AH ANNUAL REPORT 2018

31.2 Total on-SoFP PFI, LIFT
and Other Service Concession
Arrangement Commitments
This note provides an analysis of the trust’s payments
in 2017/18:
Unitary Payment Payable to
Service Concession Operator
Consisting of:
- Interest Charge
- Repayment of
Finance Lease Liability
- Service Element
and Other Charges to
Operating Expenditure
- Revenue Lifestyle
Maintenance
2017/18 2016/17
£000 £000
12,094 13,566
8,098 8,249
2,070 2,044
1,174 2,803
202 -
- Contingent Rent 550 470
Total Amount Paid to
Service Concession
Operator
12,094 13,566
The unitary payment service element for 2017/18
includes a credit for service failures.
32 FINANCIAL INSTRUMENTS
32.1 Financial Risk Management
Financial reporting standard IFRS7 requires disclosure
of the role that financial instruments have had during
the period in creating or changing the risks a body faces
in undertaking its activities. Because of the continuing
service provider relationship that the trust has with
clinical commissioning groups (CCGs) and the way
those CCGs are financed, the trust is not exposed to
the degree of financial risk faced by business entities.
Also, financial instruments play a much more limited
role in creating or changing risk than would be typical
of listed companies, to which the financial reporting
standards mainly apply.
Liquidity Risk
Alder Hey Children’s NHS Foundation Trust net
operating costs are incurred under legally binding
contracts with local CCGs. The Trust receives regular
monthly payments form CCGs based on an agreed
contract value with adjustments made for actual
services provided.
The Trust finances its capital expenditure from internally
generated funds or Public Dividend Capital made
available by the Department of Health and Social Care.
The Trust is therefore not exposed to significant liquidity
risks.
Interest Rate Risk
All of the trust’s financial assets carry nil or fixed rates of
interest. The Trust is not exposed to significant interest
rate risk.
Foreign Currency Risk
The Trust is principally a domestic organisation with
the majority of transactions, assets and liabilities being
in the UK and sterling based. The Trust has limited
business with overseas clients. The Trust therefore has
low exposure to currency rate fluctuations.
Price Risk
The contracts from NHS commissioners in respect
of healthcare services have a pre-determined price
structure which negates the risk of price fluctuation.
Credit Risk
The contracts from NHS commissioners in respect of
healthcare services are agreed annually and take into
account the commissioners’ ability to pay and hence
credit risk is minimal.
The trust’s treasury management operations are carried
out by the finance department, within parameters
defined formally within the trust’s standing financial
instructions and policies agreed by the Board of
Directors. Trust treasury activity is subject to review by
the trust’s internal auditors.
Alder Hey Children’s NHS Foundation Trust 189
Annual Report & Accounts 2017/18