

0

10-15

0

0

Eliza Hermann, Non Executive Member Femi Adewole, Non Executive Member (to September 2009) Dr Mike Edwards, Chair of the Professional Executive Committee

5-10

0

0

5-10

0

0

0-5

0

0

5-10

0

0

65-70

0

0

65-70

0

0

75-80

0

0

70-75

0

0

50-55

0

0

55-60

0

0

75-80

0

0

60-65

0

0

Anne Walker, Chief Executive (50%) Alan Pond, Director of Finance and Commercial Development (50%) Dr Jane Halpin, Director of Public Health (50%)

Benefits in kind (Rounded to the nearest £000)

45


Name and title

Gareth Jones, Director of Strategic Planning (50%) (to January 2010) Beverley Flowers, Director of System Management (50%) Pauline Pearce, Director of Public Involvement and Corporate Services (50%) (to November 2009) Heather Moulder, Managing Director of Hertfordshire Community Health Services* Clare Hawkins, Interim Director of Nursing (50%) (to February 2010) Andrew Parker, Director of Primary Care and Service Redesign (50%) Simon Rouse, Director of Strategic Planning (50%) (from January 2010) Gloria Barber, Director of Workforce and Communications (50%)

Salary/ fees (bands of £5,000)

2009-10 Other Remuneration (bands of £5,000)

£000

2008-09 Other Remuneration (bands of £5,000)

Benefits in kind (Rounded to the nearest £000)

Salary/ fees (bands of £5,000)

£000

£000

£000

£000

£000

35-40

0

0

50-55

0

0

45-50

0

0

45-50

0

0

45-50

0

0

35-40

0

0

30-35

0

0

55-60

0

0

25-30

0

0

5-10

0

0

45-50

0

0

45-50

0

0

10-15

0

0

0

0

0

40-45

0

0

40-45

0

0

* The remuneration declared for Heather Moulder reflects 50% of her remuneration for the period 1 April 2009 to 31 October 2009 This reflects the transfer of community services from West Hertfordshire Primary Care Trust to East and North Hertfordshire Primary Care Trust on 1 November 2009

Benefits in kind (Rounded to the nearest £000)

46


47

Pensions Benefits

Name and title

Real increase in pension at age 60 (bands of £2,500)

Lump sum at aged 60 related to real increase in pension (bands of £2,500)

Total accrued pension at age 60 at 31 March 2010 (bands of £5,000)

£000

£000

£000

Lump sum at age 60 related to accrued pension at 31 March 2010 (bands of £5,000) £000

25-30

Relating to the period 1 April 2009 to 31 March 2010 Anne Walker – Chief Executive 0-2.5 2.5-5 (50%) Alan Pond – Director of Finance and Commercial Development 0-2.5 2.5-5 (50%) Jane Halpin – Director of Public 0-2.5 0-2.5 Health (50%) Gareth Jones – Director of Strategic Planning (50%) (to 0-2.5 0-2.5 January 2010) Beverley Flowers – Director of 0-2.5 0-2.5 System Management (50%)

Cash Cash Equivalent Equivalent Transfer Transfer Value at Value at 31 March 31 March 2010 2010

Real increase in Cash Equivalent Transfer Value funded by PCT

Employer’s contribution to stakeholder pension

£000

£000

£000

£00

85-90

551

474

38

0

15-20

50-55

286

247

18

0

15-20

50-55

273

245

11

0

20-25

60-65

415

367

11

0

5-10

25-30

135

113

11

0

47


Name and title Pauline Pearce – Director of Public Involvement and Corporate Services (50%) (to November 2009) Clare Hawkins – Interim Director of Nursing (50%) (to February 2010) Gloria Barber – Director of Workforce and Communications (50%) Andrew Parker – Director of Primary Care and Service Redesign (50%) Simon Rouse – Director of Strategic Planning (50%) (from January 2010)

Real increase in pension at age 60 (bands of £2,500)

Lump sum at aged 60 related to real increase in pension (bands of £2,500)

Total accrued pension at age 60 at 31 March 2010 (bands of £5,000)

£000

£000

£000

Lump sum at age 60 related to accrued pension at 31 March 2010 (bands of £5,000) £000

0-2.5

2.5-5

10-15

0-2.5

5-7.5

(2.5)-0

Cash Cash Equivalent Equivalent Transfer Transfer Value at Value at 31 March 31 March 2010 2010

Real increase in Cash Equivalent Transfer Value funded by PCT

Employer’s contribution to stakeholder pension

£000

£000

£000

£00

35-40

0

204

(100)

0

10-15

35-40

215

167

24

0

(2.5)-0

15-20

50-55

414

392

2

0

(2.5)-0

(2.5)-0

10-15

40-45

268

249

5

0

0-2.5

0-2.5

0-5

0-5

1

0

1

0

48


49 Notes: 1. As Non Executive Members do not receive pensionable remuneration, there will be no entries in respect of pensions for Non Executive Members. 2. Cash Equivalent Transfer Values. A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particularly point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries. 3. Real Increase in CETV This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another scheme or arrangement) and uses common market valuation factors for the start and end of the period. 

Pension Benefits

The above amount represents 50/50 with East and North Hertfordshire PCT. The disclosure in respect of Heather Moulder is now fully represented in East and North Hertfordshire PCT’s annual Report following the transfer of community services from West Hertfordshire PCT with effect from 1 November 2009. ( ) Denotes a decrease in pension and lump sum entitlements.

49


Board expenses Name and job title Stuart Bloom Chair Anne McPherson Non Executive Director Dr Diane Bailey Non Executive Director Mark Gainsborough, Non Executive Director Paul Smith Non Executive Director Eliza Hermann Non Executive Director Femi Adewole Non Executive Director Anne Walker* Chief Executive Alan Pond* Director of Finance and Commercial Development Jane Halpin* Deputy Chief Executive and Director of Public Health Gareth Jones* Director of Strategic Planning (to January 2020) Beverley Flowers* Director of System Management

Parking at office £ (70)

Official mileage £ 3732

Regular car user £

Parking £

Public Telephone Other transport costs £ £ £ 35 589

Total £ 4286

631

30

661

418

75

493 0

171

23

194

1131

273

1404

126

126

(136)

488

313

151

(136)

1020

380

96

(136)

417

380

103

763

(111)

570

222

144

825

(136)

(3)

813 16

1375

(136)

50


51 Name and job title Pauline Pearce* Director of Public Involvement and Corporate Services (to November 2009) Heather Moulder** Managing Director Hertfordshire Community Health Services Clare Hawkins* Interim Director of Nursing (to February 2010) Andrew Parker* Director of Primary Care and Service Redesign Gloria Barber* Director of Workforce and Communications Simon Rouse” Director of Strategic Planning (from January 2010) *

Parking at office £

Official mileage £

Regular car user £

Parking £

Public Telephone Other transport costs £ £ £

282

183

224

300

348

82

(136)

534

380

(136)

703

(30)

54

(75)

95

£ 0

28

642

26

756

(68)

143

Total

763 15

725 65

Represents 50% of the total amount claimed, the balance being paid by NHS West Hertfordshire

** Represents 50% of the total amount claimed for April 2009 to October 2009 plus 100% of total amount claimed between November 2009 and March 2010, the balance being paid by NHS West Hertfordshire

51


Board members declarations of interests Board Member Executive directors Anne Walker Chief Executive Gloria Barber Director of Workforce and Communications Beverley Flowers Director of System Management Dr Jane Halpin Deputy Chief Executive and Director of Public Health

Clare Hawkins Interim Director of Nursing Gareth Jones Director of Strategic Commissioning (to January 2009) Andrew Parker Director of Primary Care Development Pauline Pearce Director of Public Involvement and Corporate Services (to November 2009) Alan Pond Director of Finance and Commercial Development Simon Rouse Director of Strategic Planning (from January 2010) Lesley Watts Director of Innovation (from February 2010) Non executive directors Stuart Bloom Chair

NHS West Hertfordshire Board members declarations of pecuniary and other interests None None None 

Husband is a consultant employed by Luton and Dunstable Hospital NHS Trust, with whom the PCT has contracts  Governor of SS Alban & Stephen Infant & Nursery School and Junior School None Wife is a part time receptionist at a GP practice, Dr Wallis & partners in Stevenage Wife is Bone Marrow Transplant Quality Manager at Royal Free Hospital NHS Trust, (PCT has a Service Level Agreement with RFH) Son undertakes occasional temporary clerical work in other Directorates None None None

 

Femi Adewole

 

Voluntary Co-ordinator, Bushey Community Cares Welfare Group Consultancy to support United Synagogues welfare groups Mental health Panel Manager, Cygnet Clinics Non Executive Director, Expert Patients Programme Commissioning Interests Co.(set up by DoH to write a programme for PCTs for rolling out across England) Investments Director, Guinness Trust (operates social housing)

52


Board Member Diane Bailey Dr Mike Edwards Joint Chair of the Professional Executive Committee

Mark Gainsborough Eliza Hermann Anne McPherson

Paul Smith

NHS West Hertfordshire Board members declarations of pecuniary and other interests None  Principal at Fairbrook Medical Centre, Borehamwood  Director, Herts Health Limited since September 2006 (the company has bid for a tender to provide CATS services)  Wife is a Trustee of Cherry Lodge Cancer Care Charity, Barnet (since October 2006) None None  Executive officer, Association for Leaders in Nursing.  Governor Hertfordshire Partnership NHS Foundation Trust on behalf of the PCT Non Executive Director, William Sutton Housing Association (operates social housing)

53


The Accounts Name of external auditor and cost of audit work Audit Commission 2nd Floor Sheffield House Lytton Way (Off Gates Way) Stevenage SG1 3HG The external audit fees for 2009-10 were £243,400 plus VAT. The external auditors have been commissioned to undertake statutory audit work only and have not provided any services of an audit or non-audit nature that would compromise their independence as auditors. Directors’ statement on audit information All executive and non executive directors have stated that as far as they are aware, there is no relevant audit information of which the PCT’s auditors are unaware and that they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the PCT’s auditors are aware of that information. Audit Committee members West: Paul Smith (Chair) Diane Bailey Femi Adewole (to November 2009) Mark Gainsborough Statement of Chief Executive’s responsibilities as the Accountable Officer of the PCT The Secretary of State has directed that the Chief Executive should be the Accountable Officer to the Primary Care Trust. The relevant responsibilities of Accountable Officers are set out in the Accountable Officers Memorandum issued by the Department of Health. These include ensuring that:  there are effective management systems in place to safeguard public funds and assets and assist in the implementation of corporate governance;  value for money is achieved from the resources available to the primary care trust;  the expenditure and income of the primary care trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them;  effective and sound financial management systems are in place; and

54


ď&#x201A;ˇ

annual statutory accounts are prepared in a format directed by the Secretary of State with the approval of the Treasury to give a true and fair view of the state of affairs as at the end of the financial year and the net operating cost, recognised gains and losses and cash flows for the year.

To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my letter of appointment as an Accountable Officer.

Anne Walker Chief Executive Date

9 June 2010

Statement of the Directorsâ&#x20AC;&#x2122; responsibilities in respect of the accounts The directors are required under the National Health Service Act 2006 to prepare accounts for each financial year. The Secretary of State, with the approval of the Treasury, directs that these accounts give a true and fair view of the state of affairs of the organisation and the net operating cost, recognised gains and losses and cash flows for the year. In preparing these accounts, Directors are required to: I. II. III.

apply on a consistent basis accounting policies laid down by the Secretary of State with the approval of the Treasury; make judgements and estimates which are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the accounts.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the organisation and to enable them to ensure that the accounts comply with requirements outlined in the above mentioned direction of the Secretary of State. They are also responsible for safeguarding the assets of the health authority and hence for taking reasonable steps for the prevention of fraud and other irregularities. The directors confirm to the best of their knowledge and belief they have complied with the above requirements in preparing the financial statements. By order of the board.

Anne Walker Chief Executive Date

Alan Pond Director of Finance and Commercial Development

9 June 2010

55


STATEMENT ON INTERNAL CONTROL 2009-10 1. Scope of responsibility The Board is accountable for internal control. As Accountable Officer, and Chief Executive of this Board, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisation’s policies, aims and objectives. I also have responsibility for safeguarding the public funds and the organisation’s assets for which I am personally responsible as set out in the Accountable Officer Memorandum. I am also the Chief Executive of East and North Hertfordshire PCT. Although the two PCTs are separate statutory bodies, they have a single management and executive team and share some common strategic and operational goals and control system objectives. My responsibilities as Accountable Officer in respect of internal controls are supported by the (Joint) Integrated Governance Committee and the Audit Committee. Both of these committees report to the Board. The (Joint) Integrated Governance Committee is chaired by a non executive director. The chair is rotated between the two PCTs on an annual basis. In addition the chairs of the two Hertfordshire PCTs’ Audit Committees are also members of the (Joint) Integrated Governance Committee. The membership of the Audit Committee is entirely made up of non executive directors. When appropriate, internal control issues also feature at weekly meetings of the Executive Director Team. Controls are also reviewed by the PCT’s internal and external auditors. The PCT is held to account for its performance by the East of England Strategic Health Authority. It also works closely with local authorities (Hertfordshire County Council, Hertsmere Borough Council, St Albans District Council, Three Rivers District Council, Watford Borough Council and Dacorum Borough Council) and is subject to scrutiny by the Hertfordshire County Council Health Scrutiny Committee consisting of County and District Councillors. The PCT in turn, its primary role as being a commissioning organisation, has responsibilities for monitoring levels of standards, compliance and quality achieved by health care organisations and independent health practitioners from which it commissions services. This is evidenced through the Annual Health Check and monitoring of the contracts entered into for services. 2. The purpose of the system of internal control The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives; it can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to:

56


 

identify and prioritise the risks to the achievement of the organisation’s policies, aims and objectives, evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

The system of internal control has been in place in West Hertfordshire Primary Care Trust for the year ended 31 March 2010 and up to the date of approval of the annual report and accounts. 3. Capacity to handle risk The Chief Executive is the Accountable Officer for risk management within the PCT. Day to day executive responsibility for governance and control is delegated to the Director of Workforce and Communications, who is supported by a Head of Corporate Governance who provides organisational capacity to effectively monitor and facilitate risk control within the PCT. Staff are made aware of the key risk-related policies, procedures and protocols at corporate induction and through team briefings, newsletters and the PCT’s intranet. Learning from the reporting and investigation of adverse incidents, serious untoward incidents, complaints, claims, PALS enquiries and internal and external audit reviews is a key part of the internal controls on mitigating risks. The Board Assurance Framework that identifies principal risks to achieving strategic objectives, assurances and controls to mitigate these risks along with the high level risk register are a standing agenda item on the (Joint) Integrated Governance Committee and reported to the board as per the board business cycle. The Audit Committee receives regular reports from the (Joint) Integrated Governance Committee for the purpose of assuring the board that risks are identified and managed appropriately. The Secretary of State’s Directions 2004 on work to counter fraud and corruption require NHS bodies to appoint a Local Counter Fraud Specialist (LCFS). The overarching body is the NHS Counter Fraud and Security Management Service (CFSMS). The PCT employs a LCFS who reports directly to the Director of Finance and Productivity. West Hertfordshire PCT participated in the Audit Commission’s National Fraud Initiative validating identified payroll, visa and finance creditor matches, against PCT’s databases. These checks are complete. Whilst there is no fraud, overpayments within the creditor matches were identified for recovery during 200910. The work plan for 2009-2010 was agreed and completed. A national Counter Fraud Service pro-active exercise was conducted in 2009-10 looking at Recruitment Agencies. Whilst no fraud was identified a new policy on agency and self-employed workers have been drafted as a result. In the area of Primary Care Services, prescription penalty notices for falsely claimed exemptions continued to decline. The same penalty system introduced for ophthalmic claimed exemptions is currently showing a small return.

57


4. The risk and control framework The PCT’s Risk Management Policy provides details of the Risk Management systems and processes in place. The Risk Management Policy is supported by the policy on Reporting and Investigating Adverse Incidents, Serious Untoward Incidents, Information Security, Information Governance and the Risk Assessment Procedure. An overview of the PCT’s strategic objectives, associated risks and controls is provided by the “Board Assurance Framework”. The Board Assurance Framework was approved by the Board in July 2009 following consideration by the (Joint) Integrated Governance Committee and the Audit Committee. The Framework is a working document and is regularly reviewed by the (Joint) Integrated Governance Committee, the Audit Committee and the Board and updated as objectives, risks, controls or required actions change. The version of the Board Assurance Framework in place as at 31 March 2010 has identified 7 principle risks relating to the PCT’s 3 strategic objectives. The Board Assurance Framework along with regular performance reports provide a mechanism for the board to monitor the controls in place and manage the gaps or weaknesses in controls where the PCT is failing to achieve its strategic objectives. This includes regular reporting and discussions regarding management actions for mitigating the risks associated with under achieving choose and book, Chlamydia screening, smoking cessation, 18 weeks and A&E targets. The full Assurance Framework can be seen on the PCT’s website by following the link below: http://www.hertfordshire.nhs.uk/images/stories/publications/AssuranceFramework/As suranceFrameworkv8.pdf In addition as part of the risk and control framework the PCT maintains both “High Level” and operational risks registers, with risks rated as “high” being reported to the (Joint) Integrated Governance Committee and being subject to review by the Board. Any personal data related incidents and breaches are published within the PCT’s Annual report in line with Department of Health directives. The PCT’s Information Governance (IG) Strategy is based on the Department of Health’s guidance and the requirements of the Information Governance toolkit. Data security risks are managed in line with the Information Governance Strategy and the PCT’s risk management policy. The Director of Finance and Productivity is the Senior Information Risk Owner (SIRO) at board level. The SIRO is a member of the PCT’s Information Governance Sub-Committee (IGSC) which is chaired by the PCT’s Caldicott Guardian and is responsible for the monitoring and management of the Information Governance arrangements. The PCT has completed encryption of all PCT owned portable devices that connect to the network and the new Hertfordshire Primary Care Trust is currently implementing encryption and port control.

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Information Governance training was part of the corporate induction. In addition Information Governance e-learning was available to all staff alongside specially tailored Information Governance workshops. In 2010 GPs submitted their second Information Governance toolkit submissions with pharmacies submitting a baseline. The PCT works in collaboration with public stakeholders including the Overview and Scrutiny Committee, Local Involvement Networks (LINks), Partnership Boards, Carers Forums and the local community networks. The collaborative work ensures that the public are involved with decision making and management of risks that impact on service provision. As an employer with staff entitled to membership of the NHS Pension scheme, control measures are in place to ensure all employer obligations contained within the Scheme regulations are complied with. This includes ensuring that deductions from salary, employer’s contributions and payments in to the Scheme are in accordance with the Scheme rules, and that member Pension Scheme records are accurately updated in accordance with the timescales detailed in the Regulations. Control measures are in place to ensure that all the organisation's obligations under equality, diversity and human rights legislation are complied with. The PCT undertook risk assessments and Carbon Reduction Delivery Plans were in place in accordance with emergency preparedness and civil contingency requirements, as based on UKCIP 2009 weather projects, to ensure that this organisation’s obligations under the Climate Change Act and the Adaptation Reporting requirements were complied with. Complementary to and consistent with, the Assurance Framework, was the PCT’s Declaration on Compliance with the “Standards for Better Health”, which forms part of the Government’s “Annual Health Check” overseen by the Care Quality Commission. The PCT was fully compliant with the Core Standards. As all Provider Services were transferred to East and North Hertfordshire PCT, there was no requirement for West Hertfordshire PCT to register services with CQC. The PCT completed the World Class Commissioning (WCC) self assessment in January 2010. The outcome of the self assessment process was agreed with the Executive Team, Joint Audit Committee and at a Board meeting. The governance element of the self assessment has three elements; Strategy, Finance and Governance. The PCT self assessed itself as Green for all three elements. The Board also receives Assurance through the Quality Reports, regarding the progress against the Clinical Governance Agenda. 5. Review of effectiveness As Accountable Officer, I have responsibility for reviewing the effectiveness of the system of internal control. My review is informed in a number of ways. The head of

59


internal audit provides me with an opinion on the overall arrangements for gaining assurance through the Assurance Framework and on the controls reviewed as part of the internal audit work. Executive managers within the organisation who have responsibility for the development and maintenance of the system of internal control provide me with assurance. The Assurance Framework itself provides me with evidence that the effectiveness of controls that manage the risks to the organisation achieving its principal objectives have been reviewed. My review is also informed by    

Audit Commission Use of Resources review A risk-based programme of internal audits The PCT’s self-declaration of compliance with the Care Quality Commission’s “Standards for Better Health” and a review of evidence to support the declaration. Care Quality Commission’s monitoring visits

I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the following: 

The PCT Board - the Board places reliance upon the Audit Committee and (Joint) Integrated Governance Committee for assurances on the extent to which the system of internal control is sound. The Audit Committee – the Audit Committee whose primary role is to independently oversee the governance and assurance process on behalf of the PCT and to report to the Board on the soundness and effectiveness of the systems in place for risk management and internal control. In order to provide this assurance to the Board, both Internal and External Audit undertake systems based reviews providing an opinion to the committee on the processes and controls in place. The (Joint) Integrated Governance Committee – the (Joint) Integrated Governance Committee is responsible for overseeing the identification and management of risks facing the PCT, including the development and monitoring of the PCT’s Assurance Framework and the self declaration on compliance with core standards as part of the Health care Commission’s “Annual Health Check”. Executive Directors – the Executive Directors meet weekly. Risk-related items feature as agenda items for these meetings. All directors have signed and returned Stewardship Statements to me confirming that as far as they are aware, there is no relevant audit information of which the PCT’s auditors are unaware. They have taken all steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the PCT’s auditors are aware of that information. Internal Audit – Internal Audit reviews the system of internal control and report their findings to the Audit Committee. This includes specific reports on areas relevant to controls, risk and governance and also a Head of Internal Audit Opinion, which informs this Statement on Internal Control. External Audit – Use of Resources review

A plan to address weaknesses and ensure continuous improvement of the system is in place.

60


Significant Control Issues The Head of Internal Audit Opinion for the period 1 April 2009 – 31 March 2010, that “Based on the work undertaken in 2009-10, significant assurance can be given that there is a sound system of internal control, designed to meet the organisation’s objectives, and that controls are being applied consistently”. The Head of Internal Audit Opinion for 1 April 2009 – 31 March 2010 has not identified any significant issues which require disclosure within the Statement on Internal Control. In 2009-10 the PCT had overspends on its Provider Arm and on Acute Services. The PCT implemented a Financial Recovery Plan and achieved financial balance, although both of the above areas remained overspent. There have been 2 personal data related serious untoward incidents (as classified by the Department of Health) reported by West Hertfordshire PCT, as summarised below: Category Nature of Incident Total I Loss of inadequately protected electronic equipment, devices 0 or paper documents from secured NHS Premises II Loss of inadequately protected electronic equipment, devices 1 or paper documents from outside secured NHS premises III Insecure disposal of inadequately protected electronic 0 equipment, devices or paper documents from outside secured NHS premises IV Unauthorised disclosure 1 V Other 0 Lessons have been learned and actions taken as a result of these serious untoward incidents. Concluding Statement With the exception of the internal control issues that I have outlined in this statement, my review confirms that West Hertfordshire Primary Care Trust has a generally sound system of internal controls that support the achievement of its policies, aims and objectives and that those control issues have been or are being addressed.

Signed _____________________________ Anne Walker, Chief Executive Officer West Hertfordshire Primary Care Trust Date:

9 June 2010

(on behalf of the Board)

(This Statement of Internal Control has been compiled to reference the Statements of internal control (SICs) 2009-10 – Disclosures guidance. Gateway Approval Number 13383)

61


INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF HERTFORDSHIRE PRIMARY CARE TRUST AS RESIDUAL BODY FOR WEST HERTFORDSHIRE PRIMARY CARE TRUST Opinion on the financial statements I have audited the financial statements of West Hertfordshire Primary Care Trust for the year ended 31 March 2010 under the Audit Commission Act 1998. The financial statements comprise the Operating Cost Statement, the Statement of Financial Position, the Statement of Changes in Taxpayers’ Equity, the Statement of Cash Flows and the related notes. These financial statements have been prepared in accordance with the accounting policies directed by the Secretary of State with the consent of the Treasury as relevant to the National Health Service set out within them. I have also audited the information in the Remuneration Report that is described as having been audited. This report is made solely to the Board of Directors of Hertfordshire Primary Care Trust as the residual body for West Hertfordshire Primary Care Trust in accordance with Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 49 of the Statement of Responsibilities of Auditors and of Audited Bodies published by the Audit Commission in April 2008. Respective responsibilities of directors and auditor The directors’ responsibilities for preparing the financial statements in accordance with directions made by the Secretary of State are set out in the Statement of Directors’ Responsibilities. The Chief Executive’s responsibility, as Accountable Officer, for ensuring the regularity of financial transactions is set out in the Statement of the Chief Executive’s Responsibilities. My responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). I report to you my opinion as to whether the financial statements give a true and fair view in accordance with the accounting policies directed by the Secretary of State as being relevant to the National Health Service in England. I report whether the financial statements and the part of the Remuneration Report to be audited have been properly prepared in accordance with the accounting policies directed by the Secretary of State as being relevant to the National Health Service in England. I report to you whether, in my opinion, the information which comprises the commentary on the financial performance included within the financial review, included in the Annual Report, is consistent with the financial statements. I also report whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I review whether the directors' Statement on Internal Control reflects compliance with the Department of Health's requirements, set out in ‘Guidance on Completing the Statement on Internal Control 2009/10’, issued February 2010. I report if it does not meet the requirements specified by the Department of Health or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements. I am not required to consider, nor have I considered, whether the directors' Statement on Internal Control covers all risks and controls. Neither am I required to form an opinion on the effectiveness of the Primary Care Trust’s corporate governance procedures or its risk and control procedures. I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises the welcome, about us, our performance, quality report from Hertfordshire Community Health Services, engaging with our staff, our objectives 2010/11, and the unaudited part of the Remuneration Report. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements. My responsibilities do not extend to any other information. Basis of audit opinion I conducted my audit in accordance with the Audit Commission Act 1998, the Code of Audit Practice issued by the Audit Commission and International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Primary Care Trust’s circumstances, consistently applied and adequately disclosed.

62


I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that:   

the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error; the financial statements and the part of the Remuneration Report to be audited have been properly prepared; and in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Remuneration Report to be audited. Opinion In my opinion:    

the financial statements give a true and fair view, in accordance with the accounting policies directed by the Secretary of State as being relevant to the National Health Service in England, of the state of the Primary Care Trust’s affairs as at 31 March 2010 and of its net operating costs for the year then ended; the financial statements and the part of the Remuneration Report to be audited has been properly prepared in accordance with the accounting policies directed by the Secretary of State as being relevant to the National Health Service in England; in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them; and information which comprises the commentary on the financial performance included within the financial review, included within the Annual Report, is consistent with the financial statements.

Conclusion on arrangements for securing economy, efficiency and effectiveness in the use of resources Directors’ Responsibilities The directors are responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in the PCT’s use of resources, to ensure proper stewardship and governance and regularly to review the adequacy and effectiveness of these arrangements. Auditor’s Responsibilities I am required by the Audit Commission Act 1998 to be satisfied that proper arrangements have been made by the PCT for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires me to report to you my conclusion in relation to proper arrangements, having regard to the Use of Resources Guidance issued by the Audit Commission. I report if significant matters have come to my attention which prevent me from concluding that the PCT has made such proper arrangements. I am not required to consider, nor have I considered, whether all aspects of the PCT’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively. Conclusion I have undertaken my audit in accordance with the Code of Audit Practice and having regard to the Use of Resources Guidance published by the Audit Commission in May 2008 and updated in October 2009, I am satisfied that, in all significant respects, West Hertfordshire Primary Care Trust made proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2010. Certificate I certify that I have completed the audit of the accounts in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.

Mark Hodgson

Date: 10 June 2010

Officer of the Audit Commission Regus House, 1010 Cambourne Business Park, Cambourne, Cambridge, CB23 6DP

63


THE ACCOUNTS Foreword to the accounts These accounts for the year ended 31 March 2010 have been prepared by the West Hertfordshire Primary Care Trust (PCT) under section 232 Sch 15(3) of the National Health Service Act 2006 in the form which the Secretary of State has, with the approval of Treasury, directed. From the 1st November 2009 West Hertfordshire PCT transferred its Provider Services and associated staff to East and North Hertfordshire PCT. Therefore within these accounts the income and expenditure reported under Provider Services only relates to the first seven months of the year. In the last five months of the year the PCT had a contract with East and North Hertfordshire PCT to provide these services, with costs being recorded as commissioning expenditure and within note 5.1 under health care services from other PCTs. Prior year comparators in respect of 2008-09 have not been re-stated and therefore significant movements between the years are shown. The following Statements and notes to the accounts are those mainly affected: OCS, SOFP and notes 3.3, 4, 5.1, 7.1, 7.2, 7.5, 8.1, 16, 17, 18, 38.

64


OPERATING COST STATEMENT FOR THE PERIOD ENDED 31 March 2010 2009-10 NOTE ÂŁ000 Commissioning Employee benefits 7.1 11,892 Other costs 5.1 805,208 Income 4 (32,846) Provider Employee benefits Other costs Income

7.1 3.3 3.3

PCT net operating costs before interest Investment income Other (Gains)/Losses Finance costs Net operating costs for the financial year

9 10 11

2008-09 ÂŁ000 11,308 674,493 (27,660)

28,013 14,214 (4,684)

43,597 18,209 (5,207)

821,797

714,740

0 (3) 137 821,931

0 8 83 714,831

The notes on pages 71 to 121 part of this account.

65


STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2010 31 March 2010 NOTE £000 Non-current assets: Property, plant and equipment Intangible assets Other financial assets Trade and other receivables Total non-current assets

31 March 2009 £000

1 April 2008 £000

12 13 30 17

46,022 226 0 149 46,397

48,419 0 0 165 48,584

50,817 30 0 181 51,028

Current assets: Inventories Trade and other receivables Other financial assets Other current assets Cash and cash equivalents

16 17 30 31 32

Non-current assets classified "Held for Sale"

15

307 14,054 0 0 0 14,361 0

2,339 12,850 0 0 0 15,189 0

1,535 10,616 0 0 0 12,151 0

Total current assets

14,361

15,189

12,151

Total assets

60,758

63,773

63,179

Current liabilities Trade and other payables

18

(50,850)

(47,975)

(42,463)

Other liabilities

20

0

0

0

Provisions

21

(477)

(1,217)

(420)

Borrowings

19

(33)

(32)

(21)

Other financial liabilities

24

0

0

0

(51,360)

(49,224)

(42,904)

9,398

14,549

20,275

0 (2,590) (162) 0 0

(91) (2,785) (188) 0 0

0 (3,004) (212) 0 (76)

(2,752) 6,646

(3,064) 11,485

(3,292) 16,983

Total current liabilities Non-current assets plus/less net current assets/liabilities Non-current liabilities Trade and other payables Provisions Borrowings Other financial liabilities Other liabilities Total non-current liabilities Total Assets Employed:

18 21 19 24 20

66


FINANCED BY: TAXPAYERS' EQUITY

General fund Revaluation reserve Donated asset reserve Government grant reserve Other reserves Total Taxpayers' Equity:

31 March 2010 NOTE £000 (2,911) 9,557 0 0 0 6,646

31 March 2009 £000 948 10,535 2 0 0 11,485

1 April 2008 £000 3,676 13,301 6 0 0 16,983

The notes on pages 71 to 121 form part of this account. The financial statements on pages 65 to 70 were approved by the Board on 9 June 2010 and signed on its behalf by

Anne Walker Chief Executive:

Date:

9 June 2010

67


STATEMENT OF CHANGES IN TAXPAYERS' EQUITY For the year ended 31 March 2009 General fund Balance at 31 March 2008 Changes in accounting policy Restated balance at 1 April 2008 Changes in taxpayers’ equity for 2008-09 Net operating cost for the year Net gain on revaluation of property, plant, equipment Net gain on revaluation of intangible assets Net gain on revaluation of financial assets Net gain on revaluation of assets held for sale Receipt of donated or government granted assets Movements in other reserves Impairments and reversals Release of reserves to OCS Non-cash charges – cost of capital Transfers between reserves Transfers to/(from) other bodies within the Resource Account boundary Total recognised income and expense for 200809 Net Parliamentary funding Balance at 31 March 2009

£000 13,301 0 13,301

Donated asset reserve £000 6 0 6

Govt. grant reserve £000 0 0 0

1,963

0

0

(714,831) 1,963

0 0

0 0

0 0

0 0

0 (4,729) 0

0 0 0 (4)

0 0 0 0

0 0 0

498 0 0

0

0

0

0

(714,333)

(2,766)

(4)

0

0

(717,103)

0

711,605 11,485

£000 3,676 0 3,676

Revaluation reserve

Other reserves £000 0 0 0

(714,831)

0

711,605 948

10,535

2

0

Total reserves £000 16,983 0 16,983

0 0 (4,729) (4) 498 0 0

68


69 STATEMENT OF CHANGES IN TAXPAYERS' EQUITY For the year ended 31 March 2010 General Fund Changes in taxpayers’ equity for 2009-10 Balance at 1 April 2009 Net operating cost for the year Net gain on revaluation of property, plant, equipment Net gain on revaluation of intangible assets Net gain on revaluation of financial assets Net gain on revaluation of assets held for sale Receipt of donated or government granted assets Movements in other reserves Impairments and reversals Release of reserves to OCS Non-cash charges – cost of capital Transfers between reserves Transfers to/(from) other bodies within the Resource Account Boundary Total recognised income and expense for 200910 Net Parliamentary funding Balance at 31 March 2010

Govt. Grant Reserve £000 0

Other Reserves

Total Reserves

£000 10,535

Donated Asset Reserve £000 2

£000

422

0

0

0

£000 11,485 (821,931) 422

0 0 0

0 0 0 0

0 0 0 0

0 0 0

(1,400) 0

0 (2)

0 0

317 0 206

0 0

0 0

0 0

0

(821,408)

(978)

(2)

0

0

(822,388)

817,549 (2,911)

9,557

0

0

0

817,549 6,646

£000 948 (821,931)

Revaluation Reserve

0

0

0 0 0 0 0 (1,400) (2) 317 0 206

69


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2010 NOTE Cash flow from operating activities Net operating cost before interest Other cash flow adjustments Movements in Working Capital Provisions utilised Interest paid Net cash outflow from operating activities Cash flows from investing activities Payments to purchase property, plant and equipment Payments to purchase intangible assets Proceeds of disposal PPE and intangible assets Purchase of financial investments (LIFT) Sale of financial investments (LIFT) Loans made in respect of LIFT Loans repaid in respect of LIFT Payments for other financial assets Proceeds from disposal of other financial assets Interest received Rental Income Net cash inflow/(outflow) from investing activities Net cash inflow/(outflow) before financing Cash flows from financing activities Net Parliamentary Funding Other capital receipts surrendered Capital grants received Capital element of payments in respect of finance leases, on-SoFP PFI and LIFT Cash transfers (to)/from other NHS bodies Net cash inflow/(outflow) from financing Net increase/(decrease) in cash and cash equivalents Cash (and) cash equivalents (and bank overdrafts) at the beginning of the financial year Effect of exchange rate changes on the balance of cash held in foreign currencies Cash (and) cash equivalents (and bank overdrafts) at the end of the financial year

39 38 21

2009-10 ÂŁ000

2008-09 ÂŁ000

(821,797) 4,591 3,212 (396) (137) (814,527)

(714,740) 3,140 2,082 (348) (83) (709,949)

(3,475) (226) 702 0 0 0 0 0 0 0 0

(1,631) 0 0 0 0 0 0 0 0 0 0

(2,999) (817,526)

(1,631) (711,580)

817,549 0 0

711,605 0 0

(23) 0 817,526

(25) 0 711,580

0

0

0

0

0

0

0

0

The notes on pages 71 to 121 form part of this account.

70


NOTES TO THE ACCOUNTS 1. Accounting policies The Secretary of State for Health has directed that the financial statements of PCTs shall meet the accounting requirements of the PCT Manual for Accounts, which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the 2009-10 PCTs Manual for Accounts issued by the Department of Health. From the current year, the accounting policies contained in that manual follow International Financial Reporting Standards (IFRS) to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the PCT Manual for Accounts permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the PCT for the purpose of giving a true and fair view has been selected. The particular policies adopted by the PCT are described below. They have been applied consistently in dealing with items considered material in relation to the accounts. The PCT is within the Government Resource Accounting Boundary and therefore has only consolidated interests in other entities where the other entity is also within the resource accounting boundary and the PCT exercise in-year budgetary control over the other entity. For 2009-10, in accordance with the directed accounting policy from the Secretary of State, the PCT does not consolidate the NHS charitable funds for which it is the corporate trustee. 1.1 Accounting Conventions These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets, inventories and certain financial assets and financial liabilities Acquisitions and Discontinued Operations Activities are considered to be 'acquired' only if they are acquired from outside the public sector. Activities are considered to be 'discontinued' only if they cease entirely. They are not considered to be 'discontinued' if they transfer from one NHS body to another. Although the PCT has no discontinued activities however from the 1st November 2009, West Hertfordshire Primary Care Trust transferred their Provider Services Operations to East and North Hertfordshire Primary Care Trust. From the 1st of April all Hertfordshire Provider Services will be provided by East and North Hertfordshire PCT Critical accounting judgements and key sources of estimation uncertainty In the application of the PCTâ&#x20AC;&#x2122;s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors, that are considered to be relevant. Actual results may differ from those estimates. The estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if

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the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the Statement of Financial Position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year Prescription Services West Hertfordshire receives financial information from NHS Prescription Services who process prescription items to reimburse and remunerate pharmacy contractors. In addition they supply the PCT with information relating to the cost of drugs prescribed by (Independent GPs, PCT run Practices and other PCT Services). Information is available one month in arrears and therefore the PCT must estimate March costs using the PPA estimated cumulative profile to provide the total expenditure in the year. The estimate for 2009-10 was £15,672,000 (2008-09 £14,995,000) and was based on information provided by NHS Business Services Authority, and included in Trade and Other Payables. The Quality and Outcomes Framework (QOF) The Quality and Outcomes Framework (QOF) is a voluntary annual reward and incentive programme for all GP surgeries in England, detailing practice achievement results. There are two elements to the payment made to GPs. The Aspiration element, this is an upfront payment, paid in equal instalments during the financial year, based on 70% of previous years total payment and is paid as an incentive for practices to adhere to QOF. The second element is Achievement. This payment is the difference between what the practices actually achieve and the payment already made through the Aspiration element. The qualifying period for QOF runs 1st April to 31st March. As a consequence of this time period final QOF information is not known until May/June of the following financial year. For the purposes of Annual Accounts the estimate for projected QOF outturn for 2009-10 was £3,640,000 (2008-09 £4,032,000). The difference between the projected outturn and the payments made in year are included in Trade and Other Payables. Dental Services The PCT receives financial information from NHS Dental Services who process FP17s and remunerate dental contractors. Each dental contractor has a contract to perform a certain amount of activity (Units of Dental Activity (UDAs)) at an agreed price per UDA. The dental contractors are then paid 1/12 of the total contract value each month. As actual year end activity information will not be known until mid June, estimations of performance of £2,546,000 for 2009-10 (2008-09 £2,290,000) have

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been calculated. If dental practices under perform against their activity target the practice will be asked to either make up the under performance in the following financial year or repay the PCT. Secondary Health care Secondary care activity reports are received from providers monthly, but activity information for the final month of the year is not available in time for the accounts and estimates are made in agreement with providers. A full reconciliation is undertaken once actual activity is agreed which is at the end of the first quarter of the following year. Any increase or decrease in activity (if any) becomes a charge or credit in the next financial year. Historically, when these estimates have been compared to the subsequent actual data, they have not been materially different. Estimation techniques are used to ensure that the correct levels of income and expenditure due relating to current year are included through the inclusion of accruals established based on known commitments and local knowledge. 1.2 Revenue and Funding The main source of funding for the Primary Care Trust is allocations (Parliamentary Funding) from the Department of Health within an approved cash limit, which is credited to the General Fund of the Primary Care Trust. Parliamentary funding is recognised in the financial period in which the cash is received. Miscellaneous revenue is income which relates directly to the operating activities of the Primary Care Trust. It principally comprises fees and charges for services provided on a full cost basis to external customers, as well as public repayment work. It includes both income appropriated-in-aid of the Vote and income to the Consolidated Fund which HM Treasury has agreed should be treated as operating income. Revenue in respect of services provided is recognised when, and to the extent that, performance occurs, and is measured at the fair value of the consideration receivable. Where income had been received for a specific activity to be delivered in the following financial year, that income will be deferred. 1.3 Pooled budgets The PCT has entered into a pooled budget with Hertfordshire County Council. Under the arrangement funds are pooled under S75 of the NHS Act 2006 for Mental Health, Learning Disabilities and certain other services. The pool is hosted by Hertfordshire County Council. The PCT makes contributions to the pool for services to be provided as part of its commissioning role. In accordance with IAS31, the PCT's share of the assets and liabilities of the pool will be accounted for in the books of accounts as determined in the pooled budget agreement. 1.4 Taxation The PCT is not liable to pay corporation tax. Expenditure is shown net of recoverable VAT. Irrecoverable VAT is charged to the most appropriate expenditure heading or capitalised if it relates to an asset.

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1.5 Capital Charges A charge, reflecting the cost of capital utilised by the PCT is included in operating costs. The capital charge is 3.5% (2008-09 3.5%) of the net average assets less liabilities except for donated assets and cash balances with the Office of the Paymaster General (OPG) or Government Banking Services (GBS) which are excluded from the calculation. 1.6 Property, Plant and Equipment Recognition Property, plant and equipment is capitalised if:  it is held for use in delivering services or for administrative purposes;  it is probable that future economic benefits will flow to, or service potential will be supplied to, the PCT;  it is expected to be used for more than one financial year;  the cost of the item can be measured reliably; and  the item has cost of at least £5,000; or  Collectively, a number of items have a cost of at least £5,000 and individually have a cost of more than £250, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; or  Items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual or collective cost. Where a large asset, for example a building, includes a number of components with significantly different asset lives, the components are treated as separate assets and depreciated over their own useful economic lives. Valuation All property, plant and equipment are measured initially at cost, representing the cost directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets are measured subsequently at fair value. Land and buildings used for the PCT's services or for administrative purposes are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Revaluations are performed with sufficient regularity to ensure that carrying amounts are not materially different from those that would be determined at the end of the reporting period. Fair values are determined as follows:  

Land and non-specialised buildings – market value for existing use Specialised buildings – depreciated replacement cost

Until 31 March 2008, the depreciated replacement cost of specialised buildings has been estimated for an exact replacement of the asset in its present location. HM Treasury has adopted a standard approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued. HM Treasury has agreed that PCTs must apply these new valuation requirements by 1 April 2010 at the latest. In view of this change in approach, West Hertfordshire PCT 74


instructed Boshier & Company an independent firm of chartered surveyors (RICS), to provide advice in accordance with IAS 16 in respect of various freehold properties forming part of the PCT's estate as at 31 March 2010. The revaluation resulted in a net reduction of £2,618,000 on Land and £1,690,000 on Buildings. Gains made from indexation and revaluations are taken to the revaluation reserve. Losses arising from revaluations are recognised as impairments and are charged to the revaluation reserve to the extent that a balance exists in relation to the revalued asset. Losses in excess of that amount are charged to the current year's Operating Cost Statement (OCS), unless it can be demonstrated that the recoverable amount is greater than the revalued amount in which case the impairment is taken to the revaluation reserve. Impairments resulting from price changes are charged to the Statement of Recognised Gains and Losses. As a result of this revaluation, a total of £3,330,000 was charged to the OCS in 2009-10 financial year. Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees but not borrowing costs, which are recognised as expenses immediately, as allowed by IAS 23 for assets held at fair value. Assets are revalued and depreciation commences when they are brought into use. Until 31 March 2008, fixtures and equipment were carried at replacement cost, as assessed by indexation and depreciation of historic cost. From 1 April 2008 indexation has ceased. The carrying value of existing assets at that date will be written off over their remaining useful lives and new fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from fair value. An increase arising on revaluation is taken to the revaluation reserve except when it reverses impairment for the same asset previously recognised in expenditure, in which case it is credited to expenditure to the extent of the decrease previously charged there. A revaluation decrease is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Gains and losses recognised in the revaluation reserve are reported in the Statement of Changes in Taxpayers' Equity. Subsequent expenditure Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is capitalised. Where subsequent expenditure restores the asset to its original specification, the expenditure is capitalised and any existing carrying value of the item replaced is written-out and charged to operating expenses. 1.7 Intangible Assets Recognition Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the PCT’s business or which arise from contractual or other legal rights. They are recognised only when it is probable that future economic benefits will flow to, or service potential be provided to, the PCT; where the cost of the asset can be measured reliably, and where the cost is at least £5000.

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Intangible assets acquired separately are initially recognised at fair value. Software that is integral to the operating of hardware, for example an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software that is not integral to the operation of hardware, for example application software, is capitalised as an intangible asset. Expenditure on research is not capitalised: it is recognised as an operating expense in the period in which it is incurred. Internallygenerated assets are recognised if, and only if, all of the following have been demonstrated:      

the technical feasibility of completing the intangible asset so that it will be available for use the intention to complete the intangible asset and use it the ability to sell or use the intangible asset how the intangible asset will generate probable future economic benefits or service potential the availability of adequate technical, financial and other resources to complete the intangible asset and sell or use it the ability to measure reliably the expenditure attributable to the intangible asset during its development

Measurement The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is recognised in the period in which it is incurred. Following initial recognition, intangible assets are carried at fair value by reference to an active market, or, where no active market exists, at amortised replacement cost (modern equivalent assets basis), indexed for relevant price increases, as a proxy for fair value. Internally-developed software is held at amortised historic cost to reflect the opposing effects of increases in development costs and technological advances. 1.8 Depreciation, amortisation and impairments Freehold land, properties under construction and assets held for sale are not depreciated. Otherwise, depreciation and amortisation are charged to write off the costs or valuation of property, plant and equipment and intangible non-current assets, less any residual value, over their estimated useful lives, in a manner that reflects the consumption of economic benefits or service potential of the assets. The estimated useful life of an asset is the period over which the PCT expects to obtain economic benefits or service potential from the asset. This is specific to the PCT and may be shorter than the physical life of the asset itself. Estimated useful lives and residual values are reviewed each year end, with the effect of any changes recognised on a prospective basis. Assets held under finance leases are depreciated over their estimated useful lives In the 2009-10 financial year, the Primary Care Trust reviewed its policy on asset lives relating to IT equipment. It was considered due to financial constraints that IT equipment will only be replaced when it has failed or has become obsolete. From the 76


1st April 2009 the asset lives for IT Equipment was increased from 4 to 5 years in line with this replacement policy. This resulted in a reduction in the charge for depreciation of approximately ÂŁ200,000. At each reporting period end, the PCT checks whether there is any indication that any of its tangible or intangible non-current assets have suffered an impairment loss. If there is indication of an impairment loss, the recoverable amount of the asset is estimated to determine whether there has been a loss and, if so, its amount. Intangible assets not yet available for use are tested for impairment annually. If there has been an impairment loss, the asset is written down to its recoverable amount, with the loss charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable amount but capped at the amount that would have been determined had there been no initial impairment loss. The reversal of the impairment loss is credited to expenditure to the extent of the decrease previously charged there and thereafter to the revaluation reserve. 1.9 Donated assets Donated non-current assets are capitalised at their fair value on receipt, with a matching credit to the donated asset reserve. They are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations and impairments are taken to the donated asset reserve and, each year, an amount equal to the depreciation charge on the asset is released from the donated asset reserve to offset the expenditure. On sale of donated assets, the net book value is transferred from the donated asset reserve to retained earnings. 1.10 Government grants Government grants are grants from government bodies other than revenue from NHS bodies for the provision of services. Revenue grants are treated as deferred income initially and credited to income to match the expenditure to which they relate. Capital grants are credited to the government grant reserve and released to operating revenue over the life of the asset in a manner consistent with the depreciation and impairment charges for that asset. Assets purchased from government grants are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations and impairments are taken to the government grant reserve and, each year, an amount equal to the depreciation charge on the asset is released from the government grant reserve to the offset the expenditure. 1.11 Non-current assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met when the sale is highly probable, the asset is available for immediate sale in its present condition and management is committed to the sale, which is expected to qualify for recognition as a completed sale within one year from the date of classification. Non-current assets held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Fair value is open market value including alternative uses.

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The profit or loss arising on disposal of an asset is the difference between the sale proceeds and the carrying amount and is recognised in the Operating Cost Statement. On disposal, the balance for the asset on the revaluation reserve is transferred to retained earnings. For donated and government-granted assets, a transfer is made to or from the relevant reserve to the profit/loss on disposal account so that no profit or loss is recognised in income or expenses. The remaining surplus or deficit in the donated asset or government grant reserve is then transferred to retained earnings. Property, plant and equipment that is to be scrapped or demolished does not qualify for recognition as held for sale. Instead, it is retained as an operational asset and its economic life is adjusted. The asset is de-recognised when it is scrapped or demolished. 1.12 Inventories Inventories are valued at the lower of cost and net realisable value. 1.13 Cash and cash equivalents Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the PCTâ&#x20AC;&#x2122;s cash management. 1.14 Losses and Special Payments Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way each individual case is handled. Losses and special payments are charged to the relevant functional headings including losses which would have been made good through insurance cover had PCTs not been bearing their own risks (with insurance premiums then being included as normal revenue expenditure). 1.15 Clinical Negligence Costs From 1 April 2000, the NHS Litigation Authority (NHSLA) took over the full financial responsibility for all Existing Liabilities Scheme (ELS) cases unsettled at that date and from 1 April 2002 all Clinical Negligence Scheme for Trusts (CNST) cases. Provisions for these are included in the accounts of the NHSLA. Although the NHSLA is administratively responsible for all cases from 1 April 2000, the legal liability remains with the PCTs. The NHSLA operates a risk pooling scheme under which the PCT pays an annual contribution to the NHSLA which in return settles all clinical negligence claims. The

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contribution is charged to expenditure in the year that it is due. Although the NHSLA is administratively responsible for all clinical negligence cases the legal liability remains with the PCT. The total value of clinical negligence provisions carried by the NHSLA on behalf of the PCT is disclosed at Note 21. 1.16 Employee benefits Short-term employee benefits Salaries, wages and employment-related payments are recognised in the period in which the service is received from employees. The cost of leave earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry forward leave into the following period. Retirement benefit costs Past and present employees are covered by the provisions of the NHS Pensions Scheme. The scheme is an unfunded, defined benefit scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS body of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to expenditure at the time the PCT commits itself to the retirement, regardless of the method of payment. 1.17 Research and Development Research and development expenditure is charged against income in the year in which it is incurred, except insofar as development expenditure relates to a clearly defined project and the benefits of it can reasonably be regarded as assured. Expenditure so deferred is limited to the value of future benefits expected and is amortised through the Operating Cost Statement on a systematic basis over the period expected to benefit from the project. It should be revalued on the basis of current cost. The amortisation is calculated on the same basis as depreciation, on a quarterly basis. 1.18 Other expenses Other operating expenses are recognised when, and to the extent that, the goods or services have been received. They are measured at the fair value of the consideration payable. 1.19 Grant making Under section 256 of the National Health Service Act 2006, the PCT has the power to make grants to local authorities, voluntary bodies and registered social landlords to finance capital or revenue schemes. A liability in respect of these grants is recognised when the PCT has a present legal or constructive obligation which occurs when all of the conditions attached to the payment have been met.

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1.20 EU Emissions Trading Scheme EU Emission Trading Scheme allowances are accounted for as government grant funded intangible assets if they are not expected to be realised within twelve months, and otherwise as other current assets. They are valued at open market value. As the NHS body makes emissions, a provision is recognised with an offsetting transfer from the government grant reserve. The provision is settled on surrender of the allowances. The asset, provision and government grant reserve are valued at fair value at the end of the reporting period. 1.21 Contingencies A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the PCT, or a present obligation that is not recognised because it is not probable that a payment will be required to settle the obligation or the amount of the obligation cannot be measured sufficiently reliably. A contingent liability is disclosed unless the possibility of a payment is remote. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the trust. A contingent asset is disclosed where an inflow of economic benefits is probable. Where the time value of money is material, contingencies are disclosed at their present value. 1.22 Leases Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases. The PCT as lessee Property, plant and equipment held under finance leases are initially recognised, at the inception of the lease, at fair value or, if lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate on interest on the remaining balance of the liability. Finance charges are recognised in calculating the PCTâ&#x20AC;&#x2122;s net operating cost. Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term. Contingent rentals are recognised as an expense in the period in which they are incurred. Where a lease is for land and buildings, the land and building components are separated. Leased land is treated as an operating lease. Leased buildings are assessed as to whether they are operating or finance leases.

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The PCT as lessor Amounts due from lessees under finance leases are recorded as receivables at the amount of the PCTâ&#x20AC;&#x2122;s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the PCTâ&#x20AC;&#x2122;s net investment outstanding in respect of the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. 1.23 Provisions Provisions are recognised when the PCT has a present legal or constructive obligation as a result of a past event, it is probable that the PCT will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the end of the reporting period, taking into account the risks and uncertainties. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows using HM Treasuryâ&#x20AC;&#x2122;s discount rate of 2.2% in real terms. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of the receivable can be measured reliably. Present obligations arising under onerous contracts are recognised and measured as a provision. An onerous contract is considered to exist where the PCT has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. A restructuring provision is recognised when the PCT has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arsing from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with ongoing activities of the entity. 1.24 Financial Instruments Financial assets Financial assets are recognised when the PCT becomes party to the financial instrument contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the contractual rights have expired or the asset has been transferred. Financial assets are initially recognised at fair value.

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Financial assets are classified into the following categories: financial assets ‘at fair value through profit and loss’; ‘held to maturity investments’; ‘available for sale’ financial assets, and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Financial assets at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial assets at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the operating cost statement. The net gain or loss incorporates any interest earned on the financial asset. Held to maturity investments Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, and there is a positive intention and ability to hold to maturity. After initial recognition, they are held at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. Available for sale financial assets Available for sale financial assets are non-derivative financial assets that are designated as available for sale or that do not fall within any of the other three financial asset classifications. They are measured at fair value with changes in value taken to the revaluation reserve, with the exception of impairment losses. Accumulated gains or losses are recycled to the operating cost statement on derecognition. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. Fair value is determined by reference to quoted market prices where possible, otherwise by valuation techniques. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, to the initial fair value of the financial asset. At the Statement of Financial Position date, the PCT assesses whether any financial assets, other than those held at ‘fair value through profit and loss’ are impaired. Financial assets are impaired and impairment losses recognised if there is objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset.

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For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. The loss is recognised in the Operating Cost Statement and the carrying amount of the asset is reduced directly, or through a provision for impairment of receivables. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the Operating Cost Statement to the extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. Financial liabilities Financial liabilities are recognised on the Statement of Financial Position when the PCT becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the goods or services have been received. Financial liabilities are derecognised when the liability has been discharged, that is, the liability has been paid or has expired. Financial liabilities are initially recognised at fair value. Financial liabilities are classified as either financial liabilities ‘at fair value through profit and loss’ or other financial liabilities. Financial liabilities at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial liabilities at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the Operating Cost Statement. The net gain or loss incorporates any interest earned on the financial asset. Other financial liabilities After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest is recognised using the effective interest method. 1.25 Accounting standards that have been issued but have not yet been adopted The following standards and interpretations have been adopted by the European Union but are not required to be followed until 2010/11. None of them are expected to impact upon the PCT financial statements. IAS 27 (Revised) Consolidated and separate financial statements

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Amendment to IAS 32 Financial instruments: Presentation on classification or rights issues Amendment to IAS 39 Eligible hedged items IFRS 3 (Revised) Business combinations IFRIC 17 Distributions of Non-cash Assets to Owners IFRIC 18 Transfer of assets from customers 1.26 Accounting standards issued that have been adopted early The amendment to IFRS 8 Operating segments that was included in the April 2009 Improvements to IFRS has been adopted early. As a result, total assets are not reported by operating segment. 1.27 Going Concern The PCT is funded by the Department of Health and therefore remains a going concern. 2. Operating segments It has been widely considered that PCTs will have a minimum of two operational segments covering their core activities; Commissioning and Provider functions. However, this PCT considers its primary function as a commissioner (single segment) and as such, the financial reporting provided to its Chief Operating Decision Maker reflects this approach. IFRS 8 requires disclosure of what the Chief Operating Decision Maker uses to make decisions. Although the PCT has an arms length relationship with its Provider function, it reports the net income and expenditure to its Chief Operating Decision Maker and the Board, as this could have a direct impact on the overall financial performance of the PCT. The information being generated internally for management purposes reasonably reflects what is shown within these accounts.

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3. Financial Performance Targets 3.1 Revenue Resource Limit The PCTs' performance for the year ended 31 March 2010 is as follows: Total Net Operating Cost for the Financial Year Non-Discretionary Expenditure Net Operating Cost less Non Discretionary Expenditure Revenue Resource Limit Under/(Over)spend Against Revenue Resource Limit (RRL)

2008-09 £000

2009-10 £000

714,831 3,830 711,001 711,614 613

821,931 5,129 816,802 817,280 478

The figures given for periods prior to 2009-10 are on a UK GAAP basis as that is the basis on which the targets were set for those years. 3.2 Capital Resource Limit The PCT is required to keep within its Capital Resource Limit. Total Gross Capital Expenditure Loss in Respect of Disposals of Donated Assets less: Net Book Value of Non-Current Assets Disposed of to NHS Bodies less: Net Book Value of Non-Current Assets Disposed of to non-NHS Bodies less: Net Book Value of Financial Instruments (Investments) Disposed Of to NHS bodies less: Net Book Value of Financial Instruments (Investments) Disposed Of to Non-NHS bodies less: Capital Grants Received less: Donations Charge Against the Capital Resource Limit (CRL) Capital Resource Limit (CRL) (Over)/Underspend Against CRL

2009-10 £000

2008-09 £000

4,383

2,125

0 (702) 0

0 0 0

0

0

0 0 0 3,681 4,134 453

0 0 0 2,125 2,131 6

2008-09 2009-10 £000 £000 The PCT is required to recover full costs in relation to its provider functions. The performance for 2009-10 is as follows: Provider gross operating costs 61,806 42,227 Provider Operating Revenue (5,207) (4,684) 56,599 Net Provider Operating Costs 37,543 Costs Met Within PCT's Own Allocation (57,788) (36,885) (1,189) Under/(Over) Recovery of Costs 658 3.3 Provider full cost recovery duty

Provider Services transferred from West Hertfordshire PCT to East and North Hertfordshire PCT on 1st November 2009. The accounts show the position on Provider Services for the first 7 months of the financial year, prior to transfer. Provider Services did not fully recover their costs during this period and recorded an overspend of £0.658m. In 2008-09 an underspend of £1.189m was achieved. The performance in the above tables in respect of financial year 2008-09 have not been restated to IFRS and remain on a UK GAAP basis. 85


4. Miscellaneous Revenue AppropriatedIn-Aid £000 Fees and Charges Dental Charge income from Contractor-Led GDS and PDS Dental Charge income from Trust-Led GDS and PDS Prescription Charge income Strategic Health Authorities NHS Trusts NHS Foundation Trusts Primary Care Trusts Contributions to DATs Primary Care Trusts - Other Primary Care Trusts - Lead Commissioning English RAB Special Health Authorities Other English Special Health Authorities Department of Health - SMPTB Department of Health - Other Local Authorities Patient Transport Services Education, Training and Research Non-NHS: Private Patients Non-NHS: Overseas Patients (Non-Reciprocal) NHS Injury Costs Recovery Other Non-NHS Patient Care Services Charitable and Other Contributions to Expenditure Transfers from the Donated Asset Reserve Transfers from the Government Grant Reserve Contingent Rental Income from Finance Leases Rental Income from Operating Leases Other Income Total miscellaneous income

Not AppropriatedIn-Aid £000

2009-10

2008-09

Total £000

Total £000

0

0

1

6,633

6,633

5,352

0 40 3,139 741 243

0 40 3,139 741 243

0 92 1,739 2,436 1,149

0 2,340

0 2,340

0 639

20,634

20,634

18,245

0

0

44

0 0 807

0 0 807 1,537 0

2 0 61 1,004 0

115 3

253 0

0 0

0 0

57

268

231

31

2

2

4

0

0

0

0

0

0

0

142 866 9,511

0 0 28,019

142 866 37,530

0 1,547 32,867

1,537 0 2 3

0 113

0 0 57

0

231

86


5. Operating Costs 5.1 Analysis of operating costs: Goods and Services from Other PCTs Health care Non-Health care Total Goods and Services from Other NHS Bodies other than FTs Health care Non-Health care Total Goods and Services from Foundation Trusts Purchase of Health care from Non-NHS bodies Social Care from Independent Providers Expenditure on Drugs Action Teams Non-GMS Services from GPs Contractor Led GDS and PDS (excluding employee benefits) Salaried Trust-Led PDS and PCT DS (excluding employee benefits) Chair, non executive directors and PEC remuneration Consultancy Services Prescribing Costs G/PMS, APMS and PCTMS (excluding employee benefits) Pharmaceutical Services Local Pharmaceutical Services Pilots New Pharmacy Contract General Ophthalmic Services Supplies and Services - Clinical Supplies and Services - General Establishment Transport Premises Impairments and Reversals of Property, plant and equipment Impairments and Reversals of current assets held for sale Depreciation Amortisation Impairment and Reversals Intangible non-current assets Cost of Capital Charge Impairment and Reversals of Financial Assets Impairment of Receivables Inventory write offs Research and Development Expenditure Audit Fees Other Auditors Remuneration Clinical Negligence Costs Education and Training Other Total Operating costs charged to OCS (excluding employee benefits)

2009-10 ÂŁ000 91,069 1,343 92,412

200809 ÂŁ000 40,726 374 41,100

343,550 282,925 414 832 343,964 283,757 31,009 27,385 130,965 131,221 0 0 4,962 * 0 1,549 1,523 31,137 30,057 0 756 255 237 350 793 71,080 69,466 79,624 ** 70,458 2,006 1,570 0 0 5,853 5,858 5,129 3,830 3,848 4,328 109 2,563 1,697 2,885 32 64 5,051 6,228 3,330 16 0 1,544 1,741 0 30 0 0 317 498 0 0 78 39 0 0 0 0 288 274 65 1 0 0 501 635 2,267 5,389 819,422

692,702 87


Employee Benefits Employee Benefits (excluding staff associated with PCTMS) Employee Benefits associated with PCTMS PCT Officer Board Members Total Employee Benefits charged to OCS Total Operating Costs

2009-10 ÂŁ000

200809 ÂŁ000

39,605 0 300 39,905 859,327

54,905 747,607

* Drugs Action Teams spend previously shown in Purchase of Health care from Non NHS bodies in 2008/9 accounts. ** A significant part of the of the increase relates to CATS (Clinical Assessment Treatment Service) expenditure previously recorded against Purchase of Health care from Non NHS bodies in 2008/9 accounts.

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5.2 Analysis of operating expenditure by expenditure classification

200910

200809

£000

£000

Purchase of Primary Health Care GMS / PMS/ APMS / PCTMS Prescribing costs Contractor led GDS and PDS Trust led GDS and PDS General Ophthalmic Services Department of Health Initiative Funding Pharmaceutical services Local Pharmaceutical Services Pilots New Pharmacy Contract Non-GMS Services from GPs Other Total Primary Health care purchased

78,382 71,080 31,137 1,008 5,129 0 2,006 0 5,853 1,549 22 196,166

70,458 69,466 30,057 756 3,830 0 1,570 0 5,858 1,523 175 183,693

Purchase of Secondary Health care Learning Difficulties Mental Illness Maternity General and Acute Accident and emergency Community Health Services Other Contractual Total Secondary Health care Purchased

22,295 * 52,934 77,722 * 49,248 30,983 15,858 372,065 302,623 16,946 14,302 60,969 53,055 35,948 32,236 520,256 616,928

Grant Funding Grants (revenue) to fund Capital Projects - GMS Grants (revenue) to LAs to fund Capital Projects Grants (revenue) to private sector to fund Capital Projects Grants (revenue) to fund Capital Projects - Dental Grants (revenue) to fund Capital Projects - other Total Health care Purchased by PCT

1,242 2,153 36 0 0 816,525

0 1,047 304 0 0 705,300

36,885

57,788

PCT self-provided secondary health care included above

* The basis of apportioning expenditure between Mental Illness and Learning Difficulties has changed in the 2009-10 accounts. In the 2008-09 accounts, expenditure on Mental Illness and Learning Difficulties was largely apportioned on the basis of how the pooled budget as a whole was spent. In 2009-10 sub-pools were in operation and the apportionment has been based on the PCT’s contributions to those sub-pools.

89


From 2011, the PCT’s allocation and expenditure on social care for adults with a learning disability will be significantly reduced. Under the Valuing People Now programme, allocations to cover such social care costs will be made directly from the Department of Health to local authorities, rather than to PCTs as at present. Responsibility for the commissioning of social care for adults with a learning disability will transfer at the same time. To apportion our expenditure in line with the pooled budget as a whole (as in 2008-09) could in future present a distorted impression of PCT expenditure on Mental Health and Learning Disability. Therefore in anticipation of the transfer the basis of apportionment has been changed to more closely reflect PCT funding.

6. Operating Leases The PCT has arrangements with contractors that under IFRS must be accounted for as leases. West Hertfordshire has entered into certain financial arrangements involving the use of GP premises. IAS17 and IFRIC 4 has determined that those operating leases must be recognised, but, as there is no defined term in the arrangements entered into, it is not possible to analyse the arrangements over financial years. The financial value included in the Operating Cost Statement for 2009-10 is £6.8m (£6.4m in 2008-09). The PCT has a number of operating leases which relate to buildings that are either in use for office or health care purposes (or a combination of both). Of these, the unexpired terms of the leases range from between 1 to 5 years. Rentals are reviewable between three and five years. There are no specific terms for renewal or purchase options on any of these leases. There is also a long lease for land with an unexpired term of 110 years. 6.1 PCT as lessee Payments recognised as an expense Minimum lease payments Contingent rents Sub-lease payments Total Payable: No later than one year Between one and five years After five years Total

2009-10 £000

2008-09 £000

588 0 0 588

724 0 0 724

295 107 949 1,351

570 440 966 1,976

There are no expected future sublease payments.

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6.2 PCT as lessor The PCT has a number of premises that it obtains rental income from. Of these, the terms of the leases range from 1 to 2 years. 2008-09 2009-10 ÂŁ000 ÂŁ000 Recognised as income Rents 142 0 Contingent rents 0 0 0 Total 142 Receivable: No later than one year 146 0 Between one and five years 16 0 After five years 0 0 0 Total 162 In the previous financial year, lease rental income was treated as other income.

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7. Employee benefits and staff numbers 7.1 Employee benefits Total £000 Salaries and wages Social security costs Employer contributions to NHS Pensions scheme Other pension costs Other post-employment benefits Other employment benefits Termination benefits Total employee benefits Recognised as: Commissioning employee benefits Provider employee benefits Employee benefits capitalised as part of assets Total

2009-10 Permanently Employed £000

2008-09 Other £000

Total £000

Permanently Employed £000

Other £000

34,545 1,841

30,930 1,841

3,615 0

46,899 2,625

42,798 2,625

4,101 0

3,554 0 0 0 15 39,955

3,554 0 0 0 15 36,340

0 0 0 0 0 3,615

5,115 0 0 0 266 54,905

5,115 0 0 0 266 50,804

0 0 0 0 0 4,101

11,892 28,013

11,308 43,597

50 39,955

0 54,905

92


93 7.2 Staff Numbers Total Number Medical and dental Ambulance staff Administration and estates Health care assistants and other support staff Nursing, midwifery and health visiting staff Nursing, midwifery and health visiting learners Scientific, therapeutic and technical staff Social Care staff Other Total staff numbers

2009-10 Permanently Employed Number

2008-09 Other Number

Total Number

Permanently Employed Number

Other Number

23 0 261

21 0 253

2 0 8

35 0 347

25 0 321

10 0 26

201

169

32

261

254

7

351

313

38

508

469

39

0 169 0 8 1013

0 165 0 8 929

0 4 0 0 84

6 249 0 30 1,436

6 234 0 30 1,339

0 15 0 0 97

Numbers of staff above (wte) whose costs have been capitalised: 1 7.3 Retirements due to ill-health 2 persons (2008-09: 3 persons) retired early on ill-health grounds. The total additional accrued pension liabilities in the year amounted to ÂŁ73,618 (2008-09: ÂŁ134,440). The cost of ill health retirements is borne by the NHS Business Services Authority, which administers the NHS Pension Scheme.

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7.4 Pension costs Past and present employees are covered by the provisions of the NHS Pensions Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/pensions. The scheme is an unfunded, defined benefit scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS Body of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. The scheme is subject to a full actuarial valuation every four years (until 2004, every five years) and an accounting valuation every year. An outline of these follows: a) Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the scheme (taking into account its recent demographic experience), and to recommend the contribution rates to be paid by employers and scheme members. The last such valuation, which determined current contribution rates was undertaken as at 31 March 2004 and covered the period from 1 April 1999 to that date. The conclusion from the 2004 valuation was that the scheme had accumulated a notional deficit of ÂŁ3.3 billion against the notional assets as at 31 March 2004. In order to defray the costs of benefits, employers pay contributions at 14% of pensionable pay and most employees had up to April 2008 paid 6%, with manual staff paying 5%. Following the full actuarial review by the Government Actuary undertaken as at 31 March 2004, and after consideration of changes to the NHS Pension Scheme taking effect from 1 April 2008, his Valuation report recommended that employer contributions could continue at the existing rate of 14% of pensionable pay, from 1 April 2008, following the introduction of employee contributions on a tiered scale from 5% up to 8.5% of their pensionable pay depending on total earnings. On advice from the scheme actuary, scheme contributions may be varied from time to time to reflect changes in the schemeâ&#x20AC;&#x2122;s liabilities. b) Accounting valuation A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period by updating the results of the full actuarial valuation. Between the full actuarial valuations at a two-year midpoint, a full and detailed member data-set is provided to the scheme actuary. At this point the assumptions regarding the composition of the scheme membership are updated to allow the scheme liability to be valued.

94


The valuation of the scheme liability as at 31 March 2010, is based on detailed membership data as at 31 March 2008 (the latest midpoint) updated to 31 March 2010 with summary global member and accounting data. The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Resource Account, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office. c) Scheme provisions In 2008-09 the NHS Pension Scheme provided defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the Scheme or the specific conditions that must be met before these benefits can be obtained: Annual Pensions The Scheme is a “final salary” scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last three years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service. With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as “pension commutation”. Pensions Indexation Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. Lump Sum Allowance A lump sum is payable on retirement which is normally three times the annual pension payment. Ill-Health Retirement Early payment of a pension, with enhancement in certain circumstances, is available to members of the Scheme who are permanently incapable of fulfilling their duties or regular employment effectively through illness or infirmity. Death Benefits A death gratuity of twice their final year’s pensionable pay for death in service, and five times their annual pension for death after retirement is payable. Additional Voluntary Contributions (AVCs) Members can purchase additional service in the NHS Scheme and contribute to money purchase AVCs run by the Scheme’s approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers.

95


Transfer between Funds Scheme members have the option to transfer their pension between the NHS Pension Scheme and another scheme when they move into or out of NHS employment. Preserved Benefits Where a scheme member ceases NHS employment with more than two years service they can preserve their accrued NHS pension for payment when they reach retirement age. Compensation for Early Retirement Where a member of the Scheme is made redundant they may be entitled to early receipt of their pension plus enhancement, at the employer’s cost. 7.5 Management Costs

2009-10

2008-09

Management costs (£000s) Weighted population (number in units) Management Cost per weighted head of population (£ per head)

10,667 476,087 22.41

11,101 478,468 23.20

7.5.2 PCT Commissioning Services Management Costs

2009-10

Management costs (£000s) Weighted population (number in units) Management Cost per weighted head of population (£ per head)

7,822 476,087 16.43

7.5.3 PCT Provider Services Management Costs

2009-10

Management costs (£000s) Provider Services Income (£000s) Management cost as a percentage of turnover.

2,844 41,569 6.84%

The management cost per weighted head of population has reduced due to the merging of the provider functions for East and North Hertfordshire and West Hertfordshire PCTs in November 2009, with East and North Hertfordshire PCT taking on the management of these services.

96


8. Better Payment Practice Code 8.1 Measure of compliance Non-NHS Payables Total Non-NHS Trade Invoices Paid in the Year Total Non-NHS Trade Invoices Paid Within Target Percentage of Non-NHS Trade Invoices Paid Within Target NHS Payables Total NHS Trade Invoices Paid in the Year Total NHS Trade Invoices Paid Within Target Percentage of NHS Trade Invoices Paid Within Target

2009-10 Number

2009-10 £000

2008-09 Number

2008-09 £000

27,258

154,642

31,542

153,329

25,300

144,586

27,413

135,393

92.82%

93.50%

86.91%

88.30%

2,624

430,116

2,775

351,457

2,215

426,030

2,053

343,158

84.41%

99.05%

73.98%

97.64%

The Better Payment Practice Code requires the PCT to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later. 8.2 The Late Payment of Commercial Debts (Interest) Act 1998 No payments were made in respect of claims under this legislation in 2009-10 or 2008/9. 9. Investment Income The PCT did not have any Investment Income in 2009-10 or 2008/9.

10. Other Gains and Losses Gain/(loss) on disposal of property, plant and equipment Gain/(loss) on disposal of intangible assets Gain/(loss) on disposal of financial assets Gain/(loss) on foreign exchange Change in fair value of financial assets carried at fair value through the OCS Change in fair value of financial liabilities carried at fair value through the OCS Recycling of gain/(loss) from equity on disposal of financial assets held for sale Total

2009-10 £000

2008-09 £000

0 0 0 0

0 0 0 0

0

0

3

(8)

0 3

0 (8)

97


11. Finance Costs Interest Interest on obligations under finance leases Interest on obligations under PFI contracts: - main finance cost - contingent finance cost Interest on obligations under LIFT contracts: - main finance cost - contingent finance cost Provisions - unwinding of discount Interest on late payment of commercial debt Other interest expense Other finance costs Total

2009-10 ÂŁ000

2008-09 ÂŁ000

14

16

0 0

0 0

0 0 59 0 0 64 137

0 0 67 0 0 0 83

98


99 12. Property, plant and equipment 12.1 Property, plant and equipment Land

Buildings excluding dwellings £000

Plant and machinery

Transport equipment

Information technology

£000

£000

£000

22,027 0 0 0 0 0 0

23,614 2,311 0 0 (94) 0 0

1,102 114 0 0 0 0 (945)

20 0 0 0 0 0 0

4,643 1,414 0 0 0 0 (489)

400 318 0 0 94 0 (240)

51,806 4,157 0 0 0 0 (1,674)

346 (187) 0 0 22,186

76 (1,213) 0 0 24,694

0 0 0 0 271

0 0 0 0 20

0 0 0 0 5,568

0 0 0 0 572

422 (1,400) 0 0 53,311

667 0 0 (571)

20 0 0 0

2,531 0

0 0

(2) 0 0

(285)

169 2 0 (116)

3,387 0 0 (972)

0 2,777 0

0 553 0

0 0 0

0 0 0

0 0 0

0 0 0

0 3,330 0

2009-10 £000 Cost or valuation: At 1 April 2009 Additions Purchased Additions Donated Additions Government Granted Reclassifications Reclassifications as Held for Sale Disposals other than for sale Upward revaluation/positive indexation Impairments/negative indexation Reversal of Impairments Transfers (to)/from NHS Bodies At 31 March 2010 Depreciation At 1 April 2009 Reclassifications Reclassifications as Held for Sale Disposals other than for sale Upward revaluation/positive indexation Impairments Reversal of Impairments

Furniture and fittings £000

Total £000

99


Charged During the Year Transfers to NHS Bodies At 31 March 2010 Net book value at 31 March 2010

0 0 2,777 19,409

925 0 1,476 23,218

57 0 153 118

0 0 20 0

527 0 2,773 2,795

35 0 90 482

1,544 0 7,289 46,022

Purchased Donated Government Granted Total at 31 March 2010

19,409 0 0 19,409

23,218 0 0 23,218

118 0 0 118

0 0 0 0

2,795 0 0 2,795

482 0 0 482

46,022 0 0 46,022

12.2 Asset financing: Owned Held on finance lease On-SOFP PFI contracts PFI residual: interests Total

19,409 0 0 0 19,409

23,111 107 0 0 23,218

118 0 0 0 118

0 0 0 0 0

2,795 0 0 0 2,795

482 0 0 0 482

45,915 107 0 0 46,022

Buildings £000's 6,663 (1,433) 5,230

Total £000's 10,831 (1,274) 9,557

12.3 Revaluation Reserve Balance for Property, Plant and Equipment

At 1 April 2009 Movements (specify) At 31 March 2010

Land £000's 4,168 159 4,327

100


12.4 Economic Lives of Non-Current Assets Minimum Life Years Intangible Assets Development Expenditure 15 Property, Plant and Equipment Buildings exc Dwellings 7 Dwellings 0 Plant and Machinery 4 Transport Equipment 0 Information Technology 5 Furniture and Fittings 4

Maximum Life Years 15 44 0 32 0 5 15

101


13. Intangible non-current assets 13.1 Intangible non-current assets 2009-10 Cost or valuation: At 1 April 2009 Additions - purchased Additions - internally generated Additions - donated Additions - government granted Reclassifications Reclassified as held for sale Disposals other than by sale Revaluation and indexation gains Impairments Reversal of impairments In-year transfers to/from NHS bodies At 31 March 2010 Amortisation At 1 April 2009 Charged in-year Reclassifications Reclassified as held for sale Disposals other than by sale Revaluation and indexation gains Impairments Reversal of Impairments In-year transfers to NHS bodies At 31 March 2010 NBV at 31 March 2010 Net book value at 31 March 2010 comprises: Purchased Donated Government Granted Total at 31 March 2010

Software purchased £000

Development expenditure £000

Total

78 0 0 0 0 0 0 0 0 0 0 0 78

0 226 0 0 0 0 0 0 0 0 0 0 226

78 226 0 0 0 0 0 0 0 0 0 0 304

78 0 0 0 0 0 0 0 0 78 0

0 0 0 0 0 0 0 0 0 0 226

78 0 0 0 0 0 0 0 0 78 226

0 0 0 0

226 0 0 226

226 0 0 226

£000

102


13.1 Intangible non-current assets (prior year comparatives) Software Development 2008-09 purchased expenditure £000 £000 Cost or valuation: At 1 April 2008 78 0 Additions - purchased 0 0 Additions - internally generated 0 0 Additions - donated 0 0 Additions - government granted 0 0 Reclassifications 0 0 Reclassified as held for sale 0 0 Disposals other than by sale 0 0 Revaluation and indexation gains 0 0 Impairments 0 0 Reversal of impairments 0 0 In-year transfers to/from NHS bodies 0 0 78 0 At 31 March 2009 Amortisation At 1 April 2008 Charged During the Year Impairments Reversal of Impairments Reclassifications Revaluation/Indexation gains Reclassified as Held for Sale Disposals other than for sale In-year transfers to NHS bodies At 31 March 2009 Net book value at 31 March 2009 Net book value at 31 March 2009 comprises: Purchased Donated Government Granted Total at 31 March 2009

Total £000 78 0 0 0 0 0 0 0 0 0 0 0 78

48 30 0 0 0 0 0 0 0 78 0

0 0 0 0 0 0 0 0 0 0 0

48 30 0 0 0 0 0 0 0 78 0

0 0 0 0

0 0 0 0

0 0 0 0

13.2 Intangible non-current assets Hertfordshire PCT single, integrated Electronic Patient Record (EPR). The PCT has created and will continue to expand their single EPR for the population of Hertfordshire. The deployment programme currently covers community and child health services, GP led health centres, urgent care centres and approx 20% of GP Practices across the county. A further 12 GP practices and the provider community hospitals are scheduled to join the programme and adopt the solution in 2010. The EPR is built on the nationally delivered TPP SystemOne application which provides the PCT with a completely integrated, shared, clinical record and a significant

103


information asset from both a clinical and performance management perspective with an asset life of 15 years. 13.3 Revaluation reserve balance for intangible assets There is no revaluation reserve balance for intangible assets. 14. Impairments The revaluation exercise undertaken in the year resulted in a total reduction of £4,308,000. Although building values had declined over the 12 months to 31st March 2010 the largest factor was the change in the basis of valuation from specialised operational asset to non-specialised operational asset. The basis of valuation is now Existing Use Value. A total of £3,330,000 was charged to the OCS with £978,000 recognised as a movement within the Statement of Changes in Taxpayers Equity. Of the impairment charge to the OCS, significant amounts related to the land at Peace Children’s Centre and Nascot Lawn which accounted for approximately £1,500,000 and £1,000,000 respectively. 15. Non-current assets held for sale The PCT has no non-current assets held for sale 16. Inventories 31 March 2010 £000 Drugs Consumables Loan equipment Other Total

0 0 0 307 307

31 March 2009 £000 0 0 0 2,339 2,339

104


17. Trade and other receivables

NHS receivables revenue NHS receivables capital Non-NHS receivables revenue Non-NHS receivables capital Provision for the impairment of receivables VAT Prepayments and other accrued income Finance Lease Receivables Operating Lease Receivables Other Receivables Total

Current 31 March 31 March 2009 2010 £000 £000

Non-current 31 March 31 March 2009 2010 £000 £000

9,064

7,300

0

0

0

0

0

0

641

2,157

0

0

0

0

0

0

(117) 110

(39) 0

0 0

0 0

3,457

2,328

149

165

0

0

0

0

0 899 14,054

0 1,104 12,850

0 0 149

0 0 165

31 March 2010 £000

31 March 2009 £000

224 23 183 430

2,501 1,803 1,107 5,411

31 March 2010 £000

31 March 2009 £000

17.1 Receivables past their due date but not impaired By up to three months By three to six months By more than six months Total 17.2 Provision for impairment of receivables

0 Balance at 1 April (39) Amount written off during the year 0 0 Amount recovered during the year 0 11 (Increase)/decrease in receivables impaired (39) (89) (39) Balance at 31 March (117) In determining the level of provision for the impairment of receivables, the PCT carried out an objective review of its receivables. Of the £117,000 provision above, £89,000 is attributable to a single customer who is likely to be subject to insolvency proceedings.

105


18. Trade and other payables

Current 31 March 2010 £000

Interest payable Payments received on account NHS payables - revenue NHS Payables - capital FHS Payables Non-NHS trade payables revenue Non-NHS trade payables capital Tax and Social Security Costs VAT Other Payables Accruals and Deferred Income Total

31 March 2009 £000

0 0 13,415 0 25,073

0 0 11,591 0 23,520

10,126 1,248 80 1 875 32 50,850

Non-current 31 March 31 March 2009 2010 £000 £000

0 0

0 0

9,711

0

0

645 928 1 1,523 56 47,975

0

0

0 0

0 91

0

91

Other payables include £90,894 (2008-09: £181,788) in respect of payments due in future years under arrangements to buy out the liability for 5 early retirements over 5 instalments; and £113,329 in respect of outstanding pensions contributions at 31 March 2010 (31 March 2009: £701,000).

106


107 19. Borrowings

Current 31 March 2010 £000

Bank overdraft - Office of HM Paymaster General / Government Banking Service Bank overdraft - Commercial banks Finance lease liabilities PFI liabilities: Main liability Lifecycle replacement received in advance LIFT liabilities: Main liability Lifecycle replacement received in advance Other (describe) Total

Non-current

31 March 2009 £000

31 March 2009 £000

31 March 2010 £000

0 0 33

0 0 32

162

188

0 0

0 0

0 0

0 0

0 0 0 33

0 0 0 32

0 0 0 162

0 0 0 188

20. Other liabilities The PCT has no current or non current Other Liabilities in 2009-10 and 2008/9.

107


21. Provisions

Current 31 March 2010 £000

Pensions relating to former directors Pensions relating to other staff Legal claims Restructurings Continuing Care Agenda for Change Equal Pay Other (specify) Total

0 290 0 0 187 0 0 0 477

Non-current

31 March 2009 £000 0 219 0 469 517 0 0 12 1,217

31 March 2010 £000 8 2,569 13 0 0 0 0 0 2,590

31 March 2009 £000 7 2,666 13 0 0 0 0 99 2,785

108


109 Pensions relating to former directors £000

Pensions relating to other staff

Legal claims

Restructurings

Other

Total

£000

£000

£000

£000

£000

At 1 April 2008 Arising during the year Utilised during the year Reversed unused Unwinding of discount Transferred in-year At 1 April 2009 Arising during the year Utilised during the year Reversed unused Unwinding of discount Transferred in-year At 31 March 2010

7 0 0 0 0 0 7 0 0 0 0 0 7

3,104 54 (337) 0 64 0 2,885 78 (261) 0 57 0 2,759

13 0 0 0 0 0 13 0 0 0 0 0 13

0 469 0 0 0 0 469 0 (123) 0 0 (346) 0

300 336 (11) 0 3 0 628 0 (12) (330) 2 0 288

3,424 859 (348)

Expected timing of cash flows: In the remainder of the spending review period to: 31 March 2011 Between 1 April 2011 and 31 March 2016 Between 1 April 2016 and 31 March 2021 Thereafter

0 7 0 0

276 1,109 1,374 0

0 13 0 0

0 0 0 0

201 48 39 0

477 1,177 1,413 0

67 0 4,002 78 (396) (330) 59 (346) 3,067

109


* Provisions relating to the PCT's own provider functions are shown gross with the expected reimbursements from the NHSLA included in debtors. Pensions relating to other staff is the estimated full amount of the PCT's liability for the additional cost to the NHS Pensions scheme of employees retiring early. The liability has been calculated following actuarial advice, but is by its nature only an estimate. The Other Provisions relate to the PCT's future liability for Continuing Care under the Coughlan agreement (£187,000) and injury benefit (£101,000). £108,490 is included in the provisions of the NHS Litigation Authority at 31 March 2010 in respect of clinical negligence liabilities of the PCT (31 March 2009 £123,336).

110


22. Contingencies

31 March 2010 £000

31 March 2009 £000

(700)

(470)

Contingent liabilities The majority of contingent liability relates to claims for the reimbursement of continuing care expenditure, following the decision of the Health Service Ombudsman. Where a reasonable estimate of the PCT's liability can be made, based on experience to date, it has been included as a provision (Note 21). However, given the uncertainty regarding the final outcome of individual cases, a contingent liability has been included to reflect the potential cost of those claims to the PCT. 23. Capital Commitments Contracted capital commitments at 31 March not otherwise included in these financial statements: Property, plant and equipment Intangible assets Total

31 March 2010 £000

31 March 2009 £000

560 0 560

1,217 0 1,217

111


24. Other financial liabilities The PCT has no other financial liabilities carried at fair value through profit and loss for 2009-10 and 2008-09, other than those already disclosed in other notes to the accounts. 25. Finance lease obligations The PCT has three finance leases in relation to the properties at 1,3 and 4 George Street, Hemel Hempstead. All three leases are for 25 years of which the unexpired terms vary between 5 to 7 years. These leases are subject to a five year rent review which is next due in 2012 and 2013. Amounts payable under finance leases:

Minimum lease payments 31 March 2010 £000

Within one year Between one and five years After five years Less future finance charges Present value of minimum lease payments

31 March 2009 £000

Present value of minimum lease payments 31 March 31 March 2009 2010 £000 £000

36 136 41 (18)

35 136 72 (23)

33 125 37 -

32 123 65 -

195

220

195

220

33 162 195

32 188 220

Included in: Current borrowings Non-current borrowings

There are no future sublease payments expected to be received (prior year £nil) There are no contingent rents recognised as an expense (prior year £nil) 26. Finance lease receivables (i.e. as lessor) The PCT does not have any Finance Lease receivables. 27. PFI and NHS LIFT Schemes 27.1 PFI and NHS LIFT schemes on/off-Statement of Financial Position The PCT does not have any LIFT or PFI schemes. 28. Financial Instruments Financial risk management Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities. As the cash requirements of the PCT are met through Parliamentary Funding, financial instruments play a more limited role in creating risk than would apply to a non-public sector body of a similar size. The 112


majority of financial instruments relate to contracts for non-financial items in line with the PCTâ&#x20AC;&#x2122;s expected purchase and usage requirements and the PCT is therefore exposed to little credit, liquidity or market risk. Currency risk The PCT is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and Sterling based. The PCT has no overseas operations. The PCT therefore has low exposure to currency rate fluctuations. Interest rate risk PCTs are not permitted to borrow. The PCT therefore has low exposure to interestrate fluctuations Credit Risk Because the majority of the PCTâ&#x20AC;&#x2122;s income comes from funds voted by Parliament the PCT has low exposure to credit risk. Liquidity Risk The PCT is required to operate within limits set by the Secretary of State for the financial year and draws down funds from the Department of Health as the requirement arises. The PCT is not, therefore, exposed to significant liquidity risks.

113


28.1 Financial Assets

At ‘fair value through profit and loss’ £000

Embedded derivatives Receivables - NHS Receivables - non-NHS Cash at bank and in hand Other financial assets Total at 31 March 2010

0 0 0 0 0 0

Embedded derivatives Receivables - NHS Receivables - non-NHS Cash at bank and in hand Other financial assets Total at 31 March 2009 28.2 Financial Liabilities

0 0 0 0 0 0

Loans and receivables

Available for sale

Total

£000

£000

£000

0 0

0 9,064 524 0 1,009 10,597

0 7,300 2,118 0 1,104 10,522 At ‘fair value through profit and loss’ £000

0 0 0 0 0 0 Other

0 7,300 2,118 0 1,104 10,522 Total

£000

£000

Embedded derivatives NHS payables Non-NHS payables Other borrowings PFI and finance lease obligations Other financial liabilities Total at 31 March 2010

0 0 0 0 0 0 0

0 13,415 11,374 0 195 26,029 51,013

0 13,415 11,374 0 195 26,029 51,013

Embedded derivatives NHS payables Non-NHS payables Other borrowings PFI and finance lease obligations Other financial liabilities Total at 31 March 2009

0 0 0 0 0 0 0

0 11,591 10,356 0 220 25,972 48,139

0 11,591 10,356 0 220 25,972 48,139

9,064 524 0 1,009 10,597

29. NHS LIFT Investments The PCT does not have any LIFT investments. 30. Other financial assets The PCT did not hold any Other Financial Assets which were not separately disclosed elsewhere on the financial statements in 2009-10 or 2008/9.

114


31. Other current assets The PCT did not hold any Other Current Assets which were not separately disclosed elsewhere on the financial statements in 2009-10 or 2008/9. 32. Cash and Cash Equivalents Balance at 1 April Net change in year Balance at 31 March Made up of Cash with Office of HM Paymaster General/GBS Commercial banks and cash in hand Current investments Cash and cash equivalents as in statement of financial position Bank overdraft - Office of HM Paymaster General/GBS Bank overdraft - Commercial banks Cash and cash equivalents as in statement of cash flows Patients' money held by the PCT is not included above

31 March 2010 £000 0 0 0

31 March 2009 £000 0 0 0

0 0 0

0 0 0

0 0 0 0 0

0 0 0 0 0

33. Related party transactions West Hertfordshire PCT is a body corporate established by order of the Secretary of State for Health. During the year none of the Board Members or members of the key management staff or parties related to them has undertaken any material transactions with the PCT During the year local GPs sat on the Board and Professional Executive Committee of the PCTs. Payments are made to all practices in the PCT under the new GP contract for the provision of GP services and reimbursement expenses for staffing and computing. The GPs on the Board and Professional Executive Committee had no direct control over how these funds were allocated. Details of payments during the year to GPs on the Boards and Executive Committee or their practices.

Dr Michael Edwards - Partner at Fairbrook Medical Centre Dr Richard Walker - Partner at Manor Street Surgery Dr Roger Sage - Partner at Dr Sage & Partners, Parkbury House Dr Mark Sandler - Partner at Davenport House Surgery

£000s 1,720 1,203 2,173 1,680

Dr M Edwards is also a director of Herts Health Limited to whom the PCT paid £529,000 for patient diagnostic services.

115


The Department of Health is regarded as a related party. During the year the PCT has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. The PCT has adopted a disclosure level of £5million in 2009-10. These entities are listed below; Payments to Related Party

Barnet & Chase Farm NHS Trust Buckinghamshire Hospital NHS Trust East and North Hertfordshire PCT East and North Hertfordshire NHS Trust East of England Ambulance Service NHS Trust Hertfordshire County Council Imperial College Health care NHS Trust Luton & Dunstable NHS Foundation Trust Royal Free Hampstead NHS Trust South East Essex PCT University College London NHS Foundation Trust West Hertfordshire Hospitals NHS Trust Royal National Orthopaedic Hospital NHS Trust

Receipts from Related Party

£000

£000

Amounts owed to Related Party £000

Amounts due from Related Party

35,539

102

375

62

15,330

0

1,207

0

27,595

22,661

0

7,425

29,376

3

2,005

18

16,603 108,955

0 1,537

93 1,734

0 0

10,184

0

274

0

14,073

8

492

0

11,017 66,485

17 0

340 87

0 0

9,293

0

287

0

210,175

619

4,226

43

6,754

0

497

0

£000

In addition, the PCT has had a significant number of material transactions with other Government Departments and other central and local Government bodies. Where appropriate, these transactions have been reflected in the above table. The PCT has also received revenue and capital payments from a number of charitable funds, certain of the Trustees for which are also members of the PCT Board.

116


Note 33A. Related Party Transactions 2008-09 West Hertfordshire PCT is a body corporate established by order of the Secretary of State for Health. During the year none of the Board Members or members of the key management staff or parties related to them has undertaken any material transactions with the PCT During the year local GPs sat on the Board and Executive Committee of the PCTs. Payments are made to all practices in the PCTs under the new GP contract for the provision of GP services and reimbursement expenses for staffing and computing. The GPs on the Board and Professional Executive Committee had no direct control over how these funds were allocated. Details of payments during the year to GPs on the Boards and Executive Committee or their practices. £000s Dr M Edwards - Partner at Fairbrook Medical Centre Dr Richard Walker - Partner at Manor Street Surgery Dr Roger Sage - Partner at Dr Sage & Partners, Parkbury House Dr Mark Sandler - Partner at Davenport House Surgery

1,705 983 1,810 1,387

Dr M Edwards is also a director of Herts Health Limited to whom the PCT paid £474,000 for patient diagnostic services. The Department of Health is regarded as a related party. During the year the PCT has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent Department. The PCT has adopted a disclosure level of £5million in 2008-09. These entities are listed below;

117


Barnet & Chase Farm NHS Trust Buckinghamshire Hospital NHS Trust East and North Hertfordshire PCT East and North Hertfordshire NHS Trust East of England Ambulance Service NHS Trust Hertfordshire County Council HM Revenue & Customs Imperial College Health care NHS Trust Luton & Dunstable NHS Foundation Trust Royal Free Hampstead South East Essex PCT University College London NHS Foundation Trust West Hertfordshire Hospitals NHS Trust

Payments to Related Party £000

Receipts from Related Party £000

Amounts owed to Related Party £000

25,832

137

795

304

10,942 861

8 18,245

243 0

8 3,835

24,792

15

320

4

15,440 106,664 5,848

0 999 0

6 3,880 489

0 2,022 0

11,733

0

176

0

10,386 8,860 40,290

72 31 120

8 128 829

17 27 120

10,354

2

130

0

175,470

2,153

6,989

2,165

Amounts due from Related Party £000

In addition, the PCT has had a significant number of material transactions with other Government Departments and other central and local Government bodies. Where appropriate, these transactions have been reflected in the above table. The PCT has also received revenue and capital payments from a number of charitable funds, certain of the Trustees for which are also members of the PCT Board. 34. Third party assets The PCT did not hold any cash at bank and in hand at 31 March 2010 which related to monies held by the PCT on behalf of patients (£0 at 31 March 2009). Any such monies held would have been excluded from cash at bank and in hand figure reported in the accounts.

118


35. Intra-Government Balances

Current receivables

Noncurrent receivables £000s

Current payables

8,660 0

0 0

1,304 1,734

0 0

514

0

12,305

0

0 9,174

0 0

0 15,343

0 0

4,880 14,054

149 149

35,507 50,850

0 0

4,806 2,061

0 0

2,864 3,999

0 0

2,774

0

10,355

0

0 9,641

0 0

0 17,218

0 0

3,209 12,850

165 165

30,757 47,975

91 91

£000s Balances with other Central Government Bodies Balances with Local Authorities Balances with NHS Trusts and Foundation Trusts Balances with Public Corporations and Trading Funds Total Intra-Government balances Balances with bodies external to government At 31 March 2010 Balances with other Central Government Bodies Balances with Local Authorities Balances with NHS Trusts and Foundation Trusts Balances with Public Corporations and Trading Funds Total Intra-Government balances Balances with bodies external to government At 31 March 2009

Noncurrent payables £000s

£000s

36. Losses and Special Payments The total number of losses cases in 2009-10 was 4, involving a total loss of £329 (2008-09 20 cases and £56,137). There were no clinical negligence cases where the net payment exceeded £100,000 in 2009-10 or 2008/9. There were no fraud cases where the net payment exceeded £100,000 in 2009-10 or 2008/9. There were no personal injury cases where the net payment exceeded £100,000 in 2009-10 or 2008/9. There were no compensation under legal obligation cases where the net payment exceeded £100,000 in 2009-10 or 2008/9. There were no fruitless payment cases where the net payment exceeded £100,000 in 2009-10 or 2008/9.

119


Note: The total costs included in this note are on an accruals basis. The total number of special payments in 2009-10 was 0, involving a total of £0 (2008-09 nil cases and £0) 37. Events after the reporting period On the 2nd March 2010, East and North Hertfordshire PCT and West Hertfordshire PCT received notification that the Secretary of State had given approval for the two PCTs to merge from 1st April 2010 and to create one organisation called Hertfordshire PCT. Under this arrangement, the newly created organisation assumed all the assets and liabilities of the two old PCTs. With minimal changes to its management structure, the newly formed PCT will continue to operate on a day to day basis unaffected by the merger. 38. Movements in working capital (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories Increase/(decrease) in trade and other payables (Increase)/decrease in other current assets Increase/(decrease) in other current liabilities Total

39. Other cash flow adjustments Depreciation Amortisation Impairments and reversals Cost of Capital Charge Transfer from donated asset reserve Transfer from government grant reserve Non-cash movements in provisions Release of PFI deferred credits Net foreign exchange gain/(losses) Total

2009-10 £000

2008-09 £000

(982) 2,032

(2,234) (804)

2,181 0 (19) 3,212

5,134 0 (14) 2,082

2009-10 £000 1,544 0 3,330 317 (2) 0 (598) 0 0 4,591

2008-09 £000 1,741 30 16 498 (4) 0 859 0 0 3,140

40. Cash flow relating to exceptional items There are no cash flows relating to exceptional items.

120


121 41. Transition to IFRS

Taxpayers’ equity at 31 March 2009 under UK GAAP: Adjustments for IFRS changes: Private finance initiative Leases Others Adjustments for: Impairments recognised on transition UK GAAP errors Taxpayers’ equity at 1 April 2009 under IFRS:

General fund

Revaluation reserve

Donated asset reserve

Government grant reserve

Other reserves

Total

£000

£000

£000

£000

£000

£000

908

10,827

2

0

0

0 47 (7)

0 (292) 0

0 0 0

0 0 0

0 0 0

11,737 0 0 (245) (7)

0 0

0 0

0 0

0 0

0 0

0 0

948

10,535

2

0

0

11,485

£000 Net Operating Cost for 2008-09 under UK GAAP Adjustments for: Private finance initiative Leases Others Net Operating Cost for 2008-09 under IFRS

714,868 0 (36) (1) 714,831

121


Alternative formats and additional copies For people who may have difficulty reading the print in this report, a large print version can be made available by contacting our communications team: Communications Team NHS Hertfordshire Charter House Parkway Welwyn Garden City Hertfordshire AL8 6JL Telephone: Email:

01707 390855 enquiries@hertfordshire.nhs.uk

The communications team can also arrange to provide the following on request:   

Additional copies of this document (hard copy or electronic version) An audio-cassette or CD version (arranged on request only) Help in understanding the document in languages other than English

Please note that this Report is also available to download from the NHS Hertfordshire website as follows: www.hetfordshire.nhs.uk Contact us You can write to us at: NHS Hertfordshire Charter House Parkway Welwyn Garden City Hertfordshire AL8 6JL You can telephone us on: 01707 390855 (Switchboard open 8am – 6pm) You can email us at: enquiries@hertfordshire.nhs.uk Or visit our website: www.hertfordshire.nhs.uk

Annual Report and Financial Accounts produced by the Communications team (August 2010)


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NHS West Hertfordshire Annual Report 2009/10