Item 11 for 1 Aug 14 Finance Plan 14 15

Board Meeting 01 08 14 Open Session NHS GRAMPIAN Item 11

Financial Plan – 2014/15 (update)

1. Actions recommended

The Board is asked to note the:

 Position agreed with Scottish Government Health and Social Care Directorates in relation to the Board’s share of resource under the National Resource Allocation Committee (NRAC) formula.

 Update in respect of progression of commitments prioritised within the Local Delivery Plan in relation to additional investment in clinical staffing.

2. Strategic context

The Board has responsibility for delivering health and healthcare services to the population of Grampian and a statutory requirement to operate within the resources allocated for this purpose.

Core funding is allocated to the Board on the basis of the National Resource Allocation Committee (NRAC) formula. When the NRAC formula was introduced in 2009/10 it was recognised that full implementation of the changes in Board funding shares would take a period of time to avoid financial turbulence in NHS Boards. All NHS Boards are given the standard core percentage increase in funds each year. The size of the annual standard increase is meant to be sufficient to meet the main NHS inflationary pressures, including pay and price inflation and the cost of the drugs bill, together with funds for developments. Those Boards which are below their NRAC parity target (ie the level of funds required to meet the agreed NRAC share) are given extra uplift to move them towards their NRAC parity targets. NHS Grampian is one of the Boards which are below their NRAC parity target.

The challenges for NHS Grampian are twofold: (1) delivering services to the required quality and level of performance whilst being funded at a level below parity and (2) meeting its statutory responsibility to operate within allocated resource levels.

Despite being significantly below parity funding, NHS Grampian consistently:

 delivers a high level of performance in terms of outcomes against the national priorities and targets,  places patient safety and quality at the centre of its decision making, and  delivers financial balance without the need for brokerage.

In achieving this position, the Board has continually had to prioritise resources and make decisions based on balancing quality, safety and affordability.

1 3. Key matters relevant to recommendation

NRAC position

 At the start of financial year 2014/15, NHS Grampian’s core allocation was £34.7m less than the Board’s NRAC share of national resource. Compared to our peer group, we are the Board furthest away from achieving parity of funding under the NRAC formula.

Health Board Distance from NRAC parity above/(below) Greater Glasgow £47.9m Lanarkshire (£14.7m) Grampian (£34.7m) Lothian At parity Tayside £5.6m

 As presented to the Board previously, our Local Delivery Plan confirms the NRAC parity uplift agreed with Scottish Government which will increase our allocation by £43m over the next three years and bring NHS Grampian to within 1% of parity (assuming a constant population) by 2016/17. If we had been funded at the NRAC share our funding over the period 2014/15 – 2016/17 would have been approximately £48m greater. The projected baseline increase and agreed NRAC parity adjustments in each of the next 3 years are as follows:

2014/15 2015/16 2016/17 Projected baseline increase £20.0m £14.0m £14.6m NRAC parity adjustment £15.5m £13.5m £14.0m Total £35.5m £27.5m £28.6m

 Whilst we welcome the positive commitment towards parity we would highlight that, even at parity, our funding share relative to the other large territorial boards (excluding Lothian) is impacted by the relative weighting allocated to account for the health and wellbeing of the Grampian population relative to other Board areas. As shown below the MLC (Morbidity Life Circumstances) index is the proxy for health and wellbeing – in terms of Scotland NHS Grampian has the lowest MLC index.

Health Board Population Adjusted Age / sex MLC share share index1 index2 Greater Glasgow 22.91% 24.17% 0.975 1.102 Lanarkshire 10.77% 10.94% 0.976 1.053 Grampian 10.79% 9.77% 0.981 0.920 Lothian 15.88% 14.36% 0.960 0.955 Tayside 7.74% 7.73% 1.044 0.958

1 Index takes account of the differing need for healthcare across different age groups for males and females separately. 2 Index takes into account factors that predict the need for healthcare in addition to the needs due to age and sex, for example due to higher underlying morbidity. 2 Prioritisation of resources

Background

The targeted investments (set out below) approved in the Local Delivery Plan for 2014/15 are in line with national health priorities and/or local priorities reflected in the Grampian Healthfit 2020 vision. The commitments relating to national health priority decisions account for £10.3m of the £14.2m of targeted investments.

Acute3 Primary Care / Mental health £m £m Waiting times 8.5 Insulin pumps 0.4 Cancer oncology4 0.9 CAHMS regional service 0.7 Research & Development 1.4 HMP Grampian 0.7 HAI compliance 0.5 New primary care facilities 0.4 AAA screening 0.2 Immunisation programme 0.5 11.5 2.7

In addition to the above there are a number of service pressures which are under review and action is being progressed as an integral element of our Improvement Programme. These service pressures require to be prioritised against the funding that is available to the Board. The Board, as part of the Local Delivery Plan process, negotiated a further increase in NRAC parity funding of £5m in 2014/15 to be targeted at clinical priorities. The £5m additional funding is included within the NRAC parity funding of £15.5m noted above.

Investing in additional clinical staffing

Investment in additional clinical staffing is a priority for the Board and a number of planned investments have been approved to support service developments and/or address known pressures arising as a result of increased activity. The key investments approved by the Board in relation to clinical staffing are noted below:

Source of investment FTE £000 New theatre investment LDP Prioritised investment 74.5 3,3485 Cancer action plan LDP Prioritised investment 19.2 9806 ITU nursing Additional NRAC funding 21.0 700 Endoscopy Additional NRAC funding 12.3 484 OMFS – Head and Neck consultant Additional NRAC funding 1.0 190 Trauma Theatre nursing Additional NRAC funding 3.0 103 Total 131.0 5,805

3 During 2013/14 and 2014/15 the Acute sector have been allocated an additional £22.4m in recurring and non-recurring resource 4 An additional investment of £0.25m was approved in 2013/14 5 This is in addition to the commitment of £1.7m made for the recruitment of 39.3 FTE nursing staff in 2013/14 6 This is in addition to the commitment of £0.25m made for the recruitment of c4 FTE staff in 2013/14 3 In addition to the above, the Board also committed an additional £2m for investment in new nurse posts. The prioritisation of this funding is being overseen by the Nursing Resources Utilisation Implementation Group (NRUIG) chaired by a non- executive member of the Board. Further details are noted below, with a copy of the interim report from the NRUIG being provided as a separate Board report.

Further investment in staffing was also facilitated using earmarked funding, the principle sources being Change Fund, Unscheduled Care funding (including staffing within the Emergency Department) and Detecting Cancer Early.

The key points we would highlight in relation to the above investments are noted below:

New theatre investment

The Board approved the additional investment in staffing to support the four new theatres for Woodend Hospital and Aberdeen Royal Infirmary. The increase in local capacity was necessary to enable the Board to comply with the Treatment Time Guarantee (TTG) as set out in the Patient Rights (Scotland) Act 2011. The comparison of final costs compared to the Board approved paper are noted below, the differences being due to additional investment in theatre nursing and allied health professional (AHP) staff.

Aberdeen Royal Infirmary Woodend Theatres Board paper Final costing Board paper Final costing £000 £000 £000 £000 Medical staff 1,371 1,375 813 813 Nursing staff 625 810 433 696 Other clinical and non 785 704 486 668 clinical costs Sub-total 2,781 2,889 1,732 2,177 Supply costs 2,200 2,180 1,300 1,300 Total 4,981 5,069 3,032 3,477

Intensive Care Unit (ICU) nursing

Following a review of the service requirements, informed by discussions with the clinical lead and an executive patient safety ward visit, a proposal for additional investment into substantive Intensive Care Unit (ICU) nursing posts was invited. This was with the aim to also improve the availability of quality, skilled nursing staff, who are also able to support the wider hospital whilst supporting the general ICU. The outcome of the evaluation of the proposal was approval for an increase in bed capacity and an investment in 21 full time equivalent (FTE) nursing staff.

Endoscopy

Based on demand and capacity planning an identified shortfall in endoscopy capacity was identified. The service developed a proposal with several options to increase capacity. The outcome of the evaluation of the proposal was approval of an investment of approximately £0.5m to the address the gap in demand for new appointments and to provide additional scoping capacity to help clear the backlog. 4 The funding was provided on a non-recurring basis with a further review of service to be undertaken prior to the end of the financial year.

Cancer action plan

Additional investment was required within the Haematology and Oncology Units as a result of increasing patient numbers and advances in treatment and supportive care and the need to meet cancer access targets. The service conducted a review of the requirements and a detailed business plan was prepared. Following review and evaluation of the business plan with the service the following investment in additional staffing was agreed.

Medical Post(s) FTE £ Nursing Posts FTE £ Permanent Permanent Consultant Clinical 1.0 Head and Neck Specialist 1 Oncologist Nurse Consultant Medical 0.6 Haematology Day Unit 1 Oncologist Nurse Consultant Clinical 1.0 Senior charge Nurse 2 Oncologist (backfill) - Haematology Consultant Medical 1.0 Oncology Lung Specialist 1 Oncologist Consultant Malignant 1.0 ECC ward - Band 5 / Band 2 9.3 Haematology Consultant General 1.0 GU Oncology Nurse 1 Haematology, Specialist Haemostasis & Thrombosis Healthcare Support Workers 2.7 Total medical 5.6 676,000 Total 18.0 539,000

Oral and Maxillo-facial Surgery – Head and Neck consultant

There has been a year on year increase in Head and Neck cancer advances in treatment options available. These procedures are lengthy and demanding in terms of senior staff time. To preserve the service in a sustainable fashion a third consultant to join the Head and Neck cancer team was approved, along with sustainable theatre staffing for three session days. The demand for this service is around 50 patients a year, which equates to requiring one session a week. Trauma Theatre nursing

Following a consultant-led review of service, a requirement was identified to extend the capacity of the trauma theatre to meet increasing demand for the service. Investment has been provided to allow the theatre to operate from 0800 – 2000 Monday to Sunday. This involved providing funding to recruit 3 FTE additional nursing staff.

5 Additional investment in nursing staff

In 2010/11, NHS Grampian reported on the findings of the Safe Affordable Nursing Establishment (SANE) programme, which was a comprehensive appraisal of the nursing establishment at that time, taking into consideration professional guidance and judgement.

Since that date we have made a number of strategic investments in our nursing resource in order to address priority areas – Emergency Care Centre wards (£0.8m), mental health (£0.7m) and medical high dependency (£0.8m). Expenditure on nursing increased by £6.7m in 2013/14 (3.5%).

As set out in the separate Board paper relating to the work of the Nursing Resources Utilisation Implementation Group, further investment in nursing staff is required in addition to the commitments already approved.

Based on an initial assessment of the additional requirements considered at a peer review and challenge meeting, funding was released to recruit 18 FTE targeted at the Geriatric Assessment Unit, cardiac catheter laboratory, trauma orthopaedic theatres and Inverurie Renal Unit. Work is ongoing to allocate the remaining available funding (c£1m) against the priorities identified by the sectors. This work will be taken forward by the Nursing Resources Utilisation Implementation Group.

Whilst this additional investment will enhance nursing capacity within clinical areas, it is recognised through the nurse led assessments of workforce requirements and the work of the Nursing Resources Utilisation Implementation Group that further investment and service change will be required to meet the increasing demand within our hospitals and community services.

4. Risk Mitigation

The relevant Strategic Risk is 851 - Delivery strategies to meet the future health needs of the population.

Evaluation and prioritisation of service requirements on the basis of quality, safety and deliverability will be critical given our relative funding position and the level of challenge that we face in meeting targets and addressing demand pressures.

5. Responsible Executive Director and contact for further information

If you require any further information in advance of the meeting please contact:

Responsible Executive Director Contact for further information Alan Gray Alan Gray Director of Finance Director of Finance [email protected] [email protected]

6 22 July 2014