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UNIVERSITY HOSPITAL SOUTHAMPTON NHS FOUNDATION TRUSTFinance ReportReport to: Trust Board - 18 th December 2012Report from:SponsoringExecutive:Purpose of Report:Review History toDate:Andy Wood, Deputy Finance DirectorAlastair Matthews, Finance Director and Deputy CEOTo update Trust Board on the financial, activity and savings performance of the Trustfor November 2012.The Trust Board has previously agreed the income and expenditure budgets for2012/2013 with a full year plan pre-impairment surplus of £6m.RecommendationThe Board are asked to note:(1) In November the Trust has delivered a pre-impairment surplus of £926k, £6kbetter than Plan although the cumulative position is a surplus of £3,278kwhich is £196k worse than Plan.(2) Cost Improvement Programmes (CIPs) delivered were cumulatively £1.0mbelow Plan, which is phased based on a historic delivery profile. Thisrepresents a £0.1m deterioration in November. The target is fully identified at30 th November although a significant element remains classified as amber.(3) Divisions and headquarters overspent against expenditure budgets by£1.8m, exacerbated by a £0.9m overspending on reserves and corporatebudgets. This was largely offset by activity above plan with income estimatedto be £2.5m above plan in the month.(4) The November position is based on a number of specific assumptions onincome.SummaryThe Trust delivered a pre-impairment surplus of £0.9m in November, which was inline with Plan. EBITDA was £3.3m compared to a Plan of £3.6m. Cumulativelypreimpairment surplus is below Plan by £0.2m.Cumulative NHS Clinical Income at month 8 is estimated to be £3.4m above plan.A phased budget is used to reflect expected actual activity more accurately thanusing a straight line, unphased approach. The budgets for Southampton City andHampshire were adjusted with budget brought forward to the first quarter of thefinancial year, to reflect the expectation that significant activity management forthese PCTs would not be achieved during the first quarter.Actual income reported at month 8 consists of cumulative activity to month 7 asreported in SLAM plus an estimate for month 8 which extrapolates the first 7 months'income and then applies the appropriate phasing as a proxy for actual activity inmonth. Additional income has been anticipated for clinical activity which started inMonth 7 and would therefore not be recognised in this extrapolation, as well as earlydata indicating that spells are likely to be higher than usual.Provisions have been made for likely impacts from fines for 30 day readmissionsand 18 week breaches, a technical adjustment regarding the method for calculatingMRET, and provisions for the risk of partial non-achievement of C Diff and CQUIN.1
Non - NHS clinical income was £0.1m better than Plan and is cumulatively £0.5mabove Plan. Notably private patient income continues to improve and is £0.2mbehind plan cumulatively.There is an in month positive variance of £0.6m on other operating income andcumulatively this income is £4.9m over plan. Of this, £1.7m relates to R&D (mirroredby increased spend) and £1.2m is additional capital works recharged to theUniversity. The balance relates to Divisional sundry income.Divisions and Trust Headquarters were £12.0m overspent against expenditurebudgets cumulatively, offset by underspends on corporate and reserve budgets togive a £9.7m adverse variance overall. The former number includes £5m which isthe impact of adding back the positive variance on divisional income, to give a trueexpenditure variance.Savings required for the year (CIPs) total £23.2m. In November, savings of £2.2mwere delivered (£2.1m in October), leading to a cumulative adverse variance againstPlan of £1.0m.The period end cash balance at £16.3m was £6.9m below plan due mainly toincreased working capital balances(£4.1m) higher net capital expenditure (£2.2m)and lower cash generated from earnings (£0.9m) partly offset by lower financingcosts (£0.3m).Key Messages forNovember:The year end cash forecast at £15.7m is £4.7m lower than plan due mainly to highernon cash income within the Trust planned surplus and less external income tosupport the capital programme.Delivery of the Trust’s financial targets in 2012/2013 will principally be determined byperformance in four areas:a) Divisional and Headquarter Directorates controlling expenditure to within theirbudgetary targetsb) Delivery of in-year financial savings of at least £23.2m plus activitymanagement savings of a further £5.1m. Activity Management cost savings arephased into the corporate budget from 1 st July 2012.c) Delivery of activity levels in line with budgets and the Capacity Plan.d) Development of a contingency reserve to offset any unexpected variations onthe above, and to manage the risks associated with Activity Managementand other unforeseen risks emerging.This report provides an update on these four areas.a) Controlling of expenditure to within the agreed ‘runrate’ budget targetsIn overall terms the Trust was cumulatively above Plan on operating expenditure by£9.7m at the end of October. Divisions and Trust Headquarters were £12.0moverspent against expenditure budgets cumulatively, offset by underspends oncorporate and reserve budgets to give a £9.7m adverse variance overall. The formernumber includes £5m which is the impact of adding back the positive variance ondivisional income, to give a true expenditure variance. Total revenue at 31 stNovember was £8.8m above Plan, largely offsetting the £9.7m overspend onoperating expenditure.As previously noted a number of reserves are now phased in fixed twelfths. Thecumulative underspend on reserves at month 8 was £2.9m. The reserves that havebeen phased in twelfths include NESC, the capacity reserve, nonpay and druginflation, IT and consultant increments.2
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Page 18 and 19: FINANCE REPORTSchedule 1 2012/13 Mo
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Page 28 and 29: Schedule 8b 2012/13 Month: 8Univers
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Page 32 and 33: Annex 2DIVISIONAL/HEADQUARTERS INCO
Page 34 and 35: Annex 4CAPITAL EXPENDITURE 2012/13
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Page 38 and 39: 2.3 Other Guidance ReceivedThe DOH
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Page 48 and 49: 2 SECTION 1: What Patients are Tell
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Page 56 and 57: The Clinical accreditation Scheme (
Page 58 and 59: 1 Purpose1.1 The UHS patient qualit
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2012/13 PIF (For Reference)Appendix
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Board Paper Cover SheetTitleChief E
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4. Signing & Sealing4.1 The Seal of
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performance target and C-Diff targe
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University Hospital Southampton NHS
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Appendix 2Exception Reports - Novem
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Monthly MeasuresPatient ExperienceH
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IM&T Report - Nov 20121. Purpose1.1
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2.2. Information to support patient
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