Meeting of Lanarkshire NHS Board
Lanarkshire NHS Board 14 Beckford Street
27 April 2011 Hamilton ML3 0TA
Telephone 01698 281313
Fax 01698 423134
SUBJECT: FINANCE REPORT FOR THE PERIOD ENDED 31 MARCH 2011
The attached report briefs the NHS Board on the provisional financial outturn for 2011/12.
2. CONTENT/SUMMARY OF KEY ISSUES
To achieve the Board’s objectives while still living within available funding the 2010/11
financial plan had to deliver £17.100m of efficiency savings and utilise £4.469m of the
brought forward surplus. This plan left the Board with £7.600m of retained surplus at the
end of the year (0.76%) which is fully committed over 2011 to 2013.
The first cut of figures indicate that all financial targets have been achieved. Year end
timetable is extended to allow the SGHD submission to reflect the latest available
information and minimise the risk of further movements between that position and the
annual accounts. At the time of writing the normal financial analysis has not been finalised
and this will be reported verbally to the Board on 27 April.
A full report on the Board’s achievement of efficiency targets for 2010/11 is included in this
The NHS Board are asked to note the contents of the report.
4. FURTHER INFORMATION
For further information or clarification of any issues in this paper, please contact:
Laura Ace - Director of Finance
Director of Finance
20 April 2011
FINANCE REPORT FOR THE PERIOD ENDED 31 MARCH 2011
1.1. The purpose of this report is to brief the NHS Board on the provisional outturn for
the financial year 2010/11 and give a detailed account of the Board’s achievement of
2.1. The 2010/11 financial plan set out a year end recurring surplus of £0.552m alongside
a non recurring over spend of £5.021m. When added to the confirmed cumulative
surplus of £12.069m at 31 March 2011, this will leave NHS Lanarkshire with £7.600m
of accumulated funds for use in 2011/12 and beyond.
2.2. Key to achieving this is the ability to deliver £17.100m of efficiency savings including
prescribing efficiencies which will offset primary care prescribing growth. At the year
end £16.258m had been achieved against the delegated cash releasing targets of
£15.000m. In addition to this the CHPs delivered a significant underspend and
divisions managed their financial position without calling down various
supplementary funding reserves such as £2.500m set aside for incremental drift.
These underspends have cushioned the Board against the increased prescribing
costs and allowed the Board to take forward invest to save and risk reduction
initiatives. The single largest of these was the voluntary severance scheme which will
make a substantial contribution to delivering the workforce reductions required in the
2011/12 savings plans whilst maintaining the guarantee of no compulsory
2.3. Price fluctuations across a wide range of drugs have made the monthly forecasts of
the potential year end overspend difficult and this area has been kept under constant
review in the financial plan. The latest figures, based on the month 10 information,
show the highest potential overspend yet.
2.4. Work has continued right up to the year end in progressing the voluntary service
scheme with additional funds been applied to support the later agreements. The
payback period now stands at around 1.5 years.
2.5. The late start on Airdrie combined with a revenue to capital transfer in the final
quarter to facilitate additional essential equipment and dental surgery adaptations
means the capital expenditure was weighted towards the final months. The final
invoices and valuations are still being assessed but it is anticipated the Board will
meet the CRL target agreed with SGHD.
3.1 The Board has both a HEAT target and an internal target to meet in terms of
efficiency. Delivering the internal target will ensure we meet the HEAT target.
3.2 The Board has over achieved against it’s the target for specific cash releasing
schemes savings targets and has generated non recurring savings over and above
these due to actions taken to prepare for 2011/12. Any such savings generated are
being used to support prescribing and other pressures, risk reduction, invest to save
measures or workforce reprofiling.
3.3 A full schedule of what was achieved is attached as annex A. Most schemes delivered
as expected. Two involving greater public engagement, X ray and out of hours, were
not able to be progressed to the level originally envisaged. Some of the IT enabled
schemes proved more complex and took longer to implement. Procurement savings
proved particularly difficult to track as while product switches could be demonstrated
unrelated changes in product mix and price changes on other products made it
difficult to see the clear bottom line effect. Both in e-health and supplies spend,
compensating non recurring savings were found to substitute.
The Board is asked to note:
• That the first draft of the figures indicate the Board has met all its financial
targets for the year;
• The year end achievement against the individual savings schemes.
DIRECTOR OF FINANCE
20 April 2011
NHS Lanarkshire ANNEX A
Progress Against Savings Plans 31st March 2011
Scheme Lead Actual
Status Scheme Title CRES Plan
No. ED 2010-11
1 D Implement key elements of COPD pilot RL 200 200 200 Service designed and staffed appropriately. Financial plan amended.
Process streamlined. Staff redeployed. Budget adjusted. Mechanism for
2 D Streamline Discharge Process RL 124 124 125
adjusting for cost containment element ( £51k) agreed.
Stand down 16 Surgical beds at
3 D RL 300 300 300 Operating successfully without beds in quieter months.
Monklands in quieter months
4 P Review of continuing care bed provision RL Engagement, option appraisal and business case development under way
5 P Review X Ray Provision RL 100 Scheme start delayed due to consultation requirements.
Reduce duplicate and unnecessary lab Business case incorporating savings from 2011 approved. LIMS contract
6 I RL
tests using LIMS awarded. Order comms being implemented 2011/12.
7 I-D Reduce Laboratory Activity RL 50 50 50 Guidance distributed on targeted tests. Being monitored on a monthly basis
8 D Review Acute management structure RL 40 40 40 Savings removed from budget
Posts have been identified across the division and been removed from
A&C 3% Budget Reduction - Acute
9 D RL 406 406 406 budget.Reviewed on a monthly basis to ensure no backfill from additional
Mechanisms in place to control and monitor. Non recurring overahievement of
10 D Review use of A & C overtime in Acute RL 50 50 75
Service reviews : Laboratory Change in management structure agreed. Savings will take effect following
11 D RL 59 59 59
management structure retiral at end of July.
Service reviews : Laboratory Well established Laboratory review group working through options in
12 P RL
Service reviews : Radiology management
13 D RL 59 59 59 Vacancies used to remove post from structure and budget.
14 D Review use of medical locums RL 200 200 200 Removed from budget and monthly monitoring in place.
Review Acute nursing use of bank and Reduction in use of bank and overtime monitored throughout the year.
15 I-D RL 500 500 735
overtime Overachieved target, though amount in excess is non recurring.
System being tested. Go live date not now until 2011/12 Balance of savings
16 I Effective Theatre Stock Management RL 100 100
made up by scheme 16a
Additional non recurring savings made in theatres and other areas to
16a D Additional Acute supplies savings RL 153
compensate for slippage in other schemes.
Interim local price agreement in place which is delivering lower prices .
17 D Better contract for drug eluting stents RL 100 100 100
Awaiting new national contract. Savings removed from budget.
Contract with desired price improvement in place for 2010/11. Savings
18 D Implantable Cardiac Devices RL 45 45 45
removed from budget
Greater standardisation achieved from start of year progressing towards pan
Lanarkshire agreement. Some supply disruptions experienced meaning full
19 D Standardise surgical gloves used RL 100 100 83
benefit of national contracts not achieved till over half way through year.Some
savings in other areas available to offset this.
20 D Standardise exam/ward gloves used RL 75 75 62 As above.
Implement national contract for renal
21 D RL 30 30 30 Contract implemented.
Standardise drapes used and make best Contract implemented but further testing taking place in response to user
22 I-D RL 30 30
use of contract concerns. Savings not realised. Compensated for in scheme 16a.
23 D Scopes rental cancellation RL 52 52 52 Rental agreements cancelled and savings secured.
Number of product lines has been rationalised and work is continuing in this
24 D NDC Product Rationalisation RL 100 100 100
Ensure all using national contract for Contract being used. Evidence of lower spend. Need to be tracked on a
25 D RL 50 50 50
stationery/computer cons. monthly basis and budgets across Lanarkshire identified for reduction.
Reduce use of taxis, especially for
26 D RL 50 50 50 Use of taxis has reduced.
Early savings from product and contract switches.Protocols in place so that
27 D Review provision of Orthodontic supplies RL 20 20 20
remainder of savings accrue throughout the year.
Review Provision of Adult Critical Care
28 D RL 50 50 27 Price savings of £27k secured and work ongoing to secure other savings.
AHP restructuring plan approved. Hosting arrangements revised. Vacant posts
29 D AHP vacant post reductions RL 150 185 185
being identified as opportunities to move to new structure.
AHP restructuring plan approved. Hosting arrangements revised. Vacancies
being used to deliver savings while moving to new structure.Total savings
30 D AHP Review PW 270 235 235
between schemes 29 and 30 should be £500k with £80k set aside for invest to
31 P Community nursing review PW Work ongoing to prepare for 2011/12 delivery
New structure in place. HR process successfully completed. Savings removed
32 D Review CHP management structure CS/AL 800 800 800
Better match Out of Hours provision to
33 I-D AL 62 40 42 Consultation underway. Scheme likely to be delayed.
Achieved for 2010/11 with redesign achieving the aims of first tranche of new
34 D Reprofile mental health developments CS 250 250 250
35 D Review domestic abuse service structure AL 35 35 35 Structure revised.
Remove longstanding community dental
36 D CS 164 164 164 Budget surrendered and service provided through alternative means.
Remove discretionary primary care
37 D AL/CS 256 256 256 Discretionary spend suspended and budgets removed.
Reduce non pay budget for digital
38 D AL 54 54 54 Budget surrendered without impact on service provision.
End pilot arrangement using paramedics
39 D AL 175 175 175 Service changed and funding transfer agreed with SAS.
Review and restructuring process complete. Still working through HR
Health Improvement/Public Health
40 I-D HK 1,000 1,000 1,000 processes for redeployment or protection for some posts. Looking for
additional non recurring savings to balance this off in year.
41 P Primary Care Pharmacy Review AL 13 Exisiting postholders retain entitlements. Savings cannot be achieved.
42 D Pharmacy staffing budget re-alignment RL 49 49 49 Budget realigned and savings surrendered.
43 P Other Pharmacy Savings AL 90 90 Other pharmacy savings will not take effect till 2011/12 plan.
Business case revised setting out £150k of savings. Lockers and protocols to
44 D Evaluation of patients own medicine pilot AL 150 150 150 allow use of patients own drugs being rolled out across Hairmyres and
Monklands ( already in Wishaw)
Project team has worked through various strands of efficiency and savings
45 D Substance Misuse CS 360 360 360
have been delivered.
Review use of drugs not approved by
46 D AG 200 200 200 Savings on budget achieved through range of measures
Further review of prescribing within Acute drug project Board and action plan established. Saving on budget
47 D AL 500 500 500
Acute division achieved.
More cost effective primary care Prescribing action plan 6a is delivering savings, along with further action plan
48 I-D AL/CS 1,900 1,900 2,876
prescribing (7). June volumes rising at 4.2%.
Further primary care prescribing
49 I-D AL 1,400 1,400 1,400 Assumptions round generic switches still in place.
Lower enabling costs in first year of
50 D AL 140 140 140 Plans adjusted accordingly.
prescribing efficiency scheme
E Health 1 - Medical Records - Reception
51 P-I AL 68 34 34 Work ongoing at Hairmyres but still staffing issues to be resolved.
E Health 2 - Medical Records - Case
52 P-I AL 102 68 Work being progressed but not yet in place.
E Health 3 - Medical Records - Record
53 P AL Work ongoing for 2011/12 delivery
E Health 4 - Medical Records - Case
54 P AL Work ongoing for 2011/12 delivery
E Health 5 - Medical Records - A&E/OOH
55 P AL Work ongoing for 2011/12 delivery
E Health 6 - Medical Records - E-Vetting
56 D AL 34 17 17 Roll out commenced. Impact on workload being monitored.
E Health 7 - Primary Care - GP Scanner
57 D AL 13 13 13 Contract revised and savings accruing.
E Health 8 - Primary Care - bring back
58 D AL 29 29 29 Contract ended and service being delivered in house at lower cost.
E Health 9 - Primary Care - PIMS
59 D AL 40 40 40 Contract revised and savings accruing.
E Health 10 - Primary Care -
60 D AL 50 50 50
E Health 11 - Departmental Staff Travel
61 I-D AL 10 10 10 Travel being monitored on a monthly basis.
E Health A - Child Health Services
62 P AL Work ongoing for 2011/12 delivery
63 P E Health D - Mobile Phone Review AL 20 20 Scoping work still to be completed.
64 P E Health F - Virtualisation of IT Estate AL Work ongoing for 2011/12 delivery
65 P E Health F - Full Network Review AL Work ongoing for 2011/12 delivery
Pilot site potential evaluated and report presented for agreement on direction.
66 P E Health H - Reduction of Printer Estate AL 30 30
No savings recorded for 2010/11.
66a D E Health - Staff deployment AL 118 118 Non recurring savings from effective staff deployment against priority projects
Work to improve efficiency of 6 poorest site has been completed. Monitoring
67 D Energy Efficiency Projects IR 183 183 183
systems to track consumption being implemented.
68 D Electricity Billing Savings IR 13 13 13 Discount agreed. Saving removed from budget.
Energy awareness campaign undertaken. PC Switch off software still to be
69 D Energy Awareness, PC switch off IR 100 100 100
deployed.Monitoring systems to track consumption being implemented.
70 D Contract Review & Savings IR 14 14 14 Discount agreed. Saving removed from budget.
71 D Waste IR 12 12 12 Efficiency measures in place
New arrangements in place for second class mail. Costs and activity will be
72 I-D Postage Review IR 120 120 120
monitored . Early evidence of costs reducing across sites.
73 D Maintenance Services staffing - call outs IR 13 13 13 Additional controls in place. Living within budget.
Extensive work in partnership to explore options for removing subsidy on non
74 I-D Review non-patient catering services IR 108 108 63 patient catering. Elements of schemes implemented, measures being reviewed
and further action taken as necessary.
75 D Cleaning in non-clinical areas IR 30 30 30 New work schedules implemented and staffing realigned.
76 D Transport Services IR 29 29 29 New work schedules implemented and staffing realigned.
77 D Dental Transport IR 12 12 12 Van to be decommissioned september 2010.
78 P External Advertising on NHSL vehicles IR 5 Scheme not achievable
79 D Caretaker review - Community sites IR 7 7 7 Hours realigned.
Property stratgey group established to look at space utilisation and lease
80 P Improve space utlisation of estate IR 22 22 arrangements alongside service plans. No savings to date but future potential
implemented for 2011/12.
81 D Security Review IR 215 215 215 Law sale site buildings demolished. Arrangements reviewed across NHSL.
82 D WRVS Lease Monklands IR 55 55 55 Income received
83 D Staffing review within Capital Services. IR 50 50 50 Post removed from structure following retiral.
84 P Laundry Sleep Knit IR Undertaking trials to see if viable for 2011/12 implementation
Product switch took place as planned and would have produced cash releasing
85 I-D Laundry Linen Review IR 8 8
savings had the overall price of cotton products not risen by 35%
86 I-D Laundry Cage Tracker IR 7 7 7 Tracker in place. Monitoring to ensure cage losses reduced.
87 D Extract Pacs element from PFI contract IR/LA 540 540 540 Contract renegotiated and saving removed from budget
88 D PFI margin debt reduction IR 12 12 12 Interest renegotiated, savign removed from budget.
Calibrate voluntary sector agreement and
89 D IR 69 69 69 Achieved.
service level 2
Calibrate voluntary sector agreement and
90 D IR 20 20 20 Achieved.
service level 1
91 D Surrender uncommitted budget IR 35 35 35 Achieved
92 D Efficiency offset in VS uplift IR 34 34 34 Achieved.
Arrangements in place for full year. Cost savings to be validated at 6 month
93 D Fully recover lease car insurance costs LA 43 43 43
Make lease car scheme economically New leased car scheme in place for full year. Savings being achieved but work
94 I-D LA 94 94 94
viable still needed to attribute to departments at year end and adjust budgets.
Protocols, communication plan and monitoring in place. Latest report ( feb
95 I-D Reduce miles travelled by all users IR 20 20 110
2011) shows £110k reduction on previous year.
96 D Reduce training programmes KS 85 85 85 Training prgramme revised. Budget removed.
Review use of NHSL libraries and
97 D KS 15 15 15 Subscriptions reviewed and rationalised. Two libraries integrated.
98 D Spiritual care and diversity non pay KS 20 20 20 Revised spending plan agreed. Budget removed.
Although no plans to have event, savings had been surrendered in previous
99 P Cease development event KS 16
year in anticipation.
Guidance developed and cascaded through management teams. Monitoring
arrangement to be put in place. Year end showed £251k less spent in the acute
25% reduction on general courses and
100 P-I KS 100 100 100 and corporate than previously and £254k more in CHPS. The latter however
had some exceptional e health expenditure. Not yet found way to adjust
101 D OD balance of 10% KS 39 39 39 Saving delivered non recurringly through staff secondment arrangement.
102 D C & I Team restructuring IR 57 57 57 Post removed from structure following retiral.
103 D Transfer of C+I Staff to LEAN IR 66 66 66 Transfer in place.
Review secretarial hours within Planning
104 D IR 9 9 9 Hours reduced.
& Performance Directorate
105 D C & I non pay budget reduction IR 25 25 25 Saving removed from budget and department living within budget.
106 D Comms Web management IR 12 12 12 Hours reduced.
107 D Comms Photography IR 4 4 4 Revised protocol in place.
All staffing proposals implemented . Non recurring savings available in year to
108 D Finance 10% LA 438 438 438
cover phasing of recurring savings being delivered.
Staffing restructuring implemented, change in recruitment practices
109 D HR Directorate 10% LK 212 212 212
implemented, full savings achieved
Savings being delivered non recurrently through vacancies and non pay
110 I-D Procurement 10% LA 135 135 135 savings. Recurrent plan to be agreed in conjunction with procurement
111 D Reduced sessional fees corporate affairs NA 33 33 33 Achieved and savings removed from budget.
Corporate affairs: reduced stationery and
112 D NA 25 25 25 Measures in place, savings being delivered.
113 D Nursing directorate 10% PW 200 200 200 Bankaide and PDC service redesign implemented, full savings removed
114 D Salus 10% KS 313 313 313 Savings to be delivered from securing external business. Plans on track.
115 D effectiveness/governance/medical audit AG 88 88 88 Central structure agreed, budgets transferred and staff movements agreed
Changes to medical and nursing establishment fully implemented. A & C
116 D Review of Learning Disabilities service CS 151 151 151
changes scheduled for July.
Clinical user group selected Standard list of products , specification written and
117 D Orthopaedic kit rationalisation RL 50 50 50
tendered. One site took longer to sign up but savings achieved.
New GP IT arrangements being rolled out. Savings potential to be reassessed
More cost effective arrangements for GP
118 I-D AL 20 20 once implementation experience better known. Included in 2011/12 savings
Project Board and subgroups well advanced. Sign off decision to come to
119 P Estates Rationalisation IR/LA
Overall Hospitality costs in 1st 5 months had not reduced. Issued reviewed
120 D 50% reduction in Hospitality costs 50 50 62 through CMT , further action taken by directors and year end position showed
reduction both in hospitality and chilled water.
121 D Review Staffing for Cancer Services RL 20 20 20 Changes identified and implemented
122 D Review of Admin Staffing - Training KS 18 18 18 Vacant post removed from structure.
Estimated Slippage Through
123 (375) (274)
Totals 15,000 14,978 16,258
P Proposal being scoped 296 162
I In process of implementation 100 100
D Scheme delivered
p g g 9,245 9,346 9,483
P-I implementation 270 202 134
I-D Implementation almost complete 5,464 5,442 6,642
Other (375) (274)
Total 15,000 14,978 16,258