Finance Committee
24th June 2008
Agenda Item 4.2c
Income and Expenditure Report – May 2008
The financial tables shown below are provided at the end of this report in support of the
commentary that follows.
Table
1.
Details
I and E 1
Summary Income and Expenditure Statement
I and E 2
Summary Income Statement
I and E 3a
Divisional Income and Expenditure Statement
I and E 3b
Subjective Analysis of Budget v Expenditure to Date
I and E 4a
Summary of CRES 2008/09 Programme
I and E 4b
CRES by Workstream 2008/09 Programme
I and E 4c
Summary of CRES 2007/08 Carried Forward
I and E 4d
CRES by Workstream 2007/08 Carried Forward
Division of Diagnostic and Therapies

Overview – The Division reports a favourable variance of £119k to the end of May, an
improvement of £83k in the month.

Pay budgets show a favourable variance of £76k, an improvement of £98k in the
month. Driving this improvement is the receipt of £40k budget reflecting an increase in
the issue of NICE drugs. This represents the Division’s share of issued budget,
attributable to Pharmacy pay budgets. Furthermore, the Division has received
backdated income of £22k in respect of a research trial within Physiotherapy. There
has also been a catch-up in invoicing peripheral hospitals for the junior doctor
radiology rotation following the issue of an updated rota.

Non Pay budgets show an adverse variance of £80k, a worsening of £168k in the
month. Driving this shift is an under-achievement to date of the Division’s Non-Pay
Cash Releasing Efficiency Savings schemes (£47k). Staff shortages within Pharmacy
have caused a delay in the entering of new drug contracts onto the database,
prohibiting the ability to generate savings through the impact of reduced unit prices.
Action has been taken to resolve this. Further reasons for the adverse shift in the month
include costs in respect of MEMO contracts that had not previously been reported
(£40k), and bills for Lipid treatment in Haematology (£15k), for which the department
is awaiting clarification of potential PCT funding. In addition, there has been a
subjective coding change within Pharmacy to correct a Private Patient income target.

Income from Activities budgets show a £71k overachievement, an improvement of
£115k in the month. The position reflects the Division’s share of Trust-wide overperformance across General Medicine (£30k), Adult & Paediatric Cardiology (£21k),
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Agenda Item 4.2c
Paediatrics and Paediatric Surgery (£36k) and Radiology Direct Referrals (£8k). This
offsets, in part, increased Non-Pay expenditure.

Income from Operations budgets show an overachievement of £52k, a favourable
movement of £39k in the month. This is due primarily to the final payment from
Taunton and Somerset NHS Foundation Trust for the installation of a medical gas
alarm system. Work is ongoing within MEMO to ensure that the reporting of
outstanding jobs is improved, thereby allowing for more accurate forecasting of
outstanding income due and better cash collection.

Cash Releasing Efficiency Savings Plans 2008/9 programme – the Division has
achieved savings of £106k against a target of £186k. Staffing shortages within
Pharmacy have to date restricted the ability to generate savings through the contracting
process. Recruitment plans are in place and full achievement of this scheme (£200k) by
31st March 2009 is anticipated. There is a delay in the appointment of a substantive
Paediatric Pathologist post, as the case supporting the proposed appointment is being
finalised.

Cash Releasing Efficiency Savings 2007/8 carried forward – the Division has achieved
its target saving of £98k to date.
Risks – Anticipated risks in 2008/09 include the Division’s share of a Trust wide
inability to mitigate against the loss of Cardiac activity to North Bristol, a requirement
of further resources to support the ongoing achievement of the 18 week target and an
overspend on the Health Protection Agency contract as a result of potentially higher
activity.

2
Forecast Outturn – the Division is forecasting a breakeven position at the year end.
Division of Medicine

Overview - The Division reports an adverse variance of £152k to the end of May, a
£173k worsening since last month.

Pay budgets show an adverse variance of £46k at the end of May, compared to a
favourable variance of £14k last month. This relates in the main to nursing staff
budgets which shows an adverse variance of £85k due to Ward 22 Overflow Ward
being kept open without funding during May, the catch up in pay for bank staff and the
increased use of agency nursing staff. Income for the additional activity in month 2
with Ward 22 being open should be recognised next month. Medical staffing budgets
show a favourable variance of £22k due to vacant consultant PAs being held for the
recruitment of the Acute Physicians. The vacancy factor cost pressure remains at £32k
for month 2.

Non-pay budgets show an adverse variance of £279k compared to £46k last month,
due to in the main drugs budgets which shows an adverse variance of £165k.
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Agenda Item 4.2c
Expenditure is slightly higher than previous months, and budget for the NICE drugs
has only been pro-rata’d on one month’s usage. It is anticipated that the cost pressure
on drugs will decrease when actual information becomes available for NICE usage and
the budget is amended to reflect this. A further reason for the deterioration in non pay
relates to the penalty fines, for which the Division was charged £65k in month 2.
3.

Income from Activities budgets are £170k overachieved of which £132k relates to
uncoded activity.

Cash Releasing Efficiency Savings 2008/9 programme – the Division’s savings are
currently reporting an under-achievement of £40k due to savings not made in the
William LLoyd Unit and the delay in the voice recognition technology scheme. It is
anticipated that other schemes will over-achieve to support this slippage by the end of
the year, but further work needs to be undertaken to ensure the Division has sufficient
contingency plans in place to support any further scheme slippage.

Cash Releasing Efficiency Savings 2007/08 carried forward - the Division has
achieved savings to date of £31k against a target of £28k, the Division is forecasting an
outturn of £16k ahead of plan.

Forecast Outturn – the Division is forecasting an adverse outturn variance of £50k
excluding any allowance for further penalty fines. The Division is working up
mitigating plans in order to address this and deliver a breakeven position.

Risks – the risks to the forecast outturn include the requirement of further resources to
support the ongoing achievement of the 18 week target and 4 hour A&E target,
changes to the costed plan to achieve 13 weeks, further penalty fines allocated to the
Division for under achievement of C Difficile targets (which could amount to a total
annual cost pressure of £400k at the current rate), and an inability to achieve savings
from the amalgamated Sexual Health Service across Bristol if the North Bristol Trust
service is not transferred.
Division of Specialised Services

Overview - The Division reports a favourable variance of £61k to the end of May
compared to a surplus of £21k last month; an improvement of £40k.

Pay budgets show an adverse variance of £78k. Allied Health Professional budgets
such as radiotherapy staff and cardiac perfusion staffing budgets show adverse
variances of £46k and £26k respectively due to staff regradings, pay arrears and over
establishments; these issues will be addressed in the coming months. Nursing and
medical budgets generally show favourable variances, however, agency nursing
budgets show an adverse variance of £17k due to the need for specialist care and the
need to cover vacancies. The vacancy factor across all staff groups is also contributing
to the adverse pay variance.
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Agenda Item 4.2c
4.
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
Non-pay budgets show an adverse variance of 226k. Cardiac services shows adverse
variances on blood of £38k, transport costs (cardiac shuttle) of £20k and catering of
£19k; these support budgets are being carefully monitored. Cardiac surgery costs
include charges from private hospitals of £89k which is recovered through income
from activities. The Cardiology non pay budget is under spent by £113k. BHOC drugs
budgets are overspent by £105k; this is not a cause for immediate concern as much of
this expenditure is NICE related and will be funded by PCTs. Blood costs,
cytogenetics and stem cell costs are significant cost pressures in Haematology.

Income from Activities budgets show a favourable variance of 381k. Service level
agreements for cardiac surgery and cardiology have favourable variances of £97k and
£94k respectively. There are also favourable variances for oncology of £17k and
haematology of £7k. The Division has also received the difference between actual and
estimated income relating to 2007/08 totalling £142k.

Income from Operations budgets show an adverse variance of £16k. This variance
reflects a slight fall in income for commercial trials in oncology this month.

Cash Releasing Efficiency Savings 2008/9 programme - the Division has achieved
savings to date of £198k against a plan of £253 k. The Division is forecasting full
achievement of the plan.

Cash Releasing Efficiency Savings 2007/08 carry forward – the Division has achieved
savings of £70k to date through slippage on appointments and additional procurement
savings.

Forecast Outturn – the Division is forecasting a break even position at year end.

Risks – the major risk for the Division is ensuring that sufficient cardiology activity is
achieved to mitigate the loss of the North Bristol transfer; this area of work is a high
priority for the Division.
Division of Surgery, Head and Neck

Overview – The Division reports an adverse variance of £16k to the end of May.

Pay budgets show an adverse variance of £79k to the end of May. The key areas
causing this are Anaesthesia Consultant budgets £102k (cost of Locum Consultants
due to inability to recruit to clinical fellow vacancies) and Ophthalmology medical
staff budgets £34k. These increased costs are clearly linked to the substantial over
achievement in variable contract income. These unfavourable pay variances are offset
by a favourable position of £62k within Community Dental and Personal Dental
Service.

Non Pay budgets show an adverse variance of £602k to the end of May. The key areas
responsible for this position are theatre non pay budgets £187k (increased cost to
reflect contract income over achievement), share of Service Level Agreement fine,
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Agenda Item 4.2c
£64k, energy £155k (52% increase in unit cost of gas since October 2007, and 30%
increase in usage compared to the same period in 2007/08) and Drugs £141k. The
Division has undertaken a detailed review of the drugs position with particular focus
on reconciling the expenditure showing within drugs and the income received in terms
of NICE funding. The current position is broadly in line with last year’s bearing in
mind the significant over achievement in contract income. The Division is actively
looking to reduce the drug over spend in the coming months with actions such as the
introduction of a revised antibiotic policy.

Income from Activities budgets show an over achievement of £622k. The key area
showing a favourable position is variable contract income, in particular
Ophthalmology £236k, Intensive Therapy Unit £86k, Dental Hospital ££96k, Illizarov
Frames £41k, Trauma and Orthopaedics £23k, ENT £29k and the difference between
the estimated variable contract income reported to the end of 2007/8 and the actual
final year end contract income position £95k. The contract income over achievement
reflects the work the Division is doing to achieve the 13 week target. The funding for
the additional activity required to achieve the target has yet to be agreed with Bristol
PCT. Once agreed, additional non recurring funding will be added to the Division with
a corresponding increase in the targets.

Income from Operations budgets show a favourable position of £43k. This is due to
income from the Orthodontic Therapy course within Dental and Commercial trials
income.

Cash Releasing Efficiency Savings Plans 2008/9 programme – The Division has
achieved savings of £351k to date against a plan of £352k. The year end projection is
an over achievement of £19k.

Cash Releasing Efficiency Savings Plans 2007/8 carried forward- The Division has
achieved savings to date of £213k compared to a plan of £213k, the year end projection
shows savings fully achieved.

Forecast Outturn – the Division is forecasting a breakeven position at the year end.

Risks – the risks to the forecast outturn include, SLA fines, failure to achieve Cash
Releasing Efficiency Savings, service disinvestments as a result of service
redesign(such as the Practice Based Commissioning Urology proposal) and non
payment by Welsh Commissioners for activity that hasn’t been pre authorised.
Division of Women’s and Children’s
5.
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
Overview – The Division reports an unfavourable variance of £743k or 5.7% of budget
to the end of May.

Pay budgets show an adverse variance of £87k or 0.8% of budget. The adverse position
is primarily due to Medical staffing budgets £47k adverse and Nursing & Midwifery
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Agenda Item 4.2c
budgets £31k adverse. The Medical staffing overspend is primarily due to Waiting List
Initiative payments of £41k to date. Nursing & Midwifery gives cause for concern due
to a combination of filling vacant posts and an increase of bank and agency
expenditure.
6
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
Non Pay budgets show an adverse variance of £688k. The adverse position is primarily
due to Services received from NHS and Non NHS Bodies at £446k adverse. This
includes Bone Marrow Transplant donor charges, clinical genetics and cytogenetic test
charges and Spire Healthcare. It also includes an anticipated recharge from North
Bristol NHS Trust for cochlear implants. Drugs budgets show an adverse variance of
£62k primarily in Paediatric Medicine.

Income from Activities budgets show an underachievement of £4k.

Income from Operations budgets show an overachievement of £36k. This is primarily
due to income received from other NHS Trusts for Consultant peripheral clinics.

2008/09 Cash Releasing Efficiency Savings programme – the Division’s savings plan
totals £2,659k. Savings of £231k were achieved in April and May compared with the
target of £395k. The Division is currently forecasting full achievement of the savings
plan.

Cash Releasing Efficiency Savings 2007/8 Plans carried forward – Savings of £408k
were achieved non-recurrently in 2007/08 and must be delivered again in 2008/09.
Savings of £68k were achieved in April and May in line with target. The Division is
currently forecasting full achievement of the £408k.

Forecast Outturn – The Division is currently forecasting an adverse outturn variance of
£2.8m. The Division is working up mitigating plans in order to address this and deliver
a breakeven position.

Risks – The underlying non pay over spend is a significant risk to the Division’s
financial position. The Division is drawing up plans to mitigate the non pay over
spend. The Cash Releasing Efficiency Savings under achievement to date will require
the identification of additional saving schemes in order to recover the under
achievement to date and deliver the 2008/09 target. This will require significant effort
on the part of the Division.
Division of Estates & Facilities

Overview – The Division reports an adverse variance of £28k at the end of May, a
deterioration of £4k during the month.

Pay budgets show a favourable variance of £40k at the end of May. This is due to
vacancies at Senior Manager and Admin and Clerical grades. Existing vacancies
amongst Ancillary staff are being covered primarily by the use of agency staff.
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Agenda Item 4.2c
7

Non Pay budgets show an adverse variance of £97k. This is due to a combination of
increasing food costs (£29k over spent during May) and additional cleaning materials
expenditure (£23k over spent during May).

Income from Operations budgets are overachieved by £29k. This is due to an overachievement of income in Residences and Car Parking.

Income from Activities budgets show a breakeven position, an improvement of £8k
during the month. This is the Division’s share of the Trust position.

Cash Releasing Efficiency Savings Plans 2008/9 programme – the Division has
achieved savings of £77k to date against a plan of £86k. The forecast for the year is an
under-achievement of £12k (2%) on the £632k plan.

Cash Releasing Efficiency Savings 2007/8 carried forward – The Division has
achieved savings of £14k, which is in line with the plan. The forecast outturn is the full
achievement of the £83k target.

Forecast Outturn – the Division is forecasting an adverse variance of £63k, mitigation
plans are in place (rates rebates) to address this and return the Division to breakeven.

Risks - In House Cleaning, which covers the BRI precinct, is £63k overspent at the end
of May. Vacancy levels remain high, leading to increased use of agency, £138k spent
to date.
Division of Trust Services

Overview – The Division reports a deficit of £150k at the end of May, a deterioration
of £104k during the month.

Finance – has an adverse variance of £34k at the end of May. This is due to additional
expenditure within the Payroll Department on overtime and agency staff.

Trust Headquarters – has an adverse variance of £93k at the end of May. £32k is due
to the over spending on the Central Bank Office. The remaining over spend is due to
an under achievement on Cash Releasing Efficiency Savings.

Corporate Human Resources – is break even at the end of May.

Information Technology – has a favourable variance of £5k at the end of May

Central Services – has an adverse variance of £31k at the end of May. This is due to
an under achievement on Cash Releasing Efficiency Savings.
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Agenda Item 4.2c
8.
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
Community – has a favourable variance of £3k at the end of May.

Forecast Outturn - the Division is forecasting a break even position.

Cash Releasing Efficiency Savings Plans 2008/9 programme – the Division has
achieved savings of £62k to date against a plan of £103k, the Division is forecasting
full achievement of its target.

Cash Releasing Efficiency Savings 2007/8 carried forward - The Division has achieved
savings of £11k to date against a plan of £20k, the Division is forecasting full
achievement of its target.
Skills for Health

Overview – Skills for Health is breakeven at the end of May.

Pay budgets show a breakeven position to date this compares to a favourable variance
of £155k at the end of the previous month. This is mainly due to a reallocation of
budgets within Skills for Health this month.

Non-Pay budgets show a favourable variance of £631k due to slippage on certain
projects.

Income budgets show an adverse variance of £631k; this is due to a delay of 08/09
projects.

Forecast Outturn - Skills for Health is continuing to forecast a breakeven position at
year end.
Miscellaneous Support Services

10.
Miscellaneous Support Services reports a favourable variance of £113k at the end of
May. The main reasons for this are favourable variances on interest £48k, VAT £74k,
RTA Income £ 11k and insurance £14k offset by an adverse variance on legal fees
£50k.
Depreciation and Public Dividend Capital

Depreciation and Public Dividend Capital is reporting an adverse variance of £1k at
the end of May.
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Agenda Item 4.2c
11.
Subjective Analysis of Income and Expenditure to date. (See Table I and E 3b)

Income – shows a favourable variance of £2,143k. Income from activities shows a
favourable variance of £2,582k which is due mainly to income from PCTs exceeding
targets by £2,352k and income from the Department of Health exceeding targets by
£206k and NICE income exceeding targets by £104k.This is offset by an
underachievement on private patient income of £112k Operating income shows an
adverse variance of £439k, this is due to adverse variances on Skills for Health
Charges to NHS and non NHS bodies £631k, this is offset by favourable variances on
UH Bristol charges to NHS bodies £77k and smaller favourable variances on Research
and Development and Education and Training income.

Pay budgets show an adverse variance of £158 k. This includes adverse variances on
consultants £54k, junior doctors £16k, administration and estates staff £ 390k, agency
staff £ 452k, and vacancy factor £634k.These adverse variances are offset by a
favourable position with regard to senior managers £141k, dental medical staff £21k,
nurses and midwives £46k, other clinical staff £160k, healthcare assistants £160k, pay
recharges £172k and pay reserves £688k.

Non-Pay budgets show an adverse variance of £2,030k significant factors include
adverse variances on drugs and blood £523k, clinical supplies and services £15k,
general supplies and services £162, establishment expenses£ 60k, services from non
NHS bodies £273k and services from NHS bodies £562k and other expenditure £477k.
These adverse variances are offset by a favourable position on premises and fixed plant
£42k.

Financing costs (including capital charges as well as interest payable and receivable) –
shows a favourable variance of £54k.
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