TB2012.34
Trust Board Meeting: Thursday 3 May 2012
TB2012.34
Title
Financial Performance to 31 March 2012
Status
A paper for information
History
Regular monthly report
Board Lead(s)
Mr Mark Mansfield, Director of Finance and Procurement
Key purpose
Strategy
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Assurance
Policy
Performance
1
Oxford University Hospitals
TB2012.34
Summary
This paper reports on the Trust’s financial position for 2011/12. The financial position is subject to audit
and therefore may differ from the final published figures for the year.
Key points to note:
1
The Trust achieved its target surplus for the year and therefore met its financial duty to break
even. (See page 3)
2
The Trust delivered 98% of its total savings target for the year. (Page 9)
3
The Trust underspent against its Capital Resource Limit (CRL) for the year by £2.4m and
therefore also met its financial duty not to overshoot this target. (Page 10)
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Oxford University Hospitals
TB2012.34
TB2012.34
Statement of Comprehensive Income (Income & Expenditure Account)
Year to Date
Revised
Plan
£000
Actual
Variance
£000
£000
Commissioning income exceeded plan as the result of over-performance against
initial PCT contracts (see Page 8).
Income
Commissioning & RTA
623,564
647,454
11,350
11,514
164
121,669
125,177
3,508
756,583
784,145
27,562
Pay
(405,194)
(422,591)
(17,397)
Non-Pay
(280,463)
(292,040)
(11,577)
(685,657)
(714,631)
(28,974)
70,926
69,514
(1,412)
Depreciation
(34,694)
(34,850)
Impairments
(308)
PP & Overseas
Other Income
Total Income
23,890
Expenditure
Total Expenditure
EBITDA
Investment Revenue
Other Gains & Losses
Finance Costs
PDC Dividend Payable
Retained Surplus
115
(156)
2,328
2,636
135
20
(179)
(159)
20
(21,369)
(20,471)
898
(8,404)
(8,894)
(490)
6,087
7,603
1,516
IFRIC12 Technical Deficit
526
Impairments
308
(2,328)
(2,636)
Donated Asset Adjustment
230
1,442
1,212
7,151
7,157
6
Performance against Break
Even Duty
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440
The Trust made a surplus of £0.4m in March (as measured against its break even
duty) and ended the year £6,000 better than plan.
The adjustment for donated assets reflects the fact that the Department of Health
changed the way these assets were to be accounted for by the NHS in 2011/12
but agreed that this would not impact against Trust break even duties (see Page
4).
The Trust’s year-to-date EBITDA is 8.9% of turnover. This is slightly below the
target the Trust set itself at the start of 2011/12 of 9.3%. As an aspirant
Foundation Trust, the organisation should aim to achieve this target in the future
since EBITDA performance is integral to the Financial Risk Rating (FRR) that
Monitor applies.
Missing the EBITDA reflects the fact that the Trust achieved its overall income and
expenditure target but not quite in the way originally planned. EBITDA is a
measure of the value generated by the Trust’s operations but is impacted where
the Trust uses some non-operational sources to achieve its financial duties.
The financial position is subject to audit and therefore may differ from the final
published figures for the year.
(86)
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Oxford University Hospitals
TB2012.34
TB2012.34
Statement of Comprehensive Income – The Retained Surplus & the Break Even Duty
Actual
£000
Retained Surplus
IFRIC12 Technical Deficit
7,603
440
Impairments
(2,328)
Donated Asset Adjustment
1,442
Performance against Break
Even Duty
The retained surplus includes all income received, and expenditure incurred, by the Trust during the year. It
will be the “bottom line” in the Trust’s Statement of Comprehensive Income (or Income & Expenditure
Account) in the Trust’s final, audited financial statements.
However the Department of Health (DH) does not use the retained surplus to assess whether or not Trusts
have complied with their financial duty to break even but, instead, measures the surplus once certain
technical items have been excluded. These items are:
The additional cost charged to the I&E account following the adoption by the NHS of International
Financial Reporting Standards (IFRS) and which meant that Private Finance Initiative (PFI) assets that
were not previously on Trusts’ balance sheets are now regarded as on-balance sheet assets;
Impairments; and
7,157
The impact on income and expenditure that has occurred as the result of the NHS changing the way
donated assets are to be accounted for from 2011/12 onwards.
The Trust has three PFI schemes and the impact on the I&E account that has resulted from the adoption of IFRS varies from scheme to scheme. In 2011/12
the effect is that the retained surplus was £440,000 below the level that would have been reported had the accounts continued to be consistent with UK
GAAP (generally agreed accounting policies – the financial standards used by the NHS prior to its adoption of IFRS in 2009/10).
The DV revalued all of the Trust’s land and buildings as at 31 March 2012. If the DV’s value is lower than the net book value of the asset included within the
Trust’s balance sheet then a further impairment charge may need to be made against the I&E Account. Impairments are an item of expenditure that reduces
the retained surplus but is excluded from the break even surplus. Any reversals of impairments that have occurred in previous years benefit the Trust’s
retained surplus but have no impact on the Trust’s break even duty.
The change in accounting for donated assets could affect the retained surplus in two ways. Firstly the Trust can no longer release funds from the Donated
Asset Reserve to match deprecation on donated assets and therefore, instead of being cost neutral, there is a charge against the I&E Account. Secondly the
Trust can now treat new donated asset additions as a revenue item which benefits the retained surplus but would need to be excluded from the break even
surplus.
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Oxford University Hospitals
TB2012.34
TB2012.34
Statement of Financial Position (Balance Sheet)
Opening
Balance
Closing
Balance
01-Apr-11
31-Mar-12
Movement
NON-CURRENT ASSETS
Property, Plant and Equipment
703,411
696,398
Intangible Assets
4,253
7,301
Trade and Other Receivables
4,259
3,742
(517)
711,923
707,441
(4,482)
Inventories
13,014
12,761
Trade and Other Receivables
28,746
36,392
70
70
25,799
43,884
18,085
67,559
93,107
25,548
67,559
93,107
25,548
TOTAL NON-CURRENT ASSETS
(7,013)
3,048
CURRENT ASSETS
Other Current Assets
Cash and Cash Equivalents
CURRENT ASSETS
TOTAL CURRENT ASSETS
(253)
7,646
CURRENT LIABILITIES
Trade and Other Payables
DH Working Capital Loan
DH Capital Loan
(86,848)
(100,707)
(3,332)
(3,326)
(13,859)
6
(1,404)
(1,404)
(12,352)
(12,626)
(274)
(3,641)
(8,421)
(4,780)
(107,577)
(126,484)
(18,907)
NET CURRENT ASSETS/(LIABILITIES)
(40,018)
(33,377)
6,641
TOTAL ASSETS LESS CURRENT LIABILITIES
671,905
674,064
2,159
Borrowings
Provisions for Liabilities and Charges
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
DH Working Capital Loan
(3,326)
DH Capital Loan
(9,215)
(7,811)
1,404
(303,510)
(291,503)
12,007
Borrowings
Trade and Other Payables
Provisions for Liabilities and Charges
TOTAL NON-CURRENT LIABILITIES
TOTAL ASSETS EMPLOYED
Retained Earnings
Revaluation Reserve
Other Reserve
TOTAL TAXPAYERS EQUITY
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Current Receivables increased in the year, but the year-end figure was much
lower than those reported in earlier months following settlements made in
March by NHS commissioners of amounts outstanding.
The increase in cash reflects both the fact that the Trust generated a surplus in
the year and that it spent less on capital than the depreciation charge made to
the income and expenditure account.
Trade & Other Payables increased during the year but fell during March,
reflecting the clearance of backlog NHS creditor issues.
The reduction in net borrowing reflects the repayments made during the year on
the capital element of the contracts with the Trust’s PFI providers. These
repayments are made through the monthly PFI unitary payments.
The Trust received additional Public Dividend Capital of £2.96m as a contribution
towards the capital development of the NICU building.
3,326
(630)
(1,364)
(1,565)
(1,426)
(734)
139
(318,246)
(302,104)
16,142
353,659
371,960
18,301
The surplus on the Statement of Comprehensive Income is included within
increase in Retained Earnings. The Trust also disposed of some equipment assets
that still had an amount included in the Revaluation Reserve, and this resulted in
a small transfer from that reserve to retained Earnings.
The increase in the Revaluation Reserve reflects the increase in asset values
following the DV’s valuation on 31 March.
FINANCED BY TAXPAYERS EQUITY
Public Dividend Capital
Non-Current Assets reduced in the year because depreciation on the existing
asset base exceeded both new capital additions and the increases to land and
building values that resulted from their assessment by the District Valuer (DV) at
31 March 2012.
203,912
206,873
2,961
7,913
15,600
7,687
140,091
147,744
7,653
1,743
1,743
353,659
371,960
The balance sheet is subject to audit and therefore may differ from the final
published figures for the year.
18,301
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Oxford University Hospitals
TB2012.34
TB2012.34
Statement of Cashflows
Full
Year
The Trust’s cash holdings increased by £25.8m over the course of 2011/12.
£000
Cash Flows from Operating Activities
Operating Surplus/(Deficit)
36,992
Depreciation and Amortisation
34,850
Impairments and Reversals
Interest Paid
Dividend Paid
(2,328)
(20,436)
(8,983)
Receipt of Donated Assets
(45)
(Increase)/Decrease in Inventories
253
(Increase)/Decrease in Trade and Other Receivables
(7,138)
Increase/(Decrease) in Trade and Other Payables
13,448
Increase/(Decrease) in Provisions
Net Cash Flow from Operating Activities
The increase was principally generated because the cash earned by the Trust
through its depreciation charges (£34.9m) exceeded that spent on capital (£19.7m).
The Trust’s cash position was also strengthened because a surplus was generated in
the year.
The cashflow position is subject to audit and therefore may differ from the final
published figures for the year.
4,599
51,212
Cash Flows from Investing Activities
Interest Received
(Payments) for Property, Plant and Equipment
(Payments) for Intangible Assets
145
(14,203)
(3,420)
Net Cash Flow from Investing Activities
(17,478)
NET CASH FLOW BEFORE FINANCING
33,734
Cash Flows from Financing Activities
Public Dividend Capital Received
Capital Investment Loans - Repayment of Principal
Working Capital Loans - Repayment of Principal
Capital Element of Finance Leases and PFI
Net Cash Flow from Financing
2,961
(1,404)
(3,332)
(13,874)
(15,649)
Net Increase/(Decrease) in Cash
18,085
Cash at the Beginning of the Period
25,799
Cash at the End of the Period
43,884
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Oxford University Hospitals
TB2012.34
TB2012.34
Analysis of Activity and Activity-Related Income
Year-to-Date
Elective (incl. day cases)
YTD
Plan
95,158
YTD
Actual
101,494
Emergency
107,431
Outpatient
780,253
4,550,156
Activity
Other
YTD
Diff.
6,337
YTD Diff.
%
6.7%
113,232
5,801
5.4%
832,587
52,334
6.7%
4,819,964
269,808
5.9%
Year-to-Date
Income
Activity
YTD
Plan
£000
YTD
Actual
£000
YTD
Diff.
£000
YTD
Diff.
%
Elective (incl. day cases)
136,002
142,771
6,769
5.0%
Emergency
161,959
168,049
6,090
3.8%
Outpatient
Other
95,764
101,536
5,772
6.0%
206,860
210,515
3,655
1.8%
600,585
622,871
22,286
3.7%
The Trust exceeded plan across all areas of activity and generated 2.7% more income than planned in the year.
Due to “case mix” and, in some areas, the application of marginal rates of remuneration, the Trust does not earn the same level of additional funding in
percentage terms when compared to the additional work it carries out over and above planned levels.
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Oxford University Hospitals
TB2012.34
TB2012.34
Analysis of Income by Commissioner
Revised
YTD
YTD
Var.
Plan
Actual
Variance
YTD
£000
£000
£000
%
367,882
378,605
10,723
2.9%
South Central Specialised Commission.
79,232
81,929
2,697
3.4%
Northamptonshire PCT
19,013
20,014
1,001
5.3%
East Midlands Specialised Commission.
16,733
18,065
1,332
8.0%
South West Specialised Commission.
21,135
20,404
(731)
(3.5%)
Berkshire West PCT
15,674
13,636
(2,038)
(13.0%)
Milton Keynes PCT
Commissioner
NHS Buckinghamshire & Oxfordshire
12,907
14,773
1,866
14.5%
Swindon PCT
5,636
6,082
446
7.9%
Bedfordshire PCT
4,394
5,124
730
16.6%
NCG Kidney & Pancreatic Transplantation
4,211
4,500
289
6.9%
Berkshire East PCT
1,623
1,758
135
8.3%
Warwickshire PCT
5,413
5,488
75
1.4%
62,348
72,460
10,112
16.2%
616,201
642,838
26,637
4.3%
Others (including non-Contract Income)
Total
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The over-performance against the NHS Buckinghamshire
and Oxfordshire contract is in line with the agreement on
the year-end position reached with the Commissioners.
Additional funds were received in March from a variety of
commissioners to settle the year end position and this is
reflected in the “others” category reported in this table.
Oxford University Hospitals
TB2012.34
TB2012.34
Analysis of the Savings Programme for 2011/12
Target
Actual
Variance
£000
£000
£000
FYE of 2010/11 schemes
10,560
10,560
Divisional General Efficiency
12,411
19,935
7,524
4,403
4,579
176
Procurement
Staff Productivity:
Review of Specialist Nurses
100
67
(33)
2,000
423
(1,577)
500
303
(197)
6,577
2,263
(4,314)
Outpatients - Use of Clinics
500
25
(475)
Reduce Pre-Op. LOS
400
Agency
Consultant Job Plans
Radiology Retention
Other Workforce Measures
Medicines Management
Productive Theatres
Estates Management
400
(400)
(400)
3,500
3,438
(62)
999
185
(814)
700
467
(233)
Ward Moves
1,200
923
(277)
Reduce 18 Week Premium Costs
7,000
7,000
R & D Income
1,500
1,500
Former NOC Schemes
5,625
5,551
(74)
58,375
57,219
(1,156)
Grand Total
The Trust delivered £57.2m in savings year-to-date. This represents 98% of the overall target for the year.
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Oxford University Hospitals
TB2012.34
Performance against the Trust’s Capital Resource Limit (CRL)
£000
Capital Resource Limit 2011/12
£000
22,761
Capital Expenditure 2011/12
Buildings
Equipment
4,090
10,720
Information Technology
2,817
Other
3,420
The Trust’s Capital Resource Limit (CRL)
for 2011/12 was £22.8m. One of the
financial duties that Trusts must comply
with is that they are not allowed to
overshoot their CRL.
The Trust spent £21.0m cash on capital
items in the year. However £0.7m of this
was funded from donations and grants.
21,047
Less: Grants & Donations
Total Charge Against the CRL
Under/(Over) Spend against CRL
(690)
20,357
The Trust therefore spent £2.4m less on
capital than its limit. Hence it met this
financial duty for the year.
2,404
Conclusion
The Board is asked to note the content of this report.
Mr Mark Mansfield, Director of Finance and Procurement
Mr Kevin Davis, Senior Business Partner
April 2012
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