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            NORTH CENTRAL LONDON SHA -
BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST

         PROVIDER SUSTAINABILITY PLAN

                2005/06 TO 2007/08

             REPORT – 29TH APRIL 2005
BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                                                 2005-08 Provider Sustainability Plan


                                                TABLE OF CONTENTS
1         EXECUTIVE SUMMARY ...................................................................................... 1
    1.1       SUMMARY OF THE TRUST’S STRATEGY .................................................................... 1
    1.2       IMPACT ASSESSMENT ................................................................................................. 1
    1.3       SENSITIVITY ANALYSIS ................................................................................................ 2
    1.4       IMPLEMENTATION AND MONITORING ........................................................................ 2
    1.5       SUMMARY ..................................................................................................................... 3
2         HISTORICAL CONTEXT ..................................................................................... 4
    2.1       OVERVIEW .................................................................................................................... 4
    2.2       FINANCIAL PERFORMANCE ......................................................................................... 4
    2.2.1 UNDERLYING DEFICIT: ................................................................................................. 4
    2.2.2 COST IMPROVEMENT PROGRAMME .......................................................................... 4
    2.2.3 INCOME ......................................................................................................................... 5
    2.2.4 EXPENDITURE .............................................................................................................. 5
    2.2.5 FINANCIAL HISTORY – CASH AND WORKING CAPITAL ............................................ 5
    2.2.6 DETAILED CASH FLOW – 2004-05 ............................................................................... 7
    2.3       ACTIVITY........................................................................................................................ 7
    2.3.1 IN PATIENT .................................................................................................................... 7
    2.3.2 OTHER ACTIVITY .......................................................................................................... 8
    2.4       ANALYSIS OF ACTIVITY TRENDS ................................................................................ 9
    2.4.1 IN PATIENTS .................................................................................................................. 9
    2.4.2 OUT PATIENTS ............................................................................................................ 10
    2.4.3 OTHER ACTIVITY ........................................................................................................ 10
    2.5       OTHER TARGETS........................................................................................................ 11
    2.5.1 ACCESS TARGETS ..................................................................................................... 11
    2.5.2 KEY TARGETS ............................................................................................................. 11
    2.5.3 DELAYED TRANSFERS OF CARE .............................................................................. 11
    2.6       HR PERFORMANCE .................................................................................................... 12
3         STRATEGIC DIRECTION ................................................................................. 14
    3.1       SERVICE CHANGE ...................................................................................................... 14
    3.2       SERVICE INVESTMENT PRIORITIES ......................................................................... 14
    3.2.1 EARLY INTERVENTION IN PSYCHOSIS..................................................................... 14
    3.2.2 MENTAL HEALTH PSYCHIATRIC LIAISON ................................................................. 14
    3.2.3 NICE GUIDELINES ....................................................................................................... 15
    3.2.4 PSYCHOLOGICAL THERAPY SERVICES ................................................................... 15
    3.2.5 SUBSTANCE MISUSE: ................................................................................................ 15
BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                                               2005-08 Provider Sustainability Plan


    3.2.6 CAMHS 10% INCREASE IN INVESTMENT ................................................................. 15
    3.2.7 DELIVERING RACE EQUALITY: .................................................................................. 15
    3.2.8 CARE RECORDS SERVICE/NATIONAL PROGRAMME FOR IT (NPFIT) ................... 15
    3.3      THE MODERNISATION AGENCY “10 HIGH IMPACT CHANGES” .............................. 16
    3.4      FINANCE ...................................................................................................................... 16
    3.5      HUMAN RESOURCES ................................................................................................. 16
    3.5.1 AGENDA FOR CHANGE .............................................................................................. 16
    3.5.2 IMPROVING WORKING LIVES PRACTICE PLUS (IWLPP) ......................................... 17
    3.5.3 ORGANISATIONAL DEVELOPMENT AND CHANGE MANAGEMENT ........................ 17
    3.5.4 EQUALITY AND DIVERSITY ........................................................................................ 17
    3.5.5 RECRUITMENT AND RETENTION .............................................................................. 17
    3.5.6 MANDATORY TRAINING ............................................................................................. 17
    3.5.7 REMODELLING ROLES AND DESIGNING NEW JOBS .............................................. 17
    3.5.8 MANAGEMENT AND LEADERSHIP DEVELOPMENT ................................................. 18
    3.5.9 ELECTRONIC STAFF RECORD (ESR) ........................................................................ 18
    3.5.10 SUPPORTING THE TRUST’S FINANCIAL STRATEGY ............................................... 18
    3.6      CAPITAL INVESTMENT ............................................................................................... 18
    3.6.1 CAPITAL PROJECTS CURRENT AND PLANNED ....................................................... 18
    3.6.2 CAPITAL EXPENDITURE COMMITMENTS ................................................................. 20
    3.6.3 FUNDING THE CAPITAL PROGRAMME: .................................................................... 20
    3.7      SUMMARY ................................................................................................................... 21
4         IMPACT OF THE PROPOSED STRATEGY ................................................... 22
    4.1      FINANCIAL MODEL...................................................................................................... 22
    4.2      IMMEDIATE IMPACT ON WORKING CAPITAL ........................................................... 22
    4.3      MEDIUM TERM FINANCIAL IMPACT........................................................................... 23
    4.4      CAPITAL PROGRAMME .............................................................................................. 24
    4.5      INCOME AND PAYMENT BY RESULTS ...................................................................... 25
    4.6      COST IMPROVEMENT PROGRAMME ........................................................................ 26
    4.7      HUMAN RESOURCES ................................................................................................. 27
5         UNDERPINNING ASSUMPTIONS................................................................. 29
    5.1      FINANCE ...................................................................................................................... 29
    5.2      ACTIVITY...................................................................................................................... 31
6         SENSITIVITY ANALYSIS ................................................................................ 35
    6.1      APPROACH .................................................................................................................. 35
    6.2      RESULTS ..................................................................................................................... 35
7         IMPLEMENTATION AND MONITORING ARRANGEMENTS .................. 36
    7.2      MONITORING............................................................................................................... 36
BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                                           2005-08 Provider Sustainability Plan


                                                TABLE OF FIGURES
Figure 1: I & E History .......................................................................................................... 6
Figure 2: Cash and Working Capital History ................................................................. 6
Figure 3: Actual Cash Flow – Key Indicators................................................................ 7
Figure 4: In Patient ............................................................................................................... 7
Figure 5: Other Activity ........................................................................................................ 8
Figure 6: Delayed Transfers of Care .............................................................................. 11
Figure 7: HR Information .................................................................................................. 12
Figure 8: Cash flow forecast 2005/06 .......................................................................... 23
Figure 9: I & E Forecast ..................................................................................................... 24
Figure 10: Balance Sheet Forecast................................................................................. 24
Figure 11: Income Plans .................................................................................................... 25
Figure 12: Income Reconciliation – 2005/06 ............................................................ 26
Figure 13: Cost Improvement Programme summary ............................................... 26
Figure 14: Planned Manpower ................................................................................................... 27
Figure 15: Sensitivity Analysis ........................................................................................ 35
BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST              2005-08 Provider Sustainability Plan



1 EXECUTIVE SUMMARY

1.1 Summary of the Trust’s strategy
      The Trust continues to develop services in line with national and local
      strategies, together with local needs as identified by feedback from service
      users, staff and partners.

      The Trust‟s strategy is based on providing responsive services based on local
      needs, the priority being to improve:
       Community-based services to support service users in regaining
         independence on their road to recovery;
       Access which is timely and sensitive to individual‟s needs in respect of their
         culture and the sort of information and involvement that people want.

      The Trust‟s strategy for improving local mental health services relies on close
      working with partner organisations and sharing the emerging issues through
      our Local Development Plan (LDP – copy attached). Joint investment plans with
      PCTs and Local Authorities have enabled the development of increased capacity
      and specialism in community teams. As a result, there is now comprehensive
      coverage of Adolescent Outreach Teams, integrated CMHTs, Assertive Outreach
      Teams, and Crisis Resolution & Home Treatment Teams.

      A continuous programme to modernise and improve our Estate remains a key
      target in our delivery of quality care. More work is still to be done in this regard.
      Improvements to inpatient facilities have been achieved with new facilities for
      adolescents (New Beginning), adults (Elysian House, 70 bed long-term forensic
      unit), older people (Oaks). There has also been significant refurbishment to
      meet modern standards for privacy and dignity. Key priorities remain the
      completion of the Barnet scheme adjacent to the general hospital and the
      redevelopment of the St Ann‟s site (see 3.9.1 below)

      However, the Trust‟s financial position remains very challenging. Whilst there
      have been vital new investment for service developments, the inherited deficits
      and continuing new cost pressures mean the Trust faces difficulties in
      continuing   to   improve     services    within  very    limited   resources.


1.2 Impact Assessment

      Particular risks which require contingency planning include:
      o Achieving financial efficiencies;
      o Capital investment to maintain the estate and modernise information and
         communications technology;
      o Delivering an ambitious service strategy to reshape capacity closer to user
         needs;
      o Recruiting and retaining the quality of workforce needed to provide the
         improvements set out.

      The Trust will have to make an estimated £5.8m of cash-releasing savings to
      stand still in providing the current range of services for 2005/06. The Trust has


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      commissioned external consultants to work with staff in developing a range of
      options for achieving long-terms savings, in addition to on-going cost-
      improvement and efficiency savings programmes. The Trust will also need to
      prepare for the future impact of payment by results and the current low
      reference costs at 91% provide a favourable starting point.

      Service quality and efficiency targets require a reasonable level of investment in
      estates improvement and information technology. Due to the scarcity of capital
      resources, the capital programme is currently constrained to only high priority
      projects. The Trust is exploring with the SHA the possibility of brokerage to
      assist with this programme.

      Substantial investment in computer hardware and the information infrastructure
      (with over 300 new PCs) has been made and new network connections made to
      outlying teams. However, further investment of at least £1m will be required to
      upgrade the IT infrastructure for the Trust to prepare for the National
      Programme for IT.

      A capacity plan has been developed which envisages inpatient services activity
      reduction through the impact of improved community teams. This is subject to
      the realisation of benefits from the impact of the new Crisis Teams and the
      reduction of delayed transfers, as well as the improvement of inpatient services
      to handle a higher proportion of more seriously ill patients.

      The changes in the service model will require new skills in different places. The
      new Agenda for Change workforce structure offers potential benefit to be
      realised through enhances recruitment, deployment and retention to meet this
      need and, at the same time, maintain the current low unit costs.


1.3 Sensitivity Analysis
      The Service strategy assumes that the PCTs will be able to afford the continuing
      need to improve the quality and quantity of local services that is by no means
      certain in the light of their difficult financial positions.

      The financial plan for 2005-06 assumes that the PCT‟s will continue to fund the
      £2.3m part of the underlying recurrent deficit. Failing this, the Trust‟s savings
      requirement for 200506 will rise to £7m and financial balance will not be
      achieved without service reductions. Financial balance in 2005-06 assumes that
      the ambitious cost improvement programme (CIP) will be successfully
      implemented.

      The community services-based strategy assumes that ongoing collaboration and
      co-operation with the PCTs and local Authorities will continue especially in
      relation to delayed transfer of care.


1.4 Implementation and Monitoring
      The Trust‟s Capacity plan identifies key targets and dates for achieving key
      impacts through the development of the service strategies over the next three
      years (see section 5.2 below). The Board will continue to play a key role in


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      over-seeing the implementation and performance of all aspects of this strategy
      through effective governance arrangements.

1.5 Summary

      The capacity plan models some of the complex shifts in care pathways over the
      next three years which have arisen from investment in a greater range of
      community-based services.

      The plan forecasts reductions in admissions and bed days due mainly to the
      impact of Crisis Resolution and Home Treatment Team (CR&HTT)
      implementation and reductions in delayed transfers of care (DToCs). Experience
      from CR&HTT implementation elsewhere is that admissions reduce by between
      20 – 30%. The model assumes that this will also happen and that the
      admissions avoided will be those with a shorter length of stay (30 days on
      average). The outcome so far suggests that admission reduction has been
      achieved but the level of reductions in delayed transfers of care reductions have
      not yet been achieved. The plan will be adjusted to the actual activity outturn
      at the year-end 2004/05. Indications are that future bed reductions are only
      likely to achieved if support for reducing DtoC and improving psychiatric liaison
      is forthcoming.




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST             2005-08 Provider Sustainability Plan




2 HISTORICAL CONTEXT

2.1 Overview
      The Trust was established through the merger of Mental Health services
      previously provided by the Barnet Community Healthcare NHS Trust, the Enfield
      Community Care NHS Trust and the Haringey Healthcare NHS Trust. The new
      organisation faced major challenges in the bringing together of a variety of
      systems into one cohesive organisation, but also inherited significant financial
      deficits. This has also coincided with a significant growth in the Trust‟s
      activities; annual budgeted expenditure has risen from £114 million in 2001/02
      to £164 million in 2004/05.

2.2 Financial Performance
      Since achieving break-even on I&E in the first year (2001-2002), the Trust has
      reported deficits on its income and expenditure in years 2002-03 and 2003-04.
      The 2004-2005 financial plan approved by the Trust Board included unidentified
      cost savings totalling £3.7 million, after allowing for the full repayment of
      previous deficits. The latest forecast for 2004-2005 is that the Trust has
      achieved break-even and will report a surplus to reflect the fact that previous
      deficits have been recovered.

2.3 Underlying Deficit:

2.4 Despite the considerable increase in turnover over the past 3 years, the
    Trust has relied upon non-recurring financial support from local partners
    in addition to internal cost Improvement initiatives. The need for such
    financial support in the early years has arisen for a number of reasons.
         Significant morbidity across the 3 boroughs and high demand for Mental
          Health services.
         The Trust inherited a significant level of underlying financial deficit (£4m in
          2001-2002) that could not be resolved by short-term cost improvements
          and efficiency initiatives (CIPs).
         In the short–term, the options for resolving the financial deficits effectively
          were limited to either service reductions or PCT assistance.
         The Trust‟s reference cost rating suggests that the average unit cost of
          services provided were relatively cost-effective and that demand pressures
          were largely responsible for the continuing deficits.

2.5 Cost Improvement Programme
      During these first four years, the Trust has successfully implemented significant
      cost improvements to a cumulative value of some £6 million. This level of cost
      improvement is significant, considering that that most of these initiatives are of
      a recurring nature, and consequently provide a sound basis for the Trust‟s
      future competitiveness and financial balance. Further cost improvement
      initiatives continue to be developed as part of the financial recovery plan.




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2.6 Income
      Income growth above generic uplift has largely been due to increasing
      investment by PCT‟s and growth in variable income sources, especially Forensic
      Services. 62% of the Trusts recurrent income comes from Service agreements
      with the three local PCTs. Total income relating to generic Mental Health
      Services accounts for 71%, whiles specialist services (Forensic, CAMHS and
      Eating Disorders) accounts for 20%.
      A significant part of the growth in income is due to increasing investment in
      Crisis Teams and community services as detailed in the Local Development Plan
      (attached at appendix 1)
      The Trust has also sought to reduce financial risk through negotiating risk-share
      contracts for more of its services as with the Forensic and CAMHS services
      contracts.

2.7 Expenditure
      The recurring financial deficit position has arisen because recurring operating
      expenditure exceeds recurring income. External factors such as short supply of
      medical consultants and the consequent rise in agency locum prices have
      further contributed to the cost pressures faced each year. The main cost
      pressures over the four years have been:
         Medical staff costs: High costs of locums have been problematic due to
          difficulties in recruiting medical staff.
         Nursing staff costs: These have varied depending on the intensity of care
          provision on the in-patient wards. The Trust also identified the high unit
          costs of agency staff and has taken management action to fill staff vacancies
          and substitute bank nurses to agency staff where possible.
         External placements expenditure – (Adult Overspill): -This arises either due
          to excess demand for inpatient beds or the need for specialist treatment.
          Significant overspill of adult inpatient activity in the first two years led to
          management action in 2004-2005 to exhaust intra-sector internal capacity
          before external placements can be authorised.
         External placements expenditure – Specialist Treatment: This is due to the
          need for specialist treatment and is very much demand driven. The largest
          expenditure here is on CAMHs.
      Figure 1 below summarises the Income and Expenditure history of the Trust.


2.8 Financial History – Cash and Working Capital
      Cash and Working capital balances have been relatively steady over the first
      three years.

      Cash: -The Trust inherited a share (£7m) of the previous Barnet Community
      Care Trust‟s cash deficit at its inception in 2001-2002. This has been managed
      annually through brokerage assistance from the SHA. The cash deficit has
      reduced to £4.2m in 2004-05 through The NCL sector cash rebasing exercise
      and this balance will be fully recovered using part of the proceeds the sale of
      Colindale site when it is realised in 2006.




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                     2005-08 Provider Sustainability Plan


      The levels of NHS debtor and creditor balances have been higher than planned,
      averaging over £12m each year. This situation is not dissimilar to other Trusts
      within the sector and is attributable to delays in clearing Inter-NHS Trust
      balances. Recent initiatives by the Strategic Health Authority to accelerate the
      clearing of inter-NHS Trust balances have helped to reducing these balances.

      The trust has achieved it‟s EFL targets in all of the first three years by
      managing its total working capital while maintaining positive cash balances. The
      forecast for 2004-2005 also indicates that the EFL target will be achieved.

      Figure 2 below summarises the Trust‟s working capital history.

       Figure 1: I & E History

                                               2001/02     2002/03        2003/04        2004/05
                                                                                         Forecast
                                                £‟000        £‟000          £‟000          £‟000
          Income                               119,598     131,455        144,424         164,223

          Less: Pay costs                      68,159      76,239         83,320             96,705
          Less: Non Pay costs                  46,381      49,778         57,835             57,550

          Operating Surplus / (Deficit)        5,058       5,438          3,269              9,968

          Retained Surplus / (Deficit)         4           -686           -924                840

          Non recurrent support / other        3,324       4,845          4,933              4,100
          non-recurrent measures

          Retained Surplus / (Deficit) after   -3,324      -5,531         -5,587             -2,260
          adjustment for non-recurrent
          issues


       Figure 2: Cash and Working Capital History

                                               2001/02     2002/03        2003/04        2004/05
                                                                                         Forecast
                                                   £‟000     £‟000            £‟000        £‟000

               End of year EFL undershoot      219         15             4              0
               / (overshoot)

               End of year creditor            16,613      19,854         15,806         12,122
               balances

               End of year debtor              15,737      17,100         16,213         11,341
               balances

               End of year cash book           419         434            438            480

               Cash brokerage received         2,421       7,537          14,241         11,882
               Cash brokerage paid (-)         0           -2,421         -7,537         -14,241




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                 2005-08 Provider Sustainability Plan


                Net Cash brokerage         2,421      5,116           6,704          -2,359




2.9 Detailed Cash Flow – 2004-05
      A detailed cash flow statement is attached at appendix 1 as part of the FIMS
      return. Figure 3 below also summarises cash positions. The peak balances for
      2003/04 and 2004/05 (£16.305m & £13.312m respectively) occurred in the
      first month (April). In each case, the normal monthly SLA payments from PCTs
      were received in addition to one month‟s advance payment.

       Figure 3: Actual Cash Flow – Key Indicators

                Details                             2002/03        2003/04      2004/05
                                                        £m            £m            £m
                Peak cash balance                     12.000        16.305        13.312
                Trough cash balance                     0              0              0
                Number of days with negative cash       0              0              0




      Trough Cash Balance:– The trust‟s policy has been to always maintain a positive
      cash balance. Consequently, the Trust has maintained a minimum cash balance
      of £100K and not allowed the cashbook to go overdrawn.


2.10 Activity

2.11 In Patient
      Figures 4. and 5 shows details of recent trends in activity.

       Figure 4: In Patient




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST             2005-08 Provider Sustainability Plan




                                           2001/02    2002/03     2003/04       2004/05
                                                                                Forecast

               CAMHS
                Admissions                       25      23           64            75
                Discharges                    12         19           58            98
                Occupied Bed Days           2,184      6,453        5,992         5,863

               Adults
                Admissions                  3,300      3,079        3,070         2,278
                Discharges                  2,784      2,786        2,856         2,312
                Occupied Bed Days          191,295    188,520      182,709       171,073

               Older People
                Admissions                   694        517          577           413
                Discharges                   492        457          581           399
                Occupied Bed Days           73,767     73,998       73,637        71,231
               Specialist: Forensic*
                Admissions                    61         76           85            90
                Discharges                    51         66           56            59
                Occupied Bed Days           74,861     79,755       91,910        95,307

               Specialist: BIRU
                Admissions                    12         19           27            20
                Discharges                    35         40           42            26
                Occupied Bed Days            4962       4744         4939          4626

               Specialist: Eating
               Disorders
                Admissions                    53         48           58            39
                Discharges                    40         48           58            42
                Occupied Bed Days           4,630      5,540        6,507         6,390

              *Including ECRs

2.12

2.13 Other Activity
       Figure 5: Other Activity

                                           2002/03    2003/04      2004/05
                                                                   Forecast
               CMHT Caseloads
                Enhanced CPA                 2,705      3,041        2,936
                Standard CPA                 3,595      6,046        5,043

               Assertive Outreach                        168           206
               (average caseload)

               Crisis Resolution & HT                                1,015
               (completed treatments)



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                  Adult Out Patients
                  First and Follow Up           44,522        45,418       44,972
                  Attendances**

                  OPMH Out Patients
                  First and Follow Up                         2,582        2,985
                  Attendances**

                  CAMHS Out Patients
                  First and Follow Up           37,064        24,636       34,253
                  Attendances
                  ** Medical staff only


2.14 Analysis of Activity Trends

2.15 In Patients
      The adult in patient activity trend shows a 31% reduction in admissions overall
      over the 4 years (2001/2 – 2004/5 forecast) as the following chart shows:


         3500
         3000
         2500                                                                    Acute
         2000                                                                    PICU
         1500                                                                    Rehab
         1000                                                                    Cont. Care
          500
            0
                    2001/02       2002/03      2003/04        2004/05*




      This has been most dramatic in 2004/05 with the advent of the Crisis
      Resolution and Home Treatment teams (see capacity plan above). This has
      resulted in a reduction in occupied bed days of 11% as shown below:


         160000
         140000
         120000                                                                    Acute
         100000
                                                                                   PICU
          80000
          60000                                                                    Rehab
          40000                                                                    Cont. Care
          20000
              0
                      2001/02       2002/03         2003/04     2004/05*




      The reason this has not reduced as dramatically as admission is because the
      level of delayed transfers of care has remained in excess of 20,000 bed days
      (remaining particularly high in Barnet and Haringey). It is estimated that if a




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      recharging system was applied to mental health that charges would exceed
      £3m (see below).

      CAMHS in-patient activity has changed over recent years with the reduction of
      beds in the Northgate Unit (from 33 to 21) and the establishment of a 12-bed
      adolescent acute in patient unit called New Beginning.

      Forensic Activity has changed with the creation of additional 79 beds in Camlet
      3 and reduction in external placements (down 26% between 2003/4 and
      2004/5).


2.16 Out Patients
      The level of out-patients activity has been fairly consistent over the last 4
      years. The main problem has been the level of “Did not attends” (DNAs) which
      have been higher than the national average of 25% (particularly in Enfield and
      Haringey). Work on “Choose and book” has enabled some process redesign to
      take place which is helping to reduce DNAs to a more acceptable level.


2.17 Other Activity
      The Crisis Resolution and Home Treatment (CR&HTT), Assertive Outreach Team
      (AOT) and Early Intervention in Psychosis (EIP) Teams have nationally
      determined activity targets established of patients treated. The activity levels
      compared against these targets is shown below for 2004/5 (forecast):

      Team                  Target date            National Target for      Actual numbers
                                                   BEHMHT                   treated as at end
                                                                            of 2004/5
      CR&HTT                Dec. 2004                     1981                     1015
      AOT                   Dec. 2005                      397                      206
      EIP                   Dec. 2006                      446                       24

      Most of the CR&HTTs have only been established recently (very recently in
      Enfield) and there is a learning curve effect with the numbers of patients
      treated. However, there is every reason to believe that the target numbers will
      be met by December 2005. With the AOTs there is an issue of insufficient
      capacity in some areas and the need to revisit referral criteria. Apart from a
      pilot in Barnet there is no EIP service established at present and this is the
      under discussion with commissioners.




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2.18 Other Targets

2.19 Access Targets

      Generally, access is good and the Trust is meeting best-practice targets.
      Outpatient referrals in the Trust are made to the multi-disciplinary team and
      not to a consultant. The main areas of concern in adult services has been the
      number of clinic cancellations.

      There have also been long waits in CAMHS services where a large number of
      long waits have occurred both for assessment and treatment. Significant
      improvements have been achieved in waiting times for CAMHS services. Once
      again the “Choose and book” work has helped with process redesign resulting in
      improved waiting times in Barnet. In other services there are issues of long
      waits for specialist treatment.

      Another problematic area is in adult psychological therapies where waits for
      treatment can be excessive. This is due to insufficient capacity to meet
      demand.


2.20 Key targets

      A 2005/06 LDP target is the percentage of patients on enhanced CPA who have
      service contact within 7 days after discharge from an inpatient episode (it is
      expected that most commissioners will set this at high level (above 90 %). The
      Trust will monitor this during 2005/06. The Trust will also continue to monitor
      LDP targets for CR&HTT, AOT and EIP team activity (see appendix on
      monitoring targets attached).

      In terms of NHS Performance ratings the Trust achieved a one star rating in
      2002/3 and 2003/4. The Trust monitors performance in star rating areas
      during the year. It is expected that this will be improved upon in 2004/5.

      The Trust‟s CHAI review was undertaken in February 2003 and staff in the Trust
      have worked hard since then to implement the clinical governance action plan
      “A Blueprint for Change”. This has resulted in a significant improvement to the
      working of clinical governance in the Trust as independent assessment has
      shown.


2.21 Delayed Transfers of Care
      Delayed transfers of care represent a large area of inefficiency in the use of in
      patient beds, the table below shows the number of non-specialist OBDs
      occupied as a result of a delayed transfer of care and as a percentage of total
      bed days.


       Figure 6: Delayed Transfers of Care




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                                             2002/03        2003/04    2004/05
                                                                       Forecast

               Occupied Bed Days                   25,218    25,144      20,158
               % Rate                                 9.4        9.5          8.1


      If a charging mechanism was in place for mental health it is estimated that
      charges would exceed £3m. In 2004-05 significant improvements have been
      made to the level of DToCs in Enfield and work is in hand with partners in
      Barnet and Haringey to improve this position.


2.22 HR performance

      Details of key changes in our staffing portfolio is summarised as follows:

      o   The total number of Trust staff has been increasing in 2003-04 and 2004-05
          due to the development of Crisis and Assertive Outreach Teams and the
          opening of the 70-bed Medium Secure unit.

      o   During the same period, the Trust‟s staffing policy was particularly targeted
          at reducing the use of temporary agency staff to cover temporary vacancies
          and staff absence. The unchanged level of temporary staff costs (£7.4m) in
          from 2002-2003 to 2004-2005 represents a net reduction in each of those
          years (considering the respective annual cost includes yearly inflation
          uplifts).

      o   The Human resources department has had a very difficult experience with
          performance monitoring because the Trust inherited three different legacy
          systems from the previous Community care Trusts. This situation is being
          resolved and the Trust‟s payroll and HR support from April 2005 will now be
          administered from one system supported by one provider.




       Figure 7: HR Information




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                                                   2001/02     2002/03     2003/04      2004/05
                                                                                        Forecast

          WTE (average actual staff in
          post)
          NHS Staff
           Nursing and Midwifery                     1,085     1,096        1,054         1,214
           Qualified scientific, therapeutic &        247       223          204           245
          tech
           Unqualified scientific, therapeutic            29     31           33            42
          & tech
           Healthcare scientists                       0          0            0            0
           Mental health workers                       0          0            0            0
           Admin and estates                          272       364          443           504
           Junior doctors                              55        69           77            85
           Consultants                                 41        48           62            71
          Total NHS Staff                            1,729     1,782        1,872         2,161
          Non-NHS Staff                                **        **           **            **
          Total Staff WTE                            1,729     1,782        1,872         2,161

          Total Pay Cost
           Nursing and Midwifery                    31,820     34,975      36,270        44,878
           Qualified scientific, therapeutic &       7,845     8,333       9,228         10,932
          tech
           Unqualified scientific, therapeutic
          & tech
           Healthcare scientists                       0          0           0             0
           Mental health workers                       0          0           0             0
           Admin and estates                        10,313     12,243      14,226        17,995
           Junior doctors                            5,235      6,499       7,260         8465
           Consultants                               5,815      6,789       8,844        10,883
          Total NHS Staff costs                     61,156     70,122      76,371        93,153
          Non-NHS Staff costs                        7,355      7,476       7,492         7,211
          Total Staff Costs                         68,383     76,315      83,320       100,364

          Non-NHS usage (% of total                10.76%      9.8%        8.99%         7.18%
          costs)
          Sickness Rate (%)                               **     **         3.8%          4.2%

      Note: Figure 8 has been completed on the basis of actual staff in post (rather than
      establishment). The non-NHS staff WTE has been calculated pro-rata to costs.
      ** - Data notreadily available in required format.




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3 STRATEGIC DIRECTION

3.1 Service Change
      The Trust aims to continue to develop services in line with national and local
      strategies, together with local needs as identified by feedback from service
      users and staff.

      National objectives (“National Standards, Local Action”) to achieve include:
       Access to Crisis Services by 2005;
       Comprehensive CAMHS by 2006;
       Choice: Outpatient booking for all referrals;
       Maximum wait of 3 months for an Outpatient appointment;
       Delayed transfers of care reduced to minimum level by 2006;
       Health Improvement: reduction of suicides by 20%; dealing with inequalities
         in life expectancy;
       Supporting People with long term conditions: personalised care plan for
         vulnerable people; reduction in emergency bed-days by 5% by 2008;
       Access: increase participation of problem drug users in treatment by 100%
         by 2008;
       User experience: improve the independence of older people by increasing
         the number living in their own homes.

      All of these reinforce the Trust‟s strategy of improving:
       Community-based services which are local to need and support service
           users in regaining independence on their road to recovery;
       Access which is timely and sensitive to individual‟s needs in respect of their
           culture and the sort of information and involvement that people want.



3.2 Service Investment Priorities
      Emerging from the local and national objectives are a series of Trust-wide
      issues which will occupy Service Level Agreement (SLA) discussions with each
      of our local commissioners.


3.3 Early Intervention in Psychosis
      The need to agree a service model and implementation arrangements to that
      activity targets can be met by the year-end.


3.4 Mental Health Psychiatric Liaison
      – to provide a liaison service to people with serious mental health needs in the
      General Hospitals, including A&E (24/7) Whilst some medical input will be
      necessary, this service need could be met through the gateway worker target.




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3.5 NICE guidelines
      – the need to meet the resource implications arising from the following
      guidelines:

         Schizophrenia – whilst much has been done to meet the pharmacological
          treatments, there remains a significant gap in resourcing the psychosocial
          treatments;
         Depression
         Anxiety
         Bipolar Disorder
         ECT
         Self Harm – possibly through improvements to A&E liaison.


3.6 Psychological Therapy Services
      – waiting times exceed national targets and capacity needs improving across
      inpatient and community services.


3.7 Substance Misuse:
      Additional capacity to meet the NTA target of a 10% year-on-year increase in
      the number of users sustaining or completing treatment programmes.


3.8 CAMHS 10% increase in investment
       -in line with local strategies.


3.9 Delivering Race Equality:
       Developing a shared strategy to improve the experience and access of BME
      communities to services and, in particular, the introduction of Community
      Development Workers and an effective interpreting service meeting the
      increased need.


3.10 Care Records Service/National Programme for IT (NpfIT)
      – the deployment plan requires the Trust to start a significant programme of
      development in 2005 to be able to implement the new system.




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3.11 The Modernisation Agency “10 High Impact Changes”

      The 10 high impact changes are not all applicable to Mental Health services.
      Where they do, the Trust will include these within its approach to service
      developments. These issues are also being considered within the wider context
      of the Cost improvement programme

3.12 Finance
      The Trusts overall financial strategy is very much driven by its financial duties
      and the requirements of the Local Delivery Plan. The strategy in summary is to
      achieve a sustainable healthy financial position through the elimination of the
      underlying deficit and to demonstrate efficiency and positive return on invested
      resources. This comprises;
       A balanced Income & Expenditure (I&E) Budget and break-even out-turn on
         I&E Account each year.
       Elimination of the Trust‟s underlying recurrent deficit by the end of 2008.
       Securing sufficient additional income from Commissioners to meet NHS Plan
         and relevant NSF targets as detailed in the Local Delivery Plan (attached at
         appendix 4)
       Achievement of the 3.5% Capital Cost Absorption Duty by 2006/07 at the
         latest.
       Achieve the Trust‟s External Financing Limit and Capital Resource Limit each
         year.
       Demonstrating a value for money improvement of 1% each year.
       Achieving a 95% compliance rate with the Public Sector Payments Policy.

      Achievement of this financial strategy is closely aligned to the services strategy
      through;
       o Further cost efficiency through the capacity plan bed reductions
       o Partnership working with local commissioners to improve patient pathways
          and recover costs appropriately.
       o Improvement in financial control and cost effectiveness
       o Modernisation and review of clinical practice and service delivery models



3.13 HUMAN RESOURCES
      The Trust‟s HR strategy sets out the workforce priorities which will support the
      Trust‟s overall aims. Key workforce objectives therefore currently include:


3.14 Agenda for Change
      Implementing agenda for change with more than 90% of staff employed by the
      Trust assimilating to new pay and terms and conditions of service by October
      2005. The Knowledge and Skills Framework will also be rolled out across the
      Trust within this timescale, with all posts needing to have a KSF outline in place
      and all staff to be appraised against these outlines.




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3.15 Improving Working Lives Practice Plus (IWLPP)
      Preparing for IWL PP validation in December 2005, with a target to achieve this
      by end of March 2006.


3.16 Organisational Development and Change Management
      Working with service directors and managers to support change management,
      and HR implications of service developments and reorganisations


3.17 Equality and Diversity
      Developing a strategy to improve the experience of BME communities;
      developing a revised Race Equality Scheme for 2005-2008; ensuring robust
      monitoring systems are in place; and providing employment opportunities for
      local people, service users and refugees and asylum seekers.


3.18 Recruitment and Retention

      Continuing to implement and develop a range of initiatives to improve
      recruitment and retention of staff and to support other strategies such as IWL
      PP. For example, introducing a Trust-wide harassment advisory service;
      working with the SHA to provide pre-employment courses to local people;
      extending the e-recruitment service to cover the entire Trust and facilitating the
      application process as well as increasing efficiency and reducing costs;
      continuing to develop and implement strategies to control and monitor the use
      of temporary staff, reducing costs and improving effectiveness. This includes
      implementing LAP3 for nursing staff and working to reduce the costs of agency
      A&C staff. The Trust is also working to reduce violence and harassment to staff
      including re-launching a programme on Prevention and Management of Violence
      and Aggression in line with national guidelines.


3.19 Mandatory Training
      Providing a programme of mandatory training for all staff planned around the
      needs of services making it easier for staff to attend. Organising and
      monitoring attendance of these and other training events through a new
      training database


3.20 Remodelling Roles and Designing New Jobs

      The impact of the capacity plan requires a flexible and changing workforce. The
      planned reduction in adult in-patients beds will mean skill mix changes in ward
      staffing, and a need to equip more staff for roles in community based services,
      e.g. introducing new roles including support time and recovery workers,
      gateway workers and community development workers, in partnership with
      PCTs.




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3.21 Management and Leadership Development
      Providing a range of opportunities for training and mentoring for managers at
      all levels of the Trust, ensuring that managers at all levels have the skills
      needed to deliver the Trust‟s objectives


3.22 Electronic Staff Record (ESR)
      Preparing for the introduction of ESR.


3.23 Supporting the Trust’s Financial Strategy
      The HR strategy is aligned to the financial strategy through working to reduce
      the reliance on bank and agency staff, and reducing the associated overhead
      costs. For example, implementing LAP3, PASA contracts for supply of other
      temporary staff and extending the Trust‟s medical staff bank should reduce the
      per unit cost of temporary staff. The Trust is also working in partnership with
      other local NHS organisations to share services and expertise where
      appropriate.


3.24 Capital Investment
      In line with the Trust‟s Delivery Plan, the investment objective is to support
      both the infrastructure and services provided, to ensure that the Trust is able to
      modernise its services. The Trust has a very mixed property portfolio, ranging
      from very modern and custom-built facilities to old and poor quality
      accommodation.

      The Capital Programme includes schemes to improve patient accommodation in
      order to meet the NHS Plan. The business cases for all investments, especially
      the larger ones, include a cost-benefit analysis that is required to demonstrate
      cost reduction and efficiency savings for the Trust and PCTs. Recent
      developments include;
       Camlet Inpatient Services, a £12.8m 70-bed unit recently completed and
          integral to the Forensic service Risk –share Consortium contract. This
          facility enables a reduction in the cost of Forensic Mental Health patients
       CAMHS New Beginning: A £1.79m facility at Edgware Community Hospital
          recently completed as part of the Tier 4 services strategy. This investment
          has enabled the Trust to negotiate a Risk-share contract with PCT‟s and is
          also significantly contributing to cost reduction for the Trust and its
          partners.


3.25 Capital projects current and planned
      In line with the Trust‟s Modernisation Plan for its services, the following major
      capital schemes are in progress or are planned (see below):




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                                      Scheme/Development                       Progress
       Borough
                                   Complete Business Case for          OBC Submitted
       3.26 Barnet                 East of Barnet
                   Barnet          BMHS – Reprovision of               Planned for 2006
                                   Facilities on Barnet General
                                   Site
                   Barnet          Closure & Disposal of Colindale     Exit Strategy
                                   Hospital                            Submitted
                   Barnet          Holly Oak Reprovision               OBC Submitted
                   Barnet          Reprovision of Substance            OBC Submitted
                                   Misuse Services for Barnet &
                                   Hertsmere
                   Barnet          Reprovision of Memory Clinic        In Planning for
                                                                       2006
                   Barnet          CAMHS Accommodation                 Ascertaining need
                   Barnet          EIP Team Accommodation              Ascertaining need

                                   Completion of „Elms‟ part of        In progress for
       3.27 Enfield                Oaks & Elms scheme                  2005/6

                   Enfield         Older people CMHT – Move            In Planning
                                   from Highlands to Edmonton
                                   Area
               Enfield/Haringey    Relocate Edmonton beds from         In Planning
                                   St Ann‟s to Enfield
                   Enfield         Changes to Somerset Ward –          In Planning
                                   aligned to Rehabilitation
                                   Strategy
                   Enfield         Review of OPMH                      In Planning
                                   accommodation needs
                   Enfield         CAMHS Accommodation                 Ascertaining need
                   Enfield         EIP Team Accommodation              Ascertaining need
                   Enfield         Suffolk House – Phase 2             In Planning

                                   Redevelopment of St Ann‟s –         OBC planned for
       3.28 Haringey               Service Assessment                  Dec 2005

                  Haringey         Short Term Investment               In Planning
                                   Strategy – St Ann‟s
                  Haringey         Redevelopment of St. Anns           In Planning
                                   Hospital
                  Haringey         Review of DASH / HAGA               In Planning
                                   premises in Haringey
                  Haringey         CAMHS Accommodation                 Ascertaining need
                  Haringey         CMHT Moves –                        Ascertaining need
                                   Accommodation Need
                  Haringey         Hornsey Central – Input into        Under
                                   LIFT Development &                  Development for
                                   accommodation provision             2006
                  Haringey         Eating Order Expansion –            In Planning for
                                   Small development scheme to         2005/6
                                   meet overcrowding & generate
                                   income
                  Haringey         EIP Team Accommodation              Ascertaining need



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      The Oaks & Elms Reprovision: - The new Oaks Ward at Chase Farm has
      been completed and is fully occupied. The Elms day service has transferred to
      the Warwick Centre (Chase Farm). Further discussions are being held with
      Enfield PCT regarding options for the reprovision of Elms services.

      Barnet Mental Health Scheme – The revised OBC was submitted in
      September 2004 and a preliminary response from the SHA has been received
      seeking further clarification on specific issues and linking approval of the
      document to a requirement for the Trust to produce a related strategy for
      vacating the whole of the Colindale site.

      Planning consent was received from L.B. Barnet for the main Barnet Mental
      Health scheme in February 2005 and a Guaranteed Maximum Price has been
      submitted by the Trust‟s Procure 21 partner. This has been reviewed by the
      Cost Advisor and recommended for acceptance.

      Work has been undertaken on the preparation of OBCs for the re-provision of
      Holly Aak Ward/Memory Clinic and Barnet Drug & Alcohol Service (BDAS).
      Preferred options have been identified following non-financial and financial
      appraisal. The OBCs have been submitted to the SHA and their views are
      awaited.

      An exit strategy for the Colindale site and a corresponding time-timetable have
      been produced and submitted to the SHA for consideration. Investigations are
      also underway to identify possibilities to enable an earlier full vacation of the
      Colindale site (currently programmed to be December 2007). This could, if
      feasible involve the use of a ward area at Finchley Memorial Hospital for
      decanting purposes to temporarily relocate Dolphin Ward from Colindale.

      St. Anns Hospital redevelopment – This is a major priority plan for which
      the Trust has recently advertised in OJEU for consultancy support to develop a
      SOC to support the redevelopment proposals. The project director will lead and
      co-ordinate the involvement partners including of Haringey TPCT, North Middx
      Hospital trust and Moorfields Eye hospital.

3.29 Capital Expenditure Commitments
      Details of capital expenditure commitments are included at section 4 of the
      Capital programme update to the May 2005 Board (attached at appendix 4)

3.30 Funding the Capital programme:
      The main source of funding for the Trusts capital programme has been through
      business cases for large projects and the annual block capital allocations for
      smaller projects. The block allocations however are insufficient to support the
      level of capital projects deemed necessary to support the Trusts service
      strategy.
      The Trust‟s initial capital budget for 2005-06 was based upon an expectation
      that cash and CRL brokerage of £1.7m would be available from the SHA.
      However, early indications from the SHA are that this is unlikely. The capital
      programme budget for 2005-06 being presented to the May 2005 Board
      consequently includes a shortlist of projects to be delayed as a consequence.


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      Given the shortage of capital resources, the Trust at this point is unable to fund
      its share (£900k) of the required IT infrastructure upgrades relevant to prepare
      for NpfiT. A joint business case with Haringey and Enfield PCT‟s is being
      developed to address this aspect.

      Brokerage Requirements – Brokerage for 2004/05 (and its reversal in
      2005/06) is now included at the level confirmed by the SHA, £1,211k less than
      previously planned. In order to meet the capital expenditure commitments
      detailed at 4, the Trust now requires only £1,030k brokerage in 2005/06. This
      compares to £4,262k brokerage finally received in 2004/05 and so is expected
      to be available to the Trust.
      The Capital plan also assumes the disposal of Colindale site during 2005/06 and
      that as a minimum the Trust will retain £1,782k, sufficient to meet all fees
      incurred in completing the sale and to finance a £1,061k capital to revenue
      transfer actioned in 2001/02. Should the sale be delayed into 2006/07
      additional brokerage of £1,782k will be required in 2005/06.
      Other Sales - It had previously been planned that £950k sale receipts would
      be available in 2005/06 from the sales of 2 community properties. The most
      recent valuations from the District Valuer suggest that total sale receipts of
      £1,087k should be achievable, £137k greater than previously planned.
      However, one of the sales will be delayed into 2006/07 and so the brokerage
      requirement in 2005/06 includes £625k to temporarily fund this slippage.



3.31 Summary
      The Trusts strategic direction is one of modernisation and service change /
      development in line with national and local strategies. The strategy is supported
      by the LDP and implemented through an evolving capacity plan. Investments in
      services are to be directly complimented by appropriate Human resources and
      capital development strategies. A key enabling factor is the financial strategy
      aimed at eliminating the current deficits and strengthening the Trusts resource
      base.




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4 IMPACT OF THE PROPOSED STRATEGY

4.1 Financial Model
      The financial model for the three years 2005-2006 to 2007-2008 are attached
      at appendix 2 in the FIMS format. The model is supported by other appendices
      as follows;

                Further detail on the I&E position for 2005-06 – Appendix 2a.
                Further detail on Cost Improvement Plan – Appendix 3.
                Further detail on capital expenditure plans – Appendices 4 and 5.


4.2 Immediate Impact on Working Capital
      The services and investment strategy is largely linked to financial affordability.
      Large proportions of the income and expenditure within plan are received or
      made out fairly evenly throughout a financial year. However, contract
      negotiations include payment terms to ensure that income is closely matched to
      the timing of expenditure.

      A detailed cash flow statement is attached in the format of the FIMS returns
      and the information is summarised in the Figure 8 below. The cash-flow
      statement shows an estimated peak balance of £3.18m with a trough balance of
      £314K. Trust policy would not permit the bank balance to go overdrawn.


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       Figure 8: Cash flow forecast 2005/06

               Details                                        2005/06

               Peak cash balance                                    1,143
               Trough cash balance                                    0
               Number of days with negative cash                      0



4.3 Medium Term Financial Impact

      Income and Expenditure
      The financial impact of the service developments and investments outlined in
      the LDP has been modelled on the timing of income and expenditure
      consequencies as described below. The trust is only undertaking developments
      where there is at least cost efficiency or neutral I&E impact.

      Income :- The total contract income from commissioners will increase through
          o Full year effect - totalling £1,050k mainly for crisis teams
          o New Developments fund - total estimated to reach £300k for various
             developments
          o Activity rebasing adjustments – CAMHS, BIRU and Forensic riskshare
             contract on a 3year average will result in an estimated increase of £5.6m
      The level of increases in 2005-2006 are not expected to be repeated in 2006-
      2008 unless further commissioning funds are confirmed for projects like Early
      intervention Psychosis or new invest to save schemes get developed.

      Expenditure: - Total operating expenditure is expected to remain largely in
      proportion to investments except for the expected positive impact of the Cost
      improvement programme that will recurrently reduce the per unit cost of
      activity.

      Figure 9 below summarises the stable income and expenditure impacts:




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       Figure 9: I & E Forecast

                                               2005/06     2006/07         2007/08
                                               Forecast    Forecast        Forecast
                                                  £000        £000            £000
               Income                            174,033      176,033         178,033

               Less: Pay costs                   101,204      102,004         102,806
               Less: Non Pay costs                66,691      67,893           69,093

               Operating Surplus /                 6,138       6,136           6,134
               (Deficit)

               Retained Surplus / (Deficit)            0         0                0

               Non recurrent items                     0         0                0

               Retained Surplus / (Deficit)            0         0                0
               after adjustments for non
               recurrent items


      Balance Sheet

      The balance sheet is expected to be strengthened during the 2005-08 period
      through focused management of working balances. Fixed assets and capital
      balances will be dictated by the level of capital expenditure including asset
      disposals.

4.4 Capital Programme
      Details of the capital programme have been entered into the FIMS returns, and
      a full narrative attached at appendix 4.
      Figure 11 below summarises the key balance sheet features:

       Figure 10: Balance Sheet Forecast

                                               2005/06     2006/07         2007/08
                                               Forecast    Forecast        Forecast
               Fixed assets                     160,608       163,028        165,448
               Current assets                    12,602        12,602         12,602
               Creditors (less than 1 year)       11,645      11,444           11,200
               Creditors (more than 1              1,441      1,441            1,441
               year)
               Total assets deployed

               Equity                           160,124      162,745         165,409
               PDC                              116,187      116,444         116,744
               Revaluation reserve               43,903       46,323          48,743
               Donated asset reserve                3            1               0
               I&E Reserve                        -508         -508            -508
               Government Grant reserve            539          485             430
               Total equity                    160,124       162,745         165,409



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4.5 Income and Payment by Results
      A key aspect of contracting now within the NHS is the implications of Payments
      by results (PbR). At this stage of the development of PbR, Mental Health Trusts
      are exempt due to the complexity of activity measurement.
      Most Contract negotiations have reached agreement and the financial plan
      makes prudent assumptions where full agreement has not been reached. It is
      therefore assumed within this plan that all recurrent income will continue to be
      received and specific estimates have been included regarding non-recurrent
      allocations where necessary

      Attention is drawn at this stage to two elements of funding where there is a
      difference of opinion with the PCTs as to the continuation of funding. The
      financial plan assumes that the following funding streams will continue to be
      received from the Local PCTs.

      1. Deficit contribution £1,850k.
      2. Incentive Scheme Contribution £450k.

      The Trust has presented its case to the PCT‟s and the SHA and hopes for a
      favourable resolution. The risk of losing this income source will significantly
      impact upon the Trusts ability to develop a balanced budget for 2005-2006

      This detail is included in the financial model at appendix 1 and summarised in
      figure 13 below.


       Figure 11: Income Plans

                              2005/06                  2006/07                2007/08
                         Total     Contract        Total     Contract   Total        Contract
                         Planned                   Planned              Planned
          Income
          from PCTs
          Barnet         29,953    29,953          30,153    30,153     30,353       29,953
          Enfield        36,895    36,895          37,095    37,095     37,295       36,895
          Haringey       45,105    45,105          45,305    45,305     45,505       45,105
          Other PCTs     42,047    42,047          42,047    42,047     42,247       42,047

          Other          20,033    20,033          20,169    20,169     20,033       20,033
          Income

          Total          174,033   174,033         174,969   174,969    174,033      175,769
          Income




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      Figure 14 below summarises the breakdown of income expected to be
      generated in 2005/06 from all sources.


       Figure 12: Income Reconciliation – 2005/06

          Project                      Contracted Expected Expected Total
                                                  additions- additions-
                                                  full cost  marginal
                                                             cost
                                         £‟000      £‟000      £‟000    £‟000

          Activity covered by PbR                0               0               0             0
          Other activity related           149,000             1,000             0        150,000
          income
          Other income                     24,033                0               0         24,033

          Total Income                     173,033             1,000             0        170,033
          (reconciles to FIMS)




4.6 Cost Improvement Programme
      The 2005-06 budget-setting process identified the need for a £5.8m cost
      improvement programme to achieve recurrent financial balance. Service
      Directors and budget-managers have played a key role in determining the cost
      savings programme for each directorate. The schedule at appendix 3 provides a
      summary of the cost improvement programme analysed by directorate.

      Figure 19 below summarises the CIP programme.

       Figure 13: Cost Improvement Programme summary

        Details                     PYE Saving           FYE Saving              Responsible
                                                                                 Director
                               Recurring    Non-         Recurring   Non-
                                            recurring                recurring
                               £‟000        £‟000        £‟000       £‟000

        Directorate specific   2,281        0            2,417       0           Service
        schemes                                                                  Directors
        Corporate Schemes      392          0            424         0           Nominated
                                                                                 Service Director
        Capacity Plan          1,541        0            1,800       0           Service
                                                                                 Directors
        Green and Kassab       1,555        0            1,961       0           Nominated
        Schemes                                                                  Service Director
        Total                  5,769        0            6,602       0




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST               2005-08 Provider Sustainability Plan


4.7 Human Resources
      Information shown below in Figure 15 indicates the planned workforce changes
      over the next three years and are consistent with the Local Delivery Plan. The
      staffing numbers assume some overall growth in staff in post numbers to reflect
      reduced vacancy rates as recruitment and retention initiatives become more
      effective, Agenda for Change becomes embedded and bank and agency
      numbers reduce. Developing work on modern apprenticeships and increasing
      numbers of HCA‟s moving into nurse training will increase supply of nursing
      staff coming into the Trust although there will need to be further work on
      supporting staff nearing retirement to work flexibly rather than lose their skills.

      Sickness rates are predicted to rise slightly during 05/06 and then to start
      reducing again. The Trust has recently introduced a new sickness absence
      reporting system and this is expected to lead to an increase in reported rates at
      first although management and HR action will be taken to address this
      promptly.

       Figure 14: Planned Manpower

                                                   2005/06      2006/07             2007/08
               WTE (average actual
               staff in post)
               NHS Staff
                Nursing and                         1414          1461                1537
               Midwifery
                Qualified scientific,                275           281                287
               therapeutic & tech
                Unqualified scientific,              61            63                  65
               therapeutic & tech
                Healthcare scientists
                Mental health                        10            10                  10
               workers
                Admin and estates                    546           548                551
                Junior doctors                        64            64                 64
                Consultants                           93            95                97.
               Total NHS Staff                      2,463         2,522              2,616
               Non-NHS Staff
               Total Staff WTE                      2,463         2,522              2,616

               Total Pay Cost
                Nursing and                        54,885        58,977              64,527
               Midwifery
                Qualified scientific,              12,896        13,704              14,557
               therapeutic & tech
                Unqualified scientific,              **            **                  **
               therapeutic & tech
                Healthcare scientists
                Mental health
               workers
                Admin and estates                   20,462       21,381              22,342
                Junior doctors                      6,898        7,174               7,461
                Consultants                         13,421       14,258              15,141
               Total NHS Staff costs               108,561      115,495             124,028



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                Non-NHS Staff costs                     8,468          8,651              8,688
                Total Staff Costs                      122,281        129,840            138,899

                Non-NHS usage (%                       7.24%           6.97%              6.55%
                of total costs)
                Sickness Rate (%)                       5.7%            5.1%               4.4%


      ** : The analysis of the above cost are not available at present. Need to be re classified.




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST             2005-08 Provider Sustainability Plan



5 UNDERPINNING ASSUMPTIONS

5.1 Finance
      The financial Plan for 200506 has been based on the best estimate of income
      and expenditure. In determining the financial plan, the following approach has
      been used:
      o Starting point is the outturn for the previous year (2004-05)
      o Incorporate adjustments for non-recurring items and
      o known developments and
      o Identified cost pressures.
      Developments are only included in the expenditure estimates were there is
      corresponding income to match. All other funded items not previously budgeted
      are described as cost pressures. Cost pressures
      The key assumptions within the planning approach are:

      Services Agreement Income ; -
         Due to the complexity of defining contract currencies for quantifying activity
          baselines, the income baselines have been on a Service agreement cash
          envelope basis .
         Most Service agreements negotiations for 2005-06 have been concluded,
          consequently the financial plan is based on the agreed baseline contract
          figures. The following approach has been taken in respect of: -
           o Developments: - these have been excluded except where there is a very
               likely indication of PCTs agreeing funds. In such cases, the financial risk
               is limited by the fact that budget will not be released until funding has
               been confirmed.
           o Full Year effects: - Unless specifically notified otherwise, that these will
               be honoured by PCTs.
           o Recurrent Deficit Support: In 2004-2005, the PCTs equally contributed a
               sum of £1,850k to support part of the underlying deficit. The Trust
               views this support to be recurring and has been factored into the
               financial plan. A further £150k from each local PCT has been assumed
               to be recurrent to support the achievement of capacity plan targets.
               Recent responses from the two PCTs suggest this may not be the case
               and the Trust has sought SHA support to resolve. If this is not resolved
               favourably, the Trust will have to resort to service reductions.

      Expenditure
       As far as possible, the budgets have been estimated to reflect the 200405
       actual level of expenditure. Adjustments have been factored in to remove costs
       considered to be non-recurring.

      Cost Improvement Programme
      The cost improvement target arises from the excess of costs over income. The
      two main sources of cost excess are as follows;
           o   1.7% Effeciency savings as nationally set.
           o   Cost pressures arising from the excess of price or volume changes or
               the absence of a budget or compensating income.



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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST              2005-08 Provider Sustainability Plan


          Specific cost improvement schemes have been identified within the Cost
          Improvement programme (attached). Each scheme is directly attributed to an
          identified Service Director for implementation and monitoring purposes.
          Though some schemes have a higher full year savings value, only net
          achievable cost savings are included in the programme for 2005-06.
          The programme for 2005-06 includes elements of the capacity plan target for
          which there remains a risk of unforeseen activity variations.

          Impact of Capacity plan reductions on bed usage: - Initial indications that bed
          reductions are possible through the impact of community team developments
          have been reflected as part of the CIP targets to achieve a balance budget.

          Green and Kassab Initiatives: The Trust has employed the services of Green
          and Kassab to identify and implement cost savings over a two year period. At
          this early stage of that assignement, only a few early starter schemes have
          been costed and included in the overall programme. It is expected that more
          substantive schemes will be proposed and discussed with PCts and other
          partners prior to adoption.

      Inflation and tariff uplifts:
           An inflation uplift of 5.44% has been applied to 2005-2006 income as
            notified by the SHA. The uplifts for future years have been excluded from
            calculations.
           Inflation uplifts for Expenditure in 2005-2006 have been based on notified
            uplifts for pay and non-pay items. No uplifts have been applied to future
            years expenditure.

      External Financing Limit (EFL)
           The 2005-06 draft EFL allocations recently notified have been used in the
            2005-2006 FIMs tables. However, the real cash-flow impact of the Trusts
            capital programme shows that the required EFL will be significantly different,
            hence the FIM return shows an overshoot of £16,914k. Appendix 4 attached
            incorporates details of the Trusts capital programme and assumptions about
            sources and application of cash.

           This plan assumes that the SHA will support the Trusts programme through
            approving the brokerage requirements of £1,296k.

           This plan also assumes that the sale of Colindale site will be completed
            during 2005-2006 and that the Trust will be able to utilise a part of the cash
            proceeds to recover costs incurred in the FBC while also clearing the
            inherited cash deficit which currently stands at £4.7m. If the sale is not
            completed in 2005-2006, further cash brokerage of £7.2m will be required
            as in previous years.

      Capital Resource Limit (CRL)
           The Trusts Capital programme contains items not yet reflected in the SHA‟s
            notification of opening CRL balances. This plan assumes that the SHA will
            support the Trusts programme through approving the brokerage
            requirements of £1,296k.



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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                  2005-08 Provider Sustainability Plan


         The Trust is also expecting that a joint business case to be presented by
          Enfield PCT for capital funding support to upgrade the IT infrastucture will
          potentially increase the brokerage / CRL requirement by up to £899k in
          2005-2006.

5.2 Activity

      5.2.1 Reducing In patient Admissions
      So far in 2004/05 the actual reduction in admissions has exceeded the plan, but
      Delayed Transfers of Care (DtoCs) remained high in both Haringey and Barnet.
      The plan assumes that in line with government policy the level of DToCs, which
      have been extremely high in these services would reduce by between 10 – 15%
      in 2005/06 depending on the borough.

      Baseline Beds
       Unit            Acute        PICU             Rehab          ECR          Total
       DSU              104          16                20            2            142
       MHU               50           5                27            5             87
       ST Ann’s         155          12                12                         179
       Total            309          33               59             7            408

      The bed baseline for the capacity plan is at 2003/4. With the exception of 17
      beds purchased by Hertsmere PCT (and 2 other PICU beds) all other beds at the
      Dennis Scott Unit are purchased by Barnet PCT. SE Herts PCT have historically
      purchased 12 acute beds, 8 rehab beds and part of a PICU bed from the Mental
      Health Unit while Enfield PCT purchase the rest. Enfield PCT also purchase 22
      beds at St Ann‟s. However, the forecast for EPCT activity at St Ann‟s is for 33
      acute beds, 1 PICU bed and 3.5 Rehab beds. SE Herts PCT target activity is
      significantly down this year due to impact of the Cheshunt CR&HTT. This
      activity is currently being taken up by patients from Enfield. St Ann‟s beds are
      purchased by Haringey PCT with the exception of those purchased by Enfield
      PCT.

      The model based on the assumptions described above reduces admissions and
      ultimately bed use as follows (showing percentage reduction in brackets).

       Unit                     2004/5       Actual          2005/6       2006/7           Total
                                 plan      reduction          plan         plan            plan
       DSU      Admissions        33           521             111         150              294
                                                                                          (26%)
                Beds               5         24 +2*            25            1           31 (22%)
       MHU      Admissions         4          -255             54           60              118
                                                                                          (18%)
                Beds               2                4*         6             7               15
                                                                                          (18%)
       ST       Admissions        52                534       142          127              321
       Ann’s                                                                              (23%)
                Beds              12                12         14           13               39
                                                                                          (22%)
       Total    Admissions        89             800          307          337              733
                Beds              19              42           31           35               85
      *ECRs



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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST           2005-08 Provider Sustainability Plan




      Due to the higher than expected impact against the plan bed reductions in Barnet,
      planned for the next two years, have been brought forward into 2005/6.
      Sectorisation of beds at St Ann’s will require the use of beds for Edmonton
      residents to reduce to 27 (see below).

      5.2.2 Barnet
      The CR&HTT, together with improved bed management and CMHT working, has
      further reduced admissions against the capacity plan targets as this chart
      shows.


          300
          250
          200                                                                 Low
          150                                                                 High
          100                                                                 Actual
           50
           0
                   Q1            Q2                Q3        Q4


      This has resulted in the closure of Shannon ward (20 beds) and 4 overspill
      beds.

      There are two main problems to the target being achieved.

          High levels of delayed transfers of care
          Inappropriate attendance by the CR&HTT to the BGH A&E department out of
           hours

      The chart below shows that the level of delayed transfers of care is not reducing
      as modelled.

          2000

          1500
                                                                              Low
          1000                                                                High
                                                                              Actual
          500

            0
                   Q1             Q2               Q3        Q4




      The CR&HTT are spending almost a third of their time inappropriately attending
      the A&E department out of hours due to the inadequacy of the psychiatric
      liaison arrangements at Barnet General (see below a pie chart showing all
      referrals to the CR&HTT).




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST              2005-08 Provider Sustainability Plan




                              8%                                       GP
                                                    17%
                     11%                                               CMHT
                1%
               4%                                                      -care coordinator
                                                                       A&E
                                                                       Local In Patient
                                                          23%          Self
                                                                       Other - A&E liaison
                      29%                      7%
                                                                       Other




      5.2.3 Enfield
      The CR&HTT teams are still being established and it is unlikely that any
      significant impact will be made until the second half of 2005/06. The south
      team which was set up at the very end of 2004 is most likely to impact on the
      wards at St Ann‟s. Even after that the biggest impact will be on reducing
      overspill ECRs and reducing occupancy levels rather than reducing beds as in
      Barnet and Haringey.

      Enfield DToCs have been reduced in the first part of the year compared with the
      baseline year and this has had the effect of reducing occupancy levels.
      However, these have begun to creep up as the chart below shows.



        1000
         900
         800
         700
         600                                                                       Low
         500                                                                       High
         400                                                                       Actual
         300
         200
         100
           0
                     Q1            Q2               Q3          Q4




      This situation has helped reduce the overspill (ECR) numbers with the result of
      these being almost eliminated. The occupancy levels in this service have also
      reduced from levels in excess of 150% to 109% in Q3 2004/5.

      Relocation of Edmonton patients from St Ann‟s to Enfield is a key service
      strategy. To achieve this the use of beds at St Ann‟s needs to 27 (which is still
      significantly higher than the 22 beds commissioned).

      5.2.4 Haringey
      The CR&HTTs have significantly reduced admissions and are well below the
      target in the model as this chart shows.




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST            2005-08 Provider Sustainability Plan



        350

        300
        250
                                                                                      Low
        200
                                                                                      High
        150
                                                                                      Actual
        100
         50
          0
                  Q1               Q2              Q3               Q4




      As a result of this the 12-bed overspill ward (Jubilee) has been closed.

      As with Barnet the level of DtoCs remains unacceptably high and the reductions
      modelled in the plan are not being achieved.



        3500
        3000
        2500
                                                                                      Low
        2000
                                                                                      High
        1500
                                                                                      Actual
        1000
         500
          0
                   Q1              Q2              Q3               Q4




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST                2005-08 Provider Sustainability Plan



6 SENSITIVITY ANALYSIS

6.1 Approach
      A simple approach has been applied to the sensitivity analysis included here
      with the expectation of developing these further. Each of the main elements of
      the financial strategy is considered in terms of potential for variations in
      outcome and its financial impact is then assessed. The table below provides a
      summary of the assessed items.


6.2 Results


       Figure 15: Sensitivity Analysis

            Sensitivity                            Impact on I & E    Impact on
                                                                      Cash

            CRES slippage of 10%                       £500k                £500k


            Agenda For Change cost                     £500k                £500k
            variance of 5%

            Inpatient Beds reduction                   £250k                £250k
            variance of 15 beds
            Specialist Services activity               £200k                £200k
            (Eating Disorder, BIRU, CAMHS)
            reduces by 10%

            CAMHS Risk-share Contract                  £300k                £300k
            15% activity reduction
            Specialist ECR placements                   £60                  £60
            activity demand increases by
            20%

            CRES slippage of 10%                       £500k                £500k

            Agenda For Change cost                     £150k                £150k
            variance of 5%




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7 IMPLEMENTATION AND MONITORING ARRANGEMENTS

7.1 IMPLEMENTATION

7.1.1 Role of the Board

      The Trust Board is responsible for the overall direction and performance of this
      plan. The Board has given its support for the Business strategy and the
      accompanying LDP and capacity plan.
      The Board has been briefed about the progress to develop the Trusts
      sustainability plan and be expected to approve this Financial Plan at the May
      2005 board meeting.
      The Trust Board will be presented with monthly performance reports on the
      financial plan whiles key performance indicators normally form a part of the
      Chief executives report at month Board meetings.

7.1.2 Support

      The sustainability plan requires the support of partner organisations in its
      general direction of service improvements and the consequential impact on
      finances, activity and estates.

      The Financial plan assumes that the PCTs will recurrently fund the £2.3m part
      of the underlying deficit to substantially reduce the burden of the Trust‟s deficit
      on service provision. The support of the 3 local PCTs and the SHA is required to
      favourably confirm this assumption in full.

      The Trust has commissioned Green & Kassab to work with staff in developing a
      range of options for achieving further long-term savings. It is clear that the
      quantum of further efficiencies will affect in the way services are provided. PCTs
      and partner organisations will be required contribute in the affordability debate
      and support subsequent decisions.

      Capital expenditure plans currently indicate that there is a potential brokerage/
      funding requirement of £1m to £2m over the next year. Support from SHA in
      the form of brokerage and approval of business cases will be required, including
      the Barnet Psychiatric Unit business-case that is outstanding.



7.2 MONITORING

      The attached at appendix 5 provides the key activity targets for the Trust in
      2005/6. Targets will also be established for workforce monitoring. It is also
      important for the Trust to recognise the joint health and social care
      responsibilities it has in terms of the information it collects and the external
      review of its performance.




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BARNET, ENFIELD & HARINGEY MENTAL HEALTH TRUST             2005-08 Provider Sustainability Plan




7.2.1 Performance Management

      This will be a very challenging task that requires the Trust Boards continued
      involvement in performance monitoring and decision making as necessary. To
      achieve this objective, the Trust is in the process of updating the Financial
      Management policy to support the following mechanisms:

          Provide monthly financial and activity reports to service managers on a
           timely basis, highlighting material variations from budget and indicating
           remedial action where necessary.

          Continue with the Executive group‟s monthly performance meeting which
           reviews and agrees management action to support the achievement of
           planned service and financial objectives

          Monitor the adequacy of the actions being taken to address high-risk areas,
           through review meetings between the Chief Executive Officer and
           directorate management teams monthly or quarterly as may be necessary.

          Continue to undertake periodic risk assessments and develop alternative
           plans to safeguard the Trust‟s position

          Benchmark its costs and activity with other similar trusts to help to identify
           opportunities for improvement

          Continue with the efforts and investment to improve the quality of
           information about activity levels, and ensure it is robust and timely and to
           be used effectively to guide decisions on service provision.

          Fine tune the Trust‟s performance management systems to ensure that
           there is greater accountability and ownership by staff for the delivery of the
           Trust‟s financial and service objectives

7.2.2 Review Meetings with the SHA

      The Trust will continue to facilitate the monthly Financial Recovery Board (FRB)
      meetings involving the chief executives of the local PCTs and the SHA Finance
      Director to monitor and agree on progress of the sustainability plan. Other
      officers including Finance Directors and Services Directors of the Trust and
      PCT‟s will be invited to these meetings as and when required.
      The agenda and reports to the FRB includes
           Financial Performance summary update
           Financial Plan Impact of;
                 o Cost improvement programme
                 o Capacity Plan
           Service Development update
      Dates for FRB meetings in 20005 have been set for all months to December
      2005.




                                          - 37 -                        Report Date – 30/03/05

								
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