January 2012 - Sandwell & West Birmingham Hospitals

SWBTB (1/12) 267 (a)
Financial Performance Report – December 2011
Risk Ratings
Measure Description Value Score
EBITDA Margin Excess of income over operational costs 5.7% 3
EBITDA % Achieved
Return on Assets
Extent to which budgeted EBITDA is
achieved/exceeded
Surplus before dividends over average assets
employed
97.6% 4
4.4% 3
I&E Surplus Margin I&E Surplus as % of total income 0.4% 2
Liquid Ratio
Number of days expenditure covered by
current assets less current liabilities
34.5 4
Overall Rating 3.0
Risk Ratings
•The adjacent table shows the Monitor risk
rating score for the Trust based on
performance at December.
• An adjustment has now been made to the
liquidity ratio to reflect an uncommitted
overdraft facility (which would be in place as
an FT) as this more accurately reflects
performance against the Monitor risk rating
regime. The changes the Liquid Ratio score
from 2 to 4.
•I&E Surplus Margin is lower than would
normally be expected due to relatively low
levels of surplus being delivered.
External Focus
•Birmingham and Solihull Cluster continues to report a difficult financial position although forecasting year end
performance in line with a reduced control total. Expectations of potential difficulties in meeting winter pressures
have been identified. The cluster continues to report pressures in some areas of acute activity although not
generalised over all providers or all services.
• Financial performance at the Black Country Cluster remains strong, particularly for Wolverhampton PCT, although
at the same time, over performance on acute contracts at Dudley Group, Royal Wolverhampton and Walsall
Hospitals continues to be reported.
• Although the number of organisations concerned is still relatively small, there are increasing reports of deficits
within the NHS trust sector in 2011/12 coupled with a general expectation of significant falls in forecast surpluses
elsewhere. Actual and potential deficits have largely been associated with organisations finding increasing difficulty
in delivering demanding savings targets, a problem which can only grow in 2012/13 with the roll out of another year
of national efficiency savings requirements across providers.
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