TB2013.66
Trust Board Meeting: Wednesday 8 May 2013
TB2013.66
Title
Financial Performance for 2012/13
Status
A paper for discussion
History
Regular report
Committee Lead(s)
Mr Mark Mansfield, Director of Finance and
Procurement
Key purpose
Strategy
TB2013.66 Financial Performance
Assurance
Policy
Performance
Page 1 of 18
Oxford University Hospitals
TB2013.66
Summary
1
This report informs the Board about the Trust’s draft financial position for the
financial year 2012/13. The financial position is subject to audit and therefore
the final published figures for the year may differ from those presented in this
report.
2
The key points to note are:
1.
The Trust achieved its target surplus for the year and therefore met its
financial duty to break even. (Page 3)
2.
Other than savings from ward closures the Trust achieved the full level
of planned savings for the year. (Page 9)
3.
The Trust’s overall financial risk ratings, as it would have been assessed
by Monitor were the Trust to be a Foundation Trust, ended the year with
a score of “3”.
The Trust met its other financial duties for the year. (Page 18)
3
The Trust Board is asked to receive and discuss the report on financial
performance 2012/13
TB2013.66_Financial Performance M12
Page 2 of 18
Oxford University Hospitals
TB2013.66
Statement of Comprehensive Income (Income & Expenditure Account) – Performance against the Break Even Duty
Financial year 2012/13
Plan
Actual
Variance
£000
£000
£000
645,820
672,334
26,514
Operating Incom e
Commissioning Income
PP, Overseas & RTA Income
Other Income
Total Incom e
13,558
12,028
(1,530)
129,359
137,343
7,984
788,737
821,705
32,968
Operating Expenditure
Pay
(443,684)
(450,411)
(6,727)
Non-Pay
(279,529)
(302,477)
(22,948)
(723,213)
(752,888)
(29,675)
65,524
68,817
3,293
(61,922)
(65,171)
(3,249)
3,602
3,646
Total Expenditure
EBITDA
Non-EBITDA Items
Break Even Surplus
44
• The Trust ended the year with a surplus of £3.647m as measured against the “break
even” duty. This was £44,000 better than plan.
• Commissioning income exceeded plan by £26.5m due, in particular, to over-performance
on non-elective activity compared to the amounts contacted. Details of activity
performance by type of activity are shown on Page 6 and by individual commissioner on
Page 7.
• Income from private and overseas patients, and from road traffic accidents (RTAs)
continued to be below expected levels, as seen throughout 2012/13, and ended the year
£1.5m below plan.
• £3.6m of the over-achievement of “other” income relates to funding received for research
& development (R&D) and is partly offset by variances on pay and non-pay expenditure.
£2.3m of the balance has resulted from donations towards the Trust’s capital programme
(see Pages 5 and 17).
• The Trust over-performed on non-elective activity throughout 2012/13. Because this
exceeds 2008/09 activity levels, a marginal rate of 30% was applied in accordance with
national guidelines. It is estimated that the final income loss associated with this
adjustment in the year was £12.1m.
• Pay expenditure was £6.7m [1.5%] worse than plan. The main reason for the overspend
was the Trust’s over-performance against contracted levels of activity. Bank & agency
staff cost the Trust £24.6m in 2012/13 – £6.2m more than the previous financial year.
• Non-pay expenditure was £23.0m, or 8.2%, above plan. The reasons for the overspend
include:
− Expenditure on “pass through” drugs and devices was £5.9m [ 9.4%] greater than
plan in the year (Page 6). This increases the level of income recovered
concomitantly.
− The Trust’s level of activity over-performance as described above. Non-pay costs
represent approximately one third of cost and are variable to a significant degree;
the over-performance on elective, non-elective and out-patient activities would
result in an estimated £9.0m additional non-pay spend on a proportionate basis.
TB2013.66 Financial Performance
Page 3 of 18
Oxford University Hospitals
TB2013.66
Statement of Comprehensive Income (Income & Expenditure Account) – Retained Surplus
Full Year
Outturn
£000
Break Even Surplus
3,646
Technical Adjustments
IFRIC 12 Technical Deficit (PFI)
Donated Asset Additions
(1)
2,441
Donated Asset Depreciation
(2,834)
Impairments
(4,568)
Total: Technical Adjustm ents
Retained Surplus/(Deficit) per SOCI
(4,962)
(1,316)
The figure used to measure the Trust’s financial performance duty to “break even” is not the same
as the “retained surplus/(deficit)” figure reported within its final audited accounts on the Statement of
Comprehensive Income (SOCI). The “technical adjustments” which make up the difference between
the two figures are that:
(i)
The impact on the Trust’s financial position resulting from its PFI buildings being re-classified
from being “off balance sheet” to being “on balance sheet” that followed from the adoption of
international financial reporting standards (IFRS) by the NHS are removed from the SOCI’s
retained surplus when considering the “break even” duty. The accounting impact of this
change was negligible in 2012/13.
(ii) Any accounting impact relating to the Trust’s donated assets is also excluded from the SOCI
retained surplus when assessing the Trust’s performance against its break even. This means
that any “revenue” received from new donated asset additions, and the depreciation charged
to the SOCI that relates to donated assets, are both excluded.
(iii) Both impairments that have been charged against the retained surplus, and the reversal of
any previous impairment charges made in earlier years to the SOCI, are disregarded when
assessing the Trust’s performance against the break even duty.
The District Valuer (DV) assessed that the value of some of the Trust’s buildings had fallen in the
year to 31 March 2013. This resulted in an impairment in their value which has had to be charged
to the SOCI and is greater than the reversal of those impairments that were charged to the SOCI
in 2009/10. In particular, the main building at the John Radcliffe Hospital has been valued
downwards. In that year the Trust had to impair its PFI buildings following a significant fall in their
values.
It should be noted that this “impairment” is an accounting adjustment only. There has been no
impact in the year on the Trust’s ability to use its buildings to provide health care from them, and
no impact on the quality of health care provided.
Without taking these technical adjustments into consideration, the unaudited figure for the
Statement of Comprehensive Income, as per the Trust’s final accounts, is a deficit of £1.316m.
TB2013.66 Financial Performance
Page 4 of 18
Oxford University Hospitals
TB2013.66
Non-EBITDA Income & Expenditure
The full year plan and outturn figures for the Trust’s non-EBITDA (earnings before interest, taxation, dividend and amortisation) items of income &
expenditure are as below:
Full Year Full Year
Plan
£000
Outturn Variance
£000
£000
Incom e
Donated Asset Additions
123
2,441
2,318
Im pact on EBITDA
123
2,441
2,318
(36,758)
(2,758)
(4,568)
(4,568)
Depreciation
(34,000)
Impairments/Reversal of Imp.
Investment Revenue
132
Other Gains & Losses
189
57
(200)
(17)
183
(20,680)
(20,477)
203
(9,222)
(8,502)
720
Sub-Total: Non-Op. Exps.
(63,970)
(70,133)
(6,163)
Im pact on Retained Surplus
(63,847)
(67,692)
(3,845)
Finance Costs
PDC Dividend Payable
Technical Adjustments
IFRIC 12 Technical Deficit (PFI)
58
Impairments
Donated Asset Additions
(123)
1
• Depreciation for the year was higher than originally planned. As part of the requirement to
comply with International Financial Reporting Standards (IFRS) the Trust asks the District
Valuer (DV) to value its estate at the end of each financial year. However the estimate for
the following year’s depreciation has to be calculated before the DV’s figures are known.
Following the valuation made at 31 March 2012 depreciation in 2012/13 was higher than
anticipated when the current year’s financial plans were formed.
• The impairment figure is a technical adjustment made to the accounts following the DV’s
assessment of the value of the Trust’s land and buildings as at 31 March 2013 (see Page 4
above).
• The Public Dividend Capital (PDC) Dividend charged to the SOCI is calculated from the
value of the Trust’s assets at the start and end of the year. Because the DV assessed that
the value of land & buildings had fallen during the year, and because the Trust held more in
cash at the end of the year (see Pages 10 & 11), the value of the PDC Dividend payable
was lower than planned.
• Overall the impact of non-operating items of income and expenditure was an adverse
variance of £0.9m against plan. Several of the non-EBITDA items are disregarded when
assessing the Trust’s “break even” duty and a summary of the items than affected
performance is shown below:
(57)
Full Year Full Year
4,568
4,568
Plan
(2,441)
(2,318)
£000
Donated Asset Depreciation
2,113
2,834
721
Sub-Total: Technical
2,048
4,962
2,914
Depreciation - NHS & PFI Assets
Investment Revenue
Im pact on Break Even
(61,799)
(62,730)
(931)
Other Gains & Losses
Finance Costs
PDC Dividend Payable
IFRIC 12 Technical Deficit (PFI)
Im pact on Break Even Duty
TB2013.66 Financial Performance
(31,887)
132
Outturn Variance
£000
£000
(33,924)
189
(2,037)
57
(200)
(17)
183
(20,680)
(20,477)
203
(9,222)
(8,502)
720
58
(61,799)
1
(62,730)
(57)
(931)
Page 5 of 18
Oxford University Hospitals
TB2013.66
Analysis of Activity and Activity-Related Income
Activity - Full Year
Activity
Elective (incl. day cases)
YTD
Plan
96,048
YTD
Actual
93,857
YTD
Diff.
Incom e - Full Year
YTD Diff.
%
Plan
£000
Actual
£000
Diff.
£000
Diff.
%
(2,191)
(2.3%)
146,428
143,362
(3,066)
(2.1%)
Non-Elective
68,515
80,646
12,131
17.7%
149,500
172,172
22,672
15.2%
Out-Patients
783,380
795,004
11,624
1.5%
105,584
110,999
5,415
5.1%
Critical Care
36,919
43,645
6,726
18.2%
48,001
53,711
5,710
11.9%
Chemotherapy
22,939
25,038
2,099
9.2%
18,847
21,559
2,712
14.4%
Excess Beds
34,653
41,732
7,079
20.4%
Drugs & Devices (Pass Through)
Other Activity
Total before Adjustm ents
9,228
10,734
1,506
16.3%
62,885
68,806
5,921
9.4%
105,347
103,084
(2,263)
(2.1%)
645,820
684,427
38,607
6.0%
(12,093)
(12,093)
672,334
26,514
Adj. for Thresholds & Denials
Com m issioning Incom e
645,820
4.1%
•
Non-elective activity remained well above plan throughout the year and elective activity, including day case work, below plan. The
Trust had to put arrangements in place for some elective activity to be carried out by third party providers (such as the Manor and
Medinet) to meet waiting time targets.
•
Elective activity (excluding day cases) was 1,894 episodes below plan with average income of £3,780 per case. If the Trust had
carried out less non-elective work, and was able instead to achieve its planned level of elective activity, it is estimated that the Trust
would have generated an additional £4.9m in income. This figure does not take into account the additional costs paid to third parties
for the elective activity they carried out on the Trust’s behalf.
•
The adjustment for thresholds and denials includes £12.1m where a marginal rate of 30% has been applied to the Trust’s overperformance on non-elective activity over and above 2008/09 activity levels. This marginal rate is required under national guidelines
on tariffs.
TB2013.66 Financial Performance
Page 6 of 18
Oxford University Hospitals
TB2013.66
Analysis of Income by Commissioner
• Income from commissioners at the end of the year was £26.5m, or
Full Year
Full Year
Full Year
Plan
Actual
Variance
Var.
£000
£000
£000
%
327,204
344,252
17,048
5.2%
28,544
30,896
2,352
8.2%
115,789
119,069
3,280
2.8%
Com m issioner
NHS Buckinghamshire & Oxfordshire:
Oxfordshire
Buckinghamshire
South Central Specialised Comm.
4.1%, above plan.
• The Trust’s activity against the Oxfordshire element (NHSO) of the
contract with NHS Buckinghamshire & Oxfordshire (NHSBO) was
£17.0m higher than the sum agreed with the commissioners at the
start of the year. This was in line with the agreement reached with
commissioners towards the end of 2012.
East Midlands Specialised Comm.
38,405
38,630
225
0.6%
• Emergency activity exceeded the NHSO contract threshold and the
South West Specialised Comm.
17,935
19,885
1,950
10.9%
Northamptonshire PCT
18,644
18,606
National Commissioning Groups
12,481
12,406
(75)
(0.6%)
Berkshire West PCT
12,211
11,315
(896)
(7.3%)
nationally-mandated 30% marginal rate was applied to the overperformance. The impact of these adjustments is estimated to be
£5.9m against the NHSO contract and £12.1m across all
commissioner contracts.
Milton Keynes PCT
8,198
8,072
(126)
(1.5%)
Sw indon PCT
6,676
6,886
210
3.1%
Warw ickshire PCT
5,489
5,829
340
6.2%
Bedfordshire PCT
5,294
5,329
35
0.7%
Gloucestershire PCT
4,396
5,106
710
16.2%
Berkshire East PCT
4,582
5,099
517
11.3%
Wiltshire PCT
3,738
4,102
364
9.7%
Hertfordshire PCT
2,932
3,859
927
31.6%
West Midlands Specialised Comm.
2,803
3,235
432
15.4%
Hampshire PCT
2,421
1,933
(488)
(20.2%)
28,078
27,825
(253)
(0.9%)
645,820
672,334
Others (incl. non-Contract Income)
Total
TB2013.66 Financial Performance
(38)
26,514
(0.2%)
• The Trust over-performed against its contracts with South East and
South West Specialist Commissioning Groups, Hertfordshire and
Gloucestershire, but under-performed against the contracts for
Berkshire West and Hampshire.
4.1%
Page 7 of 18
Oxford University Hospitals
TB2013.66
Analysis of Income by Commissioner – Trends
YTD Variances
to Plan (last 6 Mths)
NHSO
Oct-12
Nov-12
6,508
9,804
SCSCG
(2,438)
(1,329)
Others
6,147
10,217
All Commissioners
Dec-12
Jan-13
Feb-13
Mar-13
12,273
14,093
15,511
17,048
448
979
2,652
3,280
5,894
5,784
6,412
8,648
6,186
14,369
18,505
21,484
26,811
26,514
• The table and chart on the left show how the Trust’s performance
against commissioning contracts varied against plan over the
final six months of the year. This is shown for:
(i)
The Oxfordshire (NHSO) part of the contract agreed with
NHS Buckinghamshire & Oxfordshire;
(ii) South Central Specialist Commissioning Group (SCSCG);
(iii) Other commissioners; and
(iv) All commissioner income.
• As part of its risk sharing strategy the Trust agreed with NHSO
that the commissioners would pay a fixed amount that was £17m
higher than the amount contracted at the start of the year. The
Trust ended the year in line with that cap.
• The Trust’s performance against all contracts grew steadily
stronger over the last 6 months of 2012/13. This factor will be
considered in planning for 2013/14 and future years.
TB2013.66 Financial Performance
Page 8 of 18
Oxford University Hospitals
TB2013.66
Analysis of the Savings Programme for 2012/13
FYE 2011/12 Schemes
Divisional Efficiency
Divisional Efficiency - High Risk
Orig. Plan
Actual
Diff.
£000
£000
£000
9,400
6,468
(2,932)
14,400
19,997
5,597
100
Consultant Job Plans
2,000
Medical Staff/On-Call Rotas
1,000
Research Fellow s
(100)
1,030
(970)
(1,000)
500
(500)
High Cost Post Review
2,500
1,234
(1,266)
Adult Ward Nursing
3,200
2,064
(1,136)
Agency Bus. Process Ousourcing
Non-Medical On Call
300
(300)
500
Reduction in Waiting Lists
2,300
Ward Closures
3,600
(500)
2,300
(3,600)
Procurement Initiatives - Low Risk
2,800
Procurement Initiatives - High Risk
1,600
(1,600)
Energy Management
1,200
(1,200)
Medicines Management
3,100
Private Patient Joint Venture
1,000
Theatre/Endoscopy Efficiency
R&D & Other Income
Total
TB2013.66 Financial Performance
49,500
4,051
1,845
• The Trust delivered £45.5m in savings in 2012/13. This represented 92.0%
of the original plan for the year.
• As previously reported the high level of bed occupancy within the Trust
meant that the full level of planned savings from ward closures would not be
realised in the current year. It was estimated that the Trust would not be
able to generate about £4.3m in savings through these bed closures and
other, related divisional efficiencies and that therefore the Trust’s overall
target savings needed to be revised downwards to £45.2m to take this into
account.
• The Trust’s actual savings for the year therefore exceeded the revised
target by £0.3m.
1,251
(1,255)
(1,000)
297
297
6,233
6,233
45,520
(3,980)
Page 9 of 18
Oxford University Hospitals
TB2013.66
Statement of Financial Position (Balance Sheet)
Opening
Balance
Closing
Balance
01-Apr-12
31-Mar-13
Movem ent
NON-CURRENT ASSETS
Property, Plant & Equipment
696,398
681,746
Intangible Assets
7,301
7,745
(14,652)
444
Trade & Other Receivables
3,742
3,774
32
NON-CURRENT ASSETS
707,441
693,265
(14,176)
Inventories
12,761
11,353
(1,408)
Trade & Other Receivables
36,462
27,054
(9,408)
Cash & Cash Equivalents
43,884
65,657
21,773
CURRENT ASSETS
93,107
104,064
10,957
(100,141)
(109,203)
(9,062)
(17,356)
(11,458)
5,898
(8,421)
(2,902)
5,519
(125,918)
(123,563)
2,355
(32,811)
(19,499)
13,312
CURRENT LIABILITIES
Borrow ings
Current Provisions
CURRENT LIABILITIES
NET CURRENT ASSETS/(LIABILITIES)
NON-CURRENT LIABILITIES
Borrow ings
depreciation on the existing asset base exceeded capital
additions made during the year, and partly because the District
Valuer assessed that the value of the Trust’s land and buildings
at 31 March 2013 had fallen during the course of the year. This
resulted in a downwards revaluation of asset values recorded
within the Statement of Financial Position.
• The Trust reduced the amount owed to it by NHS organisations
CURRENT ASSETS
Trade & Other Payables
• The value for Non-Current Assets reduced partly because
(299,314)
(289,162)
10,152
Trade & Other Payables
(1,930)
(11,616)
(9,686)
Non-Current Provisions
(1,426)
(1,602)
(176)
NON-CURRENT LIABILITIES
(302,670)
(302,380)
290
TOTAL ASSETS EMPLOYED
371,960
371,386
(574)
206,873
207,673
800
15,600
14,608
(992)
147,744
147,362
(382)
1,743
1,743
371,960
371,386
and other third parties by £9.4m at the end of the year. The
Trust’s main commissioners were abolished at 31 March 2013
and, to assist with the closure of their accounts, the Trust
reached agreement with some of them regarding settlement of
amounts outstanding.
• The increase in cash partly reflects an improvement in cash that
is underlying the Trust’s operating surplus for the year, and partly
reflects the movements in debtor and creditor levels.
• The fall in borrowings (current and non-current) is the result of
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.
• The Trust received £0.8m in additional public dividend capital in
the final month of the year.
FINANCED BY TAXPAYERS EQUITY
Public Dividend Capital
Retained Earnings
Revaluation Reserve
Other Reserve
TOTAL TAXPAYERS EQUITY
TB2013.66 Financial Performance
(574)
Page 10 of 18
Oxford University Hospitals
TB2013.66
Statement of Cashflows
Q1
2012/13
Q2
2012/13
Q3
2012/13
Q4
2012/13
Full
Year
£000
£000
£000
£000
£000
• The Trust held enough cash to cover over 32 working
days of operating expenditure at 31 March 2013.
Cash Flow s from Operating Activities
Operating Surplus/(Deficit)
7,142
9,845
8,823
1,681
27,491
Depreciation & Amortisation
8,759
8,835
8,861
10,303
36,758
Impairments & Reversals
Interest Paid
1
(4,895)
Dividend Paid
(Increase) in Trade & Other Receivables
Increase in Trade & Other Payables
Increase in Provisions
Cash Flow from Operating Activities
(4,872)
(4,859)
Receipt of Donated Assets
(Increase) in Inventories
(5,618)
(401)
(362)
(706)
17
(505)
(17,575)
4,402
13,325
2,422
(327)
5,723
(723)
13,921
4,567
4,568
(5,312)
(20,697)
(4,515)
(9,374)
(160)
(923)
2,602
1,408
7,510
15,994
10,331
7,856
(4,745)
18,858
(1,507)
(2,779)
(5,336)
25,804
17,636
63,084
Cash Flow s from Investing Activities
Interest Received
(Payments) for Fixed Assets
Cash Flow from Investing Activities
39
42
51
47
179
(8,032)
(3,591)
(4,524)
(10,092)
(26,239)
(7,993)
(3,549)
(4,473)
(10,045)
(26,060)
Cash Flow s from Financing Activities
Public Dividend Capital Received
800
Capital Loans - Repayment of Principal
(702)
Working Capital Loans - Principal Repayment
(702)
(1,660)
(3,326)
(2,360)
(2,374)
(2,591)
(3,996)
(11,321)
Cash Flow from Financing Activities
(2,360)
(4,742)
(2,591)
(5,558)
(15,251)
Net Increase/(Decrease) in Cash
(4,630)
5,630
18,740
2,033
21,773
Cash - Beginning of the Period
43,884
39,254
44,884
63,624
43,884
Cash - End of the Period
39,254
44,884
63,624
65,657
65,657
Capital Element of Finance Leases & PFI
TB2013.66 Financial Performance
(1,666)
800
(1,404)
Page 11 of 18
Oxford University Hospitals
TB2013.66
Financial Risk Rating
Scores
Financial Criteria
Risk Rating
February 2013
March 2013
Weight
5
4
3
2
1
Metric
Score
Metric
Score
Achievement of Plan
EBITDA % achieved
10%
100%
85%
70%
50%
<50%
105.0%
5
105.5%
5
Underlying Performance
EBITDA margin
25%
11%
9%
5%
1%
<1%
8.4%
3
8.5%
3
Net return after Financing
20%
3%
2%
(0.5%)
(5%)
< (5%)
0.5%
3
0.5%
3
I & E Surplus Margin
20%
3%
2%
1%
(2%)
< (2%)
0.4%
2
0.5%
2
Liquid ratio (days)
25%
60
25
15
10
<10
13
2
17
3
Financial Efficiency
Liquidity
Weighted Average
Overall Rating (see rules below )
2.75
3.00
3
3
Monitor - Rules Used to Adjust the Financial Risk Rating
Unplanned breach of Prudential Borrow ing Code (PBC)
Previous year's annual rating w orse
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
1
1.00
0
0.00
Overall FRR
Mar-13
1
2.00
Feb-13
Tw o financial criteria at '1'
2
Jan-13
2
Dec-12
3
Tw o financial criteria scored at '2'
3.00
Nov-12
One financial criterion scored at '2'
3
Oct-12
2
4.00
Sep-12
One financial criterion scored at '1'
4
Aug-12
2
Jul-12
3
PDC dividend not paid in full
5.00
Jun-12
Plan not submitted complete and correct
5
Weighted Average Score
3
May-12
Maxim um Rating
Overall Financial Risk Rating
Situation
Plan not submitted on time
Weighted Average
•
The Trust’s weighted average score under Monitor’s risk ratings for providers was 3.00 at the end of the year.
•
The score for the I&E surplus margin remained at “2” for the year. This was in accordance with the Trust’s plans. The Board agreed
to reduce the target surplus by £4m in response to the contract agreement reached with NHSO. This then meant that the revised
target surplus was less than 1% of turnover.
•
Although the Trust’s cash holdings increased markedly during 2012/13 the score for the liquidity ratio fell in March as the result of the
increase in current creditors in the month.
TB2013.66 Financial Performance
Page 12 of 18
Oxford University Hospitals
TB2013.66
Calculation of the Trust’s Financial Risk Rating (FRR)
•
Monitor uses four criteria to assess the financial risks under which Trusts are operating:
(i)
Achievement of Plan – this criterion looks at how the Trust’s year-to-date income & expenditure operating
performance compares with the plans it set itself at the start of the year.
(ii)
Underlying Performance – this assesses the operating surplus the Trust makes (EBITDA) as a percentage of
turnover.
(iii)
Financial efficiency – this evaluates the Trust’s retained surplus as a percentage of turnover and assesses (i) as a
return on its assets and (ii) as a percentage of turnover.
(iv)
Liquidity – this assesses whether the Trust has access to enough cash to support its day-to-day operations.
•
For each financial criterion a Trust’s performance is rated between 1 (high risk) and 5 (low risk) and compared to a grid of standard
values. Once the score against each criterion has been found, it is then weighted to produce an overall aggregate score. Monitor’s
current list of values and scores can be found on Page 12.
•
In order to produce the Trust’s final overall FRR score, a set of over-riding rules are then applied by Monitor. These rules are also
set out on Page 12.
•
The scores for the Trust’s FRR for 2012/13 have been calculated as follows:
Achievement of Plan
Year to Date
The Trust’s EBITDA is compared with its planned EBITDA.
The final EBITDA of £68,817k for 2012/13 compares to a planned figure of £65,524k – i.e.
it is 105.0% of plan.
Scores
Risk Rating
Achievement of Plan EBITDA % achieved
TB2013.66 Financial Performance
Actual
Diff.
£000
£000
£000
788,737
821,705
Operating Expenditure (723,213) (752,888)
EBITDA
Against Monitor’s ratings this scores 5.
Financial Criteria
Operating Income
Plan
65,524
68,817
32,968
(29,675)
3,293
March 2013
5
4
3
2
1
Metric
Score
100%
85%
70%
50%
<50%
105.0%
5
Page 13 of 18
Oxford University Hospitals
TB2013.66
Underlying Performance
Year to Date
The Trust’s EBITDA is compared with its turnover.
The final EBITDA of £68,817k is 8.4% of its turnover of £821,705k.
Operating Income
EBITDA
Scores
Risk Rating
Underlying Performance EBITDA margin
Actual
Diff.
£000
£000
£000
788,737
821,705
65,524
5
4
3
2
1
Metric
Score
11%
9%
5%
1%
<1%
8.4%
3
The Trust’s retained surplus for 2012/13 was a deficit of £1,316k. This is adjusted for any
impairments or losses on asset disposals charged against the income & expenditure
position and results in a revised surplus of £3,269k.
The Statement of Financial Position (or Balance Sheet) is used to calculate the
denominator for this rating. The starting point is the average of the total assets employed
for (i) the beginning of the year, and (ii) at the end of the current period. Because these
reduce the value of total assets employed any borrowings for loans, leases or PFI
agreements are then added back.
Operating Income
Operating Expenditure
EBITDA
Non-Operating Exps.
Retained Surplus
Scores
March 2013
5
4
3
2
1
Metric
Score
3%
2%
-1%
-5%
< (5%)
0.5%
3
Adjusted Surplus
Diff.
£000
£000
£000
788,737
821,705
32,968
(723,213)
(752,888)
(29,675)
65,524
68,817
3,293
(63,970)
(70,133)
(6,163)
1,554
(1,316)
(2,870)
4,568
4,568
17
17
3,269
1,715
1,554
Statem ent of Fin. Position
Opening
Balance
1-Apr-12
Total Assets Employed
371,960
End
Average
Balance
31-Mar-13
371,386
371,673
Add back :
Borrow ings (Current)
Borrow ings (Non-Current)
Assets
Page 2 of 18
Actual
Losses on Disposal
Against Monitor’s ratings this scores 3.
TB2013.66_Financial Performance M12
3,293
Plan
Impairments
The adjusted surplus figure is compared to the adjusted figure for net assets employed –
i.e. the return is 0.5% (= [3,269 x 100] / 680,318).
Financial Efficiency (1) Net return after Financing
68,817
Year to Date
1. The Trust’s retained surplus is assessed as a return on its assets after adjusting for
financing arrangements.
Risk Rating
(29,675)
March 2013
Financial Efficiency (1)
Financial Criteria
32,968
Operating Expenditure (723,213) (752,888)
Against Monitor’s ratings this scores 3.
Financial Criteria
Plan
17,356
11,458
14,407
299,314
289,162
294,238
688,630
672,006
680,318
Oxford University Hospitals
TB2013.66
Financial Efficiency (2)
Year to Date
2. The Trust’s retained surplus is assessed as a percentage of turnover.
The Trust’s adjusted surplus of £3,269k is 0.4% of its turnover of £821,705k.
Operating Income
Operating Expenditure
Against Monitor’s ratings this scores 2.
EBITDA
Scores
Financial Criteria
Risk Rating
Financial Efficiency (1) I & E Surplus Margin
March 2013
5
4
3
2
1
Metric
Score
3%
2%
1%
-2%
< (2%)
0.4%
2
Non-Operating Exps.
Retained Surplus
Plan
Actual
Diff.
£000
£000
£000
788,737
821,705
(723,213) (752,888)
32,968
(29,675)
65,524
68,817
3,293
(63,970)
(70,133)
(6,163)
1,554
(1,316)
(2,870)
Impairments
0
4,568
4,568
Losses on Disposal
0
17
17
1,554
3,269
1,715
Adjusted Surplus
Financial Efficiency (3)
3. To assess whether Monitor’s over-riding rules apply, the overall score for “financial efficiency” is the average of the two separately
calculated scores.
In January the two separate scores for financial efficiency for the Trust were “3” and “2”. This gives an average of 2.5. For the purpose of
assessing the Trust’s financial performance against Monitor’s over-riding rules, this means the score for financial efficiency is rounded up
to 3.
TB2013.66_Financial Performance M12
Page 2 of 18
Oxford University Hospitals
TB2013.66
Liquidity
Year to Date
The Trust’s access to readily liquid resources is compared against its daily operating
expenditure commitments.
The Trust’s annual operating expenditure for 2012/13 was £752,888 and one day of
operating expenditure is therefore £2,063k (= 752,888 / 365).
From the Statement of Financial Position, the Trust’s current assets at 31 March 2013
were £104,064k but inventories are not regarded as being a liquid asset and therefore
need to be excluded. Current liabilities were £123,563k.
Operating Income
Operating Expenditure
EBITDA
One Day's Expenditure
Plan
Actual
Diff.
£000
£000
£000
788,737
821,705
32,968
(723,213)
(752,888)
(29,675)
65,524
68,817
3,293
2,063
Financial
Position
31-Mar-13
If the Trust were to become a Foundation Trust, it is believed it would have access to a
working capital facililty of £57m. With this the Trust’s net liquid assets would be £26,148k.
Based on these figures it means that the Trust held 13 days’ worth of operating
expenditure as liquid assets at the end of the year (= 26,148 / 2,063).
Current Assets
104,064
Less : Inventories
(11,353)
Against Monitor’s ratings this scores 2.
Current Liabiliities
(123,563)
Scores
Financial Criteria
Liquidity
March 2013
Risk Rating
5
4
3
2
1
Metric
Score
Liquid ratio (days)
60
25
15
10
<10
13
2
TB2013.66_Financial Performance M12
Page 2 of 18
Working Capital Facility
57,000
Net Liquid Assets
26,148
Oxford University Hospitals
TB2013.66
Capital Programme
OUH Capital Program m e 2012/13
Full Year
Full Year
Full Year
Plan
Spend
Variance
£000s
£000s
£000s
Neonatal Intensive Care
1,942
2,328
Cardiac (Adult) Business Case
1,431
901
530
(386)
Vascular Business Case - Equipment
1,431
996
435
Trauma Centre Business Case
807
607
200
Head & Neck Relocation
767
663
Other Non-Maintenance Expenditure
842
1,118
(276)
IT/EPR
3,066
3,689
(623)
NOC Theatres
2,351
2,190
161
Medical and Surgical Equipment
2,144
2,852
(708)
104
Maintenance Expenditure
Estates Maintenance
2,908
2,190
718
Other Maintenance Schemes
2,782
2,914
(132)
Donations - Medical Equipment
1,115
1,115
Donations - Kadoori Centre Expansion
1,326
1,326
22,912
22,889
Total Capital Program m e Spend
Full Year
Full Year
Plan
Spend
Variance
£000s
£000s
£000s
22,889
4,304
4,304
Charitable Funds - Medical Equipment
(1,115)
(1,115)
Kadoori Centre Expansion
(1,326)
(1,326)
Less: Book Value of Assets Disposed
Capital Resource Lim it 2012/13
TB2013.66 Financial Performance
• The Trust’s year-to-date position against its capital
resource limit (CRL) is shown in the second table (below).
This includes expenditure made by the Trust on PFI
lifecycle costs and finance leases but excludes capital
items funded via donations from third parties or asset
disposals.
• The Trust undershot its CRL by £40,000 and therefore has
23
Full Year
22,912
PFI lifecycle and Equipment Leasing (IFRIC 12)
new neo-natal extension, medical & surgical equipment,
the new theatres at the NOC and the implementation of
the electronic patient record (EPR) project.
met its financial duty not to overshoot the agreed limit.
Projects funded from Donations
Capital Resource Lim it 2012/13
programme in the year.
• The largest areas of spend was on the construction of the
Non-Maintenance Expenditure
Total Capital Program m e Spend
• The Trust has charged £22.9m against its capital
(17)
24,775
24,735
23
17
40
Page 17 of 18
Oxford University Hospitals
TB2013.66
Performance Indicators against Financial Duties
External Financing Limit (EFL)
•
The Trust is given an external financing limit which, effectively, is a limit on the amount by which it can reduce its cash holdings. It is
permitted to undershoot this limit, or hold more cash, than originally planned.
•
The Trust ended 2012/13 with significantly more cash than was anticipated when its financial plans were agreed. It therefore
undershot its EFL target by £42.1m and met this financial duty.
Capital Resource Limit (CRL)
•
The Trust is given a capital resource limit which is a limit on the amount it may spend on its capital programme. The Trust is not
permitted to exceed this limit.
•
The Trust charged £24.7m against its CRL in 2012/13 and ended the year £40,000 below its limit and therefore also met this financial
duty. (See also page 17 above.)
-------------------------------------------------------------------------------------------------------------------------------------------------
The Trust’s performance against its financial duties for 2012/13 is summarised below:
Financial Duty
Plan
(£000)
Actual
(£000)
Better/
(Worse)
(£000)
1.
To achieve break even on Income & Expenditure
3,602
3,646
44
2.
To manage w ithin the capital resource limit (CRL)
24,775
24,735
40
3.
To operate w ithin an External Finance Limit (EFL)
5,094
(37,024)
42,118
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
May 2013
TB2013.66 Financial Performance
Page 18 of 18