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WALSALL TEACHING PRIMARY CARE TRUST
REPORT TO Trust Board
REPORT FROM Director of Resources & Performance
SUBJECT Financial Monitoring Report as at 31 October 2008
(Month 07)
1.1 PURPOSE
This report is to inform the Board of NHS Walsall’s financial position.
1.2 EXECUTIVE SUMMARY
NHS Walsall’s management accounts show an underspend of £2,271k, an
improvement of £1,921k on the position reported in September which
reflects the phased release of the declared surplus budget. The
Commissioning arm is underspent by £1,794k and NHS Walsall Community
Health is underspent by £477k.
The tPCT is still on target to achieve the planned surplus of
£11.6million within a range of £10.6 million to £12.1 million.
1.3 RECOMMENDATIONS
There are no recommendations.
2 Risks
The risks to achieving financial balance are set out in the Overview section.
3 Resource implications
This is a monitoring report.
4 Implications for our priorities
This monitoring report covers the full range of NHS Walsall’s priority areas.
Month 07 Financial Monitoring Report Page 1
27 November 2008
4.1 Health Service not illness service
4.2 Evidence based excellence
4.3 Alliances the key to success
4.4 Listening to local people
4.5 True choices, accessible services
4.6 Hitting the hard targets
5 Timescales and implementation
Not applicable.
6 Review
Not applicable.
1 OVERVIEW
At the end of October, NHS Walsall’s management accounts show an underspend
of £2,271k against its budget to date of £233,815k. This compares to the
reported underspend of £350k in September and reflects the phased release of
the declared surplus budget in line with the 2008/09 financial plan agreed with
the SHA. The forecast outturn shows an underspend of £11.6 million within a
range of £10.6 to £12.1million.
The key risks to achieving our planned position are outlined in the table below:
Forecast Outturn
Net Impact
Probability
Potential
Impact
Issue
£000 % £000
CORPORATE MANAGEMENT
Significant additional investment has been earmarked for -1,000 50 -500
implementing the new commissioning structure to deliver
World Class Commissioning. There is a risk that appointments
to new posts will be delayed. At Month 07 corporate costs are
Month 07 Financial Monitoring Report Page 2
27 November 2008
underspent by £277k.
RESERVES
Uncommitted reserves currently stand at £1.0 million. -1,000 80 -800
In addition, in the light of the significant contract over -2,000 100 -2,000
performance by Walsall Hospitals, the reserves set aside to
support Walsall Hospitals’ transformation plan may not be
released.
ACUTE CONTRACTS
Walsall Hospitals
NHS Walsall is in receipt of indicative data to September which
produces a forecast over performance of £2,634k to October or
£2,405k after the utilisation of reserves. The extent to which
this is a recurrent trend remains unclear, although the issues
are explored later in this report under Acute Services. 6,700 90 6,000
Other Acute Contracts including Specialised Services and
OATS
These show an estimated over performance to date of £1,216k.
Part Completed Spells
There is increasing pressure for PCTs to account for episodes 1,000 100 1,000
of care that have not yet been completed, and therefore are
not yet due for payment at the year end. If NHS Walsall had
taken these into account in 2007/08, an additional £856k of
expenditure would have been recorded in the accounts.
The likelihood of accounting for part completed spells has
increased to 100%.
Forecast Outturn
Probability
Potential
Impact
Impact
Net
Issue
£000 % £000
Month 07 Financial Monitoring Report Page 3
27 November 2008
CONTINUING CARE
There is a risk that expenditure will exceed the budget. This is 690 90 620
in part mitigated by the significant additional investment in this
budget area in 2008/09 (£2.6 million).
The issues are explored later in the report under the
Continuing and Free Nursing Care section.
PRESCRIBING
Prescribing expenditure is traditionally volatile and any forecast -3,300 90 -3,000
outturn will need to reflect the annual negotiation of Category
M drugs in September/October.
The total prescribing budget shows an underspend of £1,665k
to the end of October based on August’s figures from the PPA.
The September forecast outturn has now been received and
shows a forecast underspend of £3.0 million for 2008/09. It is
assumed that the reduction in the price of generic drugs
effective from October will produce additional savings of circa
£300k which is currently being managed through financing
items.
DENTAL SERVICES
NHS Walsall received an additional allocation of £955k. It is -950 80 -750
highly likely that it will not be possible to commission
additional services to this value this financial year.
PROVIDER PERFORMANCE
It is currently assumed that both Walsall Community Health The provider arm is
and Mental Health Services will break even. forecast to break even
Appendices
The appendices are as follows:
A An overview of the NHS Walsall’s financial position to show
Commissioning expenditure in total and the Provider full cost recovery
duty.
Month 07 Financial Monitoring Report Page 4
27 November 2008
B Commissioning expenditure excluding Primary Care
C1 Acute Activity
C Primary Care Commissioning Expenditure
D Learning Disabilities Pooled Fund Account – the latest figures available
are to 31 October 2008.
E NHS Walsall’s Balance Sheet as at 31 October 2008 together with key
performance indicators
2 RESOURCES AVAILABLE
The following table shows the adjustments to NHS Walsall’s revenue resource
limit to 31 October 2008.
£000
Allocation as at September 2008 421,846
MFF Adjustments for Actual Outturn -197
Revised Allocation as at October 2008 421,649
The change in allocation is attributable to the revision of the Market Forces Factor
to reflect actual performance on the PBR element of contracts in 2007/08. This
constitutes the difference between the actual value and the initial national
planning assumptions.
3 COMMISSIONING
Appendix B shows expenditure to date on Commissioning excluding Primary Care
whilst Appendix C shows Primary Care expenditure. This report focuses on the
forecast outturn position and changes since September 2008. The current
forecast underspend has been revised from £11.2 million to £11.6 million. The
changes by individual programme are detailed below.
Change in Forecast Outturn £000
Forecast as at September 2008 -11,173
Specific Programmes
Coronary Heart Disease 44
Palliative Care 12
Month 07 Financial Monitoring Report Page 5
27 November 2008
Diabetes 86 142
Public Health & Health Promotion
Health Promotion 18
Smoking Cessation -20
Teaching PCT -36
Voluntary Sector -30 -68
Health Infrastructure
IT Agency 1
Financing and other items etc -299 -298
Contracts
Acute contracts -7 -7
Non Acute contracts
Other -162
Continuing Care 18
Mental Health 2
Intermediate Care 85 -57
Primary Care
Prescribing -95
Pharmacy contract/pharmacy
schemes -23
GMS Contract 29
Dental services -10 -99
Forecast as at October 2008 -11,560
CORPORATE COSTS
The underspend on Corporate Costs has decreased to £277k to date although the
forecast underspend remains unchanged at £500k. The majority of the
underspend relates to vacancies against the budget for World Class
Commissioning.
SPECIFIC PROGRAMMES
Specific Programmes show an overspend to date of £547k. The forecast
overspend for HIV and Cancer drugs remains unchanged at £124k and £1,221k
respectively although the overspend for the latter is largely dependent upon the
uptake of Lucentis expected to cost £300k in 2008/09.
Month 07 Financial Monitoring Report Page 6
27 November 2008
Coronary Heart Disease shows a revised forecast underspend of £22k in October
compared to £66k in September, following the implementation of a new software
system costing £53k.
Palliative Care services continue to underspend, due to slippage on
developments, with the forecast outturn estimated at £250k underspend.
The Diabetes programme which includes the management of the retinal
screening programme and general diabetes management is showing a £57k
underspend to date due to slippage on the appointment of Diabetes Managers
posts. The forecast underspend of £110k reported last month has been reduced
to a projected £24k as a revised programme has been put in place to take up the
majority of the slippage.
The Sexual Health programme covers a number of areas including Teenage
Pregnancy, Chlamydia and activity purchased from Non-NHS providers. The
underspend to date of £12k is primarily due to slippage on LDP funded
developments in GP training. The forecast underspend remains unchanged at
£60k.
Public Health and Health Promotion services show an underspend to date of
£384k, and this is forecast to increase to approximately £646k by year end, an
improvement of £68k on the position reported in September. This revision is a
consequence of additional predicted savings in Smoking Cessation services (£20k)
and the Voluntary Community Sector budget (£30k), due to service vacancies and
project slippage.
HEALTH INFRASTRUCTURE
The forecast underspend on financing and other items has increased by £239k in
October. This is predominantly attributable to the estimated changes in
prescribing costs. The tPCT is expecting to see a reduction in the cost of generic
drugs as part of the national funding agreement of the Pharmacy contract. The
estimated half year savings are £300k which will be reflected within Prescribing
budgets following the introduction of the price reduction in October 2008.
IT Agency budgets are broadly in line with budget at present. The majority of
expenditure is expected to occur in the latter part of the financial year.
Month 07 Financial Monitoring Report Page 7
27 November 2008
ESTATES RESIDUAL
Estates budgets are overspent by £106k to date. The forecast overspend remains
at £284k.
ACUTE SERVICES
Acute Contracts
The overspend on Acute contracts has increased by £274k in month to £3,621k
and is accounted for principally by the following:
Walsall Manor Hospitals £158k
West Birmingham and Sandwell NHS Trust £92k
University Hospitals Birmingham £119k
OATs/Other Acute Contracts -£82k
The Walsall Hospitals NHS Trust contract shows major variances in the following
areas:
Quarter 1 &
2 YTD
Rolling Month 7
Average (cumulative)
Electives £'000 188 21 1,149
(IP and Day
Cases) activity - n 288 57 1,786
activity - % 15% 2.8% 13.1%
Non Electives £'000 82 26 520
activity - n 42 -46 204
activity - % 2% -2.0% 1.3%
Out Patients £'000 42 126 375
(new & follow
up) activity - n 251 1,073 2,577
activity - % 1% 6.1% 2.2%
Month 07 Financial Monitoring Report Page 8
27 November 2008
A&E £'000 7 -39 3
activity - n -310 -1,043 -2,900
activity - % -4% -13.7% -5.8%
Other £'000 73 148 587
activity - n 0 0 n/a
activity - % 0% 0% n/a
392 282 2,634 1,667
Application of Reserves -18 -124 -229 0
Total 375 158 2,405 1,667
The Month 06 Board Report identified an increase to the rate of overspend
following the “lows” experienced during the summer months. The data for Month
07 shows this increased rate of spend is broadly unchanged.
A&E and Emergency activity remains close to or below plan, Elective Inpatient
activity is marginally above plan, however there has been a significant over
performance in Out Patient activity this month. This rise in activity is accounted
for by GP/Other referrals made earlier in the year. The extent to which this
activity is converted into Inpatient and Day Case activity will impact on future
months’ performance.
The overall rate of overspend on the Walsall Manor SLA is significantly lower than
in the first three months of the year and this is to be welcomed. Activity levels
however are increasing and can be expected to increase further (particularly with
Emergencies) as the winter approaches.
Activity data contained in the charts below is informative as they demonstrate
recent trends and provide a useful indicator of issues which need monitoring in
the coming months.
Chart 1 below clearly shows a distinct upward trend in numbers on the elective
inpatient waiting list. The number waiting as at October causes some concern as
this is the highest level of waiters since February 2007.
Month 07 Financial Monitoring Report Page 9
27 November 2008
Chart 1
With regard to the profile of waiting times (Chart 2), there has been a marked
increase in the number of patients waiting between 0 and 4 weeks compared to
March 2008 or December 2007. This “surge” in the numbers waiting will
eventually feed through into in-patient activity which could prove difficult to
manage if it coincides with a period of high demand from emergency/non-
elective admissions.
Chart 2
Month 07 Financial Monitoring Report Page 10
27 November 2008
The increase in the numbers of Inpatients waiting is due in part to the increase in
1st Outpatient attendances (Chart 3).
Chart 3
With regard to West Birmingham and Sandwell NHS Trust, the increased variance
arises from PbR Elective and Non-Elective activity, whilst at University Hospitals
Birmingham there has been an unexpected increase in Non-PbR Elective
Inpatients and Follow Up outpatients. It is unclear at this stage if these variances
are the result of normal monthly fluctuations or a change in activity patterns,
perhaps resulting from Patient choice. The position will be monitored in future
months.
Other Acute providers continue to under perform, whilst OATs over performs in
line with the previously reported forecast outturn.
In summary therefore we are seeing a growth in waiting lists which will eventually
translate into In-Patient activity. With the onset of winter, pressures could arise
with a consequential impact on waiting times, if the level of emergency/non-
elective activity grows suddenly and reduces bed/theatre availability.
Emergency Ambulances
Month 07 Financial Monitoring Report Page 11
27 November 2008
The contract for the ambulance service is currently £49k overspent.
NON ACUTE CONTRACTS
The contract with NHS Walsall Community Health is currently shown on line and
the forecast outturn remains at break even.
From 01 October 2008, Mental Health services will be commissioned from the
newly formed Dudley and Walsall Mental Health Partnership Trust. The previous
block contract arrangements will remain and as a consequence the forecast
outturn is break even.
Other Non Acute
The forecast overspend on Non Acute Contracts has been revised to £24k, a
reduction of £162k on the position reported in September. This revision follows
the receipt of monitoring information to reflect performance to the end of August
and September. Previous forecasts were largely based on monitoring information
to June. The major changes include forecast reductions of £103k at
Wolverhampton City PCT, although there remains a forecast over performance of
£117k which is mainly due to over activity in Elderly Inpatients and the Deaf
Service. There has also been an improvement of £40k in the forecast position at
Birmingham & Solihull Mental Health Trust. The release of reserves and minor
changes in other contracts accounts for the remaining improvement of circa £20k.
Continuing Care and Free Nursing Care (FNC) show an overspend to date of
£552k, an adverse movement of £88k within month. The table below analyses
this expenditure by client group.
Annual Budget Actual Variance Forecast
Budget YTD YTD YTD Outturn
£000 £000 £000 £000 £000
Children 1,625 948 1,047 99 1,577
Mental Health 2,823 1,647 2,037 390 3,363
Physical Disability 2,150 1,254 1,042 (212) 1,785
Specialist Medical & FNC 5,477 3,195 3,470 275 5,968
Month 07 Financial Monitoring Report Page 12
27 November 2008
12,075 7,044 7,596 552 12,693
The movement in the year to date position is due to additional clients in Elderly
Mental Health and Physical Disability services, but this additional cost is offset by
small savings in Children’s and Specialist Medical services following case
completions. The forecast outturn has increased slightly to £618k, but this is
dependent upon the current client base remaining constant, with no additional
high cost placements.
Learning Disabilities Pooled Budget shows a slight underspend of £3k to date.
The forecast underspend remains unchanged at £200k which is a combination of
Walsall tPCT’s share of the Learning Disability Pooled Budget forecast underspend
and the share of potential contract under performance for LD Services provided
by NHS Walsall Community Health.
Intermediate Care budgets currently show an underspend of £137k compared to
£117k reported last month. This is due primarily to a reduction in spot purchases
from the independent sector of £68k and a lower than anticipated use of nursing
home beds of £54k, which has been a recurrent trend throughout the early part
of the financial year. It is however, assumed that this trend will not continue.
Increased demand in the final quarter of the financial year as a consequence of
winter pressures and plans for additional intermediate care equipment purchases
will impact on this underspend.
The forecast outturn position has deteriorated by £85k since September. This is
mainly attributable to a revision to the forecast overspend on the ICES Pooled
Budget. The initial forecast overspend was £160k of which the tPCT’s share was
£66k (41%). Latest estimates suggest that the over performance will be £320k of
which the tPCT’s share will be £132k. The main reasons for this revision includes
growth in referral to ICES from Social Care (to address KPI targets) and the Manor
Hospital (changes in protocol around Stroke Care and Hip replacements). A
report outlining potential recovery plans to minimise or cap this is to be
presented to PEG for discussion.
PRIMARY CARE COMMISSIONING
Month 07 Financial Monitoring Report Page 13
27 November 2008
Appendix C analyses expenditure to date on primary care services, and shows
expenditure to date of £53,770k resulting in an underspend of £1,964k, which
represent a favourable movement of £402k in month and is due to expected
savings on prescribing costs. The forecast underspend for Prescribing, based on
PPA figures for September is £3.0 million.
GMS Services
The forecast underspend for this service is estimated at £409k, a slight reduction
of £31k to that forecast at month 06, and is predominantly due to additional
expenditure forecast in IM&T Services.
Pharmaceutical Schemes show year to date expenditure of £1,312k, resulting in
an overspend of £109k, due to the continuing overspend in the Home Oxygen
service, which is expected to continue until year end.
The Pharmacy Contract shows an overspend to date of £280k which is due to
the increase in practice payments and Medicines Use Reviews from 01 October
2008. As previously reported the forecast outturn will be £1.6 million overspent
due to the price increases although the impact of Category M price changes is
still unknown. Any savings will be offset against the Pharmacy overspend.
General Dental Services show an underspend to date of £410k, due to slippage
on development funds, and this will continue for the remainder of the year, with a
forecast outturn underspend of £750k. The procurement process is ongoing to
establish additional contracts in 2009, to ensure increased access to services.
4 PRACTICE BASED COMMISSIONING
PCT Aggregate Reporting
The table below shows the estimated aggregate performance of Practice Based
Commissioners (PBC). The trends are based on aggregate monitoring information
to Month 06 (September) received from Providers. The trend for Walsall Hospitals
NHST is also based, as per last month, on Month 06.
The reported level of uncoded activity at Walsall Manor Hospitals NHST remains
as per last month at 1.20% of the total actual cost. This will be updated once
Month 07 (October) information becomes available. It is highly likely that once
Month 07 Financial Monitoring Report Page 14
27 November 2008
coded correctly, a high proportion of this spend will be reassigned to PbR. This
anticipated transfer has been mirrored in the table below.
The table below shows performance against practice based commissioning
allocated budgets:
Annual Budget to Cost to Variance
Point of Delivery (POD) Budget Date Date
£000 £000 £000 £000
All Acute Providers*
PBR
Total Elective Inpatients 30,970 17,972 18,737 765
Total Non Elective Inpatients 51,736 29,935 30,498 563
Total Inpatients 82,706 47,907 49,235 1,328
New Outpatients 12,561 7,054 7,343 289
Follow Up Outpatients 11,169 6,738 6,867 130
Total Outpatients 23,730 13,792 14,211 419
Other 6,160 3,623 3,630 7
Total Other 6,160 3,623 3,630 7
PBC PBR Acute SLA Total 112,596 65,321 67,075 1,754
All Acute Providers*
NON PBR
Total Elective Inpatients 2,435 1,417 2,087 669
Total Non Elective Inpatients 833 481 504 23
Total Inpatients 3,268 1,898 2,591 692
New Outpatients 1,232 720 874 155
Follow Up Outpatients 1,957 1,231 1,451 219
Total Outpatients 3,188 1,951 2,325 374
PBC NON PBR Acute SLA
Total 6,457 3,849 4,915 1,066
Month 07 Financial Monitoring Report Page 15
27 November 2008
Prescribing
GP Prescribing Budgets 42,837 25,256 23,560 -1,696
Other Prescribing 76 45 41 -4
Practice Pharmacists 70 0 0 0
Sub Total 42,983 25,301 23,601 -1,700
Practice Pharmacists within
Pharmaceutical Schemes 400 233 241 7
Total Prescribing 43,383 25,534 23,842 -1,692
Total PBC 162,436 94,704 95,832 1,128
*Excluding Specialised Services
GUM Outpatients included above as per CBSA - although non attributable
5 NHS WALSALL MENTAL HEALTH SERVICES
Following the inception of the Dudley and Walsall Mental Health Partnership Trust
on 01 October 2008, Walsall tPCT will enter into a formal contractual relationship
with the new organisation and as a consequence, the internal monitoring of
performance which was formerly the subject of Appendix D is no longer
appropriate. The service level agreement for 2008/09 will operate on a block
contract basis. In order to facilitate this change, the tPCT has actioned the
technical adjustments outlined in Appendix A (Mental Health adjustments) to
ensure that the new organisation receives the block contract value over the
twelve month period of the service level agreement.
6 NHS WALSALL COMMUNITY HEALTH
The net financial position year to date is £477k underspend, which represents an
increase of £193k on the Month 06 figure.
This movement is due to:
- an under reporting of income in M06
- additional income in respect of clients in the Suttons Drive unit £65k
Month 07 Financial Monitoring Report Page 16
27 November 2008
- additional recharges to the mental health trust in respect of payroll, ESR and
informatics services
- further drawdown of non recurrent funding offsetting overspends in
corporate functions
- continuing underspend
Our forecast outturn remains within the range £0 to £200k underspend.
Expenditure plans are prepared to deliver this position, albeit these include
estimates in some areas and figures are still to be confirmed.
7 LEARNING DISABILITIES POOLED BUDGET
Appendix D shows the expenditure for the first seven months on the Learning
Disability Pooled Budget. The year to date position is shown as on line with an
initial forecast underspend of £232k, together with an additional £200k to be
returned to the fund from NHS Walsall Community Health. Of this, NHS Walsall’s
share would be £207k if this materialises.
8 BALANCE SHEET
Appendix E shows NHS Walsall’s balance sheet with associated notes.
Finance Department
18 November 2008
Month 07 Financial Monitoring Report Page 17
27 November 2008
