Council of Governors
2nd December 2015
Month 7 Financial Position
1.
Introduction
This paper provides an overview of the financial position for 2015-16 as at the end of October
2015 and a forecast for performance in the remaining months of the year
2.
Year to date performance
The table below sets out the year to date financial performance to date compared to the plan
submitted to Monitor:
£ M’s
Plan
Total Income
Pay
Non-Pay
Total Expenditure
EBITDA
Year to Date
£ M’s
£ M’s
Actual
Variance
%
254.80
264.01
9.21
3.61%
(179.96)
(71.84)
(251.80)
(181.41)
(74.55)
(255.96)
(1.45)
(2.70)
(4.15)
1.65%
3.00
8.05
5.05
EBITDA %
1.18%
3.05%
1.87%
Depreciation
Interest income
Dividends and other
(5.44)
0.02
(4.78)
(4.30)
0.03
(4.78)
1.13
0.00
0.00
Retained
surplus/(deficit)
excluding disposal
Restructuring costs
Impairment
Profit on disposal
Retained
surplus/(deficit)
(7.19)
(1.01)
6.19
(1.81)
0.00
8.10
(0.90)
(0.80)
(1.01)
2.15
(0.66)
1.01
(1.01)
(5.95)
0.24
To date the Trust’s financial position indicates:
Overachievement on income by £9.21M due to additional contracts not included in the Monitor
plan.
Expenditure overspent by £4.15M against plan due to a combination of factors. This is partly
due to schemes covered by the additional income such as winter pressures and IAPT. The
main other cause of overspend is unachieved savings. The planned savings profile increases
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in Q3 and again in Q4.
The planned deficit to date is £0.90M. The actual deficit achieved to date is £0.66M. However,
excluding restructuring and disposal the planned deficit is £7.19M and actual deficit only
£1.01M.
The in-month position is a surplus of £65K. Several favourable non-recurrent benefits have
occurred this month. The underlying deficit is around £600K per month, as shown in the graph
below. This is an improvement from that previously reported due to improved income in
Jameson and Goodall.
The Surplus and Forecast Surplus contain spikes for disposals and other one-off items, but the
trends for July-September and November-March are fairly consistent. The underlying trend
assumes no one-off items and that current income/expenditure continue without change.
Future improvements are factored into the forecast where they are cash-releasing, shown as a
reduction in the monthly deficit for Q3 (slightly less steep orange line).
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3.
Forecast
£ M’s
Plan
Total Income
Pay
Non-Pay
Total Expenditure
Likely Out-Turn
£ M’s
£ M’s
Forecast Variance
438.31
452.81
14.50
(302.67)
(122.52)
(425.19)
(315.68)
(125.87)
(441.56)
(13.01)
(3.36)
(16.37)
EBITDA
13.13
11.25
(1.87)
EBITDA %
2.99%
2.49%
(0.51%)
Depreciation
Interest income
Dividends and other
Retained
surplus/(deficit)
excluding disposal
I&E Surplus %
Restructuring costs
Impairment
Profit on disposal
Retained
surplus/(deficit)
(9.32)
0.04
(8.19)
(4.34)
(7.42)
0.05
(8.20)
(4.32)
1.90
0.00
(0.01)
0.02
(0.99%)
(0.95%)
0.04%
(3.10)
0.00
8.10
0.66
(1,52)
(1.01)
7.54
0.70
1.58
(1.01)
(0.56)
0.04
%
3.31%
(3.85%)
EBITDA is expected to be £1.87M worse than plan. The bottom line is now expected to show a
surplus of around £0.7M which is on plan. There are multiple factors to this, but the key contra
is that the Trust has lower depreciation costs (below EBITDA) and has not met its savings
target (on expenditure included in EBITDA).
For non-operating costs we are also expected to underspend on restructuring, but have an
unplanned impairment. Incidental costs on the second property sale will reduce the net profit
on disposal.
Due to an update to the Monitor risk framework (which changed from September) the line now
holding most risk is I&E Surplus %. The plan was with for a 0.99% deficit which the Trust is
currently expected to meet.
Scenarios looking at the likelihood of savings achievement, redesign work in Q4, claw-back
from commissioners on un-provided services, non-recovery of recharges to CGI, and the
potential penalty from NWL’s performance notice have all been factored into best and worst
case forecasts. These vary from a £4.2M surplus to a £5.8M deficit. The range of figures will
close as we progress through the remainder of the year.
7.
Conclusion
The Board Governors are asked to note the year to date and in month financial performance
and the assumptions being used to forecast the full-year position.
Trevor Shipman -Director of Finance -25th November 2015
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