a g e n d a board/trust board documents... · tb 007/14 tb 008/14 tb 009/14 formal business of the...

LANCASHIRE CARE NHS FOUNDATION TRUST BOARD to be held in the Boardroom, Sceptre Point

09 January 2014, 9.30am

A G E N D A

Item Number Item FOIA

Exempt Presenting

PART ONE

TB 001/14 Welcome and opening comments Chair

TB 002/14 Apologies for absence and Declaration of Interests Chair

TB 003/14 Minutes of the Trust Board meeting held on 03 October and 05 November 2013 Chair

TB 004/14 Matters Arising Chair

TB 005/14

Feedback on Director Activity

• Chairs Report

Chair

TB 006/14 This Agenda Chair

TB 007/14

TB 008/14 TB 009/14

Formal Business of the Board

• Chief Executive Briefing Pack including Performance Reporting

• Quality Improvements (presentation)

• Executive Risk Register and Board Assurance Framework including Risk Appetite Statement

Chief Executive

Director of Nursing Company Secretary

TB 010/14 TB 011/14 TB 012/14

Compliance Reports (for information and assurance)

• Finance Report

• Board Level Balanced Scorecard

• Audit Committee minutes

Director of Finance Company Secretary Company Secretary

PART TWO

TB 013/14 Action and Decision Tracker Chair

TB 014/14 TB 015/14 TB 016/14

Formal Business of the Board

• CIP Addendum

• CAHMS Tier 4

• AHSN Proposal

Director of Finance Chief Operating Officer Chief Executive

TB 017/14 Any Other Business

• Review of the meeting • Key Messages from the Board

Chair

TB 018/14 Date and Time of Next Meeting Informal Board Session – 04 February 2014, 9.30am

Chair

BOARD OF DIRECTORS Minutes of the meeting of the Board of Directors (Part One) held on Thursday 03 October 2013 PRESENT: Derek Brown, Chair Peter Ballard, Deputy Chair/Senior Independent Director (SID) Craig Barratt, Director of Transformation and Innovation Colin Dugdale, Acting Director of Nursing Gwynne Furlong, Non-Executive Director Chris Heginbotham, Non-Executive Director Max Marshall, Medical Director Heather Tierney-Moore, Chief Executive Dave Tomlinson, Director of Finance Jon Tomlinson, Interim Chief Operating Officer Teresa Whittaker, Non-Executive Director IN ATTENDANCE: Diane Halsey, Company Secretary

Jo Alker, Executive Board Support Officer (Minutes) Mike Marsden, Public Governor Brian Taylor, Public Governor

Sarah Patel, Company Secretary Project Manager Steve Winterson, Engagement Director Alistair Rose, Project Director (for item TB120.13 only) Representatives from the Lancaster District Pensioners Campaign Group (for item TB 106.13 only)

Lancaster District Pensioners Campaign Group joined the meeting TB 106.13 PRESENTATION OF PETITION

The Lancaster District Pensioners Campaign Group presented a petition against the closure of Altham Meadows to the Board of Directors. The representatives from the group aired their views and concerns.

Lancaster District Pensioners Campaign Group left the meeting

The Board discussed in depth the comments that were made by the Lancaster District Pensioners Campaign Group and agreed to take the following action: 1. The Chair would formally acknowledge receipt of the petition 2. Continued engagement with the group to ensure clear understanding of

the proposals for the future 3. A letter would be written to the Commissioners who have responsibility in

this area advising them of the concerns raised 4. Explore with the Commissioners the impact on our patients and carers

and what more can be done jointly.

TB 107.13 WELCOME AND OPENING COMMENTS

The Chair welcomed everyone to the meeting in particular Public Governors Mike Marsden and Brian Taylor, the Company Secretary Project Manager and the Engagement Director. He acknowledged that this was the Interim Chief Operating Officer, Jon Tomlinson and the Director of Transformation and Innovation, Craig Barratt’s first formal Board meeting and they gave a brief overview of their profiles to the Board.

TB 108.13 APOLOGIES AND DECLARATION OF INTERESTS

No apologies for absence were received and confirmation of quoracy was given. No declarations of interest were made.

TB 109.13 MINUTES OF THE TRUST BOARD MEETING HELD ON 02 JULY 2013

The minutes of the Trust Board meeting held on 02 July 2013 were confirmed as a true and accurate record.

TB 110.13 SUMMARY OF BOARD ACTIVITY The Chair presented his report on Director activity and explained that currently this represented the activity of Non-Executive Directors but that in future he would wish to capture the activity of the whole Board. The Acting Director of Nursing explained that a mental health CQC visit had taken place at Burnley around the practice of mental health act staff and policies and procedures. Issues around estates were expected and noted. The Medical Director advised the Board that he had recently presented to Pennine Lancashire group on transforming Mental Health Care for people with Dementia. The Director of Finance explained that had attended a number of meetings with Lancashire North CCG to understand how we will work with them to address some of the issues raised around the closure of Altham Meadows. The Interim Chief Operating Officer advised that he had been involved with CCGs and hospitals across the Lancashire footprint to consider options as we come closer to the winter months. Communication had taken place with Central Lancashire to engage and commission services from us. The Director of Transformation and Innovation noted that he had been attending service visits across the Trust.

TB 111.13 CHIEF EXECUTIVE BRIEFING PACK

The Chief Executive presented her briefing pack and explained the work currently ongoing to develop the Board Balanced Sore Card. She highlighted the re-opening of the Wordsworth Unit and the significant progress made over the last six months including changes not only to the environment but to the staffing culture. The Chair of Healthwatch Lancashire Board attended and was interest in work that we had done around public and patient involvement. The Chair had also visited the unit prior to the re-opening and asked that the positive work done by the team be formally recorded. It was noted that time needed to be invested in learning from those involved and their experiences. The Acting Director of Nursing commented on the modern matron role and the high visibility of them on the ward which was he would something he would like to see throughout the Trust. The Interim Chief Operating Officer confirmed that he would take up the action to ensure learning and experience is picked up and disseminated across the Trust and the Chair would formally write to those involved to thank them for their commitment on behalf of the Board. The Chief Executive updated the Board on the homicide coverage that was published in the Lancashire Evening Post. This had now been passed to the Press Complaints Commission and she was taking advice from specialist services to understand whether they could consider potentially taking action for compensation. Formal letters of support from commissioners had been received. The Chief Executive reminded Board members that the Music and the Mind festival would be running all week and advise them that she had attended earlier in the week.

TB 112.13 DISESTABLISHMENT OF CARE COMMITTEE

The Company Secretary presented a paper proposing the disestablishment of Cost and Resource Effectiveness Committee as a formal sub-committee of the Board. The report outlined the proposed execution of the cycle of business of the Committee and following a question from a Non-Executive Director it was confirmed that processes had been put in place to ensure that Audit Committee would consider reporting around value for money. The minutes of the last meeting held on 03 April 2013 were confirmed as a true and accurate record and it was noted that all actions had been closed off.

The Board of Directors approved the disestablishment of Cost and Resource Effectiveness Committee as a formal sub-committee of the Board

TB 113.13 USE OF RESTRAINT The Acting Director of Nursing presented his report and gave background to the current process around training, recording of incidents, governance arrangements and reviewing and analysing information. He highlighted that compliance with training was under the Trust’s identified target and that this was due to timing issues of staff accessing the programme rather than non-compliance. Work had been done to identify hotspots around the use of restraint and as a unit was found to be using more restraint compared to others across the Trust. The unit was closed and whilst work was done to improve the position. A discussion followed around the need to continue to work to reduce the use of restraint. Seclusion was also highlighted and the need for this to be reviewed and the data from the Seclusion Audit reported back to the Board.

TB 114.13 WORKFORCE REPORTING

The Director of Transformation and Innovation presented the workforce report and explained the new approach to the work that was being progressed around the Board Balanced Score Card and how it linked to the Trust’s strategic aspirations. The Workforce team have been involved in the development from an early stage. Areas of the report were discussed in more detail particularly around capacity. A discussion followed around the number of people in post which was an increased number than what was originally planned for. The Board noted that the Trust had a 10% turnover which accounts for the 10% increase. Generally the Board welcomed this insightful look into workforce and the Director of Transformation and Innovation confirmed that he would be bringing something back to the Board around resource allocation. Concerns relating to data quality checks were also raised and the Director of Transformation and Innovation confirmed that this formed part of the overall workstream being undertaken around workforce data and intelligence. A discussion followed around the breakdown of sickness absence figures and the need to understand where the highlighted issues arise in the Trust and whether it was a specific banding or area.

The Director of Transformation and Innovation highlighted the need to ensure managers feel that are able to have good conversations with staff and to give managers the right information to look at where they should be focussing their attention.

TB 115.13 EXECUTIVE RISK REGISTER

The Acting Director of Nursing presented the Executive Risk Register and noted the discussions that had taken place at the Executive Risk Management Committee. A detailed review of the register took place and a discussion followed around the reduction of the score of the medicines management risk. The Acting Director of Nursing outlined the action that had been taken to reduce the risk score. The Board of Directors approved the removal of risks ERR 35, ERR37, ERR26, ERR3 from the register.

TB 116.13 BOARD ASSURANCE FRAMEWORK

The Company Secretary presented the Board Assurance Framework and asked the Board to consider whether the risks identified remained relevant and to confirm that the assurances provided were adequate to satisfy the Board. A review of the framework took place including a discussion around the reputation risk at BAF 20 on the framework and the need for it to better articulate the current position of the organisation in relation to engagement. The Board noted the interrelationship between the Executive Risk Register and Board Assurance Framework asked that in future the Executive Risk Register and Board Assurance Framework be presented as one item.

TB 117.13 FINANCE REPORT

The Board of Directors noted the content of the finance report. The Director of Finance reminded the Board that with effect from October the Risk Assessment Framework will replace the Compliance Framework with the continuity of service risk rating replacing the financial risk rating. He proposed that further information and analysis of the implications of this introduction be provided at the informal meeting in February. He explained that the continuity of service risk rating will not be impacted by the availability of the Working Capital Facility. The Board of Directors authorised to the Director of Finance to terminate the Working Capital Facility when he considered it appropriate and safe to do so.

TB 118.13 PERFORMANCE REPORTING

The performance report was circulated to the Board of Directors for information and assurance.

TB 119.13 SUB-COMMITTEE MINUTES

The minutes of Council of Governor held on 26 June 2013 were circulated to the Board of Directors for information and assurance.

BOARD OF DIRECTORS Minutes of the meeting of the Board of Directors (Part One) held on Tuesday 05 November 2013 PRESENT: Derek Brown, Chair Peter Ballard, Deputy Chair/Senior Independent Director (SID) Craig Barratt, Director of Transformation and Innovation Colin Dugdale, Acting Director of Nursing Gwynne Furlong, Non-Executive Director Chris Heginbotham, Non-Executive Director Max Marshall, Medical Director Dee Roach, Designate Director of Nursing Heather Tierney-Moore, Chief Executive Dave Tomlinson, Director of Finance Jon Tomlinson, Interim Chief Operating Officer Teresa Whittaker, Non-Executive Director IN ATTENDANCE: Diane Halsey, Company Secretary

Jo Alker, Executive Board Support Officer (Minutes) TB 127.13 WELCOME AND OPENING COMMENTS

The Chair explained that as the Trust had urgent formal business to transact and a formal meeting had been convened. Due notice had been given to the public and Governors as required. The notice identified that the business to be discussed was exempt under FOIA Section 36 and would be taken in Part Two of the meeting. He welcomed everyone to the meeting in particular Dee Roach who was designate Director of Nursing. The Chair confirmed that both Non-Executives Directors, Naseem Malik and Louise Dickenson had been formally appointed by the Council of Governors on 29 October 2013 and thanked those involved in the recruitment process.

TB 128.13 APOLOGIES AND DECLARATIONS OF INTEREST

Apologies for absence had been received from Naseem Malik and Louise Dickinson. The Chief Executive declared a technical interest in the first item as she is a member of the North West AHSN Board and was instrumental in the establishment of the Network.

AGENDA NUMBER: TB 005/14

TRUST BOARD – 09 JANUARY 2014 CHAIRS REPORT

FOIA STATUS: No Exemption Part exemption applies to page/s:

Not Applicable

PAPER TITLE: Chairs Report

PURPOSE: To purpose of this report is to provide Board members with an update on current activities

ACTION RECOMMENDED:

Noting

PAPER PREPARED BY: Derek Brown, Chair

1.0 INFORMAL BOARD SESSIONS/ BOARD AWAY DAY

The Board of Directors met informally on 05 November 2013 to receive a detailed update on the Quality SEEL assessment tool and the implementation of the Quality Strategy across the organisation. An update was received on Commissioning Engagement particularly around the benefits of the Relationship Manager posts and the CRM system. A Board Away Day took place on 03 December 2013 that planned for two in-depth discussions around quality and market analysis. Feedback from a recent external governance review was received and the Trust’s clinical priority list discussed with a view to the final list being presented to the Board in February.

2.0 NON-EXECUTIVE RECRUITMENT

The Council of Governors Nomination/Remuneration Committee formally appointed Louise Dickinson and Naseem Malik as Non-Executive Directors with immediate effect for a term of three years. As you are aware, Louise has been appointed to take over the role as Chair of Audit Committee in the future and will shadow the current Chair until an appropriate time is identified. We therefore are required to formally nominate Louise as a member of Audit Committee until such time.

3.0 GOVERNOR ELECTIONS The results for the 2013 Governor elections have now been received and are detailed on the table below.

Constituency No. of Candidates

No. of Vacancies

Elected/ Re-elected

Turnout

Public: Central Lancashire 4 1 Bill Coulton 13.9%


TRUST BOARD – 09 JANUARY 2014 CHAIRS REPORT

Public: Blackburn with Darwen 2 1 Brian Spencer 15.66%

Public: West Lancashire 0 1 No candidates -

Staff: Nursing Professionals & Support Staff

4 2 Linda Ravenscroft

Lynne Bax 11.26%

Staff: Medical 4 1 Dr Graham Ash 31.37%

Staff: Corporate 3 1 Paul Morris 14.16%

The Board of Directors are asked to note the results and the appointment/re-appointment of the Governors subject to receipt of satisfactory Disclosure & Barring Service (DBS).

5.0 DIRECTOR ACTIVITY

In addition to the usual Board business, NEDs have been involved in their areas of special interest during the period of October-December: Peter Ballard has undertaken a Good Practice visit, two Staff Grade Optional Point meetings and was involved in the shortlisting for the Non-Executive Director interviews. Gwynne Furlong has participated in a Complaints Panel meeting, the Property Strategy Committee and a visit to the Harbour, acted as a panel member on an Appeal Hearing and attended the Red Rose Corporate Board meeting as the nominated Director of our Board. Teresa Whittaker has met with Internal Audit, the Chief Executive and Company Secretary. She acted as a panel member for the Chief Operating Officer interviews and attended the Health Informatics Committee. Chris Heginbotham has attended a Recovery Conference arranged by the Specialist Services Network, Chaired the Mental Health Act Capacity Committee, acted as a panel member on an Appeal Hearing and the interviews for the Chief Operating Officer. All were involved in the Non-Executive Director interviews.

6.0 SUB-COMMITTEE MINUTES

The minutes of the Council of Governor meeting held on 18 September 2013 are attached for Board members information.

COUNCIL OF GOVERNORS Minutes of the meeting of the Council of Governors held on 18th September 2013 Present Derek Brown (Chair) Public Governors Alan Ravenscroft Brian Spencer Brian Taylor Catherine Dobson David Jackson Linda Jones Hilary Whitworth John MacLeod Mike Marsden Mike Wedgeworth Tom Lawman Appointed Governors Nigel Harrison David Jones Staff Governors Andrew Kirkby Barbara Hummer Caroline Johnson Graham Ash Linda Ravenscroft Paul Morris

In Attendance Mark Hindle, Chief Operating Officer Peter Ballard, Non-Executive Director (SID) Chris Heginbotham, Non-Executive Director Teresa Whittaker, Non-Executive Director Diane Halsey, Company Secretary Dave Tomlinson, Director of Finance Jon Tomlinson, Interim Chief Operating Officer Craig Barratt, Director of Transformation and Innovation Max Marshall, Medical Director Steve Winterson, Engagement Director Rob Jones, Senior Manager, KPMG Colin Dugdale, Acting Director of Nursing Helen Lee, Head of Governance (Item 086.13)

CG081.13 WELCOME AND OPENING COMMENTS The Chair welcomed everyone to the meeting and confirmed that the meeting was quorate.

CG082.13 APOLOGIES FOR ABSENCE AND DECLARATIONS OF INTEREST Apologies had been received from Tahir Khan and Steve Sansbury. The Chair announced that two Governors had resigned since the last formal meeting and explained the impact of this on the on-going Governor election process. There were no declarations of interest.

CG083.13 MINUTES OF COUNCIL OF GOVERNOR MEETING HELD ON 26th JUNE 2013 Following one amendment to item CG 064.13 apologies from a Non-Executive Director, both part one and part two minutes of the last meeting held on 26th June 2013 were confirmed as a true and accurate record.

CONFIRMED

Council of Governors

CG084.13 MATTERS ARISING AND ACTION TRACKER UPDATES

The Council of Governors reviewed the action tracker and noted two open actions. The Company Secretary confirmed that the progression of action CG 074.13 CQC Working Together Programme would be influenced by the outcome of discussions later in the meeting.

CG085.13 THIS AGENDA Governors were given the opportunity to raise issues arising out of reports issued for information. There were no issues raised and the reports were taken as read.

CG086.13 QUALITY ACCOUNT The Acting Director of Nursing gave a presentation on the Quality Account,

explaining the requirements on Foundation Trusts to produce one and how a large proportion of the content is mandated.

He discussed how the implementation of the Quality Strategy influenced the

report.

Clinical Commissioning Groups (CCGs); Overview and Scrutiny Committees (OSCs) and Healthwatch were involved in developing the Quality Account as were service users and carers. The Acting Director of Nursing summarised by explaining the development plan around the Quality Account to ensure delivery of targets and detailed the reporting mechanisms for updates around the report including the Quality Committee and Governor led Standards and Assurance Committee. Following a query the Senior Manager at KPMG briefly explained the suitability and role of an auditor in reviewing the Quality Account. The Head of Governance discussed the responsibilities of the auditor during production of the Quality Account and emphasised that content is not influenced by auditors but the Trust seeks to utilise the experience and advice KPMG can offer to ensure the Trust delivers an accurate account for the public. A further discussion took place around the Governor role in providing local oversight of the Quality Account through the Standards and Assurance Committee. A Governor questioned the links to Quality within the Integrated Quality & Performance report and asked whether figures reported in the Quality Account reflect discrepancies in services. It was stressed that auditors do not take into account comparative quality of the services but focus on the accuracy of the figures reported. In response to specific figures around bed occupancy detailed within the Integrated Quality and Performance report, the Chief Operating Officer gave an in depth explanation of bed occupancy and outlined the work underway with commissioners to focus on support for people in the community rather than admittance to inpatient facilities. Inpatient stays, travelling out of area and length of stay was discussed at length amongst Governors. A Non-


Executive Director offered to highlight the difficulties at Board level of assessing bed need and ensuring resources deployed where needed, at the appropriate times. The Chief Operating Officer assured Governors that the Trust has robust plans in place for achieving its aspirations, highlighting the positive steps the Trust had made so far. The Chair acknowledged Governors appetite for continuing the discussion and it was agreed to re-schedule at a later date for further debate.

CG087.13 ANNUAL AUDIT LETTER INCLUDING EXTERNAL AUDIT OF QUALITY

ACCOUNT Rob Jones, Senior Manager at KPMG gave an overview of the role of the

external auditor in Foundation Trusts. He reminded Governors that external auditors are appointed by the Council and explained auditors’ regulated and mandated duties.

More detail was given on the scope of the audit approach and the areas which audit are involved in. He explained how an auditor delivers an opinion on specific areas of audit within the Annual Audit Letter and explained the application of classifications. He summarised the financial performance of the Trust, confirming that the Trust accurately reported its performance. The Trust had a risk rating of 3 and a green governance rating. The Auditor described KPMG’s responsibilities around the Quality Account in more detail and confirmed the auditors’ opinion of the report was positive with no inconsistencies. He outlined the areas for consideration for the Trust during 2013/14 and noted that KPMG was already considering factors which could influence the Trusts’ audit risks such as the ability of Commissioners to pay for services.

CG088.13 ANNUAL REPORT & ACCOUNTS 2012/13

The Chief Operating Officer introduced his paper and outlined the Council of Governors’ duty to formally receive the Annual Report & Accounts, the detail of which had been discussed previously and Governors had viewed the online version of the Annual Report and Accounts in full earlier in the year. The Council formally received the Annual Report and Accounts 2012/13.

CG089.13 AUDIT COMMITTEE ANNUAL REPORT The Chair of Audit Committee introduced her paper and outlined the

requirement as Chair of Audit to report to Governors about how the Audit Committee discharged their responsibilities during 2012/13. She described what areas Audit Committee would be looking at for the coming year including management systems, ward to board reporting and a particular focus on clinical controls in conjunction with the Quality Committee.


She described a piece of work commissioned by the Audit Committee to provide assurance around the governance of the Harbour project. The Chair of Audit Committee thanked Governors for re-appointing her as a Non-Executive Director for a maximum term of two years. At this point the Chair reminded Governors of the on-going search two Non-Executive Directors, including a successor for Chair of Audit Committee.

CG090.13 FTGA MEMBERSHIP

The Lead Governor described the Trust relationship with the Foundation Trust Governors Association (FTGA) to date and the available benefits of remaining a member of FTGA for the forthcoming year. A Governor wished to highlight that he had attended an FTGA event earlier in the year and this had not been reflected within the report. Some Governor support for remaining with the FTGA was noted. A discussion followed around the strategic direction of the FTGA and the pattern of uptake in membership from other Trusts was noted. Governors heard from an ex-board member of the FTGA and after further discussion the Governors agreed by majority vote not to renew the membership to the FTGA.

CG091.13 POLICY FOR DETERMINING THE REMUNERATION OF THE

FOUNDATION TRUST CHAIR The Company Secretary introduced her paper on the policy for Determining

the Remuneration of the Foundation Trust Chair and described the need for a robust policy to accompany the existing process for setting the remuneration of the Chair. It was confirmed the policy was aligned to good practice and current guidance and the Council of Governors accepted the policy.

CG092.13 ANY OTHER BUSINESS The Company Secretary drew the Governors attention to the Updated

Constitution paper issued under Reports Issued to Provide Assurance. She updated Governors on the process of changing the Constitution as agreed at a previous CoG meeting (ref CG056/13) and confirmed that the Constitution has been formally updated, and uploaded to Monitors’ website.

It was noted that the link within the Performance Dashboard was taking Governors to a log-in screen and so user credentials would be required for Governors to access the data.

The Chair reminded Governors of the Annual Members Meeting to follow at 6:00pm and announced it would be Mark Hindle’s last official engagement as Chief Operating Officer at Lancashire Care. The Chair thanked Mark formally for his support to the CoG and the Trust over the years.

CG093.13 DATE AND TIME OF NEXT MEETING Formal Council of Governors, Tuesday 14th January 2014 10am – 1pm



TRUST BOARD – JANUARY 2014 CHIEF EXECUTIVES BRIEFING PACK

FOIA STATUS: Part Document Exempt Part exemption applies to page/s:

Section 43: Commercial Interests

PAPER TITLE: Chief Executive’s Briefing Pack

PURPOSE: To purpose of this report is to provide an overall summary of the Trust position and highlight the areas for further discussion

ACTION RECOMMENDED:

Noting

PAPER PREPARED BY: Heather Tierney-Moore, Chief Executive

1



The following commentary is based on the development of the Balanced Score Card domains.

QUALITY Acquired Brain Injury Service – Specialist Network The Trust received the draft report following the CQC inspection that took place in November. The areas inspected were:

• Respecting and involving people who use services • Consent to care and treatment • Care and welfare of people who use services • Safeguarding people who use services from abuse • Assessing and monitoring the quality of service provision • Records

4 areas were judged as not meeting the required standard:

• Respecting and involving people who use services • Care and welfare of people who use services • Assessing and monitoring the quality of service provision • Records

The network had identified concerns about the quality of care within the ABI Service and alerted the CQC prior to this visit. An improvement plan had been put in place to address all the issues but it had not been possible to complete all of the improvement within the timescale. The report acknowledges some of the action the Network had been taking to address the concerns. A copy of the full report can be seen here (available to Board members only or on request from the Company Secretary subject to restrictions under the Freedom of Information Act). Wordsworth Dementia Unit – Adult Community Network A compliance visit was undertaken by the CQC as a follow up to a visit earlier in the year where a number of minor concerns were identified. The CQC examined a number of areas listed below and these were fully compliant:

• Care and welfare of people who use services • Meeting nutritional needs • Supporting workers • Supporting workers Assessing and monitoring the quality of service provision

The final report can be seen here (available to Board members only or on request from the Company Secretary subject to restrictions under the Freedom of Information Act). A review of the experience of implementing the improvement plan for Wordsworth has been undertaken and will be presented to the Board in February 2014. Lancashire Health & Care Strategy A Lancashire wide multi-agency leadership summit took place in December to begin to develop a Lancashire Health & Care Strategy. This focused discussion on the out of hospital and acute care

2



strategy. There is agreement to build services around neighbourhoods with new models of primary care at the centre. This aligns well with our own Service Strategy and provides new opportunities for greater integration. It was recognised that different governance models will be needed to enable varying models of service delivery spanning more than one organisation. A number of guiding principles to inform and influence the decision making behaviours and ways of working together is being worked up. The impact of secondary and tertiary services will also be understood. NHS England and Monitor Publications There have been a number of key publications from NHS England and Monitor in December 2013 relating to National Tariff 2014/15, Allocations for Clinical Commissioning Groups 2014/15 2015/16 and Planning Guidance 2014/15. The national tariff presents price adjustments of -1.5% for acute and -1.8 % for non-acute services. There is a service development uplift factor with recognition that it will take several years for additional costs to be reflected in reference costs presenting some Trusts with real concern. The FTN are currently lobbying NHS England and Monitor due to the concern that specifically six areas of additional costs Trusts are required to meet:

• Extra staffing following the response to the Francis report • Seven day working • Enhanced mental health services • IT revenue for enhanced IT provision • Implementation of the Keogh review pathways of care • Full implementation of the Friends and Family test

The overall aim contained within the Planning Guidance is to raise the quality of care to be the best of international standards while closing the potential funding gap of £30billion by 2020/21. The Planning Guidance spans the next 5 years and signals a shift in approach to separate commissioning and provision of services based on a population need and specific pathways of care. In order to translate the domains within the NHS outcomes framework and three additional priorities (improving health, reducing health inequalities and parity of esteem between mental and physical health services), six transformational service models are proposed. These have four underpinning characteristics of quality, access, innovation and value for money.

• Citizenship inclusion and empowerment • Wider primary care • A modern model of integrated care • Access to highest quality urgent and emergency care • A step change in productivity of elective care • Specialised services concentrated in centres of excellence

The Trust is in a strong position to influence the transformation of services with our integrated offer and we are closely linked with local commissioning and provider partners. The CCG allocations for 2014/15 and 2015/16 have been confirmed with a funding formula produced to reflect population change including a deprivation measure (10% of total funding). Overall national funding has been increased from £96-£100billion over 2 years.

3



A link to a useful Foundation Trust Network briefing here (available to Board members only or on request from the Company Secretary subject to restrictions under the Freedom of Information Act) provides a more detailed comprehensive summary of the publications. Monitor’s Annual Reporting Manual 2013/14 and the Code of Governance The Annual Reporting Manual (ARM) is produced by Monitor on an annual basis and this year incorporates a number of changes which can be seen below. The Monitor Code of Governance has also been revised following consultation over the last two months. The changes include a more prescriptive approach to how the code is discharged and more granulations around reporting. Originally, the code applied from 01 April 2014 but has been brought forward to 01 January 2014 and will be reflected in this year’s Annual Report. It is not anticipated that we will have any difficultly with compliance other than in relation to the exceptional term of office for the Trust Chair and the Chair of Audit Committee. This will be fully disclosed and explained.

The timetable for the production of this year’s annual report can be found here (available to Board members only or on request from the Company Secretary subject to restrictions under the Freedom of Information Act).

Changes to the Annual Reporting Manual: - Accounting guidance for the consolidation of charitable funds - Modification to the principles of transfer by absorption for the 1 April 2013 restructure of

the NHS - Changes to the method of calculation for Public Dividend Capital (PDC) dividends in

2013/14 - Removal of disclosures relating to mandatory income and protected assets; new

disclosures relating to income from Commissioner Requested Services (CRS); and the disposal of land and building assets used for the delivery of CRS

- Changes in International Accounting Standard 19 affecting on-Statement of Financial Position pension schemes

- Removal of Prudential Borrowing Code disclosures - Changes to disclosures in accounts for losses and special payments, to achieve

greater consistency with the consolidation schedules - The quality governance disclosure relating to inconsistencies between documents is

updated to include the corporate governance statement submitted with the annual plan - A disclosure providing information on the remuneration of the directors and on the

expenses of the governors and the directors was required for the first time in 2012/13. Monitor has provided more detail on the form this disclosure should take

- New requirement to disclose significant issues considered by the Audit Committee in receiving the accounts

- Amendment to the statement of director’s responsibilities for the directors to consider the annual report and accounts as a whole

- The statement of accounting officer’s responsibilities has been amended to make clearer the responsibility to “ensure that the use of public funds complies with the relevant legislation, delegated authorities and guidance”

- The template for the annual governance statement has been updated to include disclosure of the principal risks to compliance with Condition 4 of the NHS foundation trust licence.

4



FINANCIAL & BUSINESS HEALTH

The trend in financial performance continues with the Trust performing slightly below plan, with a year to date surplus of £2.1m against a plan of £2.8m, projected to result in an outturn for the full year of £2.9m against a plan of £4.0m. Similarly, the CIP performance is a little off track with a projected outturn of £9.7m against a raw plan of £11.0m, though we are achieving a position that is better than the Risk Adjusted Plan (£9.1m for the full year). Cash balances continue to hold up strongly (£35.1m against a plan of £20.6m at the end of November 2013) and the forecast outturn will produce acceptable financial risk ratings for the year under both Financial Risk Rating (FRR) and Continuity of Services Risk Rating (CoSRR) bases. The pressures are mainly in inpatient mental health services (pressures of £2.8m year to date, projected to be £4.3m for the full year). These figures are allowed for in the overall position, implying mitigation of more than £3.0m for the full year. The position has been discussed with Monitor as part of the regular quarterly review and they recognise that the Trust is seeking to support the stability of the Lancashire health economy by managing demand issues. It is clear from discussion with Monitor that, as previously reported, CoSRR will not be impacted by the availability or otherwise of the Working Capital Facility (£16m provided by Barclays). When this was rolled on recently, break clauses were built in to allow for this eventuality. As previously agreed, the Director of Finance terminated the Working Capital Facility at the end of November. Monitor Declaration Monitor’s Risk Assessment Framework requires the Trust to make a quarterly statement relating to governance and compliance. It is recommended that the Board confirms compliance in relation to financial performance. Estimates of future continuity of service risk ratings are provided in the finance report considered monthly by the Board and the annual plan looks forward three years. It is recommended that the Board confirms compliance in relation to Governance. Performance against relevant targets is detailed in the Performance Report considered monthly by the Board and any risk of failure is drawn to the attention of Board members. There is nothing relevant to be drawn to the attention of Monitor.

The Governance Statement can be seen here (available to Board members only or on request from the Company Secretary subject to restrictions under the Freedom of Information Act).

TENDERS AND CONTRACTS This item is exempt under the Freedom of Information Act section 43. Academic Health Science Network The Board has already received a limited due diligence report regarding the North West Coast AHSN proposal to be hosted by LCFT. The Board sought clarification about contractual and legal

5



arrangements, required further consideration of governance issues and clarity about any current and potential liabilities and benefits.

The Chief Executive commissioned an independent legal report to advise the Board and has produced a further covering paper in this month’s pack which sets out the current position and a proposed way forward to enable the Board to support the request for hosting the NWC AHSN.

REPUTATION

Stakeholder Engagement The Trust is now consistently part of conversations in the Blackpool health economy and commissioners in particular are sending positive signals about how they perceive the Trust. A common theme emerging from conversations with CCGs is the desire for services to be provided on a “locality approach”. This has been specifically stated by Blackpool and Blackburn CCGs and is being addressed by Central Lancashire CCGs (Long Terms Conditions programme). Involving Governors in Trust Engagement activity is being planned for 2014 with training sessions being developed to enable Governors to enhance their ability to represent public and members views in key areas (well-being, long term conditions and dementia). Healthwatch Lancashire is planning to develop specific groups to focus on key strategic issues: young people, mental health, disability, transition, discharge, co-production. The Trust will be actively contributing to this work. Strategic engagement will be further enhanced by initiating a programme of Chair and Director meetings that will enable the Executive Team to meet the Boards of our key stakeholders (CCGs, Local and Unitary Authorities, other providers). Media Coverage Positive media coverage topics featured in the press and the Trust’s social media channels included promotion of the Trust’s ‘People’s Choice’ Award, November, winter health and wellbeing messages and recognition of Trust teams that have won or been nominated for national awards. The upward trend in relation to the Trust’s social media activity has continued with an extra 105 followers on Twitter. The proactive media plan in place for December included winter health messaging in partnership with the Commissioning Support Unit, the mental health helpline, sexual health awareness over the Festive period and the promotion of a new single point of access for the service.

AQuA’s flagship programme, Advancing Quality, hosted the first Advancing Quality (AQ) Awards to recognise and showcase the achievements of teams who have best put the AQ approach into practice. One of the awards is based on ‘the appropriate care score’ i.e. the % of patients who received all the measures across the year which are made up of a number of key things that should happen, which are referred to as clinical process and outcome measures reflecting ‘perfect care’. In the category of Best Performing Mental Health Trust LCFT gained second place with

6



83.14% of patients receiving ‘perfect care’ within the spheres of Dementia and First episode Psychosis (the first place result being 5 Boroughs Partnership NHS Foundation Trust with 86.32%).

The PCC has indicated that the matter regarding the recent LEP issue is likely to go before the Commission for a decision on whether or not the code of practice has been contravened.

Reputation This item is exempt under the Freedom of Information Act section 40.

SERVICE DELIVERY

7



Seven Day Services The Adult Community Service Network has commenced 7 Day treatment room service pilot in Central Lancashire and Blackburn with Darwen. The benefits are in providing a local service as an alternative to attending A+E, enabling discharge from hospital and freeing up District Nursing time to care for people with long term conditions at home. The evaluation is due in March 2014.

8



Wordsworth Ward, Ribbleton As reported in the quality section Wordsworth achieved a successful CQC visit. There has also been a mini PLACE inspection visit which was very positive and much improved acknowledging significant work of our Estates team. High Impact Change Projects Central Lancashire The Trust continues to play a key role in the six High Impact projects in development across the Chorley & South Ribble and Greater Preston footprint of Central Lancashire. These are being monitored by the Clinical Senate. In December several business cases were presented to the Senate. The six projects are:

• Integrated neighbourhood teams (Long Term Conditions) • Step Up/Step Down care • Ambulatory care • Shared records (core personal profile) • System wide capacity and demand • Changing the A&E front door (GP led urgent care)

These projects are significantly inter-related and impact upon service delivery, transformation and integration with Trust services. Specific impact is linked to the Ambulatory Care Business Case which describes a system wide opportunity to design and implement an integrated model of care. Adult Community Network Director is the SRO for this project which recommends the development of an ambulatory care unit, ten prioritised ambulatory care pathways and new models of funding. If approved this would have strong co-dependency with the LTC partnership and integrated neighbourhood teams. The Step up Step Down Business Case recommends the development of a community discharge coordination team led by LCFT and a single provider for all non acute beds. This may go out to procurement and the Trust would want to be the provider. The Core Personal Profile Business Case also presents an option for LCFT to lead on the Lancashire Patient Record Exchange system. This is a digital exchange platform which links disparate systems together. All cases are supported by an underpinning system wide capacity and demand strategy (3 years). The aim of the project has been to devise the route to a robust system wide capacity plan that takes into account:

● A critical analysis of current service provision across the health and social care economy; ● To analyse admission and discharge trends over a 5 year period; ● To review discharge trends over weekend periods ● To map service provision across the 7 days ● To review primary care demand ● Ensure robust escalation plans in place ● To develop a strategy proposal for robust capacity and workforce planning to support the

delivery of urgent care.

9



The six projects together will need to ensure delivery against all the key access targets such as 4 hour target, 18 weeks, Cancer targets. In addition the project team has an ambition to have 85% occupancy of acute trust beds to allow for fluctuations in demand.

The Board will be provided with updates in future meetings as this is key to the delivery of our Service Strategy.

Inpatient Bed Provision

The recommendation that 30 specialist dementia beds should be provided from The Harbour has now been through all 8 of the CCG governing bodies in Lancashire. The Harbour is on track to become operational during 2015.

Emergency Preparedness Resilience and Response Trusts are required to undertake a self-assessment against the NHS England Command and Control Framework Core Standards during November 2013 and prepare a ‘Statement of Compliance’ together with an improvement plan. During the period January/February 2014, the Local Health Resilience Partnership will review the Statements and provide any feedback to Trusts.

The Head of Emergency Planning has reviewed the core standards applicable to mental health and community services providers in detail and completed several actions already to ensure LCFT meet them. The ‘Statement of Compliance’ and Improvement Plan can be seen here (available to Board members only or on request from the Company Secretary subject to restrictions under the Freedom of Information Act) and the Board is asked to approve the statement prior to issue to the Lead CCG Commissioner and the Co-Chair of the Lancashire Local Health Resilience Partnership.

PEOPLE

Quality Assurance Reviews Workforce This month the Workforce department has completed all relevant SLAs and is now in a position to publish performance against KPI achievement on a monthly basis through 2014. A recent scenario highlighted a need to enhance our performance as a Trust with a critical aim of a applying a “no redundancy” policy. Several parts of our redeployment process have been interpreted either too literally or without the required level of proactivity. We have now been able to work with partners (senior managers and staff side) to ensure that our process is now fit for purpose which will benefit our employees and ensure our resources are directed to front line services. Executive Portfolio Developments

10



At a recent Executive Development session there was a review of existing executive portfolios and resources. This is currently being considered by the Chief Executive and Board will be updated in due course. The Board should note that the Medical Director Professor Max Marshall will join the Trust in a full-time position from February 2014. Chief Operating Officer Sue Moore also joins us in February.

INNOVATION

Research The Trust has achieved the CLRN research participant recruitment target at 104%. The Tissue Viability Service are recognised in a publishment on line in The Lancet (treatment of venous leg ulcers (Venous leg Innovation The Innovation Team successfully launched the LCFT Innovation Incubator on December 9th 2013. The Incubator invites staff and service users to submit their innovation ideas for consideration by text to the Director of Innovation and Transformation by 23 January 2014. The first 10 successful Innovators will join the Incubator giving them access to £1000 to use on their idea and they will be invited to a monthly Innovation Breakfast Meeting. Successful Innovators will also be asked to feedback to others on how they get on and share lessons learnt. The Incubator has the support of BT, DAC Beachcroft, CapGemini and Smith&Nephew. The next Incubator intake is planned for June 2014.

PERFORMANCE DASHBOARD

The live Performance Dashboard with up to date information can also be accessed from an LCFT site through the link below:

http://lct-yellowfin:8080/

Quality and Performance The Board’s attention is drawn specifically to the following:

Workforce and Culture The new Workforce and Culture metrics are being refined to include in a future performance dashboard. Sickness absence for the month increased from 4.66% in October to 5.33% in November, which exceeded the 5% threshold. Although sickness absence remains lower than the same period last year, which was 5.6 in October 2012.

11

http://lct-yellowfin:8080/



Bank and Agency Spend has also increased in November to £1,685,963. Analysis undertaken within the Adult Mental Health network indicates that circa £1.3m is accounted for by the increased acuity experienced within inpatient wards.

Finance and Business The finance and business report can be viewed as part of the Board pack. Contracts and Performance The demand for out of area beds peaked mid-November reaching 33, finally reducing to 19 at month-end. Nine out of area patients were discharged home during November and four were transferred back to our wards.

Pressure on beds within the Adult mental health network decreased from last month to 101.8% against a threshold of 90%. The average length of stay on discharge in November increased to 36.26 days from 32.82 days in October and exceeded the target of 30 days. This increase can be attributed to the excellent work being undertaken by the complex needs discharge team who consistently discharged between 4 and 6 long stay patients per week throughout the month, leading to a corresponding decrease in month-end length of stay. The occupancy for Older Adults decreased in November to 85.97% from 93.94% in October and met the target of 90%. The improvement is a reflection of some seasonal reduction in demand. In addition, a new leadership team has strengthened bed management and discharge planning. The average length of stay on discharge for the network increased significantly to 72.92 from a position of 56.8 days in the previous month. The increased length of stay reflects the effective discharge of a number of patients with long lengths of stay. Quality, Compliance and Innovation 7-Day follow-up continues to meet the target of 95%, with the actual for November at 97.8%, which is an increase from 95.7% in October. Data quality work continues, addressing issues in the recording of data with services. The adult mental health network is also starting to collect data on the number of ‘fails’ where it would not have been necessary to admit the patient, if genuine alternatives to admission were available. In addition, analysis at CCG level is being undertaken to look at areas of concern.

The Community Information Dataset targets have been met. The trust continues to exceed this target achieving over 91% against a target of 50%.

Performance Dashboard Developments The Block 1 ‘Organisational Grip’ project is well underway. Services are currently defining a variety of measures to enable the trust to manage performance from defined inputs (staffing) to outputs (patient activity). In addition, we are implementing new measures to ensure we capture clinical outcomes, incorporating this work into other trust systems, such as the SEEL tool.

12

AGENDA NUMBER: TB XX

TRUST BOARD – DECEMBER 2013 FINANCE REPORT OCTOBER 2013


Not Applicable

PAPER TITLE: Finance Report November 2013

PURPOSE: To summarise and analyse actual and forecast financial performance and standing of the Trust, the implications and any proposed management action

ACTION RECOMMENDED:

Noting

PAPER PREPARED BY: Director of Finance

The Finance Report is a routine monthly report in a format agreed by the Board. The key element to be considered is the Financial Risk Rating (FRR) (to be replaced from 1 October by the Continuity of Service Risk Rating (CoSRR)), though the report provides insights into a range of other areas, including:

Income & Expenditure Balance Sheet Budgetary variances Cost improvements Balance sheet Cash flow Capital expenditure.

Two presentations to the Board are planned relating to the financial position to supplement information previously provided regarding the market and in preparation for the plan for 2014/15:

January regarding the underpinning components of the financial position and the implications of these

February further information and analysis of the implications of the introduction of CoSRR

After eight months, the Trust is under performing against Plan (£2,117k surplus v £2,778k Plan). This includes under achievement of £558k YTD against the cost improvement programme. Key drivers of the under performance are:

Pressures on bed numbers leading to costs being incurred for private sector placements, £1,263k, with £1.9m assumed for full year

Increased acuity on available beds demands additional use of bank and agency £1,152k YTD, £1.7m assumed for full year

Ward 18 in Burnley was planned to close, but this has been deferred, leading to £400k YTD and £720k outturn shortfall on CIPs

AGENDA NUMBER: TB XX

TRUST BOARD – DECEMBER 2013 FINANCE REPORT OCTOBER 2013

Executive Directors are planning corrective action to bring outturn back in line with Plan, though the current forecast is for a full year surplus of £2.9m v £4.0m Plan. Cash balances are holding up strongly (£35.1m v £20.6 Plan). FRR for the year to date is 3 against a Plan of 3, with all modelled scenarios generating an overall FRR of 3 for the year as a whole. At the end of August, Monitor confirmed that with effect from October the Risk Assessment Framework will replace the Compliance Framework, with CoSRR replacing FRR. The precise implications of the new calculations are being considered (as there have been some minor changes following consultation), but it is currently expected that the Trust will be rated as a 4 (the lowest financial risk) on an ongoing basis. It is clear from discussion with Monitor that, as previously reported, CoSRR will not be impacted by the availability or otherwise of the Working Capital Facility (£16m provided by Barclays). When this was rolled on recently, break clauses were built in to allow for this eventuality. As previously agreed, the Director of Finance terminated the Working Capital Facility at the end of November.

Financial Report – November 2013

EXECUTIVE SUMMARY

Target To date Forecast for year Notes

EBITDA £’000 £8,520 v AP £9,289 £12,794 v AP £13,932 1

Surplus before exceptionals £’000 £2,117 v AP £2,778 £2,947 v AP £3,986 1

CIP £’000 £6,899 v AP £7,457 £9,657 v AP £11,033 2

Cash Balance £’000 £35,087 v AP £20,618 £17,197 v AP £19,746 3

Capital Expenditure £’000 £21,589 v AP £27,933 £39,868 v AP £41,800 4

Cumulative BPPC

Compliance %

NHS Volume 96 Value 98 v Target 95

Volume 95 Value 95 v Target 95

5 Non NHS



Continuity of Services risk rating 4 v AP 4 4 v AP 4 6

Key Significant risk of failure, additional action required

Medium risk of failure, performance needs to be monitored

Low risk of failure, no action required AP Annual Plan

Key Assumptions, Risks and Actions 1 Position includes under achievement of planned CIPs (£558k), resulting in an overall net

adverse variance in surplus of £661k, against a YTD Plan of £2,778k A surplus of £2.9m is forecast against the planned £4m without corrective action Key driver is unbudgeted costs of £2,815k in respect of mental health inpatient demand Executive Directors are considering corrective action to bring outturn into line with Plan

2 Figures shown are for planned schemes. Year-end position is £1.4m adverse. This is partially offset by under spends elsewhere

CIP achievement is below Plan, with a number of schemes delayed and mitigating schemes developed

3 Cash balances remain high, some £14.5m better than Plan; key drivers are working balances (£9.5m) and net under spending on capital and investment activities (£5.7m), offset by I&E performance (£0.8m).

4 Capital expenditure is below plan largely due to the reprofiling of The Harbour scheme. It is broadly in line with reforecast submitted to Monitor.

5 BPPC is on target and expected to remain so. 6 CoSRR in line with Plan. Minor concerns over the impact of performance on FRR; some

decreases in metrics, but overall broadly in line with Plan. Risks align to performance concerns.


1. INCOME AND EXPENDITURE PERFORMANCE

£0.0m

£0.5m

£1.0m

£1.5m

£2.0m

£2.5m

£3.0m

£3.5m

£4.0m

£4.5m

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Cumulative Surplus £'m

Plan Actual Best Forecast Downside

Income and Expenditure

Actual Plan Variance Forecast Plan Variance£'m £'m £'m £'m £'m £'m

Income 212.042 207.020 5.022 322.465 310.525 11.940

Pay (161.881) (159.296) (2.585) (246.457) (238.944) (7.513)Non Pay (41.641) (38.434) (3.207) (63.214) (57.649) (5.565)Total Costs (203.522) (197.730) (5.792) (309.671) (296.593) (13.078)

EBITDA 8.520 9.289 (0.769) 12.794 13.932 (1.138)

P/L on Disposals 0.014 0.000 0.014 0.024 0.000 0.024Capital Charges (5.946) (5.948) 0.002 (8.977) (8.977) 0.000Interest Receivable 0.095 0.046 0.050 0.142 0.067 0.075Interest Payable (0.566) (0.610) 0.044 (1.035) (1.035) 0.000

Net Surplus before Exceptional Items 2.117 2.778 (0.661) 2.947 3.986 (1.039)Exceptional items 0.000 0.000 0.000 0.000 0.000 0.000

Net surplus / (deficit) 2.117 2.778 (0.661) 2.947 3.986 (1.039)

EBITDA margin 4% 4% 0% 4% 4% -1%

Year To Date Annual

The surplus in November in isolation was £0.1m (October £0.3m).

Forecast outturn is £1.0m below Plan in the ‘Likely Scenario’ at month 8. This level of financial performance provisionally delivers a Continuity of Services risk rating of 4 and a financial risk rating of 3 (both in line with plan).

Forecasts

Financial Report – November 2013 All forecasts result in a Continuity of Services risk rating of 4 against a plan of 4 and an overall financial risk rating of 3 against a plan of 3 ‘Likely’ produces FRR of 3 (2.7) based on a surplus of £2.9m

‘Best case’ produces FRR of 3 (3.3) based on a surplus of £3.9m

‘Worst case’ produces FRR of 3 (2.6) based on a surplus of £1.9m

Figures below are based on the ‘Likely’ scenario

The Best case assumes a falling off of OATs and more robust CIP delivery. Worst case assumes further deterioration of both these factors, along with redundancies. Executive Directors are considering corrective action to bring outturn performance in line with Plan

With the publication of the Risk assessment Framework effective from 1 October the Trust is now being assessed using Continuity of Service Risk Ratings (see section 6)

Main variances against Plan

Planned income, pay and non pay are broadly in line with Plan taking into account contract variations with pay supporting the position presented by CIP slippage and non-pay overspends

The under achievement on CIPs (£558k) results in a net under achievement on EBITDA of £769k

Overspends have been identified in Adult Mental Health and Secure Services

CIP performance is being monitored against the raw Plan; the £1.4m forecast outturn under achievement was anticipated, based on risk assessment.

Key risks The primary financial risk concerns inpatient beds with three key drivers

Pressure on bed numbers leading to costs being incurred for private sector placements, £1,263k, with £1.9m assumed for full year

Increased acuity on available beds demands additional use of bank and agency £1,152k YTD, £1.7m assumed for full year

Ward 18 in Burnley was planned to close, but this has been deferred, leading to £400k YTD and £720k outturn shortfall on CIPs

Collectively, inpatient issues result in £2.8m of pressures to date and an expected £4.3m full year, compensated by, to a degree, risk assumptions around CIPs and underspend on developments

Further CIP failure in other areas remains a possibility

Some redundancies have been allowed for within forecasts where known, but more are likely to crystallise before the year end. Financial Impacts can be mitigated by appropriate workforce planning and a more robust line is being used


2. ANALYSIS BY DIRECTOR (See Appendix VI for details)

Clinical Services Over spend of £82k, 0.1% (Underspends to October £276k, 0.2%, Q2 £375k, 0.3%; Q1, £352k, 0.6 %) against net budget of £148m. £447k over spend on pay, £25k under on non-pay. Adult Mental Health is over spent by £1,252k, exclusively driven by Inpatient use of Bank and Agency due to acuity and the inability to proceed with ward closure. Adult Community returned a £671k underspend, dominated by Community Services. Secure is over spending by £707k, mainly driven by high use of bank and agency on wards and escort and bedwatch costs. Children & Families has favourable positions on pay from vacancies in Universal Services which helps deliver a £955k favourable position

Director of Nursing Under spend of £153k, 5.9% (£115k, 5.1% to October, Q2, £60k under, 3.1%; Q1, £2k over, 0.2%) against budget of £2.6m. Under spend on pay relates to significant vacancies primarily relating to reduced hours, maternity leave and pending recruitment, partly offset by consultancy costs

Chief Executive Over spend of £133k (£125k to October, Q2, £118k; Q1, £68k) against budgeted net income of £5.3m. Main variance relates to professional and consultancy costs

Director of Finance Over spend of £49k year to date, 0.2% ((£39k, 0.2% to October, Q2, £55k under, 1.1%; Q1, £115k under, 1.3%) against budget of £23.3m. Main variances due to pressures on interest receivable targets

Director of Workforce and Organisational Development Over spend of £275k, 9.8% (£214k, 8.7% to October, Q2, £201k, 5.0%; Q1, £29k, 2.8%) against budget of £2.8m. Main variance due to recharge of Director costs (£125k)

Medical Director Under spend of £173k, 9.0% (£161k, 9.6% to October, Q2, £145k, 10.0%; Q1, £66k, 9.5%) against budget of £1.9m. Main variances are drug under spends (£119k) following some drugs becoming generic

Chief Operating Officer Under spend of £9.7k, 1.4% (£13k, 2.2% to October, Q2, £36k, 6.2%; Q1, £54k, 11.6 %) against budget of £0.7m. Main variance is due to vacancies in Engagement (£35k).

Director of Innovation and Transformation Under spend of £147k, 22.7% (£131k, 23.5% to October, Q2, £111k, 25.5%; Q1, £18k, 13.3 %) against budget of £0.6m. Main variances are from the newly linked Lean (£81k) share between pay and non-pay. Most of this is anticipated to be utilised by year end.


3. COST IMPROVEMENT PROGRAMME (CIP) CIPs

Year to Date

Plan Actual Variance

£'000 £'000 £'000

Income &Expenditure CIP 7,457.0 6,898.7 ‐558.4

Overall under achievement against planned schemes to the end of October is £558k, 7.5%. There is an under performance against planned schemes, but it is important to recognise that under spends are being generated against budgets which partly mitigate this position. Some shortfall has occurred in Adult Community (£150k year to date) where a number of schemes, particularly relating to service redesign, have been delayed and Adult Mental Health has seen the impact of deferring the closure of Ward 18 at Burnley (£400k year to date). Children and Families have recognised the remedial schemes they have implemented and are now returning a slight underachievement year to date (£1.3k). Adult Community have generated an overall year to date surplus of £671k implying some compensatory measures. There is concern around the year end position in Adult Mental Health, where the scheme to close Ward 18 is not expected to be implemented during 2013/14, causing a £720k shortfall. The figures as presented are solely against planned schemes. A number of additional schemes will be developed during the year and compensating measures identified to offset under performance. Executive Directors are actively considering corrective action to bring outturn performance into line with Plan. Senior management have reviewed CIPs and work is continuing on the most appropriate and effective way to monitor and review programmes. The need to robustly manage schemes and source compensatory schemes where there is any shortfall has been communicated to managers as a priority, and month 3 saw services report on their CIP performance together with an assessment of outturn and any remedial measures required. The outturn position of £9.7m is better than the risk adjusted plan (£9.1m).


4. BALANCE SHEET Balance Sheet

Year To DateActual Plan Variance Forecast Plan Variance

£'m £'m £'m £'m £'m £'m

Fixed Assets 148.214 155.217 -7.003 163.279 165.554 -2.275

Stock 0.249 0.249 0.000 0.249 0.249 0.000Trade Debtors 7.872 7.929 -0.057 9.115 9.115 0.000

Other Current Assets 3.500 3.165 0.335 3.160 3.160 0.000

Cash 35.087 20.618 14.469 17.197 19.746 -2.549Current Liabilities -35.835 -26.662 -9.173 -24.136 -24.136 0.000

Working Capital 10.873 5.299 5.574 5.585 8.134 -2.549

Long Term Assets 0.791 0.916 -0.125 1.016 0.916 0.100Provisions and other Long Term Liabilities -1.733 -1.733 0.000 -1.700 -1.700 0.000Loans -21.848 -23.004 1.156 -32.738 -36.688 3.950

136.297 136.696 -0.399 135.442 136.216 -0.774

Taxpayers EquityPDC 100.889 100.889 0.000 99.201 99.201 0.000

I&E Reserve 16.139 16.064 0.075 16.832 17.272 -0.440

Other Reserves 19.269 19.743 -0.474 19.409 19.743 -0.334136.297 136.696 -0.399 135.442 136.216 -0.774

Annual

Fixed assets are £7.0m below plan, being largely attributable to timing differences on the capital programme. It should be noted however that the Trust is broadly in line with the revised forecast, largely based on the Harbour reforecasts, submitted to Monitor immediately following quarter 1 (see section 6). The transfer of £7.3m of community facilities have now been confirmed and are included as having happened, final confirmation of amounts and formal paperwork is still awaited, and accounting treatment has only been provisionally confirmed (see section 6 for details on capital expenditure). The transfer also impacts on I&E Reserves as funding has been accrued to reserves to match the expenditure. Trade debt has improved on last month and remains ahead of plan (M08 £0.1m, M07 £0.5m), though the amount has again been subdued this month by £2m of late settlements by the LAT. Issues remain with Council debt but it is now considered within acceptable levels. Underlying NHS debt remains significantly better than plan. The Trust is now drawing down loans for The Harbour to match construction costs, this is highlighting the transient cash gains on working capital and in particular current liabilities (£9.1m) experienced over recent months. The agreement of flexible monthly drawdowns has better facilitated management of future cash flows. Taking these factors together the cash balance is very strong despite the slight under performance in I&E terms.


5. CASH AND WORKING CAPITAL

£0.0m

£5.0m

£10.0m

£15.0m

£20.0m

£25.0m

£30.0m

£35.0m

£40.0m

Apr‐13 Jul‐13 Oct‐13 Jan‐14 Apr‐14 Jul‐14 Oct‐14 Jan‐15 Apr‐15 Jul‐15 Oct‐15 Jan‐16

Month End Cash £'m

Plan Actual/Forecast Best Downside Adjusted

Cashflow


Surplus/(deficit) after tax 2.117 2.778 (0.661) 2.947 3.986 (1.039)Non Cash Flows 6.403 6.512 (0.108) 9.847 9.946 (0.099)

Operating Cash Flows before WC 8.520 9.289 (0.769) 12.794 13.932 (1.138)

Changes to WC (2.007) (11.543) 9.536 (14.109) (13.924) (0.185)

CF from operations 6.513 (2.254) 8.767 (1.315) 0.008 (1.323)Capital and Investment Activities (13.272) (19.852) 6.580 (30.425) (33.174) 2.749Financing and Other 8.561 9.439 (0.878) 15.653 19.628 (3.975)

Net cash inflow/outflow 1.802 (12.667) 14.469 (16.088) (13.539) (2.549)

Opening cash balance 33.285 33.285 0.000 33.285 33.285 0.000Closing cash balance 35.087 20.618 14.469 17.197 19.746 (2.549)

Year To Date Annual

See Appendix IV for details Historic trends suggest a working capital ‘buffer’ in the system relating to the speed of settling liabilities (accruals, etc). An ‘adjusted’ forecast has been shown in the chart which allows for this ‘buffer’, estimated at around £3m, this is expected to reduce over time and will be reassessed after the NHS reorganisation has settled. The cash position is £14.5m higher than Plan: I&E performance is having a marginal negative impact (£0.8m) Changes to capital have boosted cash in gross terms by £6.6m, and flexible

drawdowns have allowed loan funding to be better matched to expenditure resulting in net cash gain of only £5.7m

Financial Report – November 2013 Overall debtors are in line with plan. As expected CCG debt is rising slightly with

underlying NHS debt almost £3m better than plan, though this is subdued by late settlements of £2m by the LAT. Council debt remains problematic but is currently considered within acceptable levels.

Though comparable to last month, current liability levels are significantly greater than Plan. The timing of settlements with suppliers represents the bulk of the shift (generating gains of £5.4m) and again these primarily relate to PropCo estate charges and SLAs, but many have now been invoiced and significant settlements have now started to be made. The remainder is largely made up by £4.1m of additional deferred income, as with last month this is made up of primarily of unplanned contract phasing and AHSN deferrals.

Many of the shifts and variances are timing differences and do not change underlying long term liquidity. The reduction in forecast I&E performance will, however, reduce this (£1.1m) as will the increases to the Trust funded portion of the forecast capital programme and finance charges (£1.2m). BPPC BPPC

Value Volume Target Value Volume Target

Cumulative Performance 98% 96% 95% 97% 96% 95%

NHS Non NHS

The Trust is once more achieving target and continues to expect to achieve the annual target.


6. CAPITAL PROGRAMME Capital Summary


Capex 21.589 27.933 (6.344) 39.868 41.800 (1.932)

Year To Date Annual

The Trust has spent £21.6m spend to date, some £6.5m below original plan, and £1m below revised forecast:

Spend is dominated by the Harbour (£9.5m). Though £6.5m behind original plan it is only a few days behind the revised schedule. However, when combined with the accumulated unspent risk and contingency reserves this puts the scheme £1.5m behind current reforecast submitted to Monitor. Expenditure is matched by loan finance so any impact on cash outturn can be easily managed.

Oaklands and Moss View projects (£1.5m) are also behind original plan (£2.6m) though they are broadly in line with revised forecast. The projects are expected to be completed to timescale and realise underspends against plan in the order of £400k (this is factored in to forecast).

IT schemes are £280k ahead of both original plan and revised forecast. Minor Improvements - overall net overspend of £0.5m against Plan; which is

expected to continue. Other Schemes - Support for minor developments (not included on original plan)

£0.2m behind reforecast Note that a revised forecast, largely based on the Harbour reforecasts, was submitted to Monitor immediately following quarter 1 and though this differs significantly from plan, the bulk of the changes relate to the Harbour and will therefore also be reflected in funding. A net cash pressure in the order of £1m-£1.5m is however considered likely. Transfers The transfer of £7.3m of community facilities has been confirmed, a some paperwork is still awaited. Legals for six of the seven properties are now with the solicitors, and the other is expected shortly. Some supporting details (including some valuation detail) remain extant and are again expected shortly. Preliminary guidance indicates a form of Absorption Accounting that will be consistent with presentation in previous months: The expenditure (not paid) is included as a technical adjustment and accrued against reserves (not received). This is also consistent with the plan submission and results in a nil impact on cash. Details of major expenditure and variance from Plan can be found in Appendix V


7. FINANCIAL RISK RATING

Weighted average is 3.1 against plan of 3.4 Overriding rules rating is 3 against plan of 3 Underperformance on plan has made no change to overall risk rating, though

weighted average has fallen. Slight improvement on forecast metrics doesn’t change ratings. Decreases in metrics have not reduced overall rating but an increase of £18k

would increase metrics to last month performance and £760k would allow a return to plan

An increase of the order of £2.1m would be required to increase the overall rating to 4 (increase underlying performance - as limited by overriding rules)

A fall in the I&E surplus in the order of £2.1m would be required to decrease overall ratings to 2

Forecasts

All forecasts result in an overall risk rating of 3 against a plan of 3 ‘Likely’ produces a rating of 3 (2.7) based on a surplus of £2.9m

‘Best case’ produces a rating of 3 (3.3) based on a surplus of £3.9m

‘Worst case’ produces a rating of 3 (2.6) based on a surplus of £1.9m

Figures below are based on the ‘Likely’ scenario

6 Months to September

2013

7 Months to October

2013

8 Months to November

2013

12 months to March

2014

EBITDA margin % 4.1% 4.0% 4.0% 4.0% 2 2 2 2

EBITDA % v Plan 93.7% 92.0% 91.7% 91.8% 4 4 4 4

Return on assets (Revised) %

2.3% 2.4% 2.2% 1.9% 4 4 4 3

I&E surplus % 1.1% 1.1% 1.0% 0.9% 3 3 2 2

Liquidity days inc WCF 32.2 30.6 31.4 24.8 4 4 4 3

Weighted average 3.3 3.3 3.1 2.7

Overriding rules rating 3 3 3 3

Key Rating < 3 Rating = 3 Rating >3


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Apr‐11 Jul‐11 Oct‐11 Jan‐12 Apr‐12 Jul‐12 Oct‐12 Jan‐13 Apr‐13 Jul‐13 Oct‐13

Overall Risk Rating

Average Overriding rules

Weighted average is 3.1 against plan of 3.4 Overriding rules rating is 3 against plan of 3 Underperformance on plan has made no change to overall risk rating, though

weighted average has fallen. Slight improvement on forecast metrics doesn’t change ratings. Decreases in metrics have not reduced overall rating but an increase of £18k

would increase metrics to last month performance and £760k would allow a return to plan

An increase of the order of £2.1m would be required to increase the overall rating to 4 (increase underlying performance - as limited by overriding rules)

A fall in the I&E surplus in the order of £2.1m would be required to decrease overall ratings to 2

6 Months

to September

2013

7 Months to October

2013

8 Months to

November 2013

12 months to March

2014

Weighted average 3.3 3.3 3.1 2.7

Plan weighted average 3.4 3.4 3.4 3.4

Overriding rules rating 3 3 3 3

Plan overriding rules rating 3 3 3 3

Key Rating <3 Rating = 3 Rating >3


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%


EBITDA Margin %

Actual 5 4 3 2

EBITDA margin 4.0% against plan of 4.5% Score of 2 against a plan of 2 Score of 3 would require increase of £2.1m (24%) Score of 1 would require a worsening of £6.4m (75%)

EBITDA margin % 6 Months

to September

2013

7 Months to October

2013

8 Months to

November 2013

12 months to March

2014

Actual/Forecast % 4.1% 4.0% 4.0% 4.0% Actual/Forecast Rating 2 2 2 2 Plan % 4.5% 4.5% 4.5% 4.5% Key Rating <3 Rating = 3 Rating >3


0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%


Achievement Of Plan %

Actual 5 4 3 2

Achievement is 91.7% against a plan of 100% Score is 4 against a plan of 5 An increase of £760k (8.9%) in EBITDA would be required to meet plan A reduction of £624k (7.3%) in EBITDA would be required to reduce this score to 3

Achievement of Plan % 6 Months

to September

2013

7 Months to October

2013

8 Months to

November 2013

12 months to March

2014

Actual/Forecast % 93.7% 92.0% 91.7% 91.8% Actual/Forecast Rating 4 4 4 4 Plan % 100% 100% 100% 100% Key Rating <3 Rating = 3 Rating >3


‐6.0%

‐4.0%

‐2.0%

0.0%

2.0%

4.0%

6.0%

May‐12 Aug‐12 Nov‐12 Feb‐13 May‐13 Aug‐13 Nov‐13

Return on Assets % (Revised)

Actual 5 4 3 2

Return of 2.2% against a plan of 2.8% Score of 4 against a plan of 4 Score of 5 would require an increase of £856k (40%) Score of 3 would require decrease of £135k (6.4%) Though sensitivity is largely based on revenue, large capital projects can impact

Return on Assets (Revised)% 6 Months

to September

2013

7 Months to October

2013

8 Months to

November 2013

12 months to March

2014



‐3.0%

‐2.0%

‐1.0%

0.0%

1.0%

2.0%

3.0%

4.0%


I&E Surplus %

Actual 5 4 3 2

Surplus £2,117k Score of 2 against a plan of 3 Score of 3 would require increase of £18k (0.8%) Score of 1 would require a decrease of £6.3m (302%)

I&E Surplus % 6 Months

to September

2013

7 Months to October

2013

8 Months to

November 2013

12 months to March

2014



0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0


Liquidity (Days)

Actual 5 4 3 2

Liquidity of 31.4 days against a plan of 25.6 days Score of 4 against a plan of 4 Score of 5 would require increase in liquidity in excess of £24m – 91% (assuming

no change in operating expenditure) Score of 3 would require a reduction in liquidity of around £5.4m – 20% (assuming

no change in operating expenditure) Under the RAF, FRR are not required and as such the £16m working capital facility

with Barclays is being reconsidered and included for comparison purposes only.

Liquidity days inc WCF 6 Months

to September

2013

7 Months to October

2013

8 Months to

November 2013

12 months to March

2014

Actual/Forecast Days 32.2 30.6 31.4 24.8 Actual/Forecast Rating 4 4 4 3 Plan Days 31.5 28.3 25.6 29.0 Key Rating <3 Rating = 3 Rating >3


8. CONTINUITY OF SERVICE RISK RATINGS With the publication of the Risk assessment Framework (RAF), effective 1 October 2013 Financial Risk Ratings (FRR) have been replaced by Continuity of Service Risk Ratings (CoSRR). This has been factored into the Trust’s financial planning and forecasting but as the ratings are still relatively new, the information and/or presentation may change.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Apr‐13 Jul‐13 Oct‐13 Jan‐14 Apr‐14 Jul‐14 Oct‐14 Jan‐15

CoSRR ‐ Overall

Actual/Forecast Plan

Overall forecast to be ongoing 4 against Plan of 4, though Debt Service cover forecast is 3 and could potentially dip to a 2 around Dec/Jan.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5


CoSRR ‐ Debt Service Cover

Actual/Forecast 4 3 2

Year to date metrics show 2.7x against a Plan 2.9x, a rating 4 against a Plan of

4. A reduction of £627k would be required to force a 3


Based on likely performance the Trust will move toward 3 (against a Plan of 3) over the course of the year with a possible dip to 2 around Dec/Jan

This has been discussed with Monitor and it is not anticipated that this will give rise to any serious concerns around the Trust’s performance

‐30.0

‐25.0

‐20.0

‐15.0

‐10.0

‐5.0

0.0

5.0

10.0

15.0

20.0


CoSRR ‐ Liquidity

Actual/Forecast 4 3 2

Year to date metrics show 12.5 against a Plan 6.1, a rating 4 against a Plan of 4. A reduction of £10.6m would be required to force a 3

Based on likely performance the Trust will remain a 4 (against a Plan of 4) throughout the year

The finalised RAF changed the calculation of CoSRR Liquidity, but Trust remains at rating of 4

The CoSRR Liquidity metric is not impacted by the availability or otherwise of the Working Capital Facility


Appendices Appendix I Financial risk rating Appendix II Glossary, terminology and definitions Appendix III Detailed CIP performance Appendix IV Cashflow Appendix V Capital Appendix VI Budgetary performance


Appendix I Financial Risk Rating A financial risk-rating matrix is used to assess the financial health of Foundation Trusts. There are five possible risk ratings as follows:

Rating 5 - Lowest risk - no regulatory concerns Rating 4 - No regulatory concerns Rating 3 - Regulatory concerns in one or more components. Significant breach of

Terms of Authorisation unlikely Rating 2 - Risk of significant breach in the medium term, e.g. 12 to 18 months in

the absence of remedial action Rating 1 - Highest risk - high probability of significant breach in the short-term, e.g.

less than 12 months, unless remedial action is taken The 146 Foundation Trusts rated on Monitor’s website currently fall into the following categories:

Financial Risk Rating Governance Risk Rating Rating No Green Under

Investigation Red

5 9 8 1 4 35 30 5 3 82 67 9 6 2 12 1 4 7 1 9 9

Total 147 106 18 23 LCFT is rated in the boxes shaded Green, i.e. Top 105 FTs. 38 are rated lower risk and 42 rated higher risk ‘Under Investigation’ indicates that Monitor is investigating the Trust’s governance or has requested further information to determine appropriate rating Scoring Matrix Weight 5 4 3 2 1 Achievement of plan 10% 100% 85% 70% 50% <50% Underlying margin 25% 11% 9% 5% 1% <1% Return on assets 20% 6% 5% 3% -2% <-2% I&E surplus margin 20% 3% 2% 1% -2% <-2% Liquidity ratio (days) 25% 60 25 15 10 <10 The overall risk rating is produced by bringing together a weighted combination of the following four factors. Achievement of plan - EBITDA achieved as % of plan Underlying margin – EBITDA as % of total operating income Return on assets – EBITDA as % of average assets I&E surplus margin – Net surplus as % of total operating income Liquidity ratio – Days’ worth of operating expenses that are covered by current assets, i.e. how easy it is to cover costs by converting assets into cash.

Financial Report – November 2013 Overriding rules Whatever the score achieved, there are a number of overriding rules that will limit the overall risk rating. If the Trust has been an FT for 12 months or less, maximum rating = 4 If the lowest ranked metric is 1, maximum rating = 2 If one financial criterion is 1 or 2, maximum rating = 3 If two financial criteria are 1 or 2, maximum rating = 2 If two financial criteria are 1, maximum rating = 1 If Prudential Borrowing Code is breached, maximum rating = 2


Appendix II Glossary, Terminology and Definitions Accruals – An accounting concept. Accruals are used to charge expenditure to the period it relates to rather than when cash settlement is made. If the Trust has received a service costing £1,000 in May, but does not pay for it until June, an accrual for £1,000 will be raised in May to increase expenditure in that month. When the payment is made in June, the accrual is released to offset it. Amortisation – The process of charging the cost of an asset over its useful life as opposed to when payment is made for it. It has the same impact as depreciation, but normally relates to intangible assets. Assets – An item that has an ongoing value to an organisation, such as a debtor or a building. Breakeven duty – A financial target, requiring an NHS organisation to match income with expenditure, i.e. making neither a profit nor a loss. Usually taken to include a very small surplus or deficit. Brokerage – The transfer of repayable revenue, cash or capital from one organisation to another to support a financial need. Capital – Expenditure on fixed assets, cost must exceed £5,000 for an asset (or a group of assets) to be treated as capital expenditure. Such assets must have a useful life expectancy of more than one year. Capital charges – The cost of owning or using capital. A charge is made to expenditure on all fixed assets comprising depreciation and interest on the outstanding debt. Capital resource limit (CRL) – A limit determined by the Department of Health constraining the amount a Trust can spend on capital. Current assets – Debtors, stock, cash or similar, which can be readily converted into cash within the next twelve months. Depreciation – The process of charging the cost of an asset over its useful life as opposed to when payment is made for it. It normally relates to tangible assets. Direct cost – Costs that can be directly attributed to a particular activity, service or other output. For example, the cost of a nurse on an inpatient ward is a direct cost of the inpatient service, whereas the cost of a site is an indirect cost as it also covers other services and departments.

Financial Report – November 2013 Earnings before interest, tax, depreciation and amortisation (EBITDA) – Used as a more meaningful identifier of an organisation’s underlying profitability than raw surplus. It is calculated as follows: Net surplus

Add back depreciation Add back any interest paid Less any financial support received Less any interest received Add back any PDC dividends paid

Equals EBITDA External financing limit (EFL) – A limit on net external financing set by the Department of Health, determining how much more or less can be spent by a Trust than the money it generates from its operations in a year. Fixed assets – Land, buildings, equipment and other long-term assets that are expected to have a useful life of more than one year. Fixed asset impairments – When the estimated real value of an asset is less than that shown in the accounts, an impairment provision is created to represent that loss in value. Fixed cost – A cost that will not change despite fluctuations in the level of activity. Indirect cost – A cost that cannot be traced directly to a particular activity, service or other output. Intangible asset – Goodwill, brand value or some other right, which though invisible is likely to derive financial benefit for its owner and for which one might be willing to pay. Liability – Something which the Trust is liable to pay, such as an outstanding bill or loan. Liquidity ratio – Days’ worth of operating expenses that are covered by current assets, i.e. how easy it is to cover costs by converting assets into cash. Generally taken to be a measure of an organisation’s ability to cover its short-term liabilities. Marginal cost – The increase or decrease in cost caused by the increase or decrease in activity by a single unit. Net book value – The value of an asset as recorded in the balance sheet of an asset at a point in time. Normally the original cost less the accumulated depreciation relating to that asset (the extent to which the asset has been ‘consumed’ over its life). Net current assets/liabilities – The net asset or liability of an organisation after adding together current assets and current liabilities. Private finance initiative – A form of public/private partnership designed to fund major capital investments without immediate recourse to public funds. Generally a private sector

Financial Report – November 2013 organisation will fund the construction/procurement of an asset and a public sector organisation will pay a periodic charge for making use of the asset. Public dividend capital (PDC) – At the formation of a Trust, the purchase of assets from the Secretary of State was half funded by public dividend. It is changed by public sector capital received or paid back over a period. Dividends or interest are repaid to the Secretary of State. PDC dividend – An amount paid to the Secretary of State representing the ‘interest’ on PDC. Reference costs – Nationally collected schedule of the relevant costs per unit of activity for different services, allowing comparison between different providers. Revenue – Ongoing costs or funding associated with operations, as opposed to capital. Tangible asset – A sub-classification of fixed assets to exclude invisible or intangible assets. Total operating income – Overall funding less interest receivable Variable cost – An expense that varies proportionately with the level of activity undertaken.


APPENDIX III: Detailed CIP Performance

Annual Plan to Date Act to Date Variance

Expected

Outturn

Year End

Variance

Adult Community £3,415,622 £2,032,123 £1,881,632 ‐£150,491 £2,771,097 ‐£644,525

Secure Services £354,139 £236,106 £236,106 £0 £354,139 £0

Adult Mental Health £3,085,146 £2,550,907 £2,151,142 ‐£399,765 £2,365,529 ‐£719,617

Children & Family Services £2,430,517 £1,620,360 £1,619,067 ‐£1,293 £2,430,518 £0

LD Psychology £18,989 £12,656 £12,656 £0 £18,989 £0

Transformation £42,925 £28,616 £28,616 £0 £42,925 £0

Company Secretary £20,000 £13,336 £13,336 £0 £20,000 £0

Property Services £362,656 £94,242 £87,432 ‐£6,810 £350,398 ‐£12,258

Information Services £240,864 £160,576 £160,576 £0 £240,864 £0

Workforce £248,196 £165,472 £165,472 £0 £248,196 £0

Director of Nursing £176,452 £117,640 £117,640 £0 £176,452 £0

Pharmacy £506,000 £337,312 £337,312 £0 £506,000 £0

Finance £131,500 £87,672 £87,672 £0 £131,500 £0

Total £11,033,007 £7,457,018 £6,898,659 ‐£558,359 £9,656,607 ‐£1,376,400

% Variance ‐7.5% ‐12.5%

CIP Performance to Month 8 End November


APPENDIX IV: Detailed Cash Flow Reported Monthly Cash Flow Statement for LANCASHIRECARE

Plan YTD Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual

unitsYTD Ending 30 Nov 2013

YTD Ending 30 Nov 2013

Month Ending 30 Apr 2013

Month Ending 31 May 2013

Month Ending 30 Jun 2013

Month Ending 31 Jul 2013

Month Ending 31 Aug 2013

Month Ending 30 Sep 2013

Month Ending 31 Oct 2013

Month Ending 30 Nov 2013

Month Ending 31 Dec 2013

Month Ending 31 Jan 2014

Month Ending 28 Feb 2014

Month Ending 31 Mar 2014

Surplus/(deficit) after tax £m 2.778 2.117 0.310 0.281 0.433 0.282 0.294 0.124 0.288 0.106 0.131 0.254 0.254 0.191

Non-cash flows in operating surplus/(deficit), Total 6.512 6.403 0.786 0.785 0.786 0.785 0.790 0.870 0.668 0.933 0.861 0.861 0.861 0.861

Operating Cash flows before movements in working capital 9.289 8.520 1.096 1.066 1.219 1.067 1.084 0.994 0.956 1.039 0.992 1.115 1.115 1.052

Increase/(Decrease) in workling capital, Total £m (11.543) (2.007) (2.413) (2.413) 0.850 0.379 2.730 0.228 (0.859) (0.510) (3.484) (0.472) (0.425) (7.720)

Net cash inflow/(outflow) from operating activities £m (2.254) 6.513 (1.317) (1.347) 2.069 1.446 3.814 1.222 0.097 0.529 (2.493) 0.643 0.690 (6.669)

Net cash inflow/(outflow() from investing activities, Total £m (19.852) (13.272) (2.787) 0.234 (2.204) (1.140) (1.877) (1.433) (2.214) (1.852) (0.468) (4.570) (4.570) (7.545)

Net cash inflow/(outflow) before financing £m (22.106) (6.759) (4.104) (1.113) (0.135) 0.306 1.937 (0.211) (2.117) (1.323) (2.961) (3.927) (3.880) (14.214)

Net cash inflow/(outflow) from financing activities, Total £m 9.439 8.561 (0.024) (0.084) (0.050) (0.072) 6.277 0.536 (0.340) 2.318 0.187 2.791 2.991 1.122

Net increase/(decrease) in cash and cash equivalents £m (12.667) 1.802 (4.128) (1.197) (0.185) 0.234 8.214 0.325 (2.457) 0.995 (2.773) (1.136) (0.889) (13.092)

Opening cash £m 33.285 33.285 33.285 29.157 27.961 27.776 28.010 36.224 36.549 34.092 35.087 32.314 31.178 30.289

Effect of exchange rates £m 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Closing cash £m 20.618 35.087 29.157 27.961 27.776 28.010 36.224 36.549 34.092 35.087 32.314 31.178 30.289 17.197

Financial Report – November 2013 Reported Monthly Cash Flow Statement for LANCASHIRECARE

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual

units













Surplus/(deficit) after tax £m 0.332 0.332 0.332 0.332 0.332 0.332 0.332 0.332 0.332 0.332 0.332 0.332

Non-cash flows in operating surplus/(deficit), Total 0.957 0.957 0.957 0.957 0.957 0.957 0.957 0.957 0.957 0.957 0.957 0.957

Operating Cash flows before movements in working capital 1.289 1.289 1.289 1.289 1.289 1.289 1.289 1.289 1.289 1.289 1.289 1.289

Increase/(Decrease) in workling capital, Total £m 0.108 (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.711)

Net cash inflow/(outflow) from operating activities £m 1.396 1.277 1.277 1.277 1.277 1.277 1.277 1.277 1.277 1.277 1.277 0.578

Net cash inflow/(outflow() from investing activities, Total £m (1.898) (3.202) (3.202) (3.202) (3.202) (3.202) (3.202) (3.202) (3.202) (3.202) (3.202) (5.674)

Net cash inflow/(outflow) before financing £m (0.502) (1.925) (1.925) (1.925) (1.925) (1.925) (1.925) (1.925) (1.925) (1.925) (1.925) (5.096)

Net cash inflow/(outflow) from financing activities, Total £m 2.789 2.965 2.402 2.965 2.965 0.310 1.621 2.965 2.402 1.965 1.965 (1.304)

Net increase/(decrease) in cash and cash equivalents £m 2.287 1.040 0.477 1.040 1.040 (1.615) (0.304) 1.040 0.477 0.040 0.040 (6.401)

Opening cash £m 17.198 19.484 20.524 21.002 22.042 23.082 21.467 21.163 22.203 22.680 22.720 22.760

Effect of exchange rates £m 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Closing cash £m 19.484 20.524 21.002 22.042 23.082 21.467 21.163 22.203 22.680 22.720 22.760 16.360

Financial Report – November 2013 Reported Monthly Cash Flow Statement for LANCASHIRECARE

Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual Actual

units













Surplus/(deficit) after tax £m 0.333 0.333 0.333 0.333 0.333 0.333 0.333 0.333 0.333 0.333 0.333 0.333

Non-cash flows in operating surplus/(deficit), Total 1.110 1.110 1.110 1.110 1.110 1.110 1.110 1.110 1.110 1.110 1.110 1.110

Operating Cash flows before movements in working capital 1.443 1.443 1.443 1.443 1.443 1.443 1.443 1.443 1.443 1.443 1.443 1.443

Increase/(Decrease) in workling capital, Total £m 0.163 (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.011) (0.694)

Net cash inflow/(outflow) from operating activities £m 1.605 1.431 1.431 1.431 1.431 1.431 1.431 1.431 1.431 1.431 1.431 0.749

Net cash inflow/(outflow() from investing activities, Total £m (0.735) (0.567) (0.567) (0.567) (0.567) (0.567) (0.567) (0.567) (0.567) (0.567) (0.567) 5.567

Net cash inflow/(outflow) before financing £m 0.870 0.864 0.864 0.864 0.864 0.864 0.864 0.864 0.864 0.864 0.864 6.315

Net cash inflow/(outflow) from financing activities, Total £m (1.331) (0.036) (0.036) (0.036) (0.036) (2.154) (2.843) (0.036) (0.036) (0.036) (0.036) (8.181)

Net increase/(decrease) in cash and cash equivalents £m (0.461) 0.829 0.829 0.829 0.829 (1.289) (1.979) 0.829 0.829 0.829 0.829 (1.866)

Opening cash £m 16.360 15.899 16.728 17.557 18.385 19.214 17.925 15.947 16.776 17.604 18.433 19.262

Effect of exchange rates £m 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Closing cash £m 15.899 16.728 17.557 18.385 19.214 17.925 15.947 16.776 17.604 18.433 19.262 17.397


APPENDIX V: Capital Capex

Actual Plan Variance Forecast Plan Variance£'000 £'000 £'000 £'000 £'000 £'000

CapexMajor

The Harbour 9.523 16.000 (6.477) 21.852 25.750 (3.898)Oaklands 1.040 1.233 (0.193) 2.440 2.700 (0.260)Moss View 0.493 1.400 (0.907) 1.571 1.700 (0.129)Other 0.000 0.000 0.000 0.000 0.000 0.000IT Schemes 0.879 0.600 0.279 1.700 1.700 0.000

11.935 19.233 (7.298) 27.563 31.850 (4.287)Minor

Minor Improvements 1.596 1.333 0.263 2.340 1.800 0.540Maintenance 0.573 0.350 0.223 0.600 0.600 0.000TCS Facilities 0.000 0.000 0.000 0.000 0.000 0.000IT 0.000 0.000 0.000 0.300 0.300 0.000Other 0.185 0.000 0.185 1.265 0.000 1.265Contingency 0.000 0.167 (0.167) 0.000 0.400 (0.400)

2.354 1.850 0.504 4.505 3.100 1.405

Capital programme 14.289 21.083 (6.794) 32.068 34.950 (2.882)Revenue Transfers 0.000 0.000 0.000 0.500 0.000 0.500TCS Property Transfer 7.300 6.850 0.450 7.300 6.850 0.450

Total Capital 21.589 27.933 (6.344) 39.868 41.800 (1.932)

Year To Date Annual

Director of Workforce, Innovation & Transformation

Chief Executive

Human Resources

Chief Operating Officer

Appendix VI Budgetary Performance

November 2013

Clinical Services

Finance and Business Operations

Medical Director

Nursing

Appendix VI Page 1

CORPORATE REPORT NOVEMBER 2013

CLINICAL SERVICES

FUNDED WTE BUDGET DETAIL BUDGET ACTUAL £ % ANNUAL PROJECTED £

EST. ACTUAL TO DATE TO DATE VARIANCE VARIANCE BUDGET ACTUAL VARIANCE

£'000 £'000 £'000 £'000 £'000 £'000

PAY

1,716.4 1,787.7 ADULT PAY 45,500.7 46,810.3 -1,309.6 -2.9 68,019.6 70,439.9 -2,420.4

NON PAY 2,378.7 2,384.6 -5.9 -0.2 3,546.2 3,506.6 39.6

PATIENT RELATED INCOME -325.3 -336.7 11.5 -3.5 -381.4 -392.3 10.9

NON PATIENT RELATED INCOME -1,035.4 -1,087.1 51.7 5.0 -1,539.7 -1,573.3 33.7

1,716.4 1,787.7 TOTAL 46,518.7 47,771.1 -1,252.4 -2.7 69,644.7 71,980.9 -2,336.2

1,917.4 1,879.1 ADULT COMMUNITY PAY 45,211.0 44,819.8 391.2 0.9 67,482.2 67,886.0 -403.8

NON PAY 8,699.2 8,504.7 194.4 2.2 13,350.1 13,099.4 250.6

PATIENT RELATED INCOME -6,029.0 -6,045.1 16.1 -0.3 -8,872.1 -8,823.6 -48.6


1,917.4 1,879.1 TOTAL 46,165.8 45,494.6 671.2 1.5 69,338.5 69,238.2 100.3

1,326.1 1,274.6 CHILDREN AND FAMILY PAY 32,180.9 31,452.8 728.1 2.3 48,636.2 48,166.5 469.7

NON PAY 3,992.7 4,027.0 -34.2 -0.9 6,155.9 6,413.1 -257.2

PATIENT RELATED INCOME -1,327.0 -1,500.1 173.1 -13.0 -2,127.8 -2,403.4 275.6


1,326.1 1,274.6 TOTAL 32,469.4 31,514.8 954.6 2.9 48,898.4 48,307.9 590.6

95.4 95.3 PSYCHOLOGICAL THERAPY PAY 2,238.8 2,133.9 104.9 4.7 3,355.1 3,219.8 135.3

NON PAY 57.6 48.7 8.9 15.5 86.4 73.1 13.4

NON PATIENT RELATED INCOME -1,742.9 -1,681.7 -61.3 3.5 -2,611.3 -2,522.5 -88.8

95.4 95.3 TOTAL 481.1 433.9 47.3 9.8 721.7 669.8 51.9

41.4 38.7 PHARMACY PAY 1,358.8 1,220.1 138.7 10.2 2,041.0 1,884.4 156.6

NON PAY 397.9 349.1 48.8 12.3 596.8 543.6 53.2

NON PATIENT RELATED INCOME 0.0 -3.5 3.5 No Budget 0.0 -5.2 5.2

41.4 38.7 TOTAL 1,756.7 1,565.7 191.0 10.9 2,637.8 2,422.8 215.0

750.1 802.1 SECURE SERVICES PAY 18,369.4 18,865.9 -496.5 -2.7 27,680.3 28,161.4 -481.1

NON PAY 2,190.1 2,393.9 -203.8 9.3 3,286.1 3,599.2 -313.1

PATIENT RELATED INCOME -280.9 -232.6 -48.3 -17.2 -379.7 -313.9 -65.8

NON PATIENT RELATED INCOME -152.0 -194.0 42.0 27.6 -228.1 -267.5 39.4

750.1 802.1 TOTAL 20,126.5 20,833.1 -706.6 -3.5 30,358.7 31,179.3 -820.6

4.0 4.0 CLINICAL MANAGEMENT PAY 325.4 328.8 -3.4 -1.0 488.1 493.2 -5.1

NON PAY 582.0 565.7 16.4 2.8 867.6 832.5 35.1

4.0 4.0 TOTAL 907.5 894.5 13.0 1.4 1,355.8 1,325.8 30.0

5,850.7 5,881.5 TOTAL 148,425.7 148,507.7 -82.0 -0.1 222,955.6 225,124.6 -2,169.0

Appendix VI Page 2


FINANCE & BUSINESS OPERATIONS



£'000 £'000 £'000 £'000 £'000 £'000

FINANCE

105.86 106.09 PAY 2,314.1 2,251.3 62.8 2.7 3,636.2 3,527.0 109.2

NON PAY 1,854.3 1,842.9 11.4 0.6 2,784.4 2,734.3 50.1

PATIENT RELATED INCOME 0.0 0.0 0.0 No Budget 0.0 0.0 0.0

NON PATIENT RELATED INCOME -751.0 -625.1 -125.9 -16.8 -1,348.3 -1,087.7 -260.6

TOTAL 3,417.4 3,469.1 -51.7 -1.5 5,072.3 5,173.6 -101.3

IM&T

152.37 168.74 PAY 3,883.2 3,962.4 -79.2 -2.0 5,824.7 5,943.6 -118.9

NON PAY 1,722.2 1,726.9 -4.7 -0.3 2,531.4 2,590.4 -59.0

PATIENT RELATED INCOME 0.0 0.0 0.0 No Budget 0.0 0.0 0.0

NON PATIENT RELATED INCOME -1,292.4 -1,376.3 83.9 -6.5 -1,886.6 -2,064.4 177.8

TOTAL 4,313.0 4,313.0 0.0 0.0 6,469.5 6,469.5 0.0

ESTATES & FACILITIES MANAGEMENT

53.33 39.81 PAY 1,374.8 1,101.9 272.9 19.8 2,062.2 1,650.5 411.7

NON PAY 14,412.7 14,781.6 -368.9 -2.6 21,397.7 21,954.4 -556.7

NON PATIENT RELATED INCOME -234.5 -333.2 98.7 42.1 -351.7 -499.8 148.1

TOTAL 15,553.0 15,550.3 2.7 0.0 23,108.2 23,105.1 3.1

311.6 314.6 TOTAL 23,283.4 23,332.4 -49.0 -0.2 34,650.0 34,748.2 -98.2

Appendix VI Page 3


MEDICAL DIRECTOR



£'000 £'000 £'000 £'000 £'000 £'000

PAY

16.69 17.03 MEDICAL 719.3 672.0 47.3 6.6 1,078.1 1,041.0 37.1

31.36 23.04 RESEARCH 808.5 730.3 78.2 9.7 1,182.4 1,095.5 86.9

5.51 5.43 CLINICAL AUDIT 132.5 141.5 -9.1 -6.8 198.7 212.3 -13.6

53.6 45.5 TOTAL 1,660.2 1,543.8 116.5 7.0 2,459.2 2,348.8 110.4

NON PAY

MEDICAL 78.1 73.8 4.4 5.6 117.2 110.7 6.5

RESEARCH 132.2 71.1 61.1 46.2 196.5 106.7 89.8

DRUGS 1,380.0 1,261.0 119.0 8.6 2,069.9 1,970.0 100.0

CLINICAL AUDIT 8.3 5.7 2.6 31.5 12.5 9.9 2.6

TOTAL 1,598.7 1,411.6 187.1 11.7 2,396.1 2,197.2 198.9

NON-PATIENT RELATED INCOME

MEDICAL -413.4 -409.0 -4.4 1.1 -620.0 -613.4 -6.6

RESEARCH -924.4 -798.1 -126.3 13.7 -1,380.5 -1,222.8 -157.7

TOTAL -1,337.8 -1,207.1 -130.7 9.8 -2,000.6 -1,836.3 -164.3

TOTAL 1,921.1 1,748.3 172.8 9.0 2,854.7 2,709.7 145.0

Appendix VI Page 4


DIRECTOR OF NURSING



£'000 £'000 £'000 £'000 £'000 £'000

PAY

11.99 8.56 DIRECTOR 609.8 534.2 75.7 12.4 914.7 863.3 51.5

26.06 21.11 CORPORATE RISK 759.6 715.7 43.9 5.8 1,139.4 1,093.5 45.9

19.27 15.01 CLINICAL GOVERNANCE 424.4 385.5 38.9 9.2 636.7 598.3 38.4

21.42 17.50 CUSTOMER CARE 501.4 500.5 0.9 0.2 752.1 750.8 1.3

78.7 62.2 TOTAL 2,295.2 2,135.9 159.4 6.9 3,442.9 3,305.8 137.1

NON PAY

DIRECTOR 83.2 144.4 -61.2 -73.6 124.8 216.6 -91.8

CORPORATE RISK 63.8 58.1 5.7 9.0 95.8 87.2 8.6

CLINICAL GOVERNANCE 92.6 58.6 34.0 36.7 138.9 107.9 30.9

CUSTOMER CARE 56.8 46.1 10.8 18.9 85.3 79.1 6.1

TOTAL 296.4 307.2 -10.8 -3.6 444.7 490.8 -46.2


DIRECTOR -13.9 -15.3 1.4 -10.0 -20.9 -23.0 2.1

CLINICAL GOVERNANCE 0.0 -1.1 1.1 No Budget 0.0 -1.7 1.7

COMPLAINTS 0.0 -2.0 2.0 No Budget 0.0 -3.0 3.0

TOTAL -13.9 -18.6 4.6 33.4 -20.9 -27.8 7.0

TOTAL 2,577.8 2,424.5 153.2 5.9 3,866.6 3,768.8 97.9

Appendix VI Page 5


HUMAN RESOURCES



£'000 £'000 £'000 £'000 £'000 £'000

PAY

118.23 142.39 HUMAN RESOURCES 2,253.6 2,576.5 -322.9 -14.3 3,363.3 3,613.9 -250.5

118.2 142.4 TOTAL 2,253.6 2,576.5 -322.9 -14.3 3,363.3 3,613.9 -250.5

NON PAY

HUMAN RESOURCES 1,079.9 1,082.5 -2.6 -0.2 1,601.3 1,603.7 -2.5

TOTAL 1,079.9 1,082.5 -2.6 -0.2 1,601.3 1,603.7 -2.5


HUMAN RESOURCES -517.4 -568.3 50.9 9.8 -740.4 -822.4 82.0

TOTAL -517.4 -568.3 50.9 9.8 -740.4 -822.4 82.0

TOTAL 2,816.1 3,090.7 -274.6 -9.8 4,224.2 4,395.2 -171.0

Appendix VI Page 6


EXECUTIVE



£'000 £'000 £'000 £'000 £'000 £'000

PAY

28.73 13.33 EXECUTIVE 669.2 420.7 248.5 37.1 1,700.8 1,481.0 219.8

1.00 1.00 NON EXECUTIVE 82.9 87.1 -4.2 -5.1 124.3 130.6 -6.3

5.80 6.15 COMPANY SECRETARY 181.4 156.3 25.1 13.9 270.2 234.4 35.8

35.5 20.5 TOTAL 933.5 664.0 269.5 28.9 2,095.4 1,846.1 249.3

NON PAY

EXECUTIVE 434.4 667.4 -233.0 -53.6 2,002.0 1,801.1 200.9

NON EXECUTIVE 7.7 30.4 -22.7 -296.4 11.5 45.6 -34.1

COMPANY SECRETARY 72.4 24.0 48.3 66.8 108.5 36.0 72.5

TOTAL 514.5 721.8 -207.3 -40.3 2,122.1 1,882.7 239.4


EXECUTIVE -6,708.1 -6,513.3 -194.8 -2.9 -12,109.0 -11,406.0 -703.1

TOTAL -6,708.1 -6,513.3 -194.8 -2.9 -12,109.0 -11,406.0 -703.1

TOTAL -5,260.2 -5,127.5 -132.7 2.5 -7,891.6 -7,677.2 -214.4

Appendix VI Page 7


CHIEF OPERATING OFFICER



£'000 £'000 £'000 £'000 £'000 £'000

PAY

14.12 13.00 CHIEF OPERATING OFFICER 589.0 508.6 80.4 13.6 839.3 762.9 76.3

14.1 13.0 TOTAL 589.0 508.6 80.4 13.6 839.3 762.9 76.3

NON PAY

CHIEF OPERATING OFFICER 108.7 179.6 -70.9 -65.3 162.0 292.8 -130.7

TOTAL 108.7 179.6 -70.9 -65.3 162.0 292.8 -130.7

TOTAL 697.7 687.9 9.7 1.4 1,001.3 1,055.3 -54.0


DIRECTOR OF WORKFORCE, INNOVATION & TRANSFORMATION



£'000 £'000 £'000 £'000 £'000 £'000

PAY

15.50 12.42 DIR INNOVATION & TRANFORMATION 580.7 483.1 97.6 16.8 863.5 724.7 138.8

15.5 12.4 TOTAL 580.7 483.1 97.6 16.8 863.5 724.7 138.8

NON PAY

DIR INNOVATION & TRANFORMATION 68.2 18.4 49.8 73.0 102.9 199.7 -96.8

TOTAL 68.2 18.4 49.8 73.0 102.9 199.7 -96.8

TOTAL 648.9 501.5 147.3 22.7 966.4 924.4 42.0


TRUST BOARD – 09 JANUARY 2014 AUDIT COMMITTEE MINUTES


Not Applicable

PAPER TITLE: Audit Committee Minutes

PURPOSE: To ensure the Trust Board remain informed about the activity of the Audit Committee and any issues arising from their discussions

ACTION RECOMMENDED:

Noting

PAPER PREPARED BY: Jo Alker, Executive Board Support Officer

1.0 EXECUTIVE SUMMARY

The confirmed minutes of the Audit Committee meeting held on 17 July 2013 are provided to keep the Trust Board informed about the activity of the Audit Committee and any issues arising from their discussions.

2.0 BOARD ACTION

Board members are asked to note the content of the minutes.

CONFIRMED

AUDIT COMMITTEE

Minutes of the meeting of the Audit Committee held on 17th July 2013, 10.00am

Boardroom, Sceptre Point

PRESENT: Teresa Whittaker, Non-Executive Director (Chair) Chris Heginbotham, Non-Executive Director Gwynne Furlong, Non-Executive Director

IN ATTENDANCE: Dave Tomlinson, Director of Finance Diane Halsey, Company Secretary

Shannon Carroll, Director of Financial Services Mark Singleton, Principal Finance Manager Rob Jones, KPMG David Jackson, Deloitte Rachel Healy, LCFS Angela Wetton, Head of Company Secretary Service (Minutes) Emma Foster, Acting Network Director Adult Community (Until item AC/78/13) Dr Amanda Thornton, Clinical Director Adult Community Dr Arokia Antonysamy, Clinical Director Adult Mental Health (Item AC/78/13 & AC/79/13 only) Dr Heather Iles-Smith, Research & Innovation Lead (Item AC/78/13 & AC/79/13 only)

AC/70/13 WELCOME AND INTRODUCTION

The Chair welcomed everyone to the meeting and introduced Gwynne Furlong who would be the Non-Executive Director taking the place of Derek Brown, who had been appointed Chair of the Trust and therefore was no longer eligible to sit on the Committee.

Emma Foster, Acting Network Director and Dr Amanda Thornton, Clinical Director for the Adult Community Network were also present and Dr Thornton stayed as an observer for the whole meeting.

AC/71/13 APOLOGIES FOR ABSENCE AND DECLARATIONS OF INTEREST

Apologies had been received from the Chief Executive; Medical Director; Jim Taylor (NED); James Meadowcroft (LCFS) and Tim Cutler (KPMG). The Director of Finance was deputising for the Chief Executive and Rachel Healy attended from LCFS. There were no Declarations of Interest.

AC/72/13 MINUTES OF THE MEETING HELD ON 30th APRIL; 22nd MAY & 29th MAY 2013

The minutes of the Audit Committee held on 30th April; 22nd May and 29th May 2013 were confirmed as a true and accurate record.

AC/73/13 ACTION TRACKING

The Committee reviewed the Action Tracker and closed off items as appropriate.

AC/74/13 BREACHES & WAIVERS REPORT Q1 2013/14 The Principal Finance Manager presented the Breaches and Waivers report to the Committee for the quarter ended June 2013.

The Committee noted that there had been no breaches and 22 waivers during the reporting period and that in common with the previous quarter a large number of the waivers (12) related to the need to secure private patient beds, often at short notice.

It was confirmed that work was being carried out via the Procurement department to put

agreements into place with private providers, at improved rates, so that that private patients beds would no longer be classed as a waiver.

AC/75/13 LOSSES & SPECIAL PAYMENTS REPORT Q1 2013/14

The Principal Finance Manager presented the Losses & Special Payment report to the Committee for the quarter ended June 2013 and confirmed that there had been one loss and four special payments during the period totalling £760.59. All the payments were within delegated limits. All payments had been made in accordance with Standing Financial Instructions. The loss of £100 cash belonging to a patient from Guild Lodge was discussed further and the Committee registered its concern about this matter. It was confirmed that work was being carried out with Guild Lodge around the security of patients’ personal effects. It was noted that Deloitte would be carrying out a review of the Trust’s cash management/handling processes.

AC/76/13 EMPLOYEE DEBTORS REPORT Q1 2013/14

The Director of Financial Services presented the report and despite the fact that the level of employee debt had reduced significantly over recent years, the Committee was disappointed to see a rise in the first quarter of this year. At March 2013 the total amount outstanding was £84,428 and this had risen at the end of June to £97,782. New cases totalling £20,203 were recorded in the last quarter and a more detailed analysis will be made available to the Chief Executive to determine what, if any further management action should be undertaken. Once again it was confirmed that recovery action continued on all the debts where it was deemed economically viable.

It was noted that Internal Audit would be addressing Employee Debt as part of their review of leavers in August.

AC/77/13 RISK OWNERS ASSURANCE PRESENTATION - ADULT COMMUNITY NETWORK The Network Director and the Clinical Director for the Adult Community Network gave a presentation to the Committee to inform them about the governance structures in place and supporting local management systems and to give an update on the work that had been done and was continuing to be done in the Network around embedding the Enterprise Assurance Management System and in particular the structures to support the identification and control of risks and the development of evidence based assurance systems.

The following points were highlighted:

• Adult Community Network is diverse and has 120 teams comprising a total of 2,000 staff and operates over 145 sites. Only 20 of these sites are under the direct control of the Trust. The services include amongst others dentistry; weight management; smoking cessation; district nurses and dementia.

• There are currently 5 clinical business units: Specialist Services; Community; Rehabilitation; Ambulatory & Treatment Rooms and Older Adult Inpatient & Intermediary Services.

• Each business unit has an Associate Clinical Director whose remit includes safety; risk; effectiveness and quality. This role is the lynchpin to the governance & reporting structure attending all the governance meetings and therefore identifying emerging risks and themes.

• The implementation of action tracking for meetings has greatly assisted in ensuring actions are closed off and fed both upwards and downwards in the structure. The Company Secretary offered to assist with implementing a decision tracking system which will give further assurance.

• There are some legacy cultural issues around lack of understanding of the importance of governance structures which are being addressed.

• Long Term Conditions and Dementia & Advanced Care are the network’s ‘big ticket’ transformation programmes.

• A ‘Hub’ has been created to triangulate and funnel information received e.g. complaints; concerns; serious incidents; coroner requests etc. This ensures that the network has a full picture of all the services and any issues arising or themes emerging.

Top Six Risks Identified for the Network:

1. Transformation programme delivery o Clinical and managerial engagement, capacity and capability to drive o Impact of partners’ priorities and whole system sustainability o Reputational risk

2. Maturity of Governance Structures and underpinning systems/processes o Significant shifts forward in Q1, but on-going work to embed and test

3. Business Intelligence and IM & T

o Multiple systems in place ECR platform required 4. Workforce and workforce development planning

o Significant % aged 50-69 5. Effectiveness of current service line structures 6. Finance

o Achieving Balance o Delivering CIPs

The Chair commented that the documentation circulated prior to the presentation appeared to be based on a corporate structure that has changed and consequently needed revision.

The Committee noted the content of the presentation and agreed that the Network should be invited back to Audit Committee at a future date to provide an update on further developments once the structure has matured. Emma Foster, Network Director Adult Community left the meeting at this point. Dr Heather Iles-Smith, Research & Innovation Lead and Dr Arokia Antonysamy, Clinical Network Director Adult Mental Health joined the meeting at this point.

AC/78/13 CLINICAL AUDIT REPORT Q1 2013/14 & DEVELOPMENT PLAN

The Research & Innovation Lead presented the report and confirmed that one audit had been completed during quarter 1 - Nutrition QS 24 – Home Enteral Feeding (HEF) Adult Community. The full report would be presented at the Quality Committee on 31 July 2013 and subsequently loaded on the Board Portal for viewing between meetings. The development plan for 2014/15 was also presented and the Committee noted the high level key points from the plan:

• Embedding clinical audit within the networks • Working closely with the networks to identify and prioritise audits • Standardising and improving the clinical audit process and reports • Focussing on key standards such as NICE QS • Focussing critical standards for each audit rather than possible standards • Re-engaging clinicians in audits • Better feedback to team who contribute to audits • The plan had been formulated by the Head of Clinical Audit and the Research &

Innovation Lead, with the involvement of senior network clinicians and clinical directors.

The significant objectives achieved in Q1 were noted:

• An audit programme has been developed for each network • The clinical audit development plan has been completed and signed off • Network clinical audits to measure 5 relevant standards now implemented • SharePoint clinical audit site has been updated and is now live

The Committee reminded the Clinical Audit team that previously, sustainability of changes following audits was a weak area. The team explained how the redesign of fit-for-purpose audits and the introduction of action tracking owned at network level would ensure sustainability.

AC/79/13 CLINICAL AUDIT CARE PLAN UPDATE PRESENTATION The Clinical Director of the Adult Mental Health Network and the Research & Innovation Lead reminded the Committee of the findings from the Clinical Audit earlier in the year:

• Overall compliance was 62%

• Strengths o the care plan was reviewed at key stages o incorporated the needs of the service user o specified the therapeutic style

• Weaknesses o collaboration with the service user was not always evident o lack of family involvement o regularly more than one care plan o responsibilities sometimes unclear o abbreviations were not explained

The Committee requested a further breakdown of the findings and it was explained how there was a lack of clarity and consistency around what should actually be included in a care plan. The Committee noted that a network wide event was held in June 2013 to kick-start improvements in care planning. They studied and discussed the action plan to address the above findings and it was confirmed that from July data would be collected from across all teams and any actions would be monitored and followed up by the Network Governance Committees and Quality Committee.

Dr Heather Iles-Smith, Research & Innovation Lead and Dr Arokia Antonysamy, Clinical Network Director Adult Mental Health left the meeting at this point.

AC/80/13 INTERNAL AUDIT PROGRESS REPORT Deloitte tabled an updated report which superseded the one previously circulated. The Committee noted that the Internal Audit plan was progressing as expected in line with indicative timings and that the review of Cash Handling, originally proposed for January 2014 would now be undertaken in July/August 2013 in order to ensure an even distribution of reporting throughout the year.

Fieldwork in respect of Cash Handling, Patients’ Property and Raising Concerns was ongoing and reviews of HR - Leavers and the series of Network Reviews would commence shortly. The management responses to the recently completed Suspensions audit were being reviewed and the Chief Executive had agreed to followup outside of the meeting with Chair and Internal Audit. As several audits would be completed before the next Committee meeting it was agreed that the reports would be circulated during the intervening period and uploaded onto the Board Portal. Following discussion, it was agreed to defer the review of the IT Helpdesk until 2014/15 due to a change in the risk profile and Internal Audit confirmed that there would be no exposure to the Trust in doing so. The Committee discussed future audits and it was highlighted that the scope of the Bedboard Audit needed to be very clear. Internal Audit confirmed that there were no issues to bring to the Committee’s attention.

AC/81/13 THE HARBOUR PROJECT ASSURANCE UPDATE Deloitte confirmed that they had carried out their initial review and the purpose was to provide assurance on the Trust’s project governance and management arrangements, as well as a regular assessment of progress against project plan milestones and the ongoing management of costs, risks and issues. A brief verbal update was given as a report will be issued in August and regular updates will be provided at each Committee meeting. It was recognised that a robust transition plan for transferring from current facilities to The Harbour would be needed and it was agreed to raise this with Board.

AC/82/13 EXTERNAL AUDIT TECHNICAL UPDATE KPMG invited questions from the Committee on the previously circulated report. Although there were no specific questions on the report, it was agreed that the importance of the Francis Report and the implications of the Care Bill, be raised with the Board.

AC/83/13 COUNTER FRAUD PROGRESS REPORT The Counter Fraud Specialist presented the Counter Fraud report and highlighted the on-going cases, their status and the progress made.

LCFS continued to deliver presentations to staff groups and issue newsletters in order to maintain staff awareness of fraud. The Committee noted that out of the 17 recommendations made by LCFS to the Trust

during 2012/13, 14 were fully implemented; 1 was partially implemented and 2 weren’t implemented. LCFS confirmed that they had no major concerns over the 2 recommendations not implemented.

AC/84/13 REPORTS TO BOARD & COG

The Committee confirmed that no serious control issues had been identified during the meeting. However, there were some areas to raise with the Board for further discussion:

• Out of area beds • Personalised budgets • Transition to the Harbour • Implication of the Care Bill • Impact of the status of surrounding Trusts

AC/85/13 ANY OTHER BUSINESS

There was no other business discussed.

AC/86/13 DATE & TIME OF NEXT MEETING 10am-1pm, 16th October 2013, Boardroom at Sceptre Point

a g e n d a board/trust board documents... · tb 007/14 tb 008/14 tb 009/14 formal business of the...

Documents