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REPORT OF: Joanne Newton

DATE OF PAPER: 26 June 2013

SUBJECT: Financial Position at 31st May 2013

IN CASE OF QUERY, PLEASE CONTACT

Joanne NewtonJoanne Downs

PURPOSE OF PAPER:This paper provides an update to the North Manchester CCG Board on the financial position for the first two months of 2013-14.

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Contents

1. Financial Performance

2. Contract Performance

3. QIPP

4. Running Costs

5. Reserves

6. Risks

7. Conclusion and Recommendations

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1 Financial Performance

 

Annual Budget £'000

YTD Budget £'000

YTD Expenditure £'000

YTD Variance £'000

Forecast outturn £'000

Forecast Variance £'000

Acute Services            

Acute - NHS £122,501 £20,417 £20,415 -£2 £122,501 £0

Acute - Private Providers £5,040 £840 £841 £1 £5,040 £0

Acute - NCA £1,050 £175 £175 £0 £1,050 £0

Total Acute Services £128,592 £21,432 £21,431 -£1 £128,592 £0

             

Mental Health            

Mental Health - NHS & non NHS £33,751 £5,625 £5,625 £0 £33,751 £0

Mental Health - NCA £2,092 £349 £349 £0 £2,092 £0

LD £2,292 £382 £382 £0 £2,292 £0

Total Mental Health  £38,135 £6,356 £6,356 £0 £38,135 £0

             

Prescribing £32,190 £5,365 £5,373 £8 £32,190 £0

Community £22,523 £3,754 £3,793 £39 £22,523 £0

Primary Care £2,759 £459 £512 £52 £2,759 £0

CHC / FNC £10,317 £1,719 £1,719 £0 £10,317 £0

Other Programme £2,844 £474 £472 -£2 £2,844 £0

NHS Property Services Recharge £970 £162 £162 £0 £970 £0

Total Other CCG Programme £71,602 £11,934 £12,032 £97 £71,602 £0

             

Programme Overheads £1,026 £171 £167 -£4 £1,026 £0

Administration Overheads £4,469 £745 £728 -£17 £4,469 £0

Total Overheads £5,495 £916 £895 -£21 £5,495 £0

             

Planned Surplus £1,258 £210 £0 -£210 £0 -£1,258

             

Reserves £17,295 £2,883 £2,806 -£77 £17,295 £0

             

CCG Total £262,377 £43,730 £43,520 -£212 £261,118 -£1,258

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1 Financial Performance

• North Manchester CCG is set to achieve its forecast surplus of £1.3m for the year and meet the requirement to deliver recurrent balance. The year to date (YTD) position at Month 2 is showing an underspend of £212k, further detail is provided on the summary table on page 3.

• There are minimal variances due to the fact that only April information has been received from Acute Trusts and Prescribing data for April had not been received when this financial position was compiled.

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2 NHS acute contracts

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2 NHS acute contracts

Contract assumptions are based on April 2013 data only. Due to this and the issues that acute providers are working through with regards to assigning the correct new commissioner codes to episodes of care, all contracts are forecast to break even at year end. This will remain the case until the accuracy of the data can be relied upon and there is sufficient data from which to build a robust forecast.

Pennine Acute NHST Contract

•The Pennine Acute financial performance is break even based on the April data received. The key variances are:

•Planned admissions £114k under performance – April was anticipated to be a low month for planned admissions due to the Easter break and actual activity has been lower than anticipated.

•High Cost Drugs £78k over performance – High Cost Drugs is an area of huge change in terms of responsible commissioners. The provider will undertake a review of the appropriateness of the charges and therefore this over performance is likely to reduce significantly.

Central Manchester FT Contract

•Central Manchester FT is under performing against plan by £234k based on the April 2013 data received. The key variances based on month one include:

•Planned admissions £124k under performance – As noted with the Pennine Acute section above, April was anticipated to be a low month but has been lower still.

•Critical Care & Rehab £121k under performance – These are episodes of care paid for on discharge and lower overall utilisation of this trust by the CCG may be linked to this under performance.

•Outpatient follow up attendances £59k over performance – The specialties with the largest over performance are Ophthalmology, Trauma and Orthopaedics and Nephrology with over performance of £16k, £14k and £11k respectively.

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2 NHS acute contracts

Salford Royal FT Contract

•Salford Royal FT is under performing YTD by £17k based on the April data received. The only ‘point of delivery’ with any significant variance is excluded drugs and devices, £15k, but as noted within the Pennine Acute section this could be subject to change due to the complexity of applying the correct commissioner.

Other Contracts

•Other contracts includes other NHS trusts with smaller value contracts, such as NWAS Emergency Ambulances and non NHS acute contracts. Based on the information received in April 2013, there are no significant under or over spends against these contracts to date.

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3 QIPP

Savings Summary Analysis

Category2013-14 

Forecast savings (May 2013 )

£'000

% of total2013-14 Forecast 

savings (30 June 2013) 

£'000

% of total2014-15 

Forecast savings (30 June 2013) 

£'000

% of total

Urgent Care 0 0.0% 0 0.0% 530 45.0%

Planned Care 352 7.3% 117 2.5% 380 32.3%

Prescribing 2,490 51.9% 2,554 55.2% 266 22.6%

Acute services 1,432 29.8% 1,432 30.9% 0 0.0%

Citywide 525 10.9% 525 11.3% 0 0.0%

Total 4,799 100.0% 4,628 100.0% 1,176 100.0%

 Target 5,149 5,149

 (Under) / over delivery -350 -521

Delivery confidence

RAG Rating

Risk: 2013-14 

forecast savings (May 2013)

£'000% of total

Risk: 2013-14 forecast 

savings (June 2013)

£'000% of total

Risk: 2014-15 forecast 

savings(June 2013)

£'000% of total

Red 775 16.1% 605 13.1% 844 71.8%

Amber 547 11.4% 548 11.8% 207 17.6%

Green 3,477 72.5% 3,475 75.1% 124 10.6%

Total 4,799 100.0% 4,628 100.0% 1,175 100.0%

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3 QIPP

Summary

•The CCG’s 2013/14 QIPP target is £5,149k, or 2% of recurrent allocations.

•At present, the CCG has QIPP plans valued at £5,804k, of which £4,628k is forecast to deliver in 2013/14 and £1,176k in 2014/15.

•Of the 2013/14 savings, £3,475k (75.1%) is rated ‘green’. The remaining £1,153k mostly reflects prescribing initiatives (largely ‘amber’ rated) and city wide schemes (all ‘red’ rated).

•The CCG has further QIPP plans of £1,176k that are forecast to be realised in 2014/15. £844k of these are presently rated ‘red’ as schemes need to be developed further.

•Due to the nature of some acute contracts in 2013/14, QIPP plan savings cannot be released in year. Where this is the case, the emphasis is on developing plans sufficiently to ensure these are realised in 2014/15.

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4 Running Costs

On the basis of the above, the CCG is forecast to deliver its target of £25 per head for 2013-14.

 

Annual Budget £'000

YTD budget £'000

YTD Spend £'000

YTD Variance £'000

Forecast £'000

Forecast Variance £'000

ADMINISTRATION & BUSINESS SUPPORT £133 £22 £38 £16 £133 £0

BUSINESS INFORMATICS £63 £11 £11 £0 £63 £0

CEO/ BOARD OFFICE £224 £37 £41 £4 £224 £0

CHAIR AND NON EXECS £213 £35 £10 -£26 £213 £0

COMMISSIONING £457 £76 £65 -£11 £457 £0

COMMUNICATIONS & PR £148 £25 £25 £0 £148 £0

CONTRACT MANAGEMENT £924 £155 £154 -£0 £924 £0

CORPORATE COSTS & SERVICES £341 £57 £57 £0 £341 £0

CORPORATE GOVERNANCE £115 £19 £19 £0 £115 £0

EQUALITY AND DIVERSITY £26 £4 £4 £0 £26 £0

ESTATES AND FACILITIES £345 £58 £58 £0 £345 £0

FINANCE £540 £90 £90 £0 £540 £0

HUMAN RESOURCES £68 £11 £11 £0 £68 £0

IM&T £439 £73 £73 £0 £439 £0

IM&T PROJECTS £0 £0 £0 £0 £0 £0

PATIENT AND PUBLIC INVOLVEMENT £56 £9 £9 £0 £56 £0

PROCUREMENT £83 £14 £14 £0 £83 £0

RECHARGES £0 -£0 £0 £0 £0 £0

MEDICINES MANAGEMENT £65 £11 £11 £0 £65 £0

GENERAL RESERVE £23 £4 £0 £0 £23 £0

ADMIN PROJECTS £178 £30 £30 £0 £178 £0

Total included in £25 per head £4,440 £741 £720 -£16 £4,440 £0

REFERALL GATEWAY £469 £78 £78 £0 £469 £0

CLINICAL CONTRACT MANAGEMENT £117 £19 £19 £0 £117 £0

MEDICINES MANAGEMENT CLINICAL £261 £43 £40 -£3 £261 £0

SAFEGUARDING £234 £39 £39 £0 £234 £0

Total not included in £25 per head £1,081 £180 £176 -£3 £1,081 £0

Total £5,521 £921 £896 -£19 £5,521 £0

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5 Reserves

The CCG’s reserves assume budget commitments in respect of national financial planning requirements, including, 2% non-recurrent expenditure and a 0.5% contingency.

Commissioning reserves include specific amounts for known and planned commitments and developments in 2013/14.

 

Annual Budget £'000

YTD budget £'000

YTD Spend £'000

YTD Variance £'000

Forecast £'000Forecast Variance £'000

COMMISSIONING RESERVE £12,241 £2,040 £1,967 -£73 £12,241 £0

NON RECURRENT RESERVE £5,031 £839 £839 £0 £5,031 £0

GENERAL RESERVE £23 £4 £0 -£4 £23 £0

Total Reserves £17,295 £2,882 £2,806 -£77 £17,295 £0

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6 Risks

The main risk facing the CCG in 2013/14 is in respect of potential allocation adjustments relating to the specialist services migration to the National Commissioning Board from 1 April 2013. Work in ongoing with the Area Team to understand this risk and resolve potential allocation pressures.

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7 Conclusion and recommendations

• The Board is asked to note the contents of the report.

• The CCG is forecasting that it will achieve its financial duties by 31 March 2014.