Trust Board papers - University Hospital Southampton NHS ...

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