Lee Bond
Chief Financial Officer

The Trust achieved all of its financial duties in 2014/15
To Break Even on its Statement of Comprehensive
Income
To achieve a 3.5% Return on Capital
To operate within our External Finance Limit
To operate within our Capital Resource Limit





As an NHS Trust we are required to at least break even. For the eighth successive year we achieved an operating surplus, with a surplus of £2.9m for
2014/15.
2007/08
£m
6.8
2008/09
£m
5.0
2009/10
£m
7.6
2010/11
£m
4.6
2011/12
£m
4.8
2012/13
£m
5.4
2013/14
£m
5.9
2014/15
£m
2.9
Total
£m
43.0
The £43m we have generated over the last 8 years has been used to repay loans and invest in our property, plant and equipment.
We generate surpluses so that we can ensure a sound financial basis for the future particularly recognising the challenging economic environment.
The Trust received a clean External Audit opinion (i.e. the financial statements give a true and fair view of the financial position of the Trust and have been properly prepared in accordance with the directed accounting policies).

The Trust reported a surplus in 2014/15 of £2.9m. This was achieved through the benefit of nonrecurrent items totalling £10.6m which included winter resilience funding and part year benefits from slippage in specific developments including Francis and Keogh related clinical staffing investments. Without these items the Trust would have reported a deficit of £7.7m.
For 2015/16 the Trust had an initial planned deficit of £21.9m which reflects the underlying position from 2015/16 along with new cost pressures from the following:
•
Partial delivery of the 2014/15 efficiency program and only partial development of a program for 2015/16
• Increased Clinical Negligence costs
•
Cost of investments, for example in the new medical model within the Trust and in the new patient administration system
As a result of the planned deficit the Trust’s External Auditor made a referral to the Secretary of State under Section 19 of the Audit commission act 1998 that the Trust is likely to break its statutory break-even duty in 2015/16.

Our income in 2014/15 was £527m, as shown below.
5%
5%
4%
23%
30%
NHS England: £157m
Hull CCG: £175m
East Riding CCG: £123m
Other CCG: £24m
Education & Training: £26m
Other: £22m
33%

Our expenditure in 2014/15 was £512m, as shown below.
3%
5%
9%
23%
60%
Pay: £305m
Clinical supplies and services: £117m
Other supplies and services: £15m
Premises & Establishment: £28m
Other: £47m
This year the cost of salaries and wages increased by £10M to £305M.

We invested £18.8m in property, plant and equipment
(£m)
Major Building Projects
New Emergency Department
New Ward Block
– Ward 500
4.8
4.1
Equipment
Medical and Scientific Equipment
Information technology
Other
Backlog maintenance and Compliance
Other
3.6
1.0
TOTAL SPENT
1.8
3.5
____
18.8
____

• We expect demand for NHS services will continue to increase, but expectations are changing as to how and where that care should be provided.
• We will need to make changes in the way services are provided .
– Clinical Commissioning Groups are looking for services to be provided within the community rather than in a hospital setting
– Care should be more personalised to the patients needs
• Patients expectations about the quality of care that they receive will not change. Quality is not optional.
• Funding will be limited as the NHS faces a massive financial burden with estimates of a £20-30bn challenge by 2020
– The Trust will need to improve efficiency and productivity to deliver services within the funding available.

• Historically we have delivered within the financial constraints we face but
2015/16 marks a stepped change in the size of the challenge being faced. This challenge is not likely to get easier over the next 5 years
• Sound financial management is a prerequisite for future success .
• Our financial plans reflect our desire to provide services locally that are safe, high quality and which meet the requirements identified by the Care Quality
Commission.
• The Trust is committed to developing a Financial Recovery Program. This is not a quick-fix. The level of transformation and change required will take time if services are to be provided safely throughout.
• The two keys to this are:
1. Transformation of our services to make them more efficient and productive
2. Collaborative working with commissioning colleagues and the wider health and social care economy.