Finance Report as at 31st July 2014

Durham Dales, Easington and Sedgefield Clinical Commissioning Group1

Executive Summary as at 31st July 2014

Income & ExpenditureThe CCG is reporting an underspend year-to-date (YTD) and forecast outturn position in line with agreed plans.

CapitalNo allocations have been announced to date however indications are that minimal funds are available.

CashThe forecast cash drawdown is in line with the anticipated cash limit.

Quality, Innovation, Productivity & Prevention (QIPP) Current QIPP forecasts show full delivery against target.

Better Payment Practice Code (BPPC)The CCG is exceeding the 95% target of paying NHS invoices within 30 days. Action is being taken to improve the position on Non NHS invoices.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group2

YTD Forecast

N/A N/A

YTD Forecast

£130,527K £418,362K

YTD Forecast

£1,830K £5,490K

YTD Forecast

£22,755K £22,755K

By Volume By ValueNon-NHS 94.01% 95.31%

NHS 98.70% 99.73%

Budget to Actual Variances as at 31st July 2014

Durham Dales, Easington and Sedgefield Clinical Commissioning Group3

Overview of Financial Position as at 31st July 2014

The current position shows a year to date under-spend of £1,830k and a forecast outturn under-spend of £5,490k against a total expected allocation of £424,750k. This is in line with the Financial Plan submitted to NHS England.

No additional allocations were confirmed by NHS England during July 2014. The CCG’s financial plan is under continual review and the current financial position

based upon latest information shows the organisation to be on track to achieve its key financial targets.

Acute Contracts are overspending, with specific pressures on County Durham and Darlington NHS Foundation Trust and City Hospitals Sunderland NHS Foundation Trust. Partially offset by underspends within North Tees and Hartlepool NHS Foundation Trust and Newcastle upon Tyne Hospitals NHS Foundation Trust contracts.

Mental Health is showing an overspend owing to high levels of activity with Northumberland Tyne and Wear NHS Foundation Trust in the early part of the year. This is forecast to continue.

Continuing Healthcare is showing a year to date under-spend due to the risk share arrangements across the County Durham and Darlington CCG’s not currently being transacted.

Pressure is currently being observed within community services, relating to County Durham and Darlington NHS Foundation Trust out of contract items, including continence.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group4

Financial Position as at 31st July 2014

Durham Dales, Easington and Sedgefield Clinical Commissioning Group5

YTD Budget YTD

Actual

YTD Variance (Under)/

Overspend

YTD Variance (Under)/

Overspend2014-15 Budget

Forecast Outturn

Forecast Variance (Under)/

Overspend

Forecast Variance (Under)/

Overspend

Previous month YTD

Variance Movement

Previous month

Forecast Outturn Variance Movement

£000's £000's £000's % £000's £000's £000's % £000's £000's £000's £000's

Commissioned Services

Acute Services 69,147 69,208 61 207,443 207,625 182 (13) 74 (52) 234

Community Health Services 14,911 14,973 63 44,732 44,919 187 103 (40) 411 (224)

Continuing Care Services 5,982 5,845 (137) 17,946 17,537 (409) (83) (54) (420) 11

Mental Health Services 17,702 17,857 156 53,105 53,572 467 106 50 423 44

Primary Care Services 21,835 21,752 (83) 65,507 65,257 (250) (19) (64) (76) (174)

Other 2,838 2,824 (14) 8,514 8,472 (41) (12) (2) (47) 5

Programme Reserve 45 0 (45) 15,030 14,994 (36) 0 (45) (239) 203

Total Commissioned Services 132,460 132,461 1 0% 412,277 412,377 100 0% 82 (81) 0 100

Running Costs

Corporate Costs and Services 2,152 2,151 (1) 6,346 6,208 (137) (82) 81 (192) 54

Running Cost Reserve 0 0 0 637 675 37 0 0 192 (154)

Total Running Costs 2,152 2,151 (1) 0% 6,983 6,883 (100) -1% (82) 82 0 (100)

1% Required Surplus 1,830 0 (1,830) 5,490 0 (5,490) (1,373) (458) (5,490) 0

GRAND TOTAL EXPENDITURE 136,442 134,612 (1,830) -1% 424,750 419,260 (5,490) -1% (1,373) (457) (5,490) (0)

Acute Commissioning as at 31st July 2014

• The month 4 position for acute contracts has been calculated based on two months of data from the secondary uses service (SUS). Month 2 data available is subject to revision as per national timetables for data submission.

• The single largest acute contract the CCG holds is with County Durham and Darlington NHS FT (CDDFT). This contract is currently unsigned and is subject to a mediation process with the provider to secure contractual agreement. No risk associated with items still in negotiation have been included in the position.

• Acute Commissioning is showing a year to date and forecast outturn overspend with the main variances shown below; o County Durham and Darlington NHS FT is forecasting an over-spend of £813k and includes an

estimate of risk associated with un-coded activity from May. Readmissions adjustment has been applied to the CDDFT contract, and the reinvestment of this has been assumed in the Integrated Short-term Intervention Service (ISIS) within Community Services.

o North Tees and Hartlepool NHS Foundation Trust (NTHFT) is showing a forecast under-spend of £306k. This is in line with the ‘cap and collar’ risk share agreement with this provider which limits the value of financial risk the CCG is exposed to for the 2014/15 financial year. Non elective and outpatient activity are showing as particular areas of under-spend at this point.

o City Hospitals Sunderland NHS Foundation Trust contract is currently forecasting a £308k over-spend. A similar cap and collar arrangement is in place. Pressure areas include Urology (Elective and Outpatient Procedures), Cardiology (Non Elective) and Clinical Oncology (Non Elective).

Durham Dales, Easington and Sedgefield Clinical Commissioning Group6

Budget Actuals Variance Budget Actuals Variance£'000 £'000 £'000 £'000 £'000 £'000

Acute Commissioning excluding Independent Sector 64,090 64,197 107 192,271 192,592 321Ambulance Services 3,239 3,214 (25) 9,718 9,641 (77)Independent Sector 1,208 1,193 (15) 3,624 3,579 (45)NCA excluding Independent Sector 660 654 (6) 1,980 1,963 (17)Other NHS (50) (50) (0) (149) (149) 0

Total Acute 69,147 69,208 61 207,443 207,625 182

YTD Forecast Outturn

Durham Dales, Easington and Sedgefield Clinical Commissioning Group

7

Acute Commissioning continued

o Newcastle upon Tyne Hospitals NHS FT is currently forecasting an under-spend of £342k, mainly due to under-performance on elective activity and Intensive Therapy Unit, offset by over-performance on non-elective.

• A number of items billed by acute providers are being challenged including data quality and application of National Tariff rules. These challenges are not assumed in the position.

• The forecast under-spend on Independent sector budgets relates to a number of providers including Nuffield (£18k) , BMI Woodlands (£45k) and Spire (£39k) , offset by a £51k over-spend on Tyneside Surgical Services. Independent sector is variable due to the element of Patient Choice.

• The Non-Contracted Activity position is based on an extrapolation of the actual charges received for months 1 and 2 resulting in a forecast under-spend of £17k.

Community Services as at 31st July2014

• Hospices – All contracts are operating at the agreed level with the exception of St Teresa’s Hospice where the contract split between DDES CCG and Darlington CCG is under discussion.

• Independent Sector – Contract activity is now available for April and May. This has resulted in a forecast under-spend driven by child package costs and a small reduction in activity on the Connect Physical Health MSK Service contract.

• Local Authority Agreements – All elements of S256 agreements currently accrued into the position as per latest estimates agreed with Durham County Council.

• County Durham and Darlington NHS FT (CDDFT) – expected over-performance on the urgent care contract and continence has resulted in a forecast over-spend of £306k.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group8

Budget Actuals Variance Budget Actuals Variance£'000 £'000 £'000 £'000 £'000 £'000

Hospices 632 632 0 1,895 1,895 0Independent Sector 1,561 1,522 (39) 4,684 4,566 (119)Local Authority Agreements 321 321 0 963 963 (0)Other NHS 808 808 0 2,424 2,424 0County Durham and Darlington NHS Foundation Trust (CDDFT) 11,589 11,691 102 34,767 35,072 306

Total Community 14,911 14,973 63 44,732 44,919 187

YTD Forecast Outturn

Continuing Healthcare as at 31st July 2014

• Continuing Healthcare (CHC) costs are based on the annual cost of packages included in the CHC finance database which is the most up to date information available at the time of publishing. These figures are based on 665 active CHC Client packages, 702 Active FNC client packages and 18 Children's cases.

• The position includes an estimate of growth in packages for the 2014/15 financial year, which has been reflected in both budget and outturn.

• There is currently no agreed risk share arrangements for high cost cases within CHC across the County Durham and Darlington CCGs. This is contributing to the under-spend position.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group9

Budget Actuals Variance Budget Actuals Variance£'000 £'000 £'000 £'000 £'000 £'000

Continuing Healthcare (CHC) 5,142 5,005 (137) 15,426 15,017 (409)Funded Nursing Care (FNC) 840 840 0 2,521 2,521 0

Total CHC 5,982 5,845 (137) 17,946 17,537 (409)

YTD Forecast Outturn

Mental Health as at 31st July 2014

• Independent Sector forecast over-spend of £102k is due to a new mental health package of care with Barchester Healthcare which started on 15th April 2014.

• The Northumberland, Tyne and Wear NHS FT contract is currently forecast to over-perform by £300k. This forecast position assumes similar levels of inpatient service activity to continue for future months.

• Other NHS over-spend relates to Non Contracted Activity in Mental Health. The over-spend is driven by a charge from a provider in North West England, and options around ongoing care for the individuals concerned are currently being explored.

• The Tees, Esk and Wear Valleys NHS FT (TEWV) main contract, CAMHS and IAPT are block arrangements therefore there are no forecast variances against these contracts.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group10

Budget Actuals Variance Budget Actuals Variance£'000 £'000 £'000 £'000 £'000 £'000

Independent Sector 605 640 34 1,816 1,919 102Local Authority Agreements 621 621 0 1,863 1,863 0Northumberland Tyne and Wear 611 711 100 1,833 2,132 300Other NHS 409 431 22 1,227 1,292 65TEWV 15,455 15,455 (0) 46,365 46,365 (0)

Total Mental Health 17,702 17,857 156 53,105 53,572 467

YTD Forecast Outturn

Primary Care as at 31st July 2014

• Enhanced Services – these are primary care services now contracted under standard NHS contracts, and are currently operating at contracted levels.

• Out of Hours – this contract is currently held by County Durham and Darlington NHS FT and is performing in line with plan.

• Prescribing – Costs consist of April and May Prescription Pricing Authority (PPA) data plus accruals for June and July 2014. The PPA has not provided any forecast outturn as yet for 2014/15, but this is expected next month. Therefore a straight-line forecast has been assumed this month giving a potential £75k under-spend on Practice Prescribing and £157k on Central Drugs.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group11

Budget Actuals Variance Budget Actuals Variance£'000 £'000 £'000 £'000 £'000 £'000

Enhanced Services 626 626 0 1,877 1,877 0Other 431 431 0 1,292 1,292 0Out of hours 1,969 1,969 0 5,906 5,906 0Prescribing 18,810 18,727 (83) 56,430 56,181 (250)

Total Primary Care 21,835 21,752 (83) 65,507 65,257 (250)

YTD Forecast Outturn

Other and Programme Reserve as at 31st July 2014

• Commissioning Reserves – earmarked and contingency reserves expected to under-spend slightly in forecasts.

• Other – includes costs for Local Incentive Schemes through GP Practices.

• Patient Transport – to date no charges have been received from County Durham and Darlington NHS FT, forecast position is based on previous years expenditure.

• Property charges - work is currently ongoing with NHS Property Services to confirm the expected property charges for the year. In 2013/14 property costs were charged in line with funding allocations received by each CCG. In 2014/15 these costs, largely relating to void space in clinical property are expected to be based on actual costs calculated by NHS Property Services. The budget above is currently showing a breakeven position until the actual charges are clarified.

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Durham Dales, Easington and Sedgefield Clinical Commissioning Group12

Budget Actuals Variance Budget Actuals Variance£'000 £'000 £'000 £'000 £'000 £'000

Commissioning Reserves 45 0 (45) 15,030 14,994 (36)NHS 111 315 315 0 945 945 0Other 268 262 (7) 805 785 (20)Patient Transport 41 41 0 123 123 (0)Patient Transport - County Durham and Darlington NHS Foundation Trust 75 68 (7) 226 205 (22)Patient Transport - Integrated Travel - DCC 58 58 0 174 174 0Patient Transport NEAS 729 729 0 2,188 2,188 (0)Property Charges 599 599 0 1,796 1,796 (0)Reablement 640 640 0 1,921 1,921 0Safeguarding 89 89 0 266 266 0Transformation Fund 23 23 0 69 69 0

Total Other 2,883 2,824 (59) 23,544 23,466 (78)

YTD Forecast Outturn

Running Costs as at 31st July 2014

• Running costs are currently showing a year-to-date position of break-even and a forecast outturn position of £100k under-spend. Approximately £209k of accruals were incorporated into the year-to-date position, mainly in relation to audit fees, North of England Commissioning Support Service Level Agreement and Service charge from NHS Property Services that have not yet been invoiced.

• No risks have been identified at month four but budget and actual spend will be regularly monitored to ensure that any potential risks are promptly identified.

• There is a budget of £637k in the General Reserve to be deployed on CCG priorities throughout the year.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group13

Budget Actual Variance Budget Actual Variance£'000 £'000 £'000 £'000 £'000 £'000

Income (7) (12) (5) (20) (25) (5)Pay 582 498 (85) 1,748 1,560 (187)Non Pay 201 192 (9) 604 561 (43)NECS Contract 1,375 1,473 98 4,014 4,112 98Running Cost Reserve 0 0 0 637 675 37

Total Running Costs 2,152 2,151 (1) 6,983 6,883 (100)

YTD Forecast Outturn

Quality Innovation Productivity & Prevention (QIPP) as at 31st July 2014

Durham Dales, Easington and Sedgefield Clinical Commissioning Group14

The table below summarises the latest forecast savings by key programme areas as at 31 st July 2014, compared to the original QIPP plan for the year. A number of red rated schemes remain owing to ongoing contract negotiations, although this has improved in July. This has slowed QIPP delivery against plan for the first four months of the year, although forecasts remain at target levels.Governing Body QIPP Summary (£000's) - Month 4 Forecast 2014/15

Original Plan Latest Forecast Schemes RAG BreakdownRed Amber Green Total

Area of QIPP Savings £'000 £'000 £'000 £'000 £'000 £'000Acute / Ambulance 5,064 4,805 1,182 1,513 2,108 4,805Mental Health / LD 200 200 0 200 0 200Community Services 581 581 581 0 0 581CHC / FNC 0 259 0 0 259 259Prescribing 629 629 0 0 629 629Primary Care 0 0 0 0 0 0Running Costs 187 187 0 0 187 187

Total Allocative QIPP 6,660 6,660 1,763 1,713 3,183 6,660Technical QIPP 15,820 15,820 0 0 15,820 15,820Grand Total QIPP 22,480 22,480 1,763 1,713 19,003 22,480

RAG Percentages - Total QIPP 8% 8% 85%RAG Percentages - Allocative QIPP 26% 26% 48%

Notes:1. Technical QIPP = Effi ciency removed from tariff/prices paid to providers (4% in 14/15)2. Allocative QIPP - Effi ciency driven out of the healthcare system by commissioners, e.g. pathway changes

Total QIPP

Allocative QIPP

Better Payment Practice Code (BPPC) at 31st July 2014

The Better Payment Practice Code (BPPC) requires NHS organisations to pay all invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later.

Durham Dales, Easington and Sedgefield Clinical Commissioning Group15

Invoice payment - cumulative to the 31st July 2014

Better Payment Practice Code - 30 Days Number £000's

Non-NHSTotal Non-NHS Trade Invoices Paid in the Year 2,821 12,973Total Non-NHS Trade Invoices Paid Within 30 Day Target 2,652 12,364Percentage of Non-NHS Trade Invoices Paid Within 30 Day Target 94.01% 95.31%

NHS Total NHS Trade Invoices Paid in the Year 769 101,821Total NHS Trade Invoices Paid Within 30 Day Target 759 101,542Percentage of NHS Trade Invoices Paid Within 30 Day Target 98.70% 99.73%

Prescribing Analysis 31st July 2014

Durham Dales, Easington and Sedgefield Clinical Commissioning Group16

Total (per PPA)

Jun / Jul Accrual

Anticipated YTD YTD Budget

YTD Over /(Under)

Spend CCG FOT Annual Budget

FOT Over /(Under)

SpendScheme £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

DDES Practice Prescribing Total 8,740 9,057 17,797 17,822 (25) 53,391 53,466 (75)Central Charges PPA 222 220 442 495 (52) 1,327 1,484 (157)Nutricia (Enteral Feeds) 204 210 (6) 612 630 (18)Meds Mgmt CSU 55 55 0 164 164 0Meds Mgmt Ind Sector 92 92 0 276 276 0Practioner Salary Costs 18 18 0 54 54 0Prescribing Incentive Scheme 72 72 0 216 216 0Medicine Waste Campaign 47 47 0 140 140 0

8,962 9,277 18,727 18,810 (83) 56,181 56,430 (250)