Agenda Item 06 Enclosure KPCT/11/101
NHS KIRKLEES Report To:
FOI Exemption Category
Andy Leary Executive Director of Finance
Author: Key Points to Note:
Steve Brennan Deputy Director of Finance The PCT is forecasting to achieve the control total, subject to the risks outlined in the report. Delivery of the QIPP target will be challenging, and there is some financial risk associated with not doing so.
No change arising from this report
No change arising from this report
Finance and Performance Committee
The Board is asked to recognise the forecast achievement of the control total and reaffirm its commitment to achievement of this target.
This Page has been left Blank
NHS Kirklees Finance Report to June Board for the 2 Months Ending of May 2011 1. Purpose of this Report 1.1.
The purpose of this report is to update the Board on NHS Kirklees’ forecast financial performance for 2011/12, including associated risks, and to advise the Board on action being taken to manage those risks.
2. Overall Revenue Position 2.1.
Our control total is agreed with the StHA at £8.3m.
We are forecasting to achieve this control total. However, at this early stage in the financial year we have not yet received trading information for our main contracts, so this is a high level assessment of the position.
3. Significant Budget Variances 3.1.
NHS commissioning is forecasting to be over spent by £2.8m. This is mainly due to slippage on acute QIPP plans. Mental Health NHS SLAs are forecasting to be £0.9m over spent, and this is also due to slippage on QIPP plans.
Corporate budgets are forecast to be £1.5m under spent at the end of the year. These are early forecast based on limited year to date information so may change as we move forward.
Earmarked reserves are showing an under commitment of £0.5m, with the majority of reserves expected to be committed during the year.
The contingency reserve has been fully applied to help achieve the control total.
KCHS is reporting a balanced position at this early stage in the year.
4. Financial Risk Analysis 4.1.
Given the timing of this report there is clearly a high degree of uncertainty about the forecast positions. The main areas of financial risk are: The acute contracts may over trade during the year, once in year activity and finance information is received. SCG contracts may over trade once activity and finance information is received. Prescribing expenditure information for 2011/12 has not yet been received from the PPA, and actual expenditure may differ from forecast as this information begins to flow. Prescribing expenditure has been volatile in previous years. Continuing care expenditure may, as in previous years, increase above the level of growth provided for in budgets, and it is too early to be able to forecast this accurately. The risk of under delivery on QIPP plans.
The relatively low level of in year contingency means that we must maintain our efforts to manage expenditure positions and deliver the QIPP plans.
5. Delivery of Efficiency Plans 5.1.
We have a QIPP target of £13.3m. The majority of the QIPP plans are expected to deliver the required level of savings. However, there is a risk that £3.9m of plans may not be fully achieved at the end of the year due mainly to slippage in implementing the agreed plans. At this stage this is being managed by forecast under spends in corporate budgets and the balance of the contingency.
Our 2 GP consortia are fully engaged with the QIPP agenda, and have assigned lead shadow board members to work alongside PCT staff in delivering this year’s plans and they are now actively engaged in doing so. We are also beginning to work together across the CKW cluster to enhance local deliverability of QIPP requirements. It is hoped that this combination of PCT, GP, and cluster focus will enable us to address the level of slippage identified above.
6. Conclusion on Financial Performance 2010/11 6.1.
I am confident that the PCT will deliver the agreed control total. However, it is very early in the financial year, and we need to maintain our control and management of expenditure.
We need to focus on delivering QIPP plans and ensuring that these are supported by GP and cluster arrangements.
7. Cash 7.1.
The PCT will manage its cash position within the available cash limit.
8. Public Sector Payment Policy 8.1.
We paid 95.7% of invoices by number and 96.1% of invoices by value, which is broadly in line with performance for the previous financial year.
9. Capital 9.1.
The PCT is forecasting to spend its capital allocation of £2,579k.
10. Summary Performance against Key Statutory Duties/Targets 10.1. A
summary of the forecast achievement of the PCT’s financial duties are shown in the table below. Table 3: Summary of financial duties Financial Duties /Targets
Forecast Financial Duty Achieved
Achieve financial balance by containing revenue expenditure with the PCT’s revenue resource limit.
Meet SHA’s £8.3m surplus control total
Containing capital expenditure with the PCT’s capital resource limit.
Recovery of full costs on provider activities.
To manage cash payments within the PCT’s cash limit
Public Sector Payment Policy
Source: Financial Reporting Pack
11. Recommendation 11.1. The
Board is asked to note the:
1..1. Forecast achievement of the control. 1..2. Financial risks to the delivery of the control total. 1..3. Position on QIPP plans and the actions taken to address this.
Andy Leary Executive Director of Finance June 2010