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					Board of Directors Meeting

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February 2009 8.1 Part 1 Finance and Activity Report for the period ending January 2009 Suzanne Tracey, Director of Finance and Business Development Suzanne Tracey, Director of Finance and Business Development Noting

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Title: Board of Directors Meeting Financial Report to end of January 2009 Date 25 February 2009

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Last Months

Change in Month

I&E year to date I&E forecast I&E year end forecast variance to budget/plan Income variance to date CRES variance to date Pay expenditure variance to date Non pay (incl. drugs) expenditure variance to date Cash at month end

8,818 7,125 695 244 -534 341 3,046 48,137

7,516 7,281 782 -778 -482 86 4,638 42,008

1,302 -87 -87 1,022 -48 255 -1,592 6,129

Overall the financial position of the Trust remains robust with a forecast year end position of £7.2m favourable. This is a comparable to that reported in month 9 of £7.3m. INCOME Forecast income has moved from an over recovery against budget of £3.3m in Month 9 to £1.5m in Month 10, this change is due to:  Orthopaedic income has deteriorated further this month by £1m, this is due to wards being closed and the number of additional sessions planned so as to meet the RTT target have not gone ahead as expected.  Women & Child’s Health’s forecasted income has also deteriorated by £0.7m. This reduction is due to 2 main reasons, the first being the expected income for SCBU has reduced. The second is Gynaecology position has deteriorated due to wards being closed because of the Noro-virus.

The forecasted position for Devon PCT has decreased to an expected over recovery of income against contract of £12.5m as compared to £13.3m in month 9. EXPENDITURE Expenditure forecast for month 10 is £0.6m adverse, which is an improvement by £1.5m to month 9’s forecast position. The reason for this is mainly related to the reductions in activity levels forecast as detailed above. Also anticipated spend on reserves has been reviewed and forecasted expenditure has benefited due to identified slippage in reserve commitments. CRES The Trust CRES plan is forecast to under achieve by £0.7m by year end. Schemes on Rosterpro (£0.25m) and Medical & Surgical Savings (£0.1m) are the most significant areas to not meet target savings, the remainder is shortfalls within Divisions. This position has been built into the Trust’s forecast financial position. CAPITAL Capital Expenditure at Month 10 was £5.3M, which is £12.7M below plan. The forecast to year end indicates that capital expenditure will be £10.3M below plan. The main reason for Page 2of 3 Title: Board of Directors Meeting Financial Report to end of January 2009 Date 25 February 2009

the fall in capital expenditure is due to slippage. Schemes that are forecast to slip by £0.8m or more are: Laboratory Information Management System (LIMS) (£0.84m), the Renal dialysis expansion (£0.96M), the nursery Scheme (£1M), Pharmacy system and Robot (£1.529M), Strategic investment fund (£2.7M) and other small schemes (£3.54M). This under spend represents a financial risk to the Trust around PDC as the Trust drew down £1M PDC in advance. This only becomes repayable if the Trusts capital Expenditure falls below an adjusted depreciation figure. Capital Expenditure is currently forecast to be £12.7M whilst the adjusted depreciation figure is £10.97M. Therefore the Trust needs to ensure capital expenditure does not fall below this level. The Capital Control Group has sought to mitigate this risk and has reviewed the position on all schemes with forecast expenditure greater than £20k. During the last 2 months £7.4M of capital spend is required and although there is a level of confidence in achieving this required expenditure there remains a risk of having to pay back PDC if any further slippage occurs. CASH Cash balance at Month 10 is £48M, which is £14.8M above plan. The variance is due to a capital under-spend and payment to creditors quicker than planned. The forecast year end cash balance is £36.76M which is £11.65M above plan. The majority of the overperformance is due to a forecast capital under-spend of £10.3M and a favourable movement in Capital Creditors of £2.9M. Due to the reduction in interest rates interest receivable will be below plan in the last quarter. However due to the over-performance in the first part of the year, interest receivable will only be £200K below plan at year end. ACTIVITY In overall terms, activity levels continue to perform above plan, in particular for non elective inpatients which were 7% above plan during January 2009. Elective inpatients continue to under perform, however this is offset by significant over performance on day case activity. During January, first outpatient attendances were 2% below plan and 9% lower than January 2008. Reasons for this underperformance are currently being examined. APPENDICES Appendix 1 – Finance Dashboard Appendix 2 – Activity Dashboard Appendix 3 – Income and Expenditure Account Appendix 4 – Balance Sheet Appendix 5 – Cashflow Statement Appendix 6 – Capital Expenditure Appendix 7 – Year to Date Surplus/Deficit by Directorate

Title: Board of Directors Meeting Financial Report to end of January 2009 Date 25 February 2009

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