1

Trust Board

Finance Report to 30th

April 2015

Contents Page

1. Financial Performance Overview 2

2. Financial Summary – Income and Expenditure 4

3. CIP Monitoring 5

4. Balance Sheet 6

5. Monthly Actual and Rolling 12 month Cash Flow Forecast 7 6. Capital Expenditure 9

7. Continuity of Service Risk Rating (COSRR) 10

8. Risk Assessment 11

9. Summary Performance by Service Line 12

10. Working Capital 13

Appendices

A Detailed Income and Expenditure Report 16

B Detailed CIP Monitoring Report 17

C Analysis of Staffing Expenditure 18

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1. Financial Performance Overview as at 30th April 2015

At the end of month 1 the Trust’s financial performance is as follows:

An actual deficit of £1,002k compared to a budgeted deficit of £958k;

Holds cash of £3,471k, £501k above the planned level;

Has a favourable variance of £18k against the CIP target;

Has achieved a rating of 2 against Monitor’s COSRR risk rating.

15/16 YTD

Month 1

£000's

Budget - surplus/(deficit) (958)

Actual performance - surplus/(deficit) (1,002)

Variance to Budget - Favourable/(Adverse) (44)

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Financial Performance Overview as at 30th April 2015 cont.

4

2. Financial Summary Year to Date Month 1 2015/16 - Income and Expenditure

The table below shows the values for the budget and the actual performance against the plan submitted to the TDA in

April 2015. The Trust will be submitting a final version of the plan and budgets will be adjusted in line with this. As at

13th May 2015 the Trust is forecasting a deficit of £11m.

Annual Mth 1 Mth 1 Mth 1 Forecast

Budget Budget Actual Variance Outturn

£000's £000's £000's £000's £000's

185,137 income 15,474 15,416 (58) 185,137

(144,073) Pay (12,046) (12,093) (47) (144,073)

(42,512) Non Pay (3,396) (3,314) 83 (42,512)

1,448- EBITDA 32 9 (23) 1,448-

-0.78% EBITDA % 0.21% 0.06% 38.97% -0.78%

0 Profit/(loss) on asset disposal 0 0 0 0

0 fixed asset impairment 0 0 0 0

(5,730) Depreciation (478) (494) (16) (5,730)

(5,771) PDC Dividend (481) (488) (7) (5,771)

(383) Interest payable (32) (32) 0 (383)

7 Interest receivable 1 2 2 7

(13,325) Surplus / Deficit (958) (1,002) (44) (13,325)

-7.20% -6.19% -6.50% 75.52% -7.20%

0 Fixed Asset Impairments 0 0 0 0

(13,325) Surplus / Deficit including impairments (958) (1,002) (44) (13,325)

Summary: The Trust's financial performance at the end of month 1 is a deficit of £1,002k against a budgeted deficit of £958k, an adverse variance of £44k. Income: Total income is behind plan by £58k. The main variations for income are:

The Trust assumed only partial achievement of CQUIN targets for month 1 whilst awaiting full activity information, leading to a reduction of £40k against the block income target for NHS England;

The NHS England contract for Mental Health services included a reduction compared to plan of £500k, with potential to over-perform in order to achieve this. However, this over-performance has not been achieved in month 1, leading to a reduction in income of £42k;

Barnet CAMHS is under-performing against the CAPA model target within the LBB contract, leading to a reduction in income of £42k in month.

A £34k under-performance on the respiratory service in Enfield. However, additional income was received due to the unplanned extension of Winter Pressures services into April, which amounted to £158k in month. Pay: The monthly pay bill was £47k over spent to budget in month. Pay expenditure overall was in line with March. The month 1 pay bill included unbudgeted costs for Winter Pressures schemes, which are offset by income. Non Pay: There is an under spend of £83k YTD on Non Pay. Of this £36k related to Drugs, however this is based on historic data and we are awaiting the actual data from the Royal Free. Other Expenditure: There is a small variance of £21k, mainly against depreciation and PDC dividend, due to the year-end revaluation of the assets. Conclusion: The Trust has a deficit of £1,002k against a budgeted deficit of £958k as at the end of month 1. Appendix A shows a detailed Income and Expenditure report for the Trust as at 30

th April 2015.

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3. CIP Monitoring

The Table below shows the performance against the savings target at month 1.

Month

Plan

Month

Achieved Variance

Full Year

Plan

Forecast

Outturn Variance

Full Year

Effect

£'000 £'000 £'000 £'000 £'000 £'000 £'000

Barnet 0 17 17 430 430 0 480

Enfield 97 110 13 1,332 1,332 0 1,332

Haringey 0 32 32 382 382 0 382

Specialist Services 0 0 0 0 0 0 0

Corporate 17 17 0 200 200 0 200

Estates 109 65 (44) 1,334 1,293 (41) 1,293

Trust wide 91 91 0 1,600 1,100 (500) 1,100

Total 314 332 18 5,278 4,737 (541) 4,787 The in-month performance is £18k ahead of plan, mainly due to the savings from the Psychosis Re-Organisation that were programmed to start in June. However as posts were being held vacant in anticipation of this scheme, the overall savings for the year are not affected. Individual Services Line performance is as follows: Barnet Barnet are showing as being ahead of target due to the early removal of savings relating to the Psychosis Re-Organisation. Their other significant scheme is the Day Hospital, for which consultation was paused during Purdah, but will now go ahead. It is anticipated that this will deliver the full savings for 2015/16. Enfield As for Barnet, Enfield is ahead of plan due to the Psychosis Re-Organisation. However, there is a risk to the continued achievement of the Somerset Villa CIP scheme. The ward re-opened on 8

th May 2015. This ward is only opened when

private placements exceed 6 patients, as it is then more economical. The Discharge Intervention Team is working on discharging the patients as quickly and safely as possible. The remaining scheme relates to increased funding for Enfield IAPT, which has been included in the contracts for 2015/16. Haringey The Psychosis Re-Organisation is also showing ahead of schedule for Haringey, however, Haringey delivered the largest proportion of savings of the three boroughs, and there is a risk that full implementation through the reduction in caseload will be slower than the other boroughs. The forecast above has not been adjusted, but this risk is shown in the Risk Assessment table in section 8. Specialist Services Specialist Services are in the process of identifying schemes for 2015/16 that will mitigate the under-achievement on Trust-wide schemes. Estates The only area that is behind plan is Estates. This is due to on-going negotiations relating to the reduction of costs associated with the vacation of the Northgate and Evergreen buildings. However, Estates have identified mitigating schemes and are likely to minimise any under-achievement of the overall annual target. Trust-wide The forecast under-achievement relates to savings associated with the Enablement Programme. Discussions are on-going with the CCGs regarding the status of additional funding to support the programme, and therefore the possible savings have been reduced as the Trust will not have the appropriate infrastructure to deliver them. Further schemes are being scoped but are not sufficiently developed to quantify savings.

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4. Balance Sheet

Non-Current Assets: The variance against plan arises from two key factors:

The plan quoted is that submitted before the results of the 31 March 2015 revaluation exercise were finalised. The increase in value arising from this revaluation created a variance between the plan and actual opening valuations, with a consequent variance in the position as at 30 April 2015. A revised plan is to be submitted to the TDA in May which will be updated in line with most recent valuation,

The capital programme is overspent against plan at the end of month 1 by £19k.This overspend is due to phasing and the budgets will be reprofiled.

Current Assets: The favourable £1.7m variance for receivables arises from lower than forecast sales ledger debtors. The key factor in this was the earlier than forecast receipt of £2.0m outstanding amounts from 2014/15, comprising:

o LBB CAMHS Tier 2&3 April 2014 to May 2014 £0.2m o Care UK Brixton & Feltham & Pentonville contract for Quarter 4 2014/2015 £0.9m o LBE Schools Forum, Speech and Language 2014/15 £0.3m o Various other invoices £0.6m

Cash: The YTD favourable variance £0.5m in cash is due mainly due to the variances in receivables and payables. Total Current Liabilities: The favourable variance of £0.8m in total current liabilities is due to more invoices being paid in April than planned. Retained Earnings and Revaluation Reserve: The main driver of the variance is the outcome of the revaluation exercise. As stated above the Trust is due to submit a final version of its 2015/16 plan to the TDA, and these items will be updated in the final iteration. The Revaluation reserve has a favourable variance. This is driven by a rise in the value of land. Due to a reduction in the value of buildings, the Trust has had to impair some assets, and as the itemised value for these assets in the revaluation reserve was not sufficient to cover the impairment; there was a charge to retained earnings. Therefore there is an adverse variance against this.

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5. Monthly Actual and Rolling 12 month Cash Flow Forecast at 30 April 2015

8

Monthly Actual and Rolling 12 Month Cash Flow Forecast (cont.)

The cash flow forecast is based on the plan submitted to the TDA on 7 April 2015 and will be revised in month 2 after

an updated plan has been submitted to the TDA.

The cash position at 30 April 2015 was £3,471k, £501k ahead of plan, mainly due to the variances in receivables and

payables, especially the receipt of old debtors earlier than forecast.

The cash flow forecast includes the receipt of £2,000k interim support from the TDA in August 2015 and a further

£6,000k in September with this not being repaid until 2016/17. At this stage this support has not been agreed with the

TDA, and the Trust is in discussion with them as to how to access interim support. If the pattern of debt recovery is

different in 2015/16 to that of 2014/15 this will change the timing, and potentially the amount of support required. This

will be monitored closely in year and reported to the Finance and Investment Committee.

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6. Capital Expenditure

The capital programme approved by the Board in March 2015 was for a total of £5,730k although individual projects

identified in the paper totalled £6,545k, leaving unidentified reductions of £815k required. This requirement to reduce

the projects in the programme was discussed at the Capital Review Group on 12 May, with actions identified for

update at the next meeting in July after the IM&T Infrastructure Transformation project requirements are confirmed in

June.

At the end of April capital expenditure is £19k above plan for the month. This overspend is due to phasing of the

budgets .

Cumulative capital spend and forecast v plan

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7. Continuity of service risk rating (COSRR)

The Continuity of Services Risk Rating (COSRR) describes the risk of a provider of Commissioner Requested Services (CRS) failing to carry on as a going concern. The two measures are as follows:

Liquidity Ratio: - The number of days of operating costs held in cash or cash equivalent form; and

Capital Servicing Capacity: - measures the ability of the provider to service debt. Due to the Trust currently running at a deficit net current assets are negative at 30 April. As the deficit position of the Trust worsens during 2015/16 this ratio is forecast to deteriorate. The Trust is allocated a risk rating of 2 for both the year to date but only 1 as a forecast outturn. If the Trust was a Foundation Trust and had a risk rating of 2 this would mean that Monitor may require the Trust to provide further monthly information where it feels that the financial position has deteriorated. This is intended to allow Monitor to identify and respond quickly to any sudden deterioration in the financial performance of the Trust. A risk rating of 1 is viewed as a more serious position where Monitor would be more involved in the operations of the Trust.

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8. Risk Assessment

Risk Assessment April 2015

Upside Opportunities

Value

£'000

0 Base Case -13,325

1 Contracting Decisions Adjustments 2,325

Best Case -11,000

Likely Case

0 Base Case -13,325

1 Contracting Decisions Adjustments 2,325

2 Use of Private Beds/Opening of Somerset Vil la -500

Likely Case -11,500

Downside Risks

0 Base Case -11,500

1 CIP Slippage -1,000

2 Use of temporary staffing to cover vacancies/provide one to one care -1,000

3 Use of Private Beds/Opening of Somerset Vil la -400

4 CQUIN under-performance -500

5 Barnet CAMHS CAPA Model -500

6 NHSE Secure Services contract over-performance not achieved -500

7 Respiratory Cost and Volume Contract -300

8 LBB Barnet CAMHS funding -200

9 Continence Products - Unfunded Over Spend -100

Worst Case -16,000

Outturn Opportunities & Risks

-16,000

-14,000

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

Worst Case Likely Case Best Case

Risk Assessment - Full Year Forecast 2015/16

The base case shown above is as per the plan submitted to the TDA in April 2015. Based on the current offers an assumption of a deficit of £11m has been included above as the likely position. The likely position also includes some use of private beds and the opening of Somerset Villa as inevitable during the year to cope with peaks in demand.

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9. Summary Performance by Service Line – Month 1 April 2015

Summary Performance by Service Line - Month 1 2015/16

Service Line / Directorate Risk Rating YTD Actual YTD Variance Commentary

Barnet

EBITDA Performance Green (1,632) 41

Barnet are marginally ahead of target due to under spends on pay due to vacancies in the

community teams.

CIP Performance Green 17 17

CIP achievement is ahead of target due to the impact of the Psychosis Re-Organisation that

was programmed to start in June.

Enfield

EBITDA Performance Amber (1,957) (72)

Enfield are showing an adverse vairance to plan due to a prudent assumption around CQUIN

income, a shortfall in respiratory income and a continued over spend on continence

products.

CIP Performance Green 110 13

CIP achievement is ahead of target due to the impact of the Psychosis Re-Organisation that

was programmed to start in June.

Haringey

EBITDA Performance Red (1,691) (123)

Haringey are showing an adverse variance to plan mainly due to high expenditure on

temproary staffing, particularly to cover junior medical vacancies and for 1-1 care on the

wards. The CAMHS service is also over-staffed due to activity pressures.

CIP Performance Green 32 32

CIP achievement is ahead of target due to the impact of the Psychosis Re-Organisation that

was programmed to start in June.

Specialist Services

EBITDA Performance Amber 685 (82)

The main reason for the adverse variance to plan is a shortfall in income relating to the NHSE

contract, arising from the recent contract negotiations.

CIP Performance Green - - Schemes are being scoped.

Estates & Facilities Directorate

EBITDA Performance Green (953) 229

Estates are ahead of plan due to higher than anticipated SLA income as premises have not

been vacated, and staffing vacancies.

CIP Performance Amber 65 (44)

CIP is slightly behind plan due to ongoing negotiations around Northgate and Evergreen,

which has been partially mitigated by the implementation of new schemes.

Corporate

EBITDA Performance Amber 5,557 (14)

Corporate is showing a small adverse variance to plan due to over-spends within pay

budgets.

CIP Performance (Corporate) Green 17 - CIP achievement is on target.

CIP Performance (Trustwide) Green 91 - CIP achievement is on target.

Total EBITDA 9 (23) Overall the Trust is showing an adverse position against planned YTD EBITDA of £23k.

Total CIP Performance 332 18 Overall the Trust is ahead of target to date by £18k.

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10. Working Capital

Debtors

Not Due 30 Days 60 Days 90 Days 120 Days 180 Days Over 180

days Total

Amounts 3,722,833 2,281,292 444,113 797,050 1,461,836 1,379,884 1,847,300 11,934,308

Percentage 31% 19% 4% 7% 12% 12% 15% 100%

At 30th April 2015 the Trust had invoices totalling £11.9m on the sales ledger, of which £5.9m was more than 60 days

overdue. As at 31st March 2015 there were invoices totalling £14.5m on the sales ledger, of which £6.9m was 60 days

past the due date. Therefore total overall debt decreased by £2.6m in month.

The total overall £2.6m decrease in the overall debt figure was mainly due to the write off of irrecoverable debts

totalling £0.6m and £2.0m of 2014/15 invoices paid in April 2015 comprising:

o LBB CAMHS Tier 2&3 April 2014 to May 2014 £0.2m o Care UK Brixton & Feltham & Pentonville contract for Quarter 4 2014/2015 £0.9m o LBE Schools Forum, Speech and Language 2014/15 £0.3m o Various other invoices £0.6m

The outstanding debt has been reviewed by management and is considered fully recoverable, the main issues

preventing recovery are:

LBB CAMHS Tier 2&3 June 2014 to March 2015, £0.8m, part payment received April 2015 remaining balance being pursued.

Issues surrounding services provided to LBH Recurrent Contribution to Crises Teams 2009/12 with a total value of £0.6m. Efforts are on-going to try and resolve this long overdue debt.

Due to practical problems in the timing of the provision of GUM backing data by NELCSU to LBE, GUM payments are made 3 months in arrears, subject to satisfactory data validation.

LBE Schools Forum, Speech and Language April 2014 to March 2015, £0.4m, part payment was received April 2015 with the balance being promised in May 2015.

Royal Free Hospital (£0.7m) for the remaining psychiatric paediatrics 2014/15, adult liaison services 2014/15 and chiropody services child health support September 2013 to March 2015 is being pursued.

The NHS Haringey CCG Learning Disabilities Partnership Fund (Psychiatry) April 2014 to March 2015 amounting to £0.7m has not been paid and discussions are on-going in an effort to get the dispute resolved.

The NHS Haringey CCG Complex Care Panel Risk Share baseline reimbursement 2013/14 and 2014/15 contract £0.3m is being resolved via a contract variation process.

The NHS Enfield CCG Complex Care Panel Risk Share baseline reimbursement 2013/14 and 2014/15 contract £0.5m is being resolved via a contract variation process.

The NHS Haringey CCG Continuing Care for an individual patient £0.2m is under contract negotiation.

The balance relates to NCA (Non Contract Activity), £0.8m, and other smaller invoices, £0.4m, that are being pursued.

The charts below show the overdue debt by age and by category. As can be seen, most of the debt is over 90 days

and the majority of debt is NHS (including Royal Free and CCG’s) and Non NHS (mainly Local Boroughs).

Debtors Information

28%

5%67%

Overdue Debt by Age - APRIL 2015

30 Days 60 Days 90+ Days

60%

37%

3%

Overdue Debt by Category - APRIL 2015

NHS Non NHS Staff

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Further detail on aged debt can be seen below; the chart shows all sales ledger debts over 30 days and over £250k

by customer.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

LondonBorough Of

Barnet

LondonBorough Of

Enfield

LondonBorough Of

Haringey

NHS EnfieldCCG

NHSEngland

NHSHaringey

CCG

Royal FreeFoundation

Trust

WhittingtonNHS Trust

OVERDUE DEBT WITH LOCAL BOROUGHS AND ANY OTHER DEBT < £250k AT 30 APRIL 2015

> 180 Days

180 Days

120 Days

90 Days

60 Days

30 Days

The overdue debt is mainly due to on-going disputes and the failure of local authorities to provide purchase order

numbers on old contracts. The other significant debt is with NHS Enfield, NHS Haringey and Royal Free. Efforts are

on-going to try and resolve these long overdue debts.

Creditors and PSPP

These amounts consist of invoices approved for payment but not paid at the month end. The significant balances in

the overdue debt category relates to amounts on hold whilst other disputes are resolved.

The April 2015 PSPP performance remained favourable within all categories exceeding the 95.0% target. At 30th April

2015, by value for NHS suppliers, 100.0% of undisputed invoices were paid within 30 days and the figure for non NHS

was 98.6%. By volume, these figures were 100.0% and 99.7% respectively, which are all above the 95.0% target.

It is anticipated that performance will remain favourable but may be affected by the Trust's cash position in the

summer.

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Cash

Cash is ahead of plan mainly due to aged debts being paid earlier than had been forecast.

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Appendix A

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Appendix B

.

R/NR

Month

Plan

Month

Achieved Variance Plan YTD

Achieved

YTD Variance

Planned

Savings

(Year)

Forecast

Outturn Variance

RAG

(FOT)

£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

Barnet

Psychosis Re-Organisation R 0 17 17 0 17 17 208 208 - G

Day Hospital R 0 0 - 0 0 - 150 150 - G

Recovery Houses R 0 0 - 0 0 - 72 72 - G

Sub Total 0 17 17 0 17 17 430 430 0

Enfield

Psychosis Re-Organisation R 0 13 13 0 13 13 160 160 - G

Somerset Vil la R 91 91 - 91 91 - 1,100 1,100 - A

Enfield IAPT R 6 6 - 6 6 - 72 72 - G

Sub Total 97 110 13 97 110 13 1,332 1,332 0

Haringey

Psychosis Re-Organisation R 0 32 32 0 32 32 382 382 - R

Sub Total 0 32 32 0 32 32 382 382 -

Specialist Services

TBC R - - - G

Sub Total 0 0 - 0 0 - 0 0 -

Corporate

Foundation Trust Application R 17 17 - 17 17 - 200 200 - G

Sub Total 17 17 - 17 17 - 200 200 -

Estates & Facilities

Northgate R 33 0 (33) 33 0 (33) 400 300 (100) G

Forest/Evergeen R 26 0 (26) 26 0 (26) 315 96 (219) G

Postage R 2 3 1 2 3 1 33 33 - G

Soft FM tender R 38 28 (10) 38 28 (10) 466 339 (127) R

Chase Farm maintenance R 5 4 (1) 5 4 (1) 60 50 (10) G

Car Parking R 5 0 (5) 5 0 (5) 60 21 (39) A

St Ann's site reductions R 0 0 - 0 0 - 0 105 105

Cleaning R 0 15 15 0 15 15 0 178 178

Catering - St Ann's R 0 11 11 0 11 11 0 129 129

Portering R 0 4 4 0 4 4 0 42 42

Sub Total Estates 109 65 (44) 109 65 (44) 1,334 1,293 (41)

Other Items/ Trust wide

Service Line Review R 91 91 - 91 91 - 1,100 1,100 - G

Enablement R 0 0 - 0 0 - 500 0 (500) R

Sub Total Unassigned 91 91 - 91 91 - 1,600 1,100 (500)

Gross Total before Contingency 314 332 18 314 332 18 5,279 4,737 -541

BARNET, ENFIELD AND HARINGEY MENTAL HEALTH TRUST

CIP MONITORING 2015/16

Position as at Month 1

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Appendix C

Analysis of Staffing Expenditure Staffing expenditure is over budget by £47k in month. March data has been shown below as a comparison. Bank and agency costs were marginally lower than for March by £65k.

*Values in brackets denote an adverse variance The variances can be explained as follows: Junior Medical There is high usage of agency junior doctors to cover vacancies in trainee posts, and also general vacancies particularly in Specialist Services and in Haringey. Some of this variance also relates to a temporary doctor in Magnolia Unit funded by Winter Pressures. Nursing, Midwifery and Health Services Again, additional nursing staff has been engaged in order to fulfil Winter Pressures funding requirements that was extended into April 2015 and offset by additional funding of £158k. . Other Clinical The main over spends are in Enfield (£71k), Specialist Services (£67k) and Haringey (£29k). All relate to additional

staffing for the wards, where temporary HCAs are generally brought in to backfill staff on one to one observations

duties. However, Specialist Services have also been backfilling nursing vacancies with lower banded staff where safe

to do so