NHS LANARKSHIRE by cuiliqing


									Meeting of                       Lanarkshire NHS Board
Lanarkshire NHS Board            14 Beckford Street
27 April 2011                    Hamilton ML3 0TA
                                 Telephone 01698 281313
                                 Fax 01698 423134


 1.     PURPOSE

 The attached report briefs the NHS Board on the provisional financial outturn for 2011/12.


 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.


 For further information or clarification of any issues in this paper, please contact:

 Laura Ace - Director of Finance
 01698 206355

 Laura Ace
 Director of Finance
 20 April 2011

                                  NHS LANARKSHIRE


1.     Introduction

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
       saving plans.

2.     Overview

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.    CRES/Efficiency

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.

4.    Conclusion

      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.

20 April 2011

NHS Lanarkshire                                                                                                                                                        ANNEX A
Progress Against Savings Plans 31st March 2011

                                                                     Planned Revised
Scheme                                                        Lead                      Actual
         Status                Scheme Title                           CRES    Plan
  No.                                                          ED                      2010-11
                                                                     2010-11 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
                               configuration                                                                                    partnership.
                  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.
                       Unit supplies

                                                                                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
                                                                                                                from budget.

            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.
                  investment budgets
             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.
                            in OOH
                                                                                          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
                     Department Review
                                                                                                 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.
                        Notes Monklands
             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
                         Notes Provision
            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.
                      outsourced function
               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
                     Infrastructure Savings
            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
                   Records Rationalisation

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.
                           advertising costs

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.

                            Review clinical
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
                                                                                                                                       October Board

                                                                                                            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)
                           implementation delays

                                    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


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