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									                                                                                      Enclosure 5



                           NHS WALSALL PUBLIC BOARD

Subject                Revenue Budget Overview for 2011/12
Report From            Tony Gallagher, Interim Director of Resources & Performance
Date of Meeting        31 March 2011

AIM OF REPORT

This report outlines the NHS Walsall revenue budget for 2011/12. The budget is the
financial plan flowing from the Operating Plan for 2011/12.


EXECUTIVE SUMMARY

The report explains how the £480.1 million available to NHS Walsall in 2011/12 will be
utilised. NHS Walsall expects to spend £479.4 million and generate a surplus of £736k.
Reserves of £1.8 million are available to manage in-year risk.

The detailed budget book which sets out the budgets at individual cost centre level will be
available in May.


RECOMMENDATION(S)

The Board is recommended to approve the summary budget for 2011/12.

Board Action Required (please tick)            Approval [ ]     Assurance [ ]

IMPLICATIONS
Priorities (please tick)                      Comment
- Health Service not Illness Service   [ ]
- Evidence-based Excellence            []
- Alliances the Key to Success         [ ]
- Listening to Local People            [ ]
- True Choices, Accessible Services    [ ]
- Hitting the Hard Targets             []    This report explains the resources allocated to
                                              delivering the full range of the NHS Walsall’s
                                              priorities.
Risks                                          The budget sets out how financial targets will be
                                               achieved.      Monthly monitoring will enable
                                               corrective action to be taken if adverse variances
                                               appear.
Resource                                      The report sets out how the total resources
                                              available to NHS Walsall in 2011/12 will be
                                              deployed.
Environment                                   N/A
Equality Impact Assessment                    N/A
Engagement (eg PPI, Clinical, Non-Clinical)   N/A
Legal                                         N/A

     Revenue Budget Overview for 2011/12                                               Page 1
     31 March 2011
Timescales and Implementation                      For implementation for the financial year 2011/12.
Review                                             The 2012/13 budget will be presented in March
                                                   2012.

WCC COMPETENCIES
1 Locally lead the NHS                     [   ]   7    Stimulate the market                         [ ]
2 Work with community partners             [   ]   8    Promote improvement and innovation           [ ]
3 Engage with public and patients          [   ]   9    Secure procurement skills                    [ ]
4 Collaborate with clinicians              [   ]   10   Manage the local health system               [ ]
5 Manage knowledge / assess needs          [   ]   11   Ensuring efficiency/effectiveness of spend   [ ]
6 Prioritise investment

Author                                             Tony Gallagher
Director Checked (Initials)                        TG
Date Received by Board Secretary                   24.03.2011

All papers are subject to the Freedom of Information Act. Whilst it is intended that they may be released
into the public domain at a future date they may not be copied or distributed further without the written
permission of the Chairman of the Board. FOI exemptions 22 (Intended for future publication) and
exemption 41 (Duty of confidence) apply.




     Revenue Budget Overview for 2011/12                                                       Page 2
     31 March 2011
INTRODUCTION

This report:

         Outlines the assumed resources available to Walsall over the next 4 years
         Summarises the investment plans that flow from the Operating Plan for
          2011/12 and outlines the Forward Financial Plan to 2014/15
         Outlines the commissioning budgets that flow from the Operating Plan

There are a number of appendices to this report, as listed below:

Appendix 1           The Operating Plan 2011/12 – Programme Based Investment Plan
Appendix 2           Forward Financial Plan for 2011/12 to 2013/14
Appendix 3           Commissioning Budget 2011/12


S E C T I O N 1.0 - THE OPERATING PLAN 2011/12

This section describes the investment that flows from the 2011/12 Operating Plan
and outlines expenditure plans for the subsequent three years.


1.1        NATIONAL OPERATING FRAMEWORK 2011/12

On 15 December 2010 the Department of Health (DH) published the Operating
Framework for the NHS for 2011/12, the first full year of the transition to the
proposed new structure for the NHS. It states that the overarching goal is to build
strong foundations for the new system by:

         Maintaining and improving quality
         Keeping tight financial control
         Delivering on the quality and productivity challenge
         Creating energy and momentum for transition and reform.

Key points in the Operating Framework include:

         PCTs will receive on average 2.2% recurrent growth with additional 0.8%
          growth in non-recurrent funding (mainly for investment in social care).
         The £20bn efficiency challenge has now been extended by one year, up to
          the end of 2014/15. This adjustment follows the Spending Review, the two
          year pay freeze and the “deeper than originally modelled reductions in
          management and administration costs”.
         The national efficiency requirement in 2011/12 is 4% with an uplift for pay and
          price inflation of 2.5%. Prices for off-tariff services will be reduced by 1.5%.
         Tariff prices for 2011/12 also reflect the 4% efficiency requirement: 2% is
          embedded in tariff design with the remaining 2% offsetting the pay and prices
          uplift resulting in a final tariff adjustment of 0.5%.
         Hospitals will no longer be reimbursed for emergency readmissions within 30
          days of discharge following an elective admission in 2011/12. All other
          readmission rates will be subject to locally determined thresholds, with a 25
          per cent decrease desired where achievable.

    Revenue Budget Overview for 2011/12                                                 Page 3
    31 March 2011
            Providers will now be allowed to offer services below the published
             mandatory price, if both commissioners and providers concur.
            New commitments are announced on health visitors, family nurse
             partnerships, the cancer drugs fund, military and veterans’ health, autism,
             dementia and carer support.


  1.2         THE OPERATING PLAN 2011/12

  Appendix 1 to this report summarises the investments contained in the 2011/12
  Operating Plan. It shows how the additional resources available to Walsall are to be
  deployed. In determining the investment plan there is an expectation that all PCTs
  have a 2% recurrent underspend during 2011/12.

  In addition the Operating Framework required SHAs to implement arrangements to
  manage sustainable change within health economies. Consequently the West
  Midlands SHA has informed PCTs that they should plan for a non-recurrent
  contribution of 2% to a Strategic Change Reserve (SCR) in 2011/12.

  In terms of achieving the 2% recurrent surplus in 2011/12 the contribution of 2% to
  the SCR will fulfil these requirements.

  The changes from the initial investment plan are shown in the table below.

                                                             2011/12     2011/12
                                                               Initial     Final
Investment Category         Description                         Plan        Plan   Change
                                                                £000        £000      £000
Access                      Acute Activity Growth              1,720       8,200     6,480
                            Demand Management                 -3,092      -4,843    -1,751
                            Cost of service reprovision          962                  -962
                            Continuing Care                      400      -1,020    -1,420
Children’s                  Short breaks provision for
                            children with disabilities           100         100         0
Learning Disabilities       Learning Disability Growth           409      -1,000    -1,409
Mental Health               Continuing Care                      250         250         0
NICE                        New standards                        500       2,193     1,693
Palliative Care             Hospice Development                  900         500      -400
Inflation                                                     -4,842      -3,080     1,761
HRG Technical Changes                                                      2,525     2,525
Prescribing                                                    2,259       1,392      -868
Specialised Services        Specialised Services               1,297         797      -500
                            West Midlands Ambulance
                            Service                              139         139         0
Long Term Conditions        Social Care                                    3,874     3,874
                            Reablement Services                              814       814
Corporate Cost              To be agreed                      -1,050      -1,600      -550
Reduction
                            Gross Investment                     -48       9,240     9,289
                            Less use of recurrent reserves    -3,727      -2,291     1,436

                            Net Investment                    -3,775       6,949    10,725




    Revenue Budget Overview for 2011/12                                                 Page 4
    31 March 2011
Initial plans for 2011/12 had been made under the assumption that NHS Walsall
would not receive any growth in resources. The Department of Health notified PCTs
of their revenue allocations for 2011/12 in December 2010. NHS Walsall received an
uplift of 3%. In the light of this revised guidance NHS Walsall has invested £10.72
million more than the initial plan. This is predominantly due to the influence of six key
features:

1      The investment in the access programme is £6.4 million higher than planned.
       This reflects the recurrent cost of the forecast over performance on Acute
       contracts in 2010/11. This cost has been mitigated by the adoption of QIPP
       programmes particularly around long term conditions, services for the frail
       elderly and continuing care totalling £4.1 million.

2      Investment in Learning Disabilities is £1.4 million less than planned.
       Following the approval of the 2010/11 budget, a savings target of £1.0 million
       was set against this budget. The reduction in planned investment reflects the
       achievement of this target in conjunction with a revision to pool growth
       assumptions in 2011/12.

3      NICE technologies – an additional £1.7 million is identified in 2011/12 to fund
       the impact of NICE recommendations and cater for the contribution to the
       Cancer Drugs Fund.

4      Inflation is £1.8 million more than planned which follows the adoption of the
       revised tariff planning assumptions. Initial plans were based on a net
       decrease of 2% whereas the tariff has been deflated by 1.5%. In addition,
       HRG technical changes has accounted for a further £2.5 million.

5      Investment in Social Care and Reablement services has been increased by
       £4.7 million following the notification of earmarked funding to support the
       delivery of social care in 2011/12.

6      Investment in prescribing is £870k less than planned. NHS Walsall had
       initially planned to increase investment by 5% on the 2010/11 budget.
       Expenditure during 2010/11 is £400k less than planned and following SHA
       benchmarking prescribing growth has been revised to 4%.


1.3   FORWARD FINANCIAL PLAN FOR 2011/12 TO 2014/15

The Department of Health notified PCTs of their revenue allocations for 2011/12 in
December 2010. NHS Walsall received an uplift of 3% comparable with the majority
of PCTs.

Indicative allocations beyond 2011/12 have not been issued and as a consequence
in drawing up the plans for Years 2 to 4 it has been assumed that NHS Walsall will
receive an allocation uplift of 2.5% in year 2 and 2.2% uplift per annum thereafter.

In accordance with National guidance the PCT is planning to break even by 2014/15.
In so doing, the PCT will have a planned recurrent surplus of £11 million (equivalent
to 2%) by 2014/15, offset by non-recurrent expenditure of £11 million.




 Revenue Budget Overview for 2011/12                                                   Page 5
 31 March 2011
The non-recurrent surplus carried forward into 2011/12 is £5.0 million. It is estimated
that this will be fully utilised over the planning period.

NHS Walsall has a planned contingency reserve of £1.8 million in 2011/12.

The Forward Investment Plan is shown in Appendix 2.

The key features are as follows:

Planning Assumptions

This section provides an overview of the key planning assumptions.

      Inflationary uplifts – the SHA assumption in respect of national tariff based
       inflation remains as an increase of 2.5% per annum over the planning period.
       This rate has been used as a proxy for all NHS contracts and as a
       consequence the majority of NHS Walsall’s commissioning portfolio is subject
       to this uplift.
      Local CQUIN and provision for increased complexity – the PCT has made
       provision for an increase in local CQUIN schemes in conjunction with an
       allowance for increased complexity in healthcare provision leading to an
       incremental increase of 1% in 2012/13 to 2014/15. It is envisaged that this
       funding will be split 50:50 between increased complexity and local CQUIN
       schemes. Resources earmarked for local CQUIN schemes would not form
       part of the recurrent baseline but would be available non-recurrently each
       year to deliver specific and tangible quality improvements.
      Efficiency – in recognition of the fact that the settlement was generous
       relative to other departments, the NHS faces efficiency challenges to cope
       with demographic changes, the cost of new technology and the health
       services higher level of inflation. The expectation has been revised to an
       annual 4% efficiency requirement over the planning period.
      Primary Care and Prescribing – the SHA has not issued inflation assumptions
       for Primary Care contractors, therefore, the net inflation and efficiency
       requirement remains at 1% per annum. Primary care prescribing volumes
       and price uplift is assumed at 7% with an efficiency requirement of 3%
       resulting in a net increase of 4% per annum.
      2010/11 Outturn in year changes and tariff changes – the financial plan
       assumes that the recurrent impact of the 2010/11 forecast outturn is funded.
       The revised tariff has now been issued and its implications are reflected in the
       revised plan.

Investment Assumptions

      Growth in acute services, inclusive of the recurrent impact of the forecast out-
       turn, equates to year on year growth of 3% above planned levels. This
       assumption is supported by a public health briefing document which has
       suggested that growth in demand for health services could be in the range of
       1.5% to 3% per annum over the planning period with the major determinants
       being demographic change and the ageing population.
      Acute demand management – following the involvement of the Chairs and
       Chief Executives of NHS Walsall and Walsall Hospitals Trust, agreement has
       been reached with regard to the formulation of QIPP programmes over the
       planning period. The net impact is a reduction of £13m over the planning


 Revenue Budget Overview for 2011/12                                                 Page 6
 31 March 2011
       period after an allowance has been made for the estimated costs of re-
       provision.
      Continuing Care – the plan includes an increase of £450k in 2011/12 and
       £650k thereafter to reflect increases in client numbers.
      Learning Disabilities – growth of £200k in 2011/12 and £400k thereafter has
       been identified. This level of investment is less than historic trend growth and
       reflects the impact of the challenging efficiency programme formulated in
       conjunction with the local authority.
      Social Care – NHS Walsall has been notified of the funding earmarked to
       increase investment in social care - £3.8m has been identified in 2011/12 with
       an additional £1.0m in 2012/13 with an expectation that the £4.8m will be
       made available recurrently.
      Reablement Services – Additional investment of £814k is planned in 2011/12
       and 2012/13 to support the development post discharge Reablement
       services.
      Increase in Health Visitors – the Operating Framework outlines a commitment
       to increase the number of Health Visitors by 4,200 nationally. NHS Walsall
       has been informed its proportionate share would be an increase of 35 staff
       over the planning period. Additional investment of £350k per annum is
       identified over the three year period 2012/13 to 2014/15.
      Short breaks for children with disabilities – an additional £100k is identified in
       2011/12 to complete the investment programme in this area.
      NICE technologies - £1.2m is identified in 2011/12 to fund the impact of NICE
       recommendations and cater for the likely impact of the Cancer drugs fund.
       An additional £800k per annum is identified thereafter.
      Hospice development – an additional £500k is committed to fund the
       additional revenue consequences of opening the new Palliative Care Centre.
      Specialised Services – investment of £797k has been identified in 2011/12
       which reflects the impact of QIPP programmes in that financial year. Trend
       growth of between £1.4m and £1.5m has been included in year 2 to 4 of the
       plan.
      West Midlands Ambulance Service shows an additional investment of
       approximately £350k over the planning period.
      Management costs reflect the target reductions of £1.6m in 2011/12 and a
       further £634k in 2012/13 and 2013/14. The target reductions are currently
       being revised whereby future savings will be based on a proportion of total
       PCT running costs rather than upon the strict management cost definition.
       Definitive guidance from the Department of Health is awaited.

Non Recurrent Expenditure Plans

      The PCT has identified 2% of its recurrent baseline to support the SHA
       strategic change initiative over the planning period. The PCT has submitted
       bids to access this funding to support the transitional costs associated with
       the implementation of QIPP schemes across the health economy.
      Commissioning capacity is enhanced by £250k in 2011/12.
      Palliative Care Centre – a reserve of £500k per annum is identified to support
       any potential shortfall in funding from our partner organisation.
      GP Consortium Support – a reserve of £500k has been identified to support
       the development of the emergent GP Consortium arrangements.




Revenue Budget Overview for 2011/12                                                    Page 7
31 March 2011
S E C T I O N 2 - RESOURCES AVAILABLE – 2011/12

This section outlines the resources available to NHS Walsall for 2011/12

The recurrent allocation for 2011/12 is £449,408k.

In addition, NHS Walsall anticipates the receipt of a number of non-recurrent
allocations totalling £30,697k detailed in the table below. The total resources
available to NHS Walsall in 2011/12 are £480,105k

 Non-Recurrent Allocations                                                 £000

 Out of Hours Development Growth                                           488
 Premises Development                                                      730
 Smoking Cessation                                                         273
 Wolverhampton PCT Rebasing                                                130
 Sandwell and West Birmingham Rebasing                                      34
 DPSD                                                                       70
 Centrally Funded NSCAG Budget                                          -1,481
 Prisoners                                                                 -68
 QOF                                                                     5,206
 Home Oxygen Service                                                       172
 TILT                                                                       72
 OLS adjustment                                                           -776
 Transfer to Local Authorities for Learning Disabilities                -6,302
 General Ophthalmic Services                                             3,480
 Pharmaceutical Services 2011/12                                         4,201
 Primary Dental Service Allocations                                      9,993
 Support for Joint Working between Health and Social Care                3,874
 Cancer Drugs Fund                                                        -744
 Pooled Drug Treatment Budget 2011/12                                    2,474
 Free School Fruit Scheme                                                 -223
 Fluoridation                                                              -90
 Equitable Access GP Practices                                           3,300
 Central Bundle                                                          1,069
 Clinical Excellence Awards 2011/12                                         52
 Charges for exempt overseas visitors                                     -237
 Revenue Resource c/fwd                                                  5,000

 TOTAL                                                                 30,697



These allocations comprise the majority of what NHS Walsall expects to receive in
2011/12.


S E C T I O N 3 - BUDGET 2011/12

The revenue budget for 2011/12 totals £479,368k. NHS Walsall has a planned
surplus of £736k.

The budget is summarised in Appendix 3.




 Revenue Budget Overview for 2011/12                                              Page 8
 31 March 2011
3.1     CORPORATE MANAGEMENT

The Operating Framework specified that the overall running costs of the “NHS
superstructure” will reduce by one third. This includes a 45% reduction in
management costs detailed in the White Paper. The expectation is that GP consortia
will have an allowance for running costs in the range £25 to £35 per head by
2014/15. Although definitive guidance has not been issued, the PCT is planning cost
reductions of £1.6 million in 2011/12 and £0.6 million in 2012/13 and 2013/14 in order
to meet this target.

In order to meet the efficiency requirements outlined in the national tariff, an
additional cost improvement programme of £220k is required to remain within
available resources.

The corporate budgets for commissioning are:

                                                                              £000


Board. PEC, Executives and Support Staff                                     1,799
Partnerships                                                                 1,498
Transformation                                                                 873
Resources and Performance                                                    3,490
Corporate Development                                                          541
Public Health                                                                1,183
Estates                                                                        768
Sub Total                                                                   10,153
Corporate Services transferred under TCS                                       -67
Planned efficiencies to meet cost reduction target                          -1,600
Additional cost improvement programme                                         -220

Total                                                                        8,266




These budgets reflect a reduction for those services utilised by the Provider arm
which have now transferred as a consequence of Transforming Community Services
(TCS), including procurement services.


3.2     SPECIFIC PROGRAMMES

Funding for Drug and Alcohol misuse services totals £2,753k in 2011/12, of which
£2,474k represents the anticipated allocation from the National Treatment Agency.

The budget for Coronary Heart Disease has been rolled forward into 2011/12
whereas investment in HIV services has increased by £300k to reflect the increased
drugs costs at the Walsall Hospitals NHS Trust.

Funding for Palliative Care services now totals £4,028k, which includes recurrent
investment of £2,269k to open the Walsall Hospice and provide Community Palliative
Care services. In addition, non-recurrent funding of £500k has been identified to
support the potential shortfall in funding received from the PCT’s partner
organisation.

 Revenue Budget Overview for 2011/12                                                 Page 9
 31 March 2011
The Cancer line includes reserves earmarked for the potential impact of NICE
recommendations in 2011/12. In practice, these recommendations include all drugs
excluded from the national tariff and cover a wider remit than cancer drugs. In
determining the 2011/12 contracts, the high costs drugs have been allocated to
individual acute providers to reflect the recurrent impact of drugs exclusions. In
addition, a contribution of £744k has been made towards the Cancer Drugs Fund.


                                                                           £000


 2011/12 Recurrent Startpoint                                             1,010

 Recurrent Impact of 2010/11 forecast outturn                               649
 Estimated Growth in 2011/12                                              1,244
 Transfer of excluded drugs to Acute Contract                              -942
 Contribution to Cancer Drugs Fund                                         -744

 Total                                                                    1,217

The Diabetes and Sexual Health programmes have been rolled forward into
2011/12.


3.3      PUBLIC HEALTH AND HEALTH PROMOTION

In 2011/12, the budget for this programme area is £4,934k of which £3,134k is
assigned to Choosing Health, £847K to Health Promotion services and £633k to
Smoking Cessation services.


3.4      HEALTH INFRASTRUCTURE

This programme area includes NHS Walsall’s Information Technology budgets,
Financing Items and Estates budgets.

The budgets for IT and Estates Services are £1,767k and £340k respectively. This
follows a reassessment of services provided to the former Community provider arm;
the net budgets have been reduced to reflect increased recharges in these areas.

Financing Items includes the budgets for capital charges, reserves to manage risks
and approved developments which at this stage have not been allocated to individual
contracts or programme areas.

The detailed budgets contained within financing items are shown below:




 Revenue Budget Overview for 2011/12                                              Page 10
 31 March 2011
                                                                              2011/12
 Financing Items                                                              Budget
                                                                                 £000

 Capital Charges                                                               -1,134

 Recurrent Reserve                                                              1,789
 Cancer Network Funding                                                            70
 Development of Reablement Services                                               814
 Goscote Capital Charges                                                          180
 Vascular Checks                                                                  165
 Enhanced Stroke Care Pathway                                                     169
 Advocacy                                                                          10
 National Bowel Screening Programme                                               123
 Targeted Community MRSA Screening                                                250
 Community Based Genetic Counsellor Service                                        75
 Short Breaks for Children with Disabilities                                      450
 Death Overview Panel                                                              35
 Increase Cervical and Cancer Screening Programmes                                 48
 Medical Negligence                                                               180
 SAFE Project                                                                      14
 Walsall Partnership                                                              100
 COPD                                                                              90

 Non- Recurrent Plans
 Hospice Support                                                                  500
 Contribution to Strategic Change Reserve                                       9,200
 Commissioning Support Posts                                                      250
 GP Consortium Support                                                            500
 Adjustment for EAPMC Additional Funding                                        1,113
 Anticipated Slippage on Reserves                                                -145


 Total                                                                         14,847




3.5      ACUTE CONTRACT PORTFOLIO

At the time of writing NHS Walsall has reached contractual agreement with Walsall
Hospitals NHS Trust and Royal Wolverhampton Hospitals. NHS Walsall is on track
to sign off its contracts by the deadline of 31 March 2011. A reserve of £200k is
being held to ensure contractual agreements are secured.

The tariff for Acute services has decreased by 1.5% comprising a gross tariff uplift of
2.5% offset by efficiencies of 4%. Investment in CQUIN remains at 1.5%. NHS
Walsall has increased recurrent investment in Acute services by approximately £5.8
million net of demand management schemes. In so doing, NHS Walsall has ensured
that the recurrent impact of 2010/11 forecast outturn is provided for to enable the
maintenance of the 18 week referral to treatment target.

A schedule of contractual arrangements is shown below:




 Revenue Budget Overview for 2011/12                                                Page 11
 31 March 2011
Local Acute Contracts                                SLA
                                                     Value       CQUIN        Total
Trust                                                £'000        £'000       £'000

Walsall Hospitals NHS Trust                          *129,791       1,947      131,738
Royal Wolverhampton NHS Trust                          19,688         295       19,983
Sandwell & West Birmingham Hospitals NHS Trust          7,254         109        7,363
Robert Jones and Agnes Hunt                               197           3          200
Shrewsbury and Telford NHS Trust                          121           2          123
Worcester Acute NHS Trust                                  52           1           53
University Hospitals Coventry and Warwick                 205           3          208
Burton Hospitals                                          159           2          161
Cost and Volume Reserve                                   382           6          388
Urgent Care Development and Reserve                       697          10          707
Birmingham Women’s Hospital Trust                         178           3          181
Birmingham Children’s Hospital NHSFT                    2,452          37        2,489
Heart of England NHSFT                                  6,776         102        6,878
Royal Orthopaedic Hospital NHSFT                        1,855          28        1,882
University Hospital Birmingham NHST                     5,614          84        5,698
Dudley Group of Hospitals NHS Trust                       464           7          471
Mid Staffordshire Foundation Trust                      1,021          15        1,036

Total                                                 176,906       2,654      179,560


This is shown by contract agreement below.

* Please note the value of the Walsall Hospitals contract is higher than the budgetary
provision detailed in Appendix 3 as elements of this contract are assigned to
individual programmes.

Specialised Services
Specialised Services including the provision of Ambulance Services                are
commissioned on NHS Walsall’s behalf by a specialist commissioning team.

Following a review of the Specialised Services portfolio, an additional £61k of
services will be commissioned by the specialist commissioning team. This reflects
the transfer of Oncology and Neurology services to local contracts offset by the
transfer of the commissioning responsibility for cystic fibrosis and mental health
services for the deaf to the specialised commissioning team.

This primarily affects contracts with Royal Wolverhampton, Heart of England,
University Hospitals Birmingham and Birmingham and Solihull Mental Health
Foundation Trust.

A reserve of £768k is being held to fund the likely consequences of a rebasing
exercise to be undertaken in 2011/12 which will reflect historic usage over the last 3
years.




 Revenue Budget Overview for 2011/12                                                  Page 12
 31 March 2011
 Specialised Services                                                       £000


 Tier 1 Services Recurrent Startpoint                                     20,338
 Transfer to Local Contracts                                                -109
 Revised Recurrent Startpoint                                             20,229

 Tier 2 Services                                                          13,487
 Transfer from Local Acute Contracts                                         170
 Total                                                                    13,657

 Reserve for potential consequence of rebasing                               768

 Grand Total Specialised Services                                         34,654


The service level agreement for Ambulance Services has not been agreed at the
time of writing.

The breakdown of the existing offer is shown below:


                                                                            £000


 Walsall Recurrent Startpoint                                              7,545
 2011/12 Growth                                                              139

 Total Contract Offer 2011/12                                              7,684




In addition, NHS Walsall is holding a modest reserve of £50k to assist in the
management of any contract over-performance and secure contractual agreement in
2011/12.


3.6      NON ACUTE SERVICES PORTFOLIO

The majority of community and mental health services are provided by NHS Walsall
Community Health and Dudley and Walsall Mental Health Partnership Trust
respectively.

NHS Walsall has secured agreement with both providers and the financial aspects of
the agreements are summarised in the tables below:




 Revenue Budget Overview for 2011/12                                           Page 13
 31 March 2011
NHS Walsall Community Health               Recurrent       Non          Total
                                                         Recurrent
                                              £000         £000         £000

SLA Value 2011/12                              32,443          171          32,614

Made up of:
Main SLA                                       28,318          145          28,464

Additional Estate                                 417            0             417
Additional IM&T                                   168            0             168
Total Main SLA 2011/12                         28,903          145          29,048

Recharges to Other Service Areas

Palliative Care                                   652            0             652
GMS LES                                           224            0             224
Sexual Health BCCSP                               111            0             111
Corporate Costs                                   171            0             171
Lifestyles                                      2,013            0           2,013
Smoking Cessation                                 282            0             282
Other Services                                     88           26             114
Total Recharges for Additional Services         3,540           26           3,566

Total SLA 2011/12                              32,443          171          32,614


The table above summarises the agreed contract value for Community Services prior
to the impact of Transforming Community Services (TCS).               Following the
implementation of TCS from 01 April 2011, the majority of Community Services will
transfer to the new Integrated Acute and Community Provider within Walsall. As a
consequence, a combined contract which reflects this change will be operational in
2011/12. The in-year financial reporting of this contract will be based on the table
below.

                                                                     £000

 Walsall Hospitals Acute Trust Agreed Contract 2011/12          131,738
 Less Recharges to Other Service Areas
 HIV and TTO Drugs                                               -1,370
 Sexual Health Services                                            -156
 Other Services                                                    -262
 Total Acute Contract                                           129,950

 Total Community Provider Agreed Contract 2011/12                32,614
 Less Total Recharges for Additional Services                    -3,566
 Total Community Provider                                        29,048

 Total Combined Monitoring Value                                158,998




 Revenue Budget Overview for 2011/12                                                 Page 14
 31 March 2011
The agreement with Dudley & Walsall Mental Health Partnership Trust is
summarised below:

                                                    Dudley & Walsall MH
                                                     Partnership Trust
                                                           £000

Startpoint 2011/12                                                 27,377
CQUIN at 1.5%                                                         413

Total Contract Value 2011/12                                       27,790




Other Non-Acute Contracts
NHS Walsall has not finalised agreement with the remainder of its community and
mental health providers although the budgets identified reflect the latest position.
The contracts affected are:

 Non Acute Providers                                                           £000


 Wolverhampton City PCT                                                       1,798
 Heart of Birmingham PCT                                                         95
 South Birmingham PCT                                                            97
 BEN PCT                                                                         94
 South Staffordshire PCT                                                        310
 Sandwell PCT                                                                   172
 Non NHS NCAs and reserves                                                      609
 Demand Management Reprovision Costs including Frail Elderly                    970
 Support for Joint Working between Health and Social Care                     3,874
 Birmingham Community Trust Dental Services                                     788

 Sub Total Community Providers                                                8,807

 Mental Health Providers
 Sandwell Mental Health & Social Care Trust                                      75
 Solihull Care Trust                                                            358

 Foundation Trusts
 Shropshire and South Staffordshire Healthcare Foundation Trust                 140
 Birmingham and Solihull Mental Health Foundation Trust                         176

 Sub Total Mental Health Providers                                              749


 Total Other Non-Acute Providers                                              9,556

A reserve of £970k is being held to enable the delivery of the frail elderly business
case. This will enable the delivery of the QIPP scheme which will reduce the number
of Non Elective admissions to Walsall Hospitals NHS Trust by providing specialist
community teams to support clients at home.

Following the Transformation of Community Services (TCS), a new contract has
been let for the provision of dental services at Birmingham Community Trust.




 Revenue Budget Overview for 2011/12                                              Page 15
 31 March 2011
The increased provision for social care is included within this area pending
agreement with the Local Authority. The majority of this funding is likely to be
committed on such areas as Reablement Services, Telehealth and care support.

There remains an outstanding risk of approximately £50k in reaching final contractual
agreement.


Continuing Care and Free Nursing Care
The total funding available for 2011/12 for Continuing Care and Funded Nursing Care
is £15,935k, which can be analysed as follows:

                                                                                 £000


 2011/12 Startpoint                                                            16,256
 2010/11 Recurrent Saving                                                      -1,000
 2011/12 Growth                                                                   450
 2011/12 Inflation                                                                229

 2011/12 Total Funding                                                         15,935


This budget has been underspent throughout 2010/11 and is forecast to underspend
by approximately £1.0 million by year end. The majority of this underspend relates to
care packages for children and mental health clients, and is due to a reduction in the
number of high cost out of borough placements. This reduction is expected to
remain due to the policy to provide care for clients closer to home wherever possible,
and therefore the budget has been reduced by £1.0 million to reflect this change. A
development addition of £450k has been allocated to meet costs due to growth in
client numbers and a further increase of £229k has been earmarked to meet inflation
costs. The table below analyses funding across the client groups.


                                                                                     Budget
              2010/11       Current      Internal                                      Total
              Budget     Commitment     Transfer    Savings    Growth    Inflation   2011/12
                 £000          £000         £000       £000      £000        £000       £000

 Children’s
 (inc
 CAMHS)         2,164          1,340                   -650         26         23       1,563
 Mental
 Health         4,454          3,768                   -350         70         62       4,236
 Physical
 Disability     7,162          7,958         500                   354        115       8,131
 Funded
 Nursing        2,476          1,869        -500                               30       2,006
 Care
 TOTAL         16,256         14,935           0     -1,000        450        229     15,935


The table shows that when comparing the funding available to current commitments,
there is an overall balance of £770k (excluding inflation funding) to meet the costs of
new care packages agreed in 2011/12. This will need to be managed across the


 Revenue Budget Overview for 2011/12                                                 Page 16
 31 March 2011
whole service area, rather than by client group, and will continue to be monitored
closely throughout the year.

Learning Disabilities
Total funding available for Learning Disabilities is £10,002k the following table
analyses this allocation in detail:

                                                  Contribution    Reserves         Total
                                                    to Pool
                                                     £000            £000          £000

 2010/11 Startpoint                                      17,654          539      18,193
 Savings Target 2010/11                                    -870         -330      -1,200
 Adjustment for Overheads                                -1,200                   -1,200
 Transfer of responsibility
  – Health to Local Authority                            -6,302                   -6,302
 Growth 2011/12                                                             200      200
 Inflation 2011/12                                                          249      249
 TCS Adjustment                                                              62       62

                                                          9,282             720   10,002


As outlined during 2010/11, responsibility for Learning Disability social care funding
and commissioning transferred from the NHS to Local Authority under DH policy, and
as a result, resources have transferred between the two bodies, at a total of £6,302k
– this transfer is revenue neutral, as the PCT contribution to the Pooled Budget has
reduced by an equivalent amount. Service commissioners embarked on an
ambitious programme to achieve savings across all service elements in 2010/11, and
the PCT has benefited by approximately £870k as a result of this. In addition, growth
in client numbers has been lower than experienced in previous years, and this,
together with savings on inflation, has resulted in further savings of £330k being
delivered. This trend is expected to continue, and therefore further in-year savings
are anticipated on the £200k earmarked for growth in 2011/12. A further £249k has
been identified for inflation in 2011/12 and a budget adjustment of £62k has been
made relating to contract changes for medical staff.

Intermediate Care
The budget for intermediate care including telemedicine is £2,953k. This includes
provision for the Integrated Equipment Store of £568k. Funding in respect of the
Rapid Response Team of £340k is now included in the integrated Walsall Acute and
Community contract following the implementation of TCS.



3.7      PRIMARY CARE

Prescribing
The total resources identified for prescribing in 2011/12 is £56,759k of which
£46,580k is set aside for drugs in Primary Care. The budget for primary care
prescribing comprises the following and is essentially based upon 2010/11 forecast
outturn plus 4% to cover the impact of inflation and volume growth:




 Revenue Budget Overview for 2011/12                                                Page 17
 31 March 2011
                                                                               £000


GP Prescribing                                                               45,322
Out of Hours and other local services                                           120
Sub Total Drugs                                                              45,442

Central Top Slice                                                               972
Contingency Practice Pharmacists                                                 86
Scriptswitch                                                                    114
Administration Fees                                                             230
Nutricia Rebate                                                                -264

Total Prescribing Budget 2011/12                                             46,580


The budgets for Pharmaceutical schemes and the Pharmacy contract are £2,036k
and £8,143k respectively. The pharmaceutical schemes budget has been reduced
by £100k to reflect the reduced costs of the TTO drugs in the Acute sector.

The funding for the pharmacy contract has been increased to £4,201k following the
devolution of Department of Health Central funds to PCTs to meet the costs of the
global sum, establishment and repeat dispensing fees.

General Medical Services
Total resources of £36,592k are available for Primary Care GMS services in 2011/12
and are analysed in the table below:

                                                                               £000


 Global Sum/MPIG                                                             14,630
 Quality and Outcomes Framework (QOF)                                         5,745
 Enhanced Services                                                            5,833
 GP Appraisal and Training                                                      291
 Premises                                                                     6,612
 Out of Hours                                                                 1,735
 IM&T                                                                           793
 PCO Admin                                                                      893
 Other                                                                           60

 Total                                                                       36,592


NHS Employers and the General Practitioners Committee (GPC) have now agreed
changes to the GMS contract for 2011/12. In recognition of the general state of
public finances and the efficiency contribution expected of General Practice, it has
been agreed that there will be no uplift to GP net pay in 2011/12. The overall value
of GMS contract payments will rise by 0.5%, to support practices in meeting the costs
of increased expenses including pay increases for employed staff with a full time
salary of less than £21,000 – this is in line with the agreement for NHS Staff on


 Revenue Budget Overview for 2011/12                                              Page 18
 31 March 2011
Agenda for Change contracts. The uplift on contract payments will be delivered
through a 2.53% increase in the value of a QOF point (from £127.29 to £130.51).
The efficiency target of £200k for Out of Hours services, set in 2010/11 remains and
it is hoped that this will be met through the procurement exercise no ongoing.

PMS and APMS Contracts
Total funding of £8,480k is available for these contracts, and is analysed as follows:

                                                                                 £000


 PMS                                                                             2,740
 APMS                                                                            1,919
 EAPMC                                                                           3,821

 Total                                                                           8,480


All PMS contracts have now been renegotiated and the savings target of £300k set in
2010/11 has been achieved on a recurring basis. The contracts negotiated under the
EAPMC initiative are now entering their third year, when the payment mechanism
based on patient list size is implemented. As a result, since patient numbers remain
at lower than anticipated levels, savings are anticipated, but final confirmation of the
allocation is awaited, as there is potential for the allocation to be reduced to take
account of this.

Other Primary Care allocations
Total funding of £679k is available for other Primary Care services in 2010/12 and
will be used to fund services agreed by practice based and primary care
commissioners.

General Dental Services (GDS)
In 2011/12, NHS Walsall will receive an allocation of £9.993 million to fund the cost of
general dental services. This funding represents an increase of approximately £201k
on the original 2010/11 allocation, and this will be used to meet uplifts on contract
payments agreed nationally, with any surpluses utilised to commission additional
services.

General Ophthalmic Services (GOS)
In 2011/12, the PCT will receive an allocation of £3,480k to meet the costs of general
ophthalmic services. Based on the 2010/11 forecast outturn, this is sufficient to meet
the level of costs incurred. This area will continue to be closely monitored throughout
the year in order to establish a trend and refine monitoring processes.


CONCLUSIONS

The 2011/12 budget leaves NHS Walsall with a planned surplus of £736k in
conjunction with a contingency reserve of £1.8 million. As a consequence, there is a
minimal risk to NHS Walsall meeting its statutory break even duty.


Tony Gallagher
Interim Director of Resources & Performance


 Revenue Budget Overview for 2011/12                                                 Page 19
 31 March 2011

								
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