TB2012.71
Trust Board Meeting: Thursday 5 July 2012
TB2012.71
Title
Financial Performance to 31 May 2012
Status
A paper for information
History
Regular monthly report
Board Lead(s)
Mr Mark Mansfield, Director of Finance and Procurement
Key purpose
Strategy
TB2012.71_Financial Performance to 31 May 2012
Assurance
Policy
Performance
Page 1 of 14
Oxford University Hospitals TB2012.71 Summary 1. The Trust can report that it is achieving its financial plan after the first two months of the 2012/13 financial year (page 3). 2. The Trust financial risk rating using the Monitor criteria would show a score of 2.65 (page 6). 3. The Trust savings plan is slightly behind the trajectory agreed by the Board at the budget setting phase and some elements of the projection for the year remain high risk (page 11). 4. The Trust will be required to manage a number of risks to its financial position in the period to 31 March 2012 (page 7). TB2012.71_Financial Performance to 31 May 2012
Page 2 of 14
Oxford University Hospitals TB2012.71 Part 1 – Statement of Comprehensive Income (Income & Expenditure Account) Annual
 The Trust is achieving its financial plan after the first two months of the year. Year to Date
Plan
Plan
Actual
Variance
£000
£000
£000
£000
643,846
105,906
107,839
11,580
1,936
1,872
(64)
131,526
20,252
19,610
(642)
786,952
128,094
129,321
1,227
Pay
(422,723)
(70,045)
(71,207)
(1,162)
Non-Pay
(298,705)
(47,535)
(47,603)
(68)
(721,428)
(117,580)
(118,810)
(1,230)
65,524
10,514
10,511
(63,970)
(10,629)
(10,758)
(129)
1,554
(115)
(247)
(132)
2,048
338
473
135
3,602
223
226
3
 Commissioning income was £1.93m better than plan after taking into account the adjustment against the NHS Oxfordshire contract for over‐performance against plan. Caution needs to be exercised when assessing this position as it is based on activity data from only one month. Details of activity performance by individual commissioner are shown on Page 10. Income
Commissioning Income
PP & Overseas
Other Income
Total Income
1,933
 £0.52m of the under‐achievement of “other” income relates to recharges to third parties and is offset by matching underspends on pay and on drugs. Operating Expenditure
Total Expenditure
EBITDA
Non-Operating Expenditure
Retained Surplus/(Deficit)
Technical Adjustments
Break Even Surplus
TB2012.71_Financial Performance to 31 May 2012
 Expenditure on pay was £1.16m above plan. This reflects both the over‐
performance against contract and also that Divisional savings schemes have not yet started to have the full planned impact. (3)
Page 3 of 14
Oxford University Hospitals TB2012.71 Part 1 – Statement of Financial Position (Balance Sheet) Opening
Balance
Closing
Balance
01-Apr-12
31-May-12
 Non‐Current Assets reduced in the month because depreciation on the existing asset base exceeded new capital additions. Movement
NON-CURRENT ASSETS
Property, Plant & Equipment
Intangible Assets
Trade & Other Receivables
696,398
692,761
(3,637)
7,301
5,782
(1,519)
398
3,742
4,140
707,441
702,683
Inventories
12,761
13,055
294
Trade & Other Receivables
36,462
49,783
13,321
Cash & Cash Equivalents
43,884
45,378
1,494
CURRENT ASSETS
93,107
108,216
15,109
(100,707)
(111,301)
(10,594)
(17,356)
(14,741)
2,615
(8,421)
(8,094)
(126,484)
(134,136)
(7,652)
(33,377)
(25,920)
7,457
NON-CURRENT ASSETS
 Although the figure for Trade & Other Receivables has increased, this reflects a higher level of income accruals that have been raised by departments. The level of debt owed on invoices raised through the Account Receivable system has fallen in the first two months of the year. (See pages 13 and 14). (4,758)
CURRENT ASSETS
 The increase in Trade & Other Payables is also the result of an increase in expenditure accruals raised by departments since the start of the year.  The fall in borrowings reflects the regular repayments on the capital element of the contracts with the Trust’s PFI providers. These repayments are made through the monthly PFI unitary payments. CURRENT LIABILITIES
Trade & Other Payables
Borrowings
Current Provisions
CURRENT LIABILITIES
NET CURRENT ASSETS/(LIABILITIES)
327
NON-CURRENT LIABILITIES
Borrowings
(299,314)
(299,122)
Trade & Other Payables
(1,364)
(1,925)
Non-Current Provisions
(1,426)
(1,426)
NON-CURRENT LIABILITIES
(302,104)
(302,473)
TOTAL ASSETS EMPLOYED
371,960
374,290
206,873
206,873
192
(561)
(369)
2,330
FINANCED BY TAXPAYERS EQUITY
Public Dividend Capital
Retained Earnings
Revaluation Reserve
Other Reserve
TOTAL TAXPAYERS EQUITY
15,600
17,930
147,744
147,744
1,743
1,743
371,960
374,290
TB2012.71_Financial Performance to 31 May 2012
2,330
2,330
Page 4 of 14
Oxford University Hospitals TB2012.71 Part 1 – Statement of Cashflows April
2012
May
2012
Year-toDate
£000
£000
£000
 The Trust’s cash holdings fell by £7.2m in May but remain £1.5m higher than at the start of the year. Cash Flows from Operating Activities
Operating Surplus/(Deficit)
Depreciation & Amortisation
Interest Paid
(Increase) in Inventories
(Increase) in Trade & Other Receivables
Increase in Trade & Other Payables
Increase in Provisions
Cash Flow from Operating Activities
862
5,806
6,668
2,911
2,911
5,822
(1,333)
(1,333)
(2,666)
(362)
68
1,306
(15,103)
(13,797)
2,397
13,233
(295)
(32)
(5,286)
 The Trust held enough cash to cover 23 working days of operating expenditure at 31 May 2012. However, liquidity remains a risk under the Monitor regime until the Trust has an agreed profile for expenditure of ring‐fenced funds from prior years (page 6). (294)
10,836
13,925
 The fall was largely the result of the increase in current receivables of £15.1m. (327)
8,639
Cash Flows from Investing Activities
Interest Received
(Payments) for Fixed Assets
Cash Flow from Investing Activities
16
9
(4,362)
(4,346)
25
(4,362)
9
(4,337)
Cash Flows from Financing Activities
Capital Element of Finance Leases & PFI
(854)
(1,954)
(2,808)
Cash Flow from Financing Activities
(854)
(1,954)
(2,808)
Net Increase/(Decrease) in Cash
8,725
(7,231)
1,494
Cash - Beginning of the Period
43,884
52,609
43,884
Cash - End of the Period
52,609
45,378
45,378
TB2012.71_Financial Performance to 31 May 2012
Page 5 of 14
Oxford University Hospitals TB2012.71 Part 1 – Financial Risk Rating Scores
Financial Criteria
Risk Rating
May 2012
Weight
5
4
3
2
1
Metric
Score
Achievement of Plan
EBITDA % achieved
10%
100%
85%
70%
50%
<50%
99.4%
4
Underlying Performance
EBITDA margin
25%
11%
9%
5%
1%
<1%
8.1%
3
Net return after Financing
20%
3%
2%
(0.5%)
(5%)
< (5%)
(0.2%)
3
I & E Surplus Margin
20%
3%
2%
1%
(2%)
< (2%)
(0.2%)
2
Liquid ratio (days)
25%
60
25
15
10
<10
15
2
Financial Efficiency
Liquidity
Weighted Average
2.65
Overall Rating (see rules below)
3
Monitor - Rules Used to Adjust the Financial Risk Rating
Situation
Maximum Rating
Plan not submitted on time
3
Plan not submitted complete and correct
3
PDC dividend not paid in full
2
One financial criterion scored at '1'
2
One financial criterion scored at '2'
3
Two financial criteria scored at '2'
2
Two financial criteria at '1'
1
Unplanned breach of Prudential Borrowing Code (PBC)
Previous year's annual rating worse
2
No more than 2 points better
than previous year
Less than 1 year as an NHS Foundation Trust
4
Deficit forecast in year 2 or 3
3
Deficit forecast in both years 2 and 3
2

The planned surplus for 2012/13 is less than 1% and therefore the score for the I&E surplus margin is “2”. 
The Trust’s financial risk rating (FRR), using the criteria applied by Monitor, scored “3” in May. The improved score for liquidity reflect an assessment that an element of its current assets & liabilities are, in fact, non‐current. Work has begun to develop an agreed plan for this element (see page 5 above). TB2012.71_Financial Performance to 31 May 2012
Page 6 of 14
Oxford University Hospitals TB2012.71 Part 1 – Risks There are significant risks to the Trust achieving its financial duties during the year. These have been identified as follows: Risk Mitigating Actions 1.
Divisional failure to deliver the agreed savings programme The Trust is using a savings tracker to monitor progress against specific schemes. Should any Division’s plans start to slip then this The majority of the Trust’s overall savings target of £49.5m for 2012/13 has been will be picked up quickly and alternative savings agreed with the allocated against Divisions through the budget setting process for the year. Division. 2.
Slippage on agreeing the remaining savings programme for the year The Trust will consider whether any savings schemes that form part of its medium term financial plans can be accelerated to the Some schemes identified for the year have yet to be finalised by divisions. Slippage on current financial year. these schemes may mean that the full year planned level of savings may not be generated in 2012/13. 3.
Over‐performance on the NHS Oxfordshire contract 4.
Emergency Activity Divisions have been asked to produce activity demand management plans so the Trust can engage with the PCT around The Trust will receive no funding for the first £4m activity over‐performance against this the production of an effective remedial QIPP programme. contract and only marginal rates thereafter. It will incur additional premium costs to carry out this activity. If the number of emergency admissions exceeds the number of admissions made by the Trust in 2008/09 then the Trust will only be paid at 30% of tariff. This is in line with the national contract. 5.
Re‐Admissions Within its financial plans the Trust has assumed that it will not receive tariff for a proportion of readmissions. If the audit carried The Trust will not be paid for avoidable readmissions to hospital. In its agreement with out by the PCT suggests a higher figure then further provision may NHSO 27% has been used as the proxy rate for such readmissions but a revised need to be made. proportion may be applied from 1 July 2012. TB2012.71_Financial Performance to 31 May 2012 Page 7 of 14 Oxford University Hospitals Risk 6.
CQUIN Gateway Payments Payment of some CQUIN funds is denied. 7.
Penalties Penalties are applied for non‐compliance in performance areas. TB2012.71 Mitigating Actions Monthly performance review meetings with Divisions are focused on meeting the relevant targets to minimise the loss of funding. Any problems with performance therefore can be quickly identified and rectified. Monthly performance review meetings with Divisions are focused on meeting the relevant targets to minimise the loss of funding. Any problems with performance therefore can be quickly identified and rectified. 8.
Delayed Transfers of Care (DTOCs) The Trust is working with the CCG, Oxford Health and Social Services to implement an effective Supportive Discharge Scheme Patients who are well enough to be supported within the community, but who cannot (SDS). be discharged, prevent the Trust from releasing resources for other purposes or incur additional, premium, costs. 9.
Over‐commitment on capital programme There is normally some slippage against capital schemes and this will be monitored carefully to see whether it can be used to The Trust capital plans for the current year exceed the amount it should spend under its compensate for the over‐commitment. agreed capital resource limit. TB2012.71_Financial Performance to 31 May 2012
Page 8 of 14
Oxford University Hospitals TB2012.71 Part 1 – Financial Key Performance Indicators The Trust’s forecast performance against its financial targets is summarised below: Targets Actual (£000) Better/ (Worse) Risk Rating
(£000) 1.
To achieve break even on Income & Expenditure 2,800 2,803 3 Amber 2.
Cost improvement programme 5,298 4,969 (329) Red 3.
To manage within the capital resource limit (CRL) 1,062 806 256 Amber 4.
To operate within an External Finance Limit (EFL) – Year End Forecast 4,294 4,294 0 Green 5.
Better Payments Practice Code NHS 95% 62.2% (32.8%) Red Non‐NHS 95% 87.7% (7.3%) Red NHS 95% 68.3% (26.7%) Red Non‐NHS 95% 85.5% (9.5%) Red Number of invoices Value of invoices 
Plan (£000) Although, after two months of the year, the capital programme is underspent against plan, the duty to manage within the capital resource limit is marked “Amber” because of the current over‐commitment of projects against the total planned amount for the year. TB2012.71_Financial Performance to 31 May 2012 Page 9 of 14 Oxford University Hospitals TB2012.71 Part 1 – Analysis of Income by Commissioner Annual
YTD
YTD
YTD
Var.
Plan
Plan
Actual
Variance
YTD
£000
£000
£000
£000
%
350,270
57,477
58,514
35,700
5,734
5,315
(419)
(7.3%)
South Central Specialised Comm.
86,531
14,359
13,929
(430)
(3.0%)
South West Specialised Comm.
22,349
3,683
3,741
58
1.6%
Northamptonshire PCT
20,247
3,284
3,146
(138)
(4.2%)
East Midlands Specialised Comm.
19,722
3,243
2,586
(657)
(20.3%)
Berkshire West PCT
15,803
2,475
2,147
(328)
(13.3%)
Commissioner
 Caution needs to be exercised when assessing the performance position against individual commissioners as it is based on only one month’s activity data. NHS Buckinghamshire & Oxfordshire:
Oxfordshire
Buckinghamshire
1,037
1.8%
Milton Keynes PCT
15,297
2,511
2,605
94
3.7%
National Commissioning Groups
12,388
2,058
2,317
259
12.6%
8,005
1,270
1,261
Berkshire East PCT
(9)
6,224
994
1,163
169
17.0%
Warwickshire PCT
5,489
893
800
(93)
(10.4%)
Bedfordshire PCT
5,294
858
932
74
8.6%
38,873
6,809
9,125
2,316
34.0%
642,192
105,648
107,581
1,933
1.8%
Total
 The Trust also over‐performed against its National Commissioning Group contracts and its contract with Swindon, but under‐performed against the contracts for South Central and East Midlands Specialist Commissioners, and the Buckinghamshire contract with NHS Buckinghamshire & Oxfordshire. (0.7%)
Swindon PCT
Others (incl. non-Contract Income)
 Income from commissioners was £1.9m more than plan for the first two months of the year once the contract for Oxfordshire patients has been adjusted by £0.9m for agreed marginal rates. Note 1 - The Oxfordshire figure is after the marginal rate adjustments
Note 2 - The "Others" figure includes known activity not yet recorded on SLAM
TB2012.71_Financial Performance to 31 May 2012
Page 10 of 14
Oxford University Hospitals TB2012.71 Part 1 – Analysis of the Savings Programme for 2012/13 FYE 2011/12 Schemes
Plan
YTD Plan
YTD Act.
Diff.
Forecast
Risk
£000
£000
£000
£000
£000
Rating
9,400
2,556
2,557
1
6,500
Low
14,500
1,250
1,221
(29)
14,500
Medium
Consultant Job Plans
2,000
134
50
(84)
1,800
Medium
Medical Staff/On-Call Rotas
1,000
1,000
500
500
High Cost Post Review
2,500
2,500
Adult Ward Nursing
3,200
Divisional Efficiency
Research Fellows
Reduction in Premium costs
300
Non-Medical On Call
500
Reduction in Waiting Lists
2,300
Ward Closures
3,600
Local Procurement Initiatives
Targeted Procurement Initiatives
250
383
33
383
(217)
(0)
Low
Low
300
Medium
500
High
2,300
Low
2,500
High
50
50
400
Low
175
175
2,000
Low
500
500
2,200
1,200
3,100
Private Patient Joint Venture
1,000
200
2,000
1,600
High
Medium
Low
High
Administration Excellence
Additional Efficiencies
49,500
 £11.6m, or 23.4%, of the savings plan is currently categorised as being high risk. The Trust is reviewing these to see what actions can be taken to mitigate this risk. High
HTE Partnership
Total
High
300
Medicines Management
 There have been revisions to the original plan, with some plans now forecast to deliver a different level of savings to the sum originally anticipated. New schemes have also been identified to meet the shortfall in the original projects. Medium
2,500
Energy Management
Theatre Managed Service
2,400
 The Trust has delivered £5.0m in savings year‐to‐date. This represents 93.7% of the year‐to‐date plan. 5,298
500
Low
7,400
High
4,969
(329)
49,500
18,600
Analysis of Savings by Risk
Low
20,200
3,414
3,198
(216)
Medium
20,400
1,884
1,771
(113)
High
Total
8,900
49,500
19,300
11,600
5,298
4,969
(329)
49,500
TB2012.71_Financial Performance to 31 May 2012
Page 11 of 14
Oxford University Hospitals TB2012.71 Part 1 –Capital Programme YTD
Plan
YTD
Actuals
Slippage/
Overspend
£000s
£000s
£000s
Buildings
BMI Theatres - Building
5
Cardiac Alterations (Level 0)
5
Churchill Haemophilia System
8
Estates Strategy (Risk Assessment)
 The largest area of spend was on expenditure associated with the implementation of the electronic patient record (EPR) project. 107
5th Endoscopy Room
11
Sub-Total - Buildings
564
136
428
Equipment
General Medical Equipment
76
Neonatal Medical Equipment
61
Rapid Assessment Unit (Cardiac)
20
Miniaturised Random Access PCR
30
Sub-Total - Equipment
424
187
 The Trust charged £0.8m against the capital programme in the first two months of the year.  The Trust currently has potential capital commitments of £25.9m against its agreed capital resource limit (CRL) of £20.9m for the year. It is currently planned that this will be managed through slippage against agreed schemes. 237
I.T.
Capital Projects Team
12
Connecting for Health
405
Upgrade of Oracle Financials
44
ORH Departments
10
e-Rostering System
6
Sub-Total - I.T.
128
477
(349)
Furniture & Fittings
Relocation of Clinical Trials Facility
6
Sub-Total - Furniture & Fittings
Total Capital
100
6
94
1,216
806
410
TB2012.71_Financial Performance to 31 May 2012
Page 12 of 14
Oxford University Hospitals TB2012.71 Part 1 – Analysis of Accounts Receivable (Debtors) Balance
1-Apr-12
Current Receivables
NHS Receivables
Non-NHS Receivables
Provision for Impairment
Balance
31-May-12
Movement
YTD
13,700
13,412
(288)
6,598
4,197
(2,401)
(3,031)
(3,244)
(213)
2,773
Prepayments & Accrued Income
3,612
6,385
VAT
4,138
3,170
11,445
25,863
14,418
36,462
49,783
13,321
Other Receivables
Current Receivables
Aged Debt Analysis
NHS
(968)
Non-NHS
In terms
9,041
1-30 days overdue
3,573
Balance
1-Apr-12
Total
2,088
11,129
8,235
Movement
to Date
2,894
419
3,992
4,224
(232)
1,403
413
519
(106)
391
485
876
954
(78)
In excess of 90 days
1,397
2,017
3,414
4,047
(633)
A/R Receivables
13,412
6,412
19,824
17,980
1,844
12,663
17,296
29,959
18,482
11,477
26,075
23,708
49,783
36,462
13,321
61-90 Days
> 90 Days
31-60 days
(990)
61-90 days
Other non-A/R Receivables
Total Current Receivables
Top 10 Debtors
Total Due
Current
1-30 Days
31-60 Days
NHS Leicestershire County
3,534
3,162
374
(2)
Milton Keynes PCT
1,528
462
1,111
(45)
Oxfordshire PCT
1,098
1,312
226
(568)
University of Oxford
1,140
300
28
455
22
Jersey General Hospital
795
200
348
230
18
Ramsay Health Care UK Ltd
669
40
South Central Specialist
539
348
185
Buckinghamshire Healthcare
467
82
20
150
5
210
Royal Berkshire Hospital
399
16
157
65
10
151
Milton Keynes General Hospital
381
45
49
2
63
222
10,550
5,967
2,498
475
124
1,487
Totals
TB2012.71_Financial Performance to 31 May 2012 128
336
189
439
5
Page 13 of 14 Oxford University Hospitals TB2012.71 1.
Current Receivables have increased by £13.3m since the start of the year. However this reflects an increase in prepayments and income accruals. The value of debts raised through the Accounts Receivables system has fallen. 2.
The amount of debts recorded through the Accounts Receivable system (A/R) and out of terms has fallen by £1m since the start of the year. Amounts owing by more than 90 days represented 22.5% of total A/R debts at the start of the year but had dropped to 17.2% by the end of May. 3.
21% of the total debt is due from healthcare organisations plus the University of Oxford. Of this 80% is either current debt or less than 30 days overdue. Some of the actions being taken with respect to these major debtors are: o
£3.2m of the amount owed by NHS Leicestershire related to the block contract and has been settled in June; o
£0.4m of the sum owed by Milton Keynes was paid in May; o
£1.0m of the over‐performance against the NHS Oxfordshire contract has also been paid in June; o
The total owed by the University of Oxford has fallen by £0.9m over the past three months. 4.
The provision for impairment is calculated as being 100% on all debts more than 180 days old and 5% on other debts greater than 90 days old. 5.
Prepayments & accrued income includes: 6.

Prepayments for lifecycle maintenance £1.2m; 
Accrued income for corporate services £2m; 
Accrued income for services relating to the Surgery & Oncology Division £1.3m. Other receivables includes: 
Accrual for RTA income £3.2m; 
Funding for merit awards £1.0m; 
Laboratories income £0.5m; 
Accruals for PCT income £8.7m. Mr Mark Mansfield, Director of Finance and Procurement Mr Kevin Davis, Senior Business Partner June 2012 TB2012.71_Financial Performance to 31 May 2012
Page 14 of 14