1
Contents
Foreword: CCG Chair and Chief Officer 4
Member Practices’ Introduction 6
Strategic report 7 About us, who we are and what we do 7 Our mission 7 Our priorities 8 Our legal status 8 Where we operate from 9 The population we serve 10 Community relationships 11 Partnership working 12 Operating and financial review 13 Principal risks and uncertainties 15 Our performance 16 Financial performance 19 Disclosure: legacy balance transfers 21 Description of CCG’s Business Model 21 Our achievements 22 Future plans 25
Sustainability report 28 Our strategy 28 The ESCCG Sustainable Development Management Plan in 28 2013-14
Equality Report 32 Our People 32 Sickness 32
Members’ Report 33 Member Practices 33 Pension Liabilities 35 Sickness Absence Data 35 Staff in Post and Leavers 35 Sickness and Absence 37 External Audit 39
2
Serious untoward incidents 39 Setting of charges for information 39 Complaints 40 Employees with a disability 42 Emergency Preparedness 43 Statement as to Disclosure to Auditors 43
Remuneration Committee Report 44 Salaries and Allowances 45 Ash Equivalent Transfer Values 47 Real Increase in CETV 47 Pay Multiples 47 Off-payroll Engagements 48
Membership Body and Governing Body Profiles 49 CCG committee member profiles – who are not members of the CCG Governing Body 54
Statements by the Accountable Officer 60 Statement of Chief Officer’s Responsibilities 60
Governance Statement 62 Annual Governance Statement 2013/14 62
Annual Accounts 89
3
Foreword: CCG Chair and Chief Officer
We have great pleasure in publishing this; our first Annual Report as a statutory Clinical Commissioning Group. Over the last year we have worked closely with our member practices to develop robust transformation plans to improve the health services and outcomes for the people of Herefordshire. We are a new organisation and this is our foundation year and we recognise that we have further work to do to improve health services for the people of Herefordshire.
Herefordshire Clinical Commissioning Group is responsible for designing local health services for 183,600 people across Herefordshire, one of the least densely populated areas in the country. We have established our foundation on an enviable platform by working closely with our single local authority and along with our local providers; Wye Valley NHS Trust and 2gether NHS Foundation Trust; our ambition is to create a high quality, sustainable and integrated Herefordshire health care service which puts the public and patients at the heart of everything we do.
Transforming the Herefordshire local health economy to achieve our vision is dependent upon providing better quality care whilst realising efficiencies through working closely with our local providers. Working towards achieving our goal, we have already mobilised several exciting and leading edge work streams to stimulate change.
We have introduced virtual wards, designed to deliver more care in the community to help people stay closer to home rather than being in hospital. We have worked with our GPs and providers to create modern maps of medicine that mean that our patients’ journey is more joined up across all care settings. Our work also involves planning health care for the future that truly makes a difference to our patients’ experiences and we are keen to work innovatively to achieve this by using IT and online consultations to engage with our people.
We believe that it is vital to involve local people in the design and buying of healthcare services that will serve our population robustly into the future. We want to do this through effective community engagement, to date we have developed enhanced feedback mechanisms which ensure we really understand your needs and listen to your preferences.
Partnership is really important to us and we put a lot of effort into working with our key providers, 2gether Foundation Trust, Wye Valley Trust and Herefordshire County Council colleagues as well as with other CCGs and wider partners and stakeholders. Working locally within Herefordshire, we can be creative and really support people to engage with their communities in a way which promotes good health and wellbeing.
We take our role in quality assurance very seriously and we continually monitor information on safety and experience to ensure all our residents get good quality care.
4
Moving forward, we are optimistic we can respond to the challenges ahead. We have built an organisation we are proud of and we want to continue to be accountable to and serve the local population of Herefordshire.
Andy Watts Jo Whitehead Chair Chief Officer
5
Member Practices’ Introduction
One key feature of clinical commissioning is that commissioning decisions should be grounded by input from patients and frontline health professionals. All 25 Herefordshire GP practices are members of the CCG and the CCG governing body has been successful in engaging effectively with member practices, so that GP surgeries have a clear and resonant voice in the work our governing body delivers. It has achieved this by setting up an engagement framework comprising of regular policy meetings, regular education events, practice visits, newsletters and an email feedback system to support rapid decision making. In addition, wider practice engagement is accomplished by establishing Practice Manager and Practice Nurse representation into the CCG team.
At the beginning of this first year the CCG GP membership worked together with Governing Body members to formulate the work programme and strategy for the next 12 months. I am proud of our achievements and I am pleased to say that the majority of that work programme has been completed. I hope this report will demonstrate how we have worked together with our partners to make a difference locally.
I would like to thank local GP practices for their supportive contributions during this first year and for their patience at this time of considerable change in the NHS. I would also like to thank the CCG executives and employees together with support unit staff. I have witnessed steadfast professionalism and a tireless work ethic that is a credit to the NHS.
The integrity of the CCG can only be achieved by putting patients and the public at the heart of what the CCG is about. The voice of our local patients is therefore, extremely important to us and we are committed to involving and listening to our local population. We have run a range of events for local people including a focus on the redesign of urgent care services and call to action events. We will ensure that the feedback that the people of Herefordshire share with us via whatever channel is used to inform our work and the decisions the Governing Body makes.
Throughout the report you will see a number of projects which we have launched that we believe will make a significant difference to patient experience in Herefordshire. We are championing changes in health care services that can really deliver improvements for our local people, an example of which is the set-up of hospital at home and virtual wards where patients are supported in their own homes rather than being admitted to hospital.
Looking to the future, there are even greater challenges ahead. It is important we build on the foundations of this first year and the CCG is clear that what matters is the quality of services for local residents together with improved outcomes from NHS treatment.
6
Strategic report
About us, who we are and what we do
Herefordshire Clinical Commissioning Group is the NHS organisation responsible for planning and buying health and care services on behalf of everyone in the county of Herefordshire, and we do mean everyone in Herefordshire – however old or young you are, whatever your gender, sexual orientation, marital status, disability, race, religion or background, whether you live in Bromyard, Leominster, Ledbury, Hereford, Ross on Wye, Kington or any of the villages in between, you are important to us.
We are led by GPs and pride ourselves on our depth of grass roots knowledge. We do not provide clinical services ourselves but commission them from a range of providers on behalf of our local population.
The services we are responsible for include:
• Urgent and emergency care (including out of hours services) • Planned, non-emergency hospital care • Rehabilitation care • Mental health and learning disability services • Most community health services including continuing healthcare • Ambulance transport
We commission services from Wye Valley NHS Trust, 2gether NHS Foundation Trust and from other major acute providers including Gloucester Foundation Trust, Worcester Acute Hospitals, University Hospital of Birmingham, and other hospitals in Bristol and Wales, and a number of independent healthcare providers including Spire Healthcare, Nuffield Health, St Michael’s Hospice and Shaw Healthcare. We also commission services from Herefordshire Council.
Our mission:
This is how we have described our mission:
“We want to create high quality health and care services that benefit everyone in Herefordshire – the kind of services that we would want available for our friends and family if they were unwell or needed help and support with a condition that impacted their lifestyle. In essence, we want to create a high quality, sustainable and integrated Herefordshire health economy with the public and patients at the heart of everything we do.”
7
Our priorities
We have based our commissioning strategy on the knowledge and understanding of the local population, the local health needs that our member GPs have built up over many years and on the joint strategic needs assessment, developed with our partners.
Through our GP network and through wider engagement, we continue to talk to local people in monitoring present services and planning for the future.
Our Patient Prospectus sets out priorities to tackle health factors linked to deprivation and health inequality together with continuing support for other core areas such as dementia, mental health and learning disabilities. This means that we will target resources at areas where they will have the biggest impact on improving health outcomes.
Alongside delivering high quality, appropriate services, we also need to make sure that we are staying within our budget and delivering good value for money.
The Patient Prospectus sets out the following four strands of our work linked to clear and measurable outcomes:
• Preventing ill-health and improving health • Improving planned care • Improving urgent care • Leading the local health system
Our legal status
Herefordshire CCG came into being as an NHS Statutory Body on 1 April 2013.
The CCG was granted legal status by NHS England in March 2013, effective as of 1 April 2013, and following the mandated authorisation process which all CCGs undertook during 2012-13.
The CCG was authorised by NHS England to be established with effect from 1 April 2013. Under the terms of the authorisation, the CCG was established with 15 conditions and 3 directions. The national CCG authorisation panel confirmed that the directions and conditions had been discharged by February 2014 and that the CCG was deemed fit for purpose to take on its new responsibilities.
We achieved this by producing additional evidence, information and commentary and by working with the local NHS England Arden Herefordshire & Worcestershire Area Team.
The CCG is a commissioning organisation, meaning that is responsible for agreeing contracts with a range of healthcare providers to deliver services to the local population of Herefordshire. The stated purpose of the CCG is to:
8
• commission in order to achieve the best possible health outcomes with the funds made available, working with patients and the public, clinicians and providers • engage with our population and partner agencies to improve the quality of health services and secure improved health and wellbeing • further improve the efficiency and effectiveness of health services, achieving financial balance each year • ensure that all patients are treated equitably, with the pursuit of equality of health outcomes, levelling up and not down • make an informed response to health needs, supporting partnership initiatives to address inequalities in health outcomes • support the development of quality and safety in all the provision we commission • promote prevention, enablement and empowerment, supporting self-care through commissioning • strengthen partnership working in the interests of better health and health care.
Where we operate from
Our corporate headquarters are at Brockington, Hafod Road, Hereford. This is a shared headquarters with the local authority and all our staff work from here. We are supported by Staffordshire & Lancashire Commissioning Support Unit (SLCSU) who are embedded at our headquarters.
The building is not generally open to the public unless attending a CCG or local authority meeting.
9
The population we serve
We serve a population of 183,600 people across the whole of Herefordshire. This is described in more detail in the Joint Strategic Needs Assessment, which can be found at www.herefordshire.gov.uk/factsandfigures
The map below defines our area of operation, and shows where patients registered with our 24 member practices are drawn from.
Herefordshire is a large, rural county with a thinly spread population. Around one in four of the population is above retirement age compared to an average of one in five nationally.
We expect the trend of people living longer to continue. By 2026, we
10
estimate that the number of local people aged more than 85 will have risen from 5,400 to 10,200.
The number of local people aged 16 to 64 is falling and we also expect this trend to continue. Potentially, this could have a significant impact on family life where older generations are cared for by younger relatives. However the birth rate is at the highest level seen since 2007, with 1,800 to 1,900 births per annum. This will see the number of children in the county, currently 31,500, rise slowly until at least 2025, when it is forecast to be 32,800.
The good news is that, in general, people in Herefordshire enjoy a high standard of health and wellbeing. Life expectancy is higher than the national average for both men and women and higher than i n neighbouring counties. Mortality rates for cancer, circulatory diseases and chronic conditions are also lower than in other areas.
However, those benefits are not shared by everyone in the county and there are some deep seated health inequalities. Life expectancy is 4.8 years lower for men and 4.1 years lower for women living in the most deprived areas of the county than for people living in the least deprived areas. However, even within this context the effects of deprivation produce demonstrable inequalities – residents living in the most deprived areas generally have a shorter average life expectancy at birth and spend a greater part of that life expectancy with a disability when compared with residents of less deprived areas.
Smoking is the single most important cause of avoidable ill-health and premature death across Herefordshire and we are working with the Public Health department to address this across all our providers and pathways of care. Obesity and alcohol also represent important public health challenges that directly affect individual’s health and wellbeing, for both adults and children. We can only tackle these effectively through system wide integrated work, and we are working closely with public health, community and patient groups, our providers, and wider system partners in order to do so.
Community relationships
Herefordshire has a high level of social capital, with higher than national rates of volunteering, unpaid carers, and an active third sector. We are very clear that working with carers, communities and third sector organisations is fundamental to ensuring that we prevent ill-health, promote social inclusion and maximise people’s independence.
We have embedded this approach within our commissioning process, with key examples being the development of services for people with dementia and their carers, and more recently our service redesign work for people with complex and enduring mental health needs. We will be embedding this into our service redesign
11
work and commissioning as we go forward, as a core principle of the way that we work.
Inward migration has contributed to population growth in the county, especially amongst young adults. At the latest count, there were 12,250 county residents who were born outside of the UK with three fifths originating from Poland.
The patient voice – Our CCG mandate is “to put patients and the public at the heart of everything that we do”. This is the over-riding principle of the CCG; that services should work for individuals, and should be designed around the needs and outcomes that matter to patients.
We have worked hard to engage with patients and the public to understand what is important to them – notable examples include hand held self-management plans in diabetes, services for people with dementia and their carers, and a county wide engagement programme with the public around urgent care.
We are embedding this principle into the way that we commission (or buy) services for the Herefordshire population. We are re-commissioning our urgent care pathway in a fundamentally different way – starting from the outcomes that matter to patients and the public, and incentivising providers of care to achieve those outcomes. In this way we intend to embed the patient voice at the centre of all our work.
We regularly work with a wide range of partners including Herefordshire Healthwatch as well as other community and voluntary organisations in addition to our commissioned service providers.
We have also launched a membership scheme called “Our NHS” to broaden public engagement and involvement in shaping future health services.
Most of our GP practices have a Patient Participation Group (PPG) which links into the district-wide Patient Participation Group, creating another information flow of information with the CCG.
In addition, we have an active PPI lay member whose role is to champion patient and public engagement at Governing Body level.
Our commitment to public engagement and involvement is described in detail in our CCG Constitution available at: http://www.herefordshireccg.nhs.uk/our-vision-and- values)
Partnership working
People’s health and wellbeing is dependent on more than just the health services that we commission. We are very clear that in order to improve people’s wellbeing and reduce their need for services we need to work with a wide range of partners including education, public health, the police, voluntary and third sector
12
organisations. By working closely with such partners we can ensure we commission joined up pathways of care irrespective of organisational boundaries.
As an example of this approach, NHS England introduced the Better Care Fund in 2014. As a joint initiative across the CCG and local authority it is intended as a driver to improve preventative community services – and as such it is a real opportunity to co-ordinate and improve the community based service that can pre-empt the need for emergency care and help people remain well and independent within their local communities.
We will be developing and delivering this in partnership with the local authority, and our providers, through the work of the Health and Wellbeing Board.
Operating and financial review
In general terms, the CCG operates within a large national market of NHS and non- NHS providers, and we commission the bulk of our services through the NHS Standard Contract with NHS Providers.
We also undertake a limited and smaller volume of commissioning activity through the “Any Qualified Provider” model – for adult hearing services, podiatry and lower back pain services.
We have a statutory duty to promote a comprehensive health service which also includes promoting, raising awareness of and acting with a view to secure health services that are provided in such a way as to meet the NHS Constitution.
We also have specific statutory duties to act effectively, efficiently and economically in commissioning health care services, assuring ourselves that we always secure continuous improvement in the quality of the services we commission.
We endeavour to ensure that our patients have full and effective choice wherever possible, and seek to promote shared decisions about the care our patients receive.
We are also required to ensure that our use of capital and resource do not exceed the amounts specified by NHS England in the financial year. (see also the CCG’s financial performance page 127)
The CCG’s financial position at the end of the financial year
As a new statutory body from April 2013, this represents the CCG’s first full year of formal reporting. The financial reporting requirements of NHS bodies are determined by the Department of Health with the approval of HM Treasury. Based on the Treasury's Government Financial Reporting Manual, NHS Herefordshire CCG is required to prepare its financial statements based on International Financial Reporting Standards (IFRS). The CCG’s 2013-14 Financial Plan recognised the financial pressures it faced and targeted the delivery of a 0.5 per cent surplus as opposed to the NHS England
13 system and business requirements of delivery of a 1 per cent in year surplus. The Financial Plan did, however, establish the required uncommitted contingency of 0.5 per cent (£1.021m), and to spend 2 per cent of its resources non-recurrently (£4.084m).
In-year performance under the contract with Wye Valley NHS Trust and changes to allocations part way through the year linked to specialised services meant the CCG had to update its plans over the summer and autumn of 2013 to reflect these in-year cost pressures. As the CCG didn’t demonstrate the totality of NHS England’s system delivery requirements this meant the CCG was considered in ‘financial recovery’, and as such produced a Financial Recovery Plan during July through to September 2013 to ensure that it could fulfill in the future its revised surplus obligations.
The CCG has a number of statutory duties in respect of its accounting and financial standing. These are outlined in the table below:
Description of Target Target Actual Delivery £'000s £'000s
Revenue Limit To deliver a minimum of 0.5% surplus of 1,021 1,038 revenue resource limit against expenditure
Running Costs To operate within the allocated CCG running 4,570 4,075 cost allowance based upon £25 per head of population
Capital To keep expenditure within the allocated 50 50 capital limit
Cash Limit The maximum amount to be left in the CCG 250 29 bank account on close of play 31 March 2014
It is pleasing to note that Herefordshire CCG has achieved and delivered against its key financial targets.
The CCG developed detailed Quality, Innovation, Productivity and Prevention (QIPP) plans for 2013-14. These amounted to £8.147m. Delivery against these plans for the year was impacted upon by emerging emergency pressures on acute contracts and the requirement for the CCG to support the outcomes of the Rapid Response Review . The 2 per cent non recurrent reserve was partially utilised to offset activity growth beyond predicted levels.
14
How your money was spent
The chart below sets out the areas the CCG incurred expenditure during 2013-14.
Looking forward
The closing financial position of the CCG at the end of the first year of operation has been pleasing and the priority going forward must be to ensure that the CCG achieves the national planning metrics. There is no doubt that this will be challenging and will require a whole health system wide approach.
Principal risks and uncertainties
The CCG faced a series of significant risks and uncertainties as a new organisation and as a consequence of the major re-organisation implemented in the NHS from 1 April, 2013.
Throughout 2013/14 the CCG has confronted several risks, both clinical and non- clinical; these have been managed in accordance with CCG’s Risk Management Framework (described in the Governance Statement found later in this report).
Notable clinical risks have related to the CCG’s response to the Francis and Keogh reports, both of which impacted upon some local organisations that the CCG commission services from, specifically Wye Valley NHS Trust who were subject to an external Rapid Response Review in October 2013. A subsequent development programme has been undertaken and the CCG is engaged in continuing scrutiny
15
and challenge to this work. There have also been some risks relating to some commissioned organisations failing to meet targets relating to waiting times and some urgent care targets. The CCG continues to work across the health and social care economy to ensure that the provision of services continues to improve delivering timely effective care, at a point where patients and families are most vulnerable. Through leadership of the Urgent Care Working Group and investment of additional funding, the CCG has supported improved quality performance across the urgent care pathway, and in the coming year is seeking to embed this learning in the re-commissioning of future out of hours services.
Notable non-clinical risks have related to managing the CCG’s challenging financial environment, ensuring that we continue to engage with the local community and ensuring that we work in partnership with other organisations. The CCG’s main provider of acute services, Wye Valley NHS Trust, operates within a challenging financial environment and has identified a deficit budget of at least £9m for 2014/15. The CCG is committed to working with its main provider to understand the cost drivers of the deficit and is actively working with them with the aim of delivering high quality sustainable health services delivered within the available financial quantum.
More information regarding the CCG’s approach to risk management can be found in the Governance Statement, which is found later in this report.
Our performance
The annual report highlights a number of successes this year and high level strategic plans have been agreed. This is commendable in view of the in-year challenge of recruiting a substantive Chief Officer.
The CCG is expected to report on national targets in particular areas and works closely with the NHS England Area Team to ensure that our performance travels in the right direction.
During our first year of operation, our performance against key national performance standards has not been fully met with some of the national indicators not being achieved. The majority of the performance standards are delivered through the contracts the CCG has in place with NHS healthcare providers. Measures necessary to resolve performance issues that arise are agreed through monthly contract performance meetings with those individual providers.
We have plans in place where performance has not met national performance indicators and we are working together to design services and future commissioning that will ensure future targets are achieved.
16
Our performance in 2013/14 is summarised below:
NHS Constitution Indicators for 2013/2014 Target RAG Rating and YTD*
Referral To Treatment waiting times for non-urgent consultant-led treatment Admitted patients to start treatment within a maximum 90% 92.93% (Feb) of 18 weeks from referral
Non-admitted patients to start treatment within a 95% 99.29% (Feb) maximum of 18 weeks from referral Patients on incomplete non-emergency pathways (yet to start treatment) should have been waiting no more 92% 96.10% (Feb) than 18 weeks from referral
Number of patients waiting more than 52 weeks 0 9 (Feb)
Diagnostic test waiting times
Patients waiting for a diagnostic test should have 99% 98.41% (Feb) been waiting no more than 6 weeks from referral
Cancer waits – 2 week wait Maximum two-week wait for first outpatient appointment for patients referred urgently with 93% 95.17% (Feb) suspected cancer by a GP Maximum two-week wait for first outpatient appointment for patients referred urgently with breast 93% 89.26% (Feb) symptoms (where cancer was not initially suspected) Cancer waits – 31 days Maximum one month (31-day) wait from diagnosis to 96% 98.98% (Feb) first definitive treatment for all cancers
Maximum 31-day wait for subsequent treatment 94% 95.12% (Feb) where that treatment is surgery
Maximum 31-day wait for subsequent treatment 98% 100% (Feb) where that treatment is an anti-cancer drug regime
Maximum 31-day wait for subsequent treatment 94% 99.52% (Feb) where the treatment is a course of radiotherapy
Cancer waits – 62 days
Maximum two month (62-day) wait from urgent GP 85% 78.29% (Feb) referral to first definitive treatment for cancer Maximum 62-day wait from referral from an NHS screening service to first definitive treatment for all 90% 94.44% (Feb) cancers
17
Maximum 62-day wait for first definitive treatment following a consultant's decision to upgrade the 93% 100% (Feb) priority of the patient (all cancers) – no operational standard set Category A ambulance calls
Category A calls resulting in an emergency response 75% 67.10% (Feb) arriving within 8 minutes – (Red 1)
Category A calls resulting in an emergency response 75% 75.70% (Feb) arriving within 8 minutes – (Red 2)
Category A calls resulting in an ambulance arriving at 95% 94.80% (Feb) the scene within 19 minutes
Cancelled Operations All patients who have operations cancelled, on or after the day of admission (including the day of surgery), for non-clinical reasons to be offered 0 22 (Apr-Dec) another binding date within 28 days, or the patient's treatment to be funded at the time and hospital of the patient's choice. Mental Health Care Programme Approach (CPA): The proportion of people under adult mental illness specialties on CPA 95% 98.12% (Feb) who were followed up within 7 days of discharge from psychiatric in-patient care during the period A&E Waits Patients should be admitted, transferred or discharged within 4 hours of their arrival at an A&E 95% 92.25% department Mixed Sex Accommodation Breaches
Minimise breaches 0 17 (Feb)
*RAG: Red – not achieving target, Amber – close to achieving target, Green – achieving target
18
Financial performance
The CCG started the financial year with an allocation of £204.2m to spend on healthcare services for its resident population. This allocation was determined by NHS England using a complex formula designed to assess the health needs of our population.
During the course of the year, a number of changes to the CCG’s financial allocation were agreed to resolve technical issues in the way the allocation was prepared. These changes increased the CCG’s budget by circa £2m. The CCG received additional monies during the year for a number of reasons, including: a share of Primary Care Trust surpluses (£181K); funding for winter pressures (£769K); specialised services top slice adjustment (£1.2M) so the CCG ended the year with a total allocation to spend on healthcare of £206.2M.
The CCG also received a separate financial allocation to spend on its running costs (the costs of employing staff, running the organisation and buying support services, in particular from the SLCSU). The running costs allocation was determined as approximately £25 per head of Herefordshire CCG population, which equated to an allocation of circa £4.57M.
The financial rules set by NHS England for CCGs are such that:
• The CCG must not overspend its total allocation as this would be a breach of its statutory duty under the NHS Act • The CCG is expected to underspend its total allocation (healthcare allocation plus running costs allocation) by 0.5 percent as agreed with NHS England Area team (£1.021M in 2013/14). The underspend is returned to the CCG in the next financial year. • The CCG can use any underspend on its running costs allocation to fund expenditure on healthcare • The CCG cannot use an underspend on its healthcare allocation to fund an overspend on running costs.
19
The table below summarises Herefordshire CCG’s financial performance against its financial allocation at the end of the 2013/14 financial year. This reflects the financial position reported in the Herefordshire CCG’s annual accounts. Healthcare expenditure in the table is broken down over the CCG’s main contract areas.
2013/14 Actual Variance 2013/14 Plan £000 £000 £000 Healthcare Allocations 206,271 205,728 543 Running Cost Allocations 4,570 4,075 495 Total Allocations 210,841
Total Expenditure 209,803
Under-Spend or Surplus 1,038 210,841 209,803 1,038
The table highlights the following main issues:
• The CCG reported an underspend of £1.038m for the financial year. Of that, £495k is attributable to an underspend on running costs, with the remaining £543k attributable to an underspend on healthcare • It is anticipated that the £1.038m underspend will be returned to the CCG to spend in the next financial year (2014/15).
The financial performance of the CCG has been as predicted in 2013/14 and, as such, the CCG is well placed to manage its finances in the next and subsequent years.
In December 2013, NHS England notified CCGs of their funding settlement for the next two financial years (2014/15 and 2015/16). The CCG will receive growth to its healthcare financial allocation of 2.14 per cent next year and 1.7 per cent in 2015/16. With healthcare inflation at levels significantly above this, however, and cost pressures arising from an ageing population and rising demand for treatments, the CCG will have to carry on identifying savings if it is to continue to balance the books. The CCG’s financial forecasts indicate savings of approximately 3 per cent per year that will need to be identified over the medium term.
The CCG’s running costs allocation will remain at a slightly reduced level next year and then will be reduced by 10 per cent in 2015/16. This reduction will be imposed on all CCGs nationally. The CCG has already planned to review its running costs expenditure in year and will take the opportunity to make cost savings where it is appropriate.
The main financial challenge facing the CCG in the medium term is to work with key partners to achieve a financially viable and sustainable health and social care
20
economy. A further financial challenge is the increase in the value to be transferred by Health to the Better Care Fund (BCF) from April 2015. This is a national policy initiative to ‘pool’ NHS health budgets with social care budgets currently managed by local authorities - the objective is to improve the integration of health and social care services to the benefit of patients. The requirment is for an additional circa £8M of existing budgets to be transferred into the BCF. The BCF will be overseen by the Herefordshire Health and Wellbeing Board.
The CCG’s statement of financial position (previously known as the balance sheet) is set out on page 92. The main assets and liabilities at 31 March 2014 are short-term receivables (amounts owed to the CCG by third parties) and short-term payables (amounts owed by the CCG, mainly to other NHS organisations).
The CCG does not hold any significant operational assets, for example, land, buildings or equipment. Nor does it have any interests in finance leases or private finance initiative/public private partnerships (PFI/PPP) schemes.
The CCG’s accounts have been prepared under a direction issued by the NHS Commissioning Board under The National Health Service Act 2006 (as amended).
Disclosure: legacy balance transfers
In accordance with the Health and Social Care Act 2012, Strategic Health Authorities and Primary Care Trusts were dissolved on 1 April, 2013 and their assets and liabilities transferred to successor bodies in the NHS or to other entities. Under the terms of the Property Transfer Scheme (s) and supporting schedules, a number of assets and liabilities were transferred from Herefordshire PCT to the CCG on that date. The most significant of these were IT assets £191k and stock £25k. These assets and liabilities are associated with the transfer to the commissioners of Healthcare, NHS Herefordshire CCG. The accounting arrangements in respect of these transfers are outlined in Note 1.4 to the Annual Accounts.
Description of CCG’s Business Model
We are funded by the NHS to commission (buy) services against specified standards from NHS, commercial and third sector healthcare providers – this is our core business. The CCG’s performance in this is regulated by the NHS England Area Team.
We employed an average of 28 staff during 2013/14 who work in areas such as quality and safety, and strategy and Primary Care development. We also buy in the majority of support services from the Staffordshire and Lancashire Commissioning Support Unit. We also have embedded support staff employed via the SLCSU who represent 23.7 WTE plus 12 WTE Continuing Health Care staff who work off site.
21
Our achievements
Hospital at Home and Virtual Wards
As a CCG we have embedded the principle of prevention of ill health into all of our work programmes. On this basis we have commissioned Wye Valley NHS Trust to conduct a one-year pilot across Hereford City of two key schemes.
The Hospital at Home programme is an innovative approach to extending the range of care and treatments that can be delivered in patients’ homes instead of in hospitals. All the care and expertise offered by treatment in a hospital, including being under the care of a consultant – but delivered in the comfort of patients own home. We have also launched a complementary programme called Virtual Wards in which GPs and community matrons are responsible for proactively identifying patients at high risk of being admitted to hospital. They then work closely with the patients to help them improve their health and care, and reduce their future risk of admissions
At the center of the two schemes is a 40-strong multi-disciplinary team including community matrons, nurses, physiotherapists, occupational therapists and health care assistants. The team is able to provide 24/7 patient care and clinical assessments.
The programme has three key aims:
• To identify patients at high risk of hospital admission and work proactively with them to reduce the risk
• To treat certain patients at home rather than in hospital
• To help patients settle back home more quickly after receiving hospital treatment. There is firm clinical evidence that patients can recover quicker at home than in hospital.
The trial period is continuing but, already, the programme is proving a success with patients. Patients’ feedback comments have included:
“I haven’t felt like this many people have cared about me before.”
“This is a marvellous service and all the staff I have met so far are fantastic.”
“When you say you’re going to do something, you do it.”
“I’ve had a full night’s sleep after your initial visit which is the first time in three months because I feel someone is there for me and to help me feel better.”
22
New resources for dementia
Earlier diagnosis, better post-diagnosis support and a more joined-up working between health and care providers are at the heart of a new approach to responding to the dementia challenge in Herefordshire. Living with dementia is becoming an everyday fact for more and more families. We estimate that around 3,000 local people have dementia. That figure is growing as one of the consequences of more people living longer. We also estimate that as many as two thirds of those with dementia have yet to be diagnosed.
In response to the challenge, we have launched a new county-wide strategy backed by additional CCG investment including extra, specialist staff.
Working with our NHS partners, the local authority, and, particularly, with organisations from the voluntary and third sector, the aims of the Herefordshire Dementia Implementation Plan are to:
• increase early diagnosis of dementia
• make sure there is capacity to provide the range of care and support services needed for people with dementia to live well in their own homes and local communities
• help people with dementia and their carers to find their way through what can be a confusing network of health and care services
• link people with dementia and their carers with local communities and support services, to promote their independence and social inclusion
• develop agreed ways of working across all service providers.
• provide extra support for care homes so that people with dementia receive the best care and support
Electronic patient referrals
In 2013 the CCG piloted the use of an e-consultation system, when their GPs could ask hospital consultants for a “virtual” opinion based upon a careful description of their symptoms, signs and investigations to date.
Using the findings from this pilot the CCG is working with Wye Valley Trust to implement a system wide mechanism of referring patients for a consultant opinion electronically. Using carefully defined clinical information, GPs will be able to use this system to gain speedier access to “virtual” consultant opinion and to book appointments for those patients that do require a face to face appointment more readily.
23
Mapping the way ahead
New technology is a vital tool if we are to make sure that we are squeezing as much as we can out of the resources available to us to improve health in Herefordshire.
Map of Medicine is a new, web-based tool that is helping us to work smarter and achieve our quality and productivity targets.
It works by collecting together all we know about a particular condition including clinical guidelines, best practice evidence, referral criteria and service availability and making that information available online to GPs and other service providers. The information is customised to take into account local needs, practices and priorities. The benefit to patients is that whatever surgery they visit, they can expect the same high quality, consistent, up-to-date, appropriate advice and treatment on their condition. The CCG can operate in the knowledge that the highest possible standards are being maintained.
As well as access to national pathways and resources, the CCG has already used the Map of Medicine system to publish localised care pathways for 13 types of condition ranging from acne to heart failure. Work is continuing to develop pathways to support patients with long term conditions such as diabetes foot care.
Urgent care review
We know Herefordshire’s network of urgent care needs to improve – because that’s what patients and members of the public have told us.
From September to November last year, we asked people to tell us about their real life experiences of urgent care – what did and didn’t work at the moment, what aspects needed improvement to achieve better results for patients and better value for money.
Herefordshire has significant access issues to address in respect of urgent care services. This is largely owing to the geography of the county and the availability of public transport. These issues demand innovative solutions.
As part of our engagement process, we held interactive workshops in Hereford, Bromyard, Kington, Leominster, Ledbury and Ross and carried out further activities at Hereford College, primary schools, the County Hospital A&E and online.
Detailed information from more than 540 patient views from different ages, right across the county has proved very valuable in helping us to develop our next steps.
24
Some of the important themes that have emerged include:
• A need to differentiate urgent care for people living with long term conditions focused on teaching people to spot danger signs earlier and know what is an emergency and what is not
• Work with rural communities and GPs to co-design local solutions that improve access– perhaps through community responders and internet consultations, advice and support
• Redesign the way that patients first come into contact with urgent care with a new emphasis on reassuring patients and building their confidence
• Change the way that urgent care providers are monitored to take more account of patient experience and outcome
• This work suggests that every urgent care episode should be regarded as a learning opportunity for the person and family; one that educates and prepares people to cope better next time
• There was strong feedback suggesting that GPs were the most favoured source of urgent care for the majority of local people. This points to a need to extend GP access and opening hours as soon as possible
The next steps involve the development of new relationships and new ways of operating between the CCG and urgent care providers. Historically, health providers have been paid for the services they offer – so, for example, an A&E department would be paid more for seeing more patients. This is regardless of the patient experience or benefit.
In future, we want to shift the emphasis to paying providers for the results they achieve for patients and the experience that those patients receive. This is known as outcomes based commissioning. We believe the change will bring improvements in quality and value for money.
Future plans
Improvement in quality of services
Herefordshire CCG is meeting its duties relating to securing continuous improvement in the quality of services provided to patients and county residents for the prevention, diagnosis or treatment of illness.
The contracts we hold with all healthcare service providers contain explicit quality requirements, measures and incentives to ensure that services meet the expectations of both the CCG and our patients.
25
We have established a clinically-led Quality Committee as a formal (non-statutory) sub-committee of the Governing Body. The Quality and Patient Safety Committee is tasked with the implementation of our Quality Strategy and its associated work programmes. Further details are available in the Annual Governance Statement – please see page 62.
Regular reporting of a range of service quality issues and performance measures is designed to secure continuous improvement against all of the outcomes that are specified within the contracts that we hold for the provision of healthcare services.
Our system is designed to track and report improvements in the effectiveness of the services we expect our commissioned providers to routinely deliver.
The CCG is provided with detailed and contemporary assurances of service safety as well as with information about the quality of patient experience. Clinical Quality Review Meetings (CQRM) are held each month with each acute, community and mental health provider – including out of hours services. These are contracting meetings focused on quality, providing an opportunity to review areas for improvement and good practice.
CQRM meetings provide a robust mechanism where commissioners and providers can work together to identify and strive to meet standards that will serve to deliver services and drive up quality. Relationships have become well established to support local accountability and respond to local needs and requirements.
The mechanism for service providers to supply exception reports for non- achievement of any key quality indicators is well established in line with NHS operating frameworks.
Herefordshire CCG’s quality strategy takes into account a comprehensive range of national guidelines, reports and examples of best practice. This library of evidence includes the Francis Report (DoH 2013); The Mid Staffordshire NHS Foundation Trust Public Enquiry; The Berwick Review (DoH 2013); A Promise to Learn – a Commitment to Act; Everyone Counts: Planning for Patients 2014/15 – 2018/19 (NHS England 2013).
Reducing inequality
Herefordshire CCG has ensured that reducing inequalities is at the core of all our business.
We strive to reduce inequalities between patients in terms of their ability to access health services at convenient and user-friendly times, and to reduce inequalities between patients with respect to the outcomes achieved for them by the provision of health services. Reducing inequalities is built in to our planning operations. It is the key strand that pulls together the individual work programmes we have established to ensure our patients receive the right care in the right setting, to ensure that those with a long
26
term condition can better manage that condition and to ensure that people start life and age well.
Our commitment to delivery of the Joint Health and Wellbeing Strategy
Herefordshire CCG is now an active and fully engaged member of Herefordshire’s Health and Wellbeing Board.
We have actively contributed to the preparation of the Joint Strategic Needs Assessment (JSNA) and the Joint Health and Wellbeing Strategy. This has helped us to ensure consistency with our own commissioning priorities.
We are currently leading the development of one of the main strands of the Joint Health and Wellbeing Strategy which focuses on delivering a sustainable health and social care economy.
We also regularly engage and involve the board in the development of our planning process and discussions around commissioning intentions. Together, we are working to establish a joint and coordinated approach to communicating and engaging with patients and the local population.
Statement by the CCG Chief Officer
I certify that the clinical commissioning group has complied with the statutory duties laid down in the NHS Act 2006 (as amended by the Health & Social Care Act 2012).
Signed: ……………………………………………..
Jo Whitehead
Chief Officer for Herefordshire CCG
3 June 2014
27
Sustainability Report
Our strategy
We are committed to implementing the principles of sustainable development within the following specific areas:
Commissioning – We are committed to taking a whole system approach to sustainable commissioning to seek ways to reduce costs and resources, produce health benefits and embrace sustainable procurement.
Energy – We are committed to minimising the consumption of non-renewable energy sources and to continually research alternative sources and technology to reduce energy consumption across all activities.
Waste – We work to minimise the impact of the waste we generate by seeking opportunities to reduce, re-use, recycle and recover otherwise redundant resources. We work to manage our clinical and hazardous waste in as safely and with as little environmental impact as possible.
Transport – We are aware of the environmental impacts of our transport operations and will develop a comprehensive management plan to focus on reducing the environmental impact of transport, including unnecessary travel.
Training – We are committed to continuous training and education of staff so that we are able to deliver our services in the most effective and sustainable manner possible.
Procurement – We advocate that procurement managers and suppliers working with us ensure that purchased products, services and materials are as sustainable as practical.
The ESCCG Sustainable Development Management Plan in 2013-14
Sustainability is about living within one’s means socially, economically and environmentally.
This section provides a simple overview commentary covering our performance in 2013-14, along with an overview of our forward plans as established by our Sustainable Development Management Plan (SDMP).
Herefordshire CCG recognises the impact that our business operations have on the environment as well as the strong link between sustainability and the health of our public. As such, we are committed to demonstrating clinical and local leadership in sustainability, and our Sustainable Development Management Plan (SDMP) outlines our priorities for this.
28
This was developed in response to the 2008 Climate Change Act and the 2009 Carbon Reduction Strategy for England However as outlined earlier in this Annual Report, Herefordshire CCG has determined that sustainable development is important as part of our wider Corporate Social Responsibility agenda.
So the following principles also guide our ongoing response to Sustainable Development:
• We will be positive about Sustainable Development (SD): we will work to lead the reduction of carbon emissions across the Local Health Economy and become more sustainable;
• SD shall be seen as good news for the benefit of all, whether as individuals, partner organisations or society as a whole;
• Our SDMP focusses on tangible benefits – for example financial savings, improved air quality from reducing traffic or avoided costs from less waste sent to landfill or car-sharing arrangements for business meetings;
• SD is in line with the CCG’s objectives: this issue is owned by the CCG Governing Body and is embedded within the wider CCG Corporate Governance structure;
• Furthermore our SD agenda has been established in relation to the rest of the commissioning, planning, risk and demand management work we are doing;
• SD is therefore not just something we do to meet national NHS accountability or reporting mechanisms: it is a long-term journey and an investment for the long term;
Key points from our Sustainable Development Management Plan (SDMP)
Our SDMP represents our CCG strategy for sustainability, and was approved by the shadow Herefordshire Governing Body in September 2012 and refreshed in 2013.
The following agreed actions have been achieved in 2013-14:
• Appropriate assignment of Sustainable Development responsibilities – to key partners across the local health economy, thereby identifying what the CCG will do, what our providers need to do and what other non-CCG agencies are taking on (e.g. the transfer of sustainable whole-life costs into capital projects led by NHS PropCo).
29
• Sustainable procurement – recognised best practice has been built into the CCG’s Procurement Strategy as a checklist to guide all CCG-led procurement activities, including tendering for contracts and contract management of those contracts.
• Sustainable working practices – through renewal of our HR policies and certain business processes, we have included sustainable and flexible working arrangements (e.g. enabling remote or offsite working, the inclusion of sustainable development as part of CCG induction programmes for new staff and introducing video / web / tele-conferencing facilities to reduce business mileage).
• Facilities management – carbon reduction targets have been built into all major healthcare Providers’ contracts.
• Developing partnerships – gaining the inclusion of sustainable development onto the Health & Wellbeing Board agenda to enable key leaders from the health and care system to work together to improve the health and wellbeing of our local populations and to reduce health inequalities.
The following actions are yet to be delivered and therefore will become priority challenges to overcome in our 2014-15 development:
• Develop a comprehensive policy on Active Travel to formalise the minimising of carbon emissions arising from travel by staff, including initiatives to reduce car usage and business mileage.
• To more accurately establish the CCG’s Carbon Footprint and finite resource consumption and use of resources patterns through the introduction of Key Performance Indicators and the monitoring of appropriate data where relevant (e.g. electricity & gas consumption, domestic waste produced and mileage records for business transport).
• To take forward our commissioning projects, especially for long term conditions, to enable greater ‘one-stop’ services and care closer to home so as to reduce the distances people travel to use health services.
• To publish a greater amount of our policies and information on the CCG website to demonstrate our commitment to Sustainable Development and raise awareness of this agenda during 2014/15.
• To consider how we share sustainability activities and associated monitoring data across the shared occupancy of our HQ building and the different accounting boundaries of the CCG, Commissioning Support Unit and Herefordshire Council to ensure that actual consumption can be measured for each organisation and costs properly attributed.
30
Note: It will not be possible to do this in 2013-14 as Herefordshire CCG currently leases desk space from Herefordshire Council, and therefore we could not provide a detailed narrative explanation of our property occupation and sustainability costs.
31
Equality Report
Breakdown (end of year figures) of:
Q. The number of persons of each sex who were on the Governing Body?
A. The number of persons on our Governing Body is 11 of which 7 are male and 4 are female.
Q. The number of other senior managers of each sex who were a grade VSM (other than persons falling within the above disclosure)
A. There are no VSM that are not on the Governing Body.
Q. The number of persons of each sex who were employees of the clinical commissioning group
There were an average 28 employees of the CCG in year, 23 are female and 5 are male.
Our People
Herefordshire CCG is a small organisation, especially in comparison to other CCGs, both in terms of the population we cover and in terms of the number of employees we have.
In total there was an average of 28 employees at the Herefordshire CCG. Direct staff costs represent just fewer than 40 per cent of our total management costs.
The remainder is allocated to our annual service level agreement that we have with SLCSU. Within this, there are the outsourced support services and functions covering, among others, quality and complaints management, treasury management, financial accounts, communications and engagement support, human resources, contract support and procurement support.
Sickness
We have developed and implemented a new sickness policy during this financial year. All staff have access to occupational health and staff counselling services.
This has meant that we have been able to manage individual sickness cases effectively through case reviews, sickness absence monitoring and trend analysis so that we are able to investigate any recurring trends and offer appropriate support.
32
Members’ Report
Member Practices
Practice Address Postcode Telephone
Alton Street Surgery Alton Street HR9 5AB 01989 563646 Ross-on Wye
Belmont Medical Centre Eastholme Avenue HR2 7XT 01432 354366 Belmont Hereford Cantilupe Surgery (and Hampton 51 St. Owen Street HR1 2JB 01432 268031 Dene Surgery) Hereford
Colwall Surgery Stone Drive WR13 6QJ 01684 540323 Colwall Worcester Cradley Surgery Cradley WR13 5LT 01886 880207 Malvern Worcester Fownhope Medical Centre Lower Island HR1 4PZ 01432 860235 Orchard Commonhill Lane Fownhope Hereford Golden Valley Practice The Surgery HR2 0EU 01981 240320 Ewyas Harold Greyfriars Surgery 25 St. Nicholas HR4 0BH 01432 265717 Street Hereford Herefordshire GP Access Centre Asda Building HR2 7JE 0330 1239309 Belmont Road Hereford King Street Surgery 22a King St HR4 9DA 01432 272181 Hereford Kingstone Surgery Kingstone HR2 9HN 01981 250215 Hereford
33
Ledbury Market Surgery Market Street HR8 2AQ 01531 632423 Ledbury Moorfield House Surgery 35 Edgar Street HR4 9JP 01432 272175 Hereford
Much Birch Surgery Much Birch HR2 8HT 01981 540310
Nunwell Surgery 10 Pump Street HR7 4BZ 01885 483412 Bromyard
Pendeen Surgery Kent Avenue HR9 5AH 01989 763535/ Ross-on-Wye 763536 Quay House Medical Centre 100 Westfaling HR4 0JF 01432 340320 Street Hereford Sarum House Surgery 3 St. Ethelbert HR1 2NS 01432 265422 Street Hereford St Katherine's Surgery Market Street HR8 2AQ 01531 633271 Ledbury The Marches Surgery Westfield Walk HR6 8HD 01568 614141 Leominster The Kington Medical Practice Eardisley Road HR5 3EA 01544 230302 Kington
The Mortimer Medical Practice Kingsland HR6 9QL 01568 Leominster 708214/708496
Wargrave House 23 St Owen Street HR1 2AB 01432 272285 Hereford
Weobley & Staunton on Wye Gadbridge Road HR4 8SN 01544 318472 Medical Practice Weobley
Westfield Surgery The Health Centre HR6 8HD 01568 612229 Westfield Walk Leominster
34
Pension Liabilities
The CCG’s accounting policy on the treatment of retirement benefits is set out in Note 4.5 of the accounts (page 109). The remuneration report is shown on page 44.
Sickness Absence Data
Staff in Post and Leavers
Staff in Post
Herefordshire CCG Staff in Post - Trend 50.00
40.00
30.00 FTE 20.00
10.00
0.00 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 13 13 13 13 13 13 13 13 13 14 14 14
Staff in Post by Age Band
Herefordshire CCG Staff 31/03/2014 - By Age Band 12.00
10.00
8.00
6.00 FTE
4.00
2.00
0.00 16 - 1920 - 2425 - 2930 - 3435 - 3940 - 4445 - 4950 - 5455 - 5960 - 6465 - 69 70+ Years Years Years Years Years Years Years Years Years Years Years Years Old Old Old Old Old Old Old Old Old Old Old Old
35
Staff in Post by Pay Band
Herefordshire CCG Staff 31/03/2014 - By Pay Band
VSM (Non-AfC) Other (Non-AfC) Medical (Non-AfC) AfC Band 9 AfC Band 8d AfC Band 8c AfC Band 8b AfC Band 8a AfC Band 7 AfC Band 6 AfC Band 5 AfC Band 4 AfC Band 3 AfC Band 2 AfC Band 1
Turnover
Herefordshire CCG Staff - FTE Turnover by Month 4.50% 4.00% 3.50% 3.00% 2.50% 2.00%
Turnover Rate Turnover 1.50% 1.00% 0.50% 0.00% Apr May Jun Jul 13 Aug Sep Oct Nov Dec Jan Feb Mar 13 13 13 13 13 13 13 13 14 14 14
36
Leavers by Reason
Herefordshire CCG Leavers - FTE by Reason Apr13 - Mar14 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00
Sickness and Absence
Monthly Sickness Absence Rates
Herefordshire CCG - Monthly Sickness Absence Rates 4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00% Sickness Rate Sickness Absence 0.50%
0.00% Apr May Jun Jul 13 Aug Sep Oct Nov Dec Jan Feb Mar 13 13 13 13 13 13 13 13 14 14 14
37
Days lost in month due to Sickness Absence
Herefordshire CCG - Days Lost in Month due to Sickness Absence - by Duration Category 40 35 3 30 0 25 Short-Term (1 - 7 Days) 8 20 Medium-Term (8 - 27 15 31 Days) 10 18 Long-Term (28+ Days) 12 14 5 8 4 4 0 0 0 0 03 0 0 0 0 02 0 10 Jul 13 Jan 14 Jun 13 Oct 13 Apr 13 Sep 13 Feb 14 Dec 13 Aug 13 Nov 13 Mar 14 May 13
38
External Audit
The CCG’s external audit service is provided by Grant Thornton. The cost of the services provided in 2013/14 is as set out below:
• Statutory Audit Services: £60k plus VAT • Further assurance services: £ NIL.
Serious untoward incidents
The quality team work with providers to ensure the robust reporting and investigation of serious untoward incidents (SUIs) and monitors the progress of any subsequent action plans. The CCG is also responsible for reporting serious incidents on behalf of independent providers.
Herefordshire CCG
Total number of SUIs Number reported on Number of Information reported during 2013/14 behalf of external Governance incidents independent providers level 3-5
5 4 1
The SUIs that were reported on behalf of external providers originated from one at a mental health secure facility and the three other incidents were community patients so would have been reported via a General Practice.
The CCG has had one Information Governance Serious Incident, which was a data breach. The incident was managed in line with the HSCIC IG Incident reporting guidance procedures June 2013 and reported to the ICO. The lesson learnt from this was the need for more frequent refresher training for staff.
Setting of charges for information
The CCG did not charge for any information during 2013-14.
We certify that the clinical commissioning group has complied with HM Treasury’s guidance on cost allocation and the setting of charges for information.
39
Complaints
The CCG complaints procedures reflect the Parliamentary Health Service Ombudsman’s six principles for remedy:
• Getting it right • Being customer focused • Being open and accountable • Acting fairly and proportionately • Putting things right • Seeking continuous improvement.
There were 23 formal complaints for the year.
Q1 Q2 Q3 Q4 Type 13/14 13/14 13/14 13/14 Total Complaint 7 4 7 5 23 Total 7 4 7 5 23
By Service
Q1 Q2 Q3 Q4 Service 13/14 13/14 13/14 13/14 Total Wye Valley NHS Trust 2 1 5 3 11 Continuing Healthcare 2 1 1 1 5 Individual Funding Requests (IFRs) 1 1 0 0 2 Dentists Hereford 1 0 1 0 2 Out of Hours 0 0 0 1 1 Not recorded 0 1 0 0 1 Commissioning Decisions 1 0 0 0 1 Total 7 4 7 5 23
40
By Service Type
Q1 Q2 Q3 Q4 13/14 13/14 13/14 13/14 Total Hospital 2 1 5 3 11 CCG Services 4 2 1 1 8 Dental services 1 0 1 0 2 Urgent Care Services & Out of Hours 0 0 0 1 1 Nursing & Residential Homes 0 1 0 0 1 Total 7 4 7 5 23
By Domains of Patient Experience i.e. by Subject
Q1 Q2 Q3 Q4 Domains of Patient Experience 13/14 13/14 13/14 13/14 Total Safe, high quality co-ordinated care 2 1 4 3 10 Better info, more choice 4 1 1 0 6 Access and Waiting 0 0 2 2 4 Building closer relationships 0 2 0 0 2 Clean, friendly comfortable place to be 1 0 0 0 1 Total 7 4 7 5 23
By Domains of Patient Experience sub-subjects i.e. by themes
Domains of Patient Experience Q1 Q2 Q3 Q4 Sub-subjects 13/14 13/14 13/14 13/14 Total Clinical care / treatment 0 0 2 2 4 Poor communication / info – Letter 2 0 0 0 2 Poor communication / information 1 1 0 0 2 Access to services 0 0 0 2 2 Care during terminal stages 0 0 0 1 1 Charges and costs 0 0 1 0 1 General Enquiry / Request for information 0 0 1 0 1 Failure to follow procedure 0 0 1 0 1 Failure to follow procedure 0 1 0 0 1 Dignity and respect 1 0 0 0 1 Diagnosis issues 1 0 0 0 1 Delay in providing prescription 0 0 1 0 1
41
Wait due to cancellation of appointment 0 0 1 0 1 Bereavement 0 1 0 0 1 Attitude 0 1 0 0 1 Advice re referral for treatment / hospital 1 0 0 0 1 Admission, Discharge and Transfer 1 0 0 0 1 Total 7 4 7 5 23
Employee Consultation
The CCG went through a management of change process at the end of the last financial year when it was still part of the PCT and these changes were implemented at the beginning of this financial year; there was of course a full consultation.
In conjunction with other CCGs, there has been a full consultation and implementation of a number of new HR policies and we are looking to develop some further policies this year. The CCG is committed to consulting with its employees and working with Trade Union colleagues.
We engage with our staff in a number of ways to ensure continuous consultation and engagement on changes that will affect them. These mechanisms are:
• A Human Resources and Organisational Development team who meet monthly to discuss policy development and staff development for the whole organisation • Informal partnership arrangement in place with unions • Monthly team briefings (CCG and CSU teams) • CCG staff newsletters
Employees with a disability
Employing people with a disability is important for any organisation providing services for the public as they need to reflect the many and varied experiences of the public they serve. In the provision of health services it is perhaps even more important, as people with disabilities make up a significant proportion of the population, and those with long- term medical conditions use the services of the NHS. The CCG’s commitment to people with disabilities includes:
• People with disabilities who meet the minimum criteria for a job vacancy are guaranteed an interview
• The adjustments that people with disabilities might require in order to take up a job or continue working in a job are proactively considered
• The CCG’s mandatory equality and diversity training includes awareness of a range of issues impacting on people with disabilities
42
• The organisation ensures any employee who needs training, either because they work with people with disabilities, or because they have acquired an impairment or medical condition, receives the necessary training.
Emergency preparedness
The CCG is an active participant in emergency planning mechanisms. We subscribe to the local Emergency & Resilience Forum and are sighted on the local partnership meetings and resilience challenges. We have a robust Business Continuity Policy and ensure are staff are up to date with training and awareness. We have participated in tabula exercises and simulations.
We certify that the clinical commissioning group has incident response plans in place, which are fully compliant with the NHS Commissioning Board Emergency Preparedness Framework 2013. The clinical commissioning group regularly reviews and makes improvements to its major incident plan and has a programme for regularly testing this plan, the results of which are reported to the Governing Body.
Statement as to Disclosure to Auditors
Each individual who is a member of the [Membership Body/Governing Body] at the time the Members’ Report is approved confirms:
So far as the member is aware, that there is no relevant audit information of which the clinical commissioning group’s external auditor is unaware; and,
That the member has taken all the steps that they ought to have taken as a member in order to make them self aware of any relevant audit information and to establish that the clinical commissioning group’s auditor is aware of that information.
Signed: ……………………………………………..
Jo Whitehead
Chief Officer for Herefordshire CCG
3 June 2014
43
Remuneration Committee Report
The Remuneration Committee was established by Herefordshire CCG to approve the remuneration and terms of service for the executive directors, other staff on very senior manager (VSM) pay terms and conditions and lay members of the CCG Board.
Pay for board members and other senior staff was mainly on nationally determined pay rates. Where pay was determined locally this was agreed by the committee.
Membership of the committee consisted of 3 Non-Executive Members:
Member Title Suzanne Penny Independent Chair of Remuneration Committee Richard Williams Secondary Care Lead Christine Daws Independent Lay Member Audit & Assurance
It was the responsibility of the committee to:
• Determine the broad remuneration policy and set the framework for setting the key objectives of the CCG’s senior managers;
• Determine the service contracts of the CCG’s senior managers, including starting salaries and termination arrangements;
• Review the performance of the Chief Officer and other senior managers and determine annual salary awards, if appropriate;
• Consider the severance payments of the Chief Officer and usually of other senior managers, seeking HM Treasury approval as appropriate in accordance with the guidance ‘Managing Public Money’ (available on the HM Treasury.gov.uk website).
The remuneration of the executive directors and lay advisors serving on the CCG’s Governing Body is determined by the Remuneration Committee in accordance with recognised national NHS pay scales for such roles.
The Remuneration Committee also determines the remuneration of the clinical members of the Governing Body. The rates payable are determined locally. The CCG does not operate any performance-related pay arrangements. Senior manager contracts of employment are not subject to fixed terms unless agreed by the committee and follow governance and HM Treasury rules and contain a standard notice period of six months on either side.
The tables below set out the salaries and allowances, along with pension benefits of all senior managers serving on the Governing Body during the year.
44
Salaries and Allowances Name Title Appointment Details Salary & Annual Long Term All Pension Taxable Total (bands Fees Performance Performance Related Benefits of £5,000) (bands of Related Related Benefits (bands of £5,000) Bonuses Bonuses (bands of £100) (bands of (bands of £5,000) £5,000) £5,000)
Jill Sinclair Chief Finance Officer 01/04/2013 to 31/03/2014 85-90 0 0 0 0 85-90 Adrian Griffiths Head of Commercial Development 01/04/2013 to 31/03/2014 55-60 0 0 0 0 55-60 Alison Talbot-Smith Head of Clinical Outcomes & Service Transformation 01/04/2013 to 31/03/2014 70-75 0 0 0 0 70-75 Michael Emery Head of Business Delivery 01/04/2013 to 31/03/2014 65-70 0 0 0 0 65-70 Catherine Gritzner Chief Officer 01/04/2013 to 30/04/2013 5-10 0 0 0 0 5-10 Josephine Whitehead Chief Officer 03/02/2014 to 31/03/2014 15-20 0 0 0 0 15-20 David Farnsworth Executive Lead Nurse 01/04/2013 to 31/03/2014 65-70 0 0 0 0 65-70 Christine Daws Lay Member and Chair of Audit and Assurance 01/04/2013 to 31/03/2014 5-10 0 0 0 0 5-10 Fiona Nikitik Practice Manager Lead 01/04/2013 to 31/03/2014 25-30 0 0 0 0 25-30 Suzanne Penny Independent Chair R&A 01/10/2013 to 31/03/2014 0-5 0 0 0 0 0-5 Dr.Ian Tait GP, Quality and Patient Safety Lead 01/04/2013 to 31/03/2014 30-35 0 0 0 0 30-35 Dr.Andrew Watts GP, Clinical Chair 01/04/2013 to 31/03/2014 90-95 90-95 Graham Taylor Lay Member for Patient and Public Involvement1 01/04/2013 to 30/09/2013 0-5 0 0 0 0 0-5 Dr. Andrew Black GP, Finance and Contracting Lead 01/04/2013 to 31/12/2013 25-30 0 0 0 0 25-30 Dr. Crispin Fisher GP, Primary Care Liaison Lead 01/04/2013 to 31/03/2014 15-20 0 0 0 0 15-20 Dr. Richard Williams Secondary Care Lead 01/04/2013 to 31/03/2014 0 0 0 0 0 0 Dr. Richard Kippax GP, Finance & Contract Lead 25/03/2014 to 31/03/2014 0-5 0 0 0 0 0-5 Diane Jones MBE Independent Chair IFR & Interim PPI Lay member 01/10/2013 to 31/03/2014 0-5 0 0 0 0 0-5 John Wicks Interim Chief Officer 29/04/2013 to 29/11/2013 100-105 0 0 0 0 100-105
Note 1 J Wicks was employed to November 2013 whilst the recruitment process for a permanent Chief Officer was undertaken.
Note 2 During the year there were 3 local authority representatives from April to November. The CCG is currently awaiting a decision from the local authority on who the sustantive local authority representative will be. 45
Pension Entitlements of Senior Managers
Name Title Real increase in pension age 60 at £2,500) of (bands £'000 Real increase in pension lump sum £2,500) of (bands 60 age at £'000 Total accrued pension at age 60 at £5,000) of (bands 2014 March 31 £'000 Lump sum age at 60 related to pension 2014 31accrued at March £5,000) of (bands £'000 Value Equivalent Cash Transfer at 2014 March 31 £'000 Value Equivalent Cash Transfer at 2013 March 31 £'000 Real increase in Equivalent Cash Transfer Value £'000 Employer's to contribution stakeholder pension (rounded to £00) nearest £ Senior Employing Entity Legal Manager Jill Sinclair Chief Finance Officer 0.0-2.5 5.0-7.5 30-35 100-105 662 599 50 0 0 Adrian Griffiths Head of Commercial Development 0.0-2.5 5.0-7.5 5-10 25-30 122 90 30 0 0 0 Alison Talbot-Smith Head of Clinical Outcomes & Service Transformation 0.0-2.5 2.5-5.0 15-20 50-55 271 237 28 0 Michael Emery Head of Business Delivery (0.0)-(2.5) 10.0-12.5 0-5 10-15 51 1 50 0 0 * Catherine Gritzner Chief Officer 0.0-2.5 0.0-2.5 30-35 95-100 711 630 6 0 0 * Josephine Whitehead Chief Officer 0.0-2.5 0 0-5 0 15 0 2 0 0 David Farnsworth Executive Lead Nurse 0.0-2.5 2.5-5.0 10-15 35-40 192 166 22 0 0 * Ian Tait GP, Quality & Patient Safety Lead 7.5-10.0 27.5-30.0 10-15 30-35 237 82 154 0 0 * Andrew Watts GP, Clinical Chair 15.0-17.5 47.5-50.0 25-30 75-80 489 185 300 0 0 * Andrew Black GP, Finance & Contracting Lead 0.0-2.5 0.0-2.5 5-10 20-25 103 93 6 0 0 * Crispin Fisher GP, Primary Care Liaison Lead 2.5-5.0 12.5-15.0 10-15 40-45 273 179 90 0 0
Notes:
As lay members do not receive pensionable remuneration, there are no entries in respect of pensions for lay members.
Real increase calculations includes an adjustment for inflation of 2.2% based on values as at 31st March 2013
Notes continued on page 47 46
Real increase calculations include a pro rata adjustment for time served in office for A Black ( 01/04/2013 - 31/12/2013) and C Gritzner ( 01/04/2013 - 30/04/2013). The real increase figures disclosed therefore show the increase relevant to the their time in office with Herefordshire CCG and the values at 31st March 2014 include other employments to 31st March 2014.
Real increase figures supplied by NHS Pensions Agency for I Tait, A Watts and C Fisher do not take account of practitioner payments for 12/13 which means that this comparison is not on a like for like basis for the financial year 13/14 only. The figures disclosed for 14/15 will include full comparatives for 13/14 and so this anomaly will not occur in the future.
* The figures in the totals above include contributions from all employments as per the NHS Pensions Agency for 2013/14. The figures therefore do not just represent contributions from employment for the individuals listed above with Herefordshire Clinical Commissioning Group for the financial year 2013/14.
Cash Equivalent Transfer Values
A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures and the other pension details include the value of any pension benefits in another scheme or arrangement that the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries.
Real Increase in CETV
The real increase in CETV reflects the increase in CETV effectively funded by the employers. It takes account of the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another scheme or arrangement) and uses common market valuation factors for the start and end of the period.
Pay Multiples
Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the median remuneration of the organisation’s workforce:- The banded remuneration of the highest paid director in the financial year 2013/14 was £182.5k. This was 4.0 times the workforce's median remuneration which was £45.7k. No employees received remuneration in excess of the highest paid director.
47
Total remuneration includes salary, non-consolidated performance-related pay, benefits- in-kind as well as severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions.
Off-payroll Engagements
Off-payroll engagements Table 1
For all off-payroll engagements as of 31 March 2014, for more than £220 per day and that last longer than six months :
Number
Number of existing engagements as of 31 March 2014 3
Of which, the number that have existed :
for less than one year at the time of reporting 0
for between one and two years at the time of reporting 3
for between 2 and 3 years at the time of reporting 0
for between 3 and 4 years at the time of reporting 0
for 4 or more years at the time of reporting 0
These relate to contracts for GP sessional work undertaken for clinical advice for transformational work programmes.
Off-payroll engagements Table 2
For all new off-payroll engagements between 1 April 2013 and 31 March 2014, for more than £220 per day and that last longer than six months :
Number
Number of new engagements between 1 April 2013 and 31 March 2014 5 Number of new engagements which include contractual clauses giving Herefordshire CCG the right to request 5 assurance in relation to income tax and National Insurance obligations Number for whom assurance has been requested 5
Of which :
Assurance has been received 5
Assurance has not been received 0
Engagements terminated as a result of assurance not being received, or ended before assurance received 0
Of the above, four relate to contracts for GP sessional work undertaken for clinical advice for transformational work programmes and one relates to the engagement for an interim chief officer during the period when the CCG was recruiting permanently for this role from Aprl to November 2013.
Signed: ……………………………………………..
Jo Whitehead
Chief Officer for Herefordshire CCG
3 June 2014
48
Membership Body and Governing Body Profiles
Dr Andy Watts - Chair/Clinical Lead
Dr Andy Watts has been a Herefordshire resident for 25 years. He is a long standing GP at Sarum House surgery and has many years' experience working in hospital clinics in both rheumatology and cardiology.
Andy led the Practice Based Commissioning (PBC) programme for NHS Herefordshire.
Dr Richard Kippax - GP Lead for Finance and Contracting
'Dr Richard Kippax joined Herefordshire CCG in March 2014. He qualified at Middlesex Hospital medical school, London in 1989 and has spent most of the intervening years working in various healthcare settings in Herefordshire, first of all doing a variety of hospital jobs then GP locums in many of the Herefordshire General Practices before settling in 1995 to become a GP principal at Belmont Medical Centre, Hereford. He is shortly (July 2014) to move to Fownhope Medical Centre also as a GP principal. He is very interested in delivering value for money for the patients of Herefordshire
49
Dr Ian Tait - GP Lead for Quality
Ian has been a GP in Bromyard for almost 25 years. He is a CCG Board Member and the lead for Quality.
Previously he was Chair of Herefordshire PCT Professional Executive Committee (PEC) and a Herefordshire PCT Board Member since 2000.
He is particularly keen to work on approaches to implementing strategy. Clinical interests are General Medicine and Mental Health.
Dr Crispin Fisher - GP Lead for Primary Care Liaison
Dr Crispin Fisher, MRCP, FRCGP, has been a GP in Leominster since 1998.
He qualified from Cambridge and London, and was elected to HCCG in September 2012, as Primary Care Lead.
Areas of interest are care closer to home, end-of-life care, and continuity of care. Outside work, music and family life are central.
50
Dr Richard Williams - Secondary Care Lead
Dr Richard Williams MB.BS, FRCP, MRCGP, DRCOG retired as Consultant Physician and Rheumatologist at Hereford County Hospital in 2010.
He qualified from the Royal Free Hospital in 1980, and trained in General Practice before returning to hospital medicine to complete specialist training in New Zealand, Winchester and The Royal London Hospital.
He believes in the vital importance of first rate hospital care with core services, including a fully functioning emergency service, provided locally.
This is especially important given the geographic position of Herefordshire. He also believes that Herefordshire is in a strong position to advance integration of primary and secondary care to the great benefit of the local population.
Jo Whitehead - Chief Officer
Jo Whitehead has over 20 years’ experience of working in the NHS managing hospital, community and commissioning services. Jo has also worked at the Department of Health, as regulator of health and social care, and for a national charity providing services to vulnerable people.
51
David Farnsworth - Executive Lead Nurse
It’s David's job to assure the Board concerning quality and safety in our commissioned services. David is also the CCG’s Safeguarding lead for children and adults, the Caldicott Guardian and takes a lead role in engagement.
Jill Sinclair - Chief Finance Officer
Jill is a Chartered Management Accountant who previously held senior finance roles with a number of public sector organisations. She has worked within provider and commissioning organisations and has experience of working within local government and the strategic health authority. Jill’s main focus is to provide transparency in respect of the CCG’s finances and to ensure that good governance and financial management underpins the improvement of quality and patient outcomes.
52
Fiona Nikitik - Practice Manager Board Member
Fiona has been the Practice Manager at the Colwall Surgery for 7 years. She is a qualified nurse and previously worked with Herefordshire Primary Care Trust.
Her role is to act as a conduit to feed the views of Practice Managers to the CCG. Practice managers manage the overall running of GP surgeries.
Christine Daws - Lay Representative and Deputy Chair, Audit and Governance Lead
Christine Daws retired from a career in the public sector in March 2010. She is a qualified public finance accountant. Her most recent post had been as Finance Director General in the Welsh Assembly Government.
Earlier in her career Christine worked in the NHS in Service Planning, Performance Management and as a Health Authority Director of Finance. She moved to the Civil Service as Deputy Director of Finance at the Department of Health. While in this post she gained considerable experience of managing major change and IT projects.
53
Diane Jones - Lay Representative Board Member, Public and Patient Involvement Diane has lived in Herefordshire for over 30 years. During this time she has been involved in a wide range of voluntary and community groups. As chair of Herefordshire Carers Support for a number of years she worked with the trustees to bring together two carers organisations to support the voice of carers in the county. Working for the Royal Voluntary Service gave her great insight into the challenges people face living in isolated rural communities and also the impact that volunteers can have in changing the lives of isolated individuals and communities, She was a Non-Executive Director for Herefordshire Primary Care Trust where she worked to ensure that the voice of the patient and carer was heard at the Board table. In 2012 she was honoured to be awarded an M.B.E in recognition of 20 years of continuous voluntary service as an advocate and voice for vulnerable groups in mental health, children’s and older people’s services.
CCG committee member profiles – who are not members of the CCG Governing Body
Audit Committee: Suzanne Penny, Independent Lay Member and Chair of Remuneration Committee Suzanne has lengthy NHS and third sector experience and is a fellow of the CIPD.
Finance and Performance Committee:
Louise Nunn, Deputy Chief Finance Officer December 2012 to March 2014. Louise joined the CCG after working in New Zealand at Wellington Hospital as Director of Performance & Business Services. Her previous experience since joining the NHS in 1995 as a National Finance Trainee includes roles within PCTs, Mental Health and acute teaching hospitals.
Adrian Griffiths, Head of Commercial Development Adrian is a qualified member of the Chartered Institute of Public Finance and Accountancy, and has worked in the NHS for over ten years. He has previously held roles with Local Authorities, PCTs and NHS Provider Trusts, mostly dealing with financial management and contracting. Adrian is a member of the CCG Senior Management Team and his role with the CCG is to advise the Governing Body on commercial matters, contracting and procurement
54
Service, Innovation and Transformation Group (STIG)
Sarah Caldicott, Clinical Programme Manager Sarah is a registered general nurse, she qualified in 1989 and her clinical experience is focused in elderly care, stroke and rehabilitation. Her most recent clinical experience was as a nurse manger in outpatients.
She has a particular interest in education and development and in how IT can support and enhance patient care and clinical practice. She works in the Clinical Outcomes and Service Transformation (COST) Team. Her role involves working with patients and all stakeholders/colleagues involved in the delivery of care to develop locally agreed care pathways that support the ‘usual’/expected care for people in Herefordshire and support taking transformational change/s in practice.
Najma Ali Najma Ali is an independent consultant and worked as Interim Deputy Chief Financial Officer (Oct 2012- Dec 2012) and then as Interim Strategic Financial Planner (Jan 2013- July 2013). Role included supporting CFO with Authorisation; finance lead on main acute contract, negotiating on two contract disputes. Developing QIPP plans, Medium Term Financial Strategy, 2014-15 Recovery Plan. Developing Business Cases for major transformation programmes - Virtual Wards, Early Support Discharge, E Consultation.
Ritesh Dua Ritesh was born in India and did his medical training in Ukraine. He first came to Hereford for training in 2004 and fell in love with the beauty of rural Herefordshire. He finished his GP training in Hereford in 2009 and since then has been working as a GP Partner at Weobley & Staunton-On-Wye surgeries. He also works as a Cardiology Clinical Assistant at the Hereford County hospital and as also a GP trainer.
Dr Saran Braybrook, Pharmaceutical Adviser Saran is a pharmacist with more than 20 year’s experience optimising medicines use across primary, secondary and social care. Having completed a PhD in the late 90s “implementing change in primary care prescribing” Saran has a keen interest in reducing prescribing variation, improving patient outcomes, ensuring patient safety and raising awareness of medicines issues.
55
Declarations of Interests
Husband is a member of Bristol CCG 17-Feb-14 HCCG Governing governing body, Trustee of PROPS, Body– voting member a Bristol based charity providing Jo Whitehead Chief Officer services for young adults with LD,Governor of a special school in Bristol GP, Partner, Sarum House Surgery, 13-Sep-13 HCCG Governing Hereford Body– voting member Dr Andy Watts GP, Clinical Chair
The Marches surgery participates in 15-Sep-13 HCCG Governing Primary Care research via the PCRN Body– voting member for which it is remunerated. Medical Officer at Leominster GP, Primary Care Community Hospital, under the Dr Crispin Fisher Liaison Lead auspices of Wye Valley NHS Trust. Part shareholder, through the Marches Surgery, in Taurus Healthcare.
56
for Dr Ian Tait: GP Partner, Nunwell 27-Aug-13 HCCG Governing Surgery, Pump Street, Bromyard. Body – voting member for Dr Ian Tait: Shareholder in Taurus (GP Provider consortium). GP colleagues hold Dr Tait’s shares in the form of ‘blind trust’ and exercise Dr Tait’s rights without consultation. for Dr Ian Tait,Contracted to Wye Valley NHS Trust for work at Bromyard Community Hospital for Gillian Diane Tait (wife): a) GP, Quality and associate dentist working with Mr Dr Ian Tait Patient Safety Rupert Parsons,High Lead St,Bromyard;holds dental contract with NHS Arden,Worcestershire and Herefordshire Area Team b) Trustee of Hope Family Centre Bromyard; c) GDP dental associate working for Bradley, Shorthouse Kidderminster dental practice holding contract with NHS Arden,Worcestershire and Herefordshire Area Team.
Nothing to declare 17-Sep-13 HCCG Governing Secondary Care Body– voting member Dr Richard Williams Lead
Lay Member and Brother is a director of Hoople Ltd. 19-Aug-13 HCCG Governing Christine Daws Chair of Audit and and Halo. Body – voting member Assurance (from
57
September2012)
Dr Nigel Fraser, LMC Chair is 12-Aug-13 HCCG Governing married to a cousin Body – voting member Chief Finance Jill Sinclair Treasurer for Brecon Women’s Aid Officer Charity – potential contact with NHS services. Director of HCQG - no contracting 27/08/2013 HCCG Governing Executive Lead David Farnsworth with HCCG Body – voting member Nurse Practice Manager at Colwall Surgery 17/09/2013 HCCG Governing Practice Manager and Chair of Governors at St Paul’s Body – voting member Fiona Nikitik Lead Primary School
Trustee for elizabeth bryant 10/01/2014 HCCG SMT foundation. Charity funding research into the NHS and healthcare delivery. Alison Talbot- Smith Speciality Doctor respiratory Head of COST Medicine at WVT. Married to CD of anesthesia and SUD elective care at WVT.
Parent Governor at Blackmarston 04/09/2013 HCCG SMT Head of Business Special School for children with Mike Emery Delivery physical and learning disabilities
Head of Nothing to declare 12/08/2013 HCCG SMT Adrian Griffiths Commercial Development
58
Independent Chair Daughter employed by Herefordshire 10/04/2014 Independent Chair Diane Jones IFR & Interim PPI Council. IFR Lay member Director of Dinedor Associates 17/09/2013 Independent Chair of Independent Chair Limited, Dinedor, Hereford. Partner a updated R&A and Audit Suzanne Penny R&A Board member of Herefordshire 12/03/2014 Healthwatch.
59
Statements by the Accountable Officer
Statement of Chief Officer’s Responsibilities
The National Health Service Act 2006 (as amended) states that each Clinical Commissioning Group shall have a Chief Officer and that Officer shall be appointed by the NHS Commissioning Board (NHS England). NHS England has appointed Jo Whitehead to be the Chief Officer of the Herefordshire Clinical Commissioning Group.
The responsibilities of a Chief Officer, including responsibilities for the propriety and regularity of the public finances for which the Chief Officer is answerable, for keeping proper accounting records (which disclose with reasonable accuracy at any time the financial position of the Clinical Commissioning Group and enable them to ensure that the accounts comply with the requirements of the Accounts Direction) and for safeguarding the Clinical Commissioning Group’s assets (and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities), are set out in the Clinical Commissioning Group Chief Officer Appointment Letter.
Under the National Health Service Act 2006 (as amended), NHS England has directed each Clinical Commissioning Group to prepare for each financial year financial statements in the form and on the basis set out in the Accounts Direction. The financial statements are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Clinical Commissioning Group and of its net expenditure, changes in taxpayers’ equity and cash flows for the financial year.
In preparing the financial statements, the Chief Officer is required to comply with the requirements of the Manual for Accounts issued by the Department of Health and in particular to:
• Observe the Accounts Direction issued by NHS England, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;
• Make judgements and estimates on a reasonable basis;
• State whether applicable accounting standards as set out in the Manual for Accounts issued by the Department of Health have been followed, and disclose and explain any material departures in the financial statements; and,
• Prepare the financial statements on a going concern basis.
60
To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my Clinical Commissioning Group Chief Officer Appointment Letter.
Signed: ……………………………………………..
Jo Whitehead
Chief Officer for Herefordshire CCG
3 June 2014
61
Governance Statement
Annual Governance Statement 2013/14
1. Introduction and Context The clinical commissioning group was licensed from 1 April 2013 under provisions enacted in the Health & Social Care Act 2012, which amended the National Health Service Act 2006.
The clinical commissioning group operated in shadow form prior to 1 April 2013, to allow for the completion of the licensing process and the establishment of function, systems and processes prior to the clinical commissioning group taking on its full powers.
The clinical commissioning group includes 24 practices and 1 walk in centre across Herefordshire, and has a head count of 30.43 members of staff, based at our headquarters at 35 Hafod Road, Herefordshire, HR1 1SH.
In April 2013 Herefordshire CCG was authorised with 15 conditions and 3 directions. These are summarised as: • CCG to provide evidence of member practice involvement in decision making process and, where appropriate, there are clear arrangements for delegation of functions.
• Demonstrate that there are systems and processes in place for monitoring and acting on patient feedback, and particularly in identifying quality including safety issues.
• Provide evidence that there are systems in place to convert insights about patient choice/s in practice consultations into plans and decision-making.
• CCG must have a clear and credible integrated plan that meets authorisation requirements.
• CCG must have detailed financial plan that delivers financial balance, sets out how it will manage within its management allowance, and is integrated with the commissioning plan.
• Demonstrate that QIPP is integrated within all plans and clearly explain any changes to existing QIPP plans.
• Provide evidence that the likely inheritance from the PCT is quantified, identified, understood and that robust transition arrangements are in place. • Provide evidence that arrangements are in place to collaborate with neighbouring CCGs in areas such as lead commissioning where there is more than one CCG contracting with a provider.
62
• Provide evidence that governance arrangements are in place to identify and manage different types of risk, including key risks to delivery of QIPP.
• Provide evidence that systems and processes are in place for monitoring and acting on patient feedback, and particularly identifying early quality issues including safety.
• Provide evidence that CCG has arrangements in place to proactively identify early warnings of a failing service.
• Provide evidence that arrangements are in place to deal with and learn from serious untoward incidents and never events.
Directions 2013
The National Health Service Commissioning Board (“the Board”), in exercise of powers conferred by the Health and Social Care Act 2012 (paragraph 8 of Schedule 6) and regulation 8 of the National Health Service (Clinical Commissioning Groups) Regulations 2012 gives the following Directions.
Citation, commencement and application
(1) These Directions are given to NHS Herefordshire Clinical Commissioning Group (“NHS Herefordshire CCG”).
(2) These Directions may be cited as the NHS Herefordshire CCG Directions 2013 and come into force on 15 February 2013.
Exercise of functions
(3) This direction applies until it is varied or revoked by the Board.
(4) The Board directs that:
(a) The Board will oversee and supervise the development of NHS Herefordshire CCG’s clear and credible integrated plan, to include, but not limited to, the CCG’s financial modelling and implementation plan for 2013/14.
(b) NHS Herefordshire CCG must obtain Board sign-off of its integrated plan and any subsequent strategic plans which are required.
(c) NHS Herefordshire CCG must provide all information, documents, records or other items and support requested by the Board, which to the Board appears necessary or expedient for the purpose of preparing for and the exercise of the function described in paragraph 4(a) and 4(b) above.
(5) The Board also directs that
63
(a) It will oversee and supervise the development of NHS Herefordshire’s project management capacity and governance structures for the purpose of delivering QIPP savings and efficiency plans.
(b) NHS Herefordshire CCG must provide all information, documents, records or other items and support requested by the Board, which to the Board appears necessary or expedient for the purpose of preparing for and the exercise of the function described in paragraph 5(a) above.
(6) The Board also directs that (a) It will oversee and supervise the development of NHS Herefordshire CCG’s capacity and capability to maintain strategic oversight with available resources.
(b) NHS Herefordshire CCG must obtain Board sign-off of its senior in-house management development plans.
(c) NHS Herefordshire CCG must provide all information, documents, records or other items and support requested by the Board, which to the Board appears necessary or expedient for the purpose of preparing for and the exercise of the function described in paragraph 6(a) above.
Following NHS England’s June quarterly review, the CCG’s conditions of authorisation were reduced to 5 and to one direction.
The September review resulted in three of the conditions being removed, the only two outstanding were conditions both relating to patient experience and feedback. These both remained at the same support level. The remaining direction relating to the CCGs capacity and capability was also revoked.
The final conditions were removed and confirmed in February 2014.
2. Scope of responsibility As Accountable Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of the clinical commissioning group’s policies, aims and objectives, whilst safeguarding the public funds and assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Managing Public Money. I am also acknowledging my responsibilities as set out in my Clinical Commissioning Group Accountable Officer Appointment Letter. I am responsible for ensuring that the clinical commissioning group is administered prudently and economically and that resources are applied efficiently and effectively, safeguarding financial propriety and regularity.
64
3. Compliance with the Corporate Governance Code
We are not required to comply with the UK Corporate Governance Code. However, we have reported on our Corporate Governance arrangements by drawing upon best practice available, including those aspects of the UK Corporate Governance Code we consider to be relevant to the CCG and best practice.
4. The Clinical Commissioning Group Governance Framework
The National Health Service Act 2006 (as amended), at paragraph 14L(2)(b) states:
The main function of the governing body is to ensure that the group has made appropriate arrangements for ensuring that it complies with such generally accepted principles of good governance as are relevant to it.
NHS Herefordshire Clinical Commissioning Group (CCG) is a clinically led membership organisation made up of general practices within the geographical area of Herefordshire and which is also coterminous with Herefordshire Council.
The CCG was established under the Health and Social Care Act 2012 and is a statutory body which has the function of commissioning services for the purposes of the health service in England. The members of the Clinical Commissioning Group are responsible for determining the governing arrangements of the organisation, which they are required to set out in the CCG’s Constitution which can be found on the CCG’s website using the following the link: http://www.herefordshireccg.nhs.uk/constitution
65
Governance Structure
The governance structure for the Herefordshire CCG’s key committees as described in the CCG’s Constitution is shown in the diagram below:
GP Parliament Clinical Chair – Dr A Watts Strategy Group Chair
Remuneration Senior Herefordshire CCG Committee Management Governing Body Team Chair – Dr A Watts Audit Committee
Service Finance, Quality, & Transformation Communications, Involvement and Performance and Patient Safety and Innovation Resources Engagement Committee Committee Group (STIG) Committee
Membership of the committees and sub committees of the CCG Governing Body is outlined in terms of reference and are to be reviewed for 2014/15, and attendance at these meetings including additional attendances are recorded in the minutes of each meeting.
The CCG has reflected on its own effectiveness and performance as part of the quarterly assurance checkpoints undertaken by NHS England for all CCGs during 2013/14, the outcomes of which are reported to the CCG Governing Body Chief Officer. In the last quarter assurance checkpoint, NHS England have concluded that the CCG has made good progress in understanding and addressing its key challenges, whilst still predicting its agreed financial surplus will be met at the end of the year. It is recognised that there continue to be performance challenges around some elements of meeting the NHS Constitution requirements regarding meeting some of the national standards, for example, for RRT waiting times, A&E 4 hour waits and Cancer referrals (as set out in the NHS Constitution and NHS Operating Framework). Herefordshire CCG has demonstrated that it understands the reasons for these issues and has made significant progress in addressing the underlying causes, and although incremental, progress is being made and can be demonstrated. The CCG has robust processes in place for monitoring quality of services and triangulates patient feedback with other information sources to ensure the patient remains at the heart of the CCG Governance Board’s decision making. The adequacy of the processes used are regularly reported to the Audit and
66
Assurance Committee and performance outcomes to the Finance and Performance Committee and the Quality Committee.
The membership of the Herefordshire CCG is made up of 24 practices and 1 walk in centre which are outlined in the Constitution. When the members of the group meet to conduct business as a group, this is known as the Clinical Commissioning GP Parliament. Each member of this group has nominated a practice representative to represent the practice in all matters, and vote on behalf of the practice at Clinical Commissioning Group at these meetings.
Herefordshire CCG GP Parliament and ‘signed in’ attendance are listed below:
Practice Attendance Quarterly Meetings attended during 2013/14
Alton Street 3/4 Belmont 3/4 Cantilupe 3/4 Colwall 4/4 Cradley 3/4 Fownhope 4/4 Golden Valley 4/4 Greyfriars 3/4 King Street 4/4 Kingstone 2/4 Kington 3/4 Ledbury Market 3/4 Moorefield House 4/4 Mortimer 3/4 Much Birch 3/4 Nunwell 3/4 Pendeen 3/4 Quay House 4/4 Sarum House 4/4 Primecare 3/4 St Katherines 4/4 The Marches 4/4 Wargrave House 3/4 Weobley & Staunton 4/4 Westfield Walk 4/4
As set out in the Constitution, the Herefordshire Clinical Commissioning Group has delegated the majority of its decision making to the Clinical Commissioning Group Governing Body and has specific functions conferred on it by section 25 in the 2012 Act.
The composition of the CCG Governing Body is made up of GP Governing body members drawn from the CCG membership, executive officers, senior management officers, other clinical representation, practice manager and lay members. The full composition is outlined in full within the Constitution.
67
Herefordshire CCG Governing Body Members and Senior CCG officer attendance:
Names of Governing Title Meetings Body Members attended during 2013/14 Dr Andy Watts Clinical Chair 12/12 Dr Andy Black GP, Finance & Performance 6/9 Lead Dr Crispin Fisher GP, Primary Care Liaison Lead 12/12 Dr Ian Tait GP, Quality and Patient Safety 7/11 Lead John Wicks Interim Chief Officer 5/6 Jo Whitehead Chief Officer 1/2 Christine Daws Lay Representative & Deputy 11/12 Chair, Audit & Governance Lead Graham Taylor PPI Lay Member 4/4 Diane Jones Interim PPI Lay Member 6/6 Richard Williams Secondary Care Lead 12/12 Fiona Nikitik Practice Manager Lay Member 12/12 Jill Sinclair Chief Financial Officer 12/12 David Farnsworth Executive Lead Nurse 11/12 Alison Talbot-Smith Head of COST 10/12 Mike Emery Head of Business Delivery 12/12 Adrian Griffiths Head of Contract Management 11/12
The CCG Governing Body has appointed the following committees and sub- committees:
Audit and Assurance Committee provides assurance to the CCG Governing Body that the organisation’s overall internal control and governance systems operate in an adequate and effective way. The committee’s work focuses not only on financial controls, but also risk management and quality governance controls.
Names of Audit and Assurance Meetings attended during Committee Members 2013/14 Christine Daws 4/4 Graham Taylor 2/2* Diane Jones 2/2* Suzanne Penny 4/4
*(Note Graham Taylor was a lay member on the committee for part of the year and therefore attended the two meetings held during that time. Diane Jones was the replacement lay member and attended the further two meetings held during her time as the replacement during the year.)
68
The highlighted areas of the committee’s reports are as follows:
• The committee received its assurance from a review of reports by Internal Audit. These included:
- The CCG’s core financial systems, (Full Assurance) - The CCG’s financial reporting and QIPP review systems, (Significant Assurance) - The CCG’s definition of running cost application, (Significant Assurance) - The CCG’s processes for strategic business planning and reporting, (Significant Assurance) - Healthcare contracting, (Significant Assurance) - The process for triangulating information to monitor quality and ensuring high standards of safeguarding. This included testing the CCG’s action plan on the implementation of the Francis and Keogh reports, (Significant Assurance) - The conflicts of interest management process and policy, (Significant Assurance).
• The audit review of the Board Assurance Framework and Corporate Risk Register systems and controls identified that there was need for more work to be undertaken and the audit received Limited Assurance
• The committee received a service on Counter Fraud from the CSU and was given Assurance on the counter fraud measures in place and on continuing work around preventing and addressing fraud
• The committee also received reports on the continued development of the CCG in addressing the authorisation conditions and directions
• The committee received a report on the financial systems of the CSU, which were deemed unsatisfactory in the initial stages. The Committee received a progress report on how the improvements were being implemented and noted that the CCG’s own financial controls (full assurance) would provide compensating controls
• The committee received assurance that the CCG was achieving the necessary development against the Information Governance toolkit
• The committee reviewed and signed off various Corporate and HR policies
• The committee reviewed its Internal Audit arrangements and as a result of this review, the CCG’s tendered for internal audit services. Baker Tilly was appointed as the CCG’s internal auditors with effect from 01 April 2014
• The committee in year reviewed the legacy issues inherited from the former Herefordshire PCT that were being managed by NHS England
• The committee received regular progress reports from External Audit
69
Finance and Performance Committee oversees and provides assurance on finance and performance.
Names of Finance and Performance Meetings attended during 2013/14 Committee Members
Dr Andy Black (chair) 9/9 Dr Richard Kippax (chair) 1/1 Jill Sinclair 11/12 Louise Nunn 6/11 Mike Emery 7/12 Adrian Griffiths 9/12 Fiona Nikitik 7/12 David Farnsworth 8/12
The highlighted areas of the committee’s reports are as follows:
• Assurance on CCG’s in year financial monitoring and reporting and identified key variances
• Assurance on QIPP delivery
• Contractual performance of CCG contracts
• CSU SLA delivery
• Assurance on quality and performance outcomes.
• Reporting by exception on Wye Valley Trust performance
• Assurance on Corporate Risk management
• Support to clinical redesign initiatives
• Financial Recovery Plan review and reporting assurance
• Policy assurance
• Assurance on IG governance, monitoring performance and training of the CCG
• Workforce and HR assurance
Individual Funding Panel (IFP) approves commissioning decisions for individual funding requests on behalf of the group.
70
Names of Individual Funding committee Meetings attended during 2013/14 Diane Jones 9/9 Paul Ryan 7/9 Arif Mahmood 5/9 Leonie Roberts 3/9 Saran Braybrook 4/9 Yvonne Coats 3/9 Alison Rogers 2/9 Bruce Herriot 7/9 Paul Harris 2/9 Cathie Hatherall 7/9 Peter Wilson 4/9 David Farnsworth 6/9 Mark Hemming 7/9 Damian Gardner 1/9 Stuart Hydon 1/9
The highlighted areas of the committee’s reports are as follows:
• An analysis of activity between 1 April 2013 to 28 March 2014 shows the number of cases taken to IFP for consideration was 26 and from this the number of cases approved by IFR was 13.(8 cases declined / 3 further information requested not received to date / 1 referred on to NHS England / 1 adjourned until April 2014)
• The IFR Panel has had no reviews (appeals) held to date during 2013/14. – One first stage appeal received (further information for panel to consider when original decision was upheld and funding declined) No second stage appeals (which would go to an independent panel)
Quality & Patient Safety Committee (QPS). Oversees and provides assurance of effective quality and patient safety of commissioned services, quality of healthcare, information governance, financial and risk management. This includes the review and monitoring of Commissioning Support Services.
Names of Health Roundtable Members Meetings attended during 2013/14 Dr Ian Tait (chair) 11/11 David Farnsworth 10/12 Sue Little 11/12 Richard Williams 11/12 Lynne Renton 9/12 Mike Emery 3/12 Dr Andy Watts 3/12 Alison Rogers (on behalf of Saran 8/12 Braybrook) Marcus Farr 6/12 Diane Jones 4/12
71
John Wicks 4/7 Jo Whitehead 1/2 Emma Sneed 6/10 Alison Talbot-Smith 2/12 Graham Taylor 3/6 Jill Sinclair 1/12
The highlighted areas of the committee’s reports are as follows:
• Agree the strategic priorities and annual work plans for quality, performance, governance and assurance work, linked to the HCCGs strategic priorities and monitor, by exception, any deviations from plan
• Assurance on quality and patient safety reports and performance outcomes
• Reporting by exception on key quality performance targets ( A&E, cancer underperformance)
• Review of assurance visits and reporting
• Assurance on Safeguarding
• Clinical policy review and approval
• Review of Serious Incidents and patient safety issues
• Patient Engagement and Experience
• Commissioned Services, review of providers and quality of services including NHS111
Service Transformation and Improvement Group (STIG) – assures design and transformation programme aligns with the strategic objectives and the CCG’s QIPP programme.
Names of Planning Priorities Committee Meetings attended during Members 2013/14 Dr Andy Watts 8/12 Richard Williams 8/12 Dr Ian Tait 11/11 Fiona Nikitik 9/12 Adrian Griffiths 8/12 Sarah Caldicott 5/12 Dr Crispin Fisher 11/12 Najma Ali 2/2
72
David Farnsworth 8/12 Mike Emery 8/12 Dr Andy Black 9/9 Jill Sinclair 5/12 Alison Talbot-Smith 10/12 Ritesh Dua 2/12 Jacinta Meighan-Davies 3/4
The highlighted areas of the committee’s reports are as follows:
• Considering various commissioning policies for adoption by the CCGs
• E-consultations development and Map of Medicines
• Primary Care incentive scheme
• Complex Care Rehab and Repatriation
• COBIC and urgent review programme
• MSK Evaluation and Methodology
• Community Teams
• Virtual Ward pilot
• Medicines Optimisation monitoring
• Joint commissioning of Children’s services
• Transition Policy for Children and Young People with Disabilities and Complex Needs
• Care and Support Bill Implications
• Integrated Commissioning
• Complex mental health needs rehabilitation and accommodation
• Primary Care Strategy and Education programme development
• Better Care Fund Development 2014/105
• QIPP review
73
Communications, Involvement and Engagement Committee oversees the delivery of the CCGs communications and engagement activity.
Names of key committee Members Meetings attended during 2013/14 Graham Taylor (Chair) 4/6 Diane Jones (Interim Chair) 8/9 Mike Emery 6/9 David Farnsworth 5/9 CSU representative 9/9 Fiona Nikitik 5/9
The highlighted areas of the committee’s reports are as follows:
• Review communications & engagement strategy
• Patients Engagement and Patients Experience activity
• Francis Report review and recommendations
• PPG and Membership Scheme monitoring
• Raising concerns and Whistleblowing processes and communications
• Staff survey, engagement and development planning
• PALS process and review
• Urgent Care review
Remuneration Committee recommends to the Governing Body appropriate salaries, payments and terms & conditions of employment.
Names of Remuneration Committee Meetings attended during 2013/14 Members Suzanne Penny 4/4 Richard Williams 1/4 Christine Daws 4/4
The highlighted areas of the committee’s reports are as follows:
• Review and recommendation on Chief Officer remuneration
• Review and recommendation on GP Board members remuneration
• Review and recommendation of CFO remuneration • Review and recommendation on GPs contracts and remuneration
74
• Review and recommendation of VSM remuneration
5 The Clinical Commissioning Group Risk Management Framework
Corporate Governance is the system by which the CCG Governing Body directs and controls the organisation at the most senior level in order to achieve its objectives and meet the necessary standards of accountability and probity. Using a risk management mechanism, the CCG Governing Body brings together the various aspects of governance; corporate, clinical, financial, and information to provide assurance on its direction and control across the whole organisation in a co- ordinated way. The co-ordinating body for receiving assurance on these strands of governance is the Audit and Assurance Committee, which oversees integrated governance on behalf of the CCG Governance Body. In addition, the other committees also oversee the risks within their specific remits, providing assurance to the Audit and Assurance Committee and Governing Body where appropriate.
The CCG wherever possible will prevent risk arising, by the application of policies and procedures for staff and contractors to follow, the CCG Constitution, standing orders and prime financial policies, the use of technical support external to the CCG e.g. legal advice, Information Governance advice, HR advice, and internal audit. The CCG will also employ deterrents to risks arising, for example counter fraud and IT deterrents. The system of risk control, forms part of the CCG’s system of internal control and is defined in the Risk Strategy, which is reviewed annually. The strategy defines the risk management responsibilities and common methodologies for the identification and assessment of risks for the whole organisation. It requires that risks are managed to a reasonable level, within the parameters of a defined risk appetite, rather requiring the elimination of all risk of failure to achieve the CCG’s objectives. The risk control system facilitates the assessment of risk by:
• identifying and prioritising the risks to the achievement of the organisation’s objectives,
• evaluating the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically
The risk management strategy applies to all risks, whether these are financial, quality, performance, governance etc.
The risk management strategy was determined and approved by the Governing Body and the strategy outlines the processes for maintaining and monitoring the Board Assurance Framework and the Corporate Risk Register with due regard to the importance of risk management.
Risk management is embedded in the activity of the Clinical Commissioning Group and can be demonstrated through:
75
• incident and serious incident reporting is encouraged by the CCG and evident through Datix reporting system.
• IG, whistleblowing and fraud awareness training has been provided to staff
• training for staff and Board members is mandated for particular areas: Health & Safety, Information Governance, Safeguarding, safer recruitment, fire safety, business continuity/emergency planning, ISFE finance system
Risks are identified, assessed and recorded in accordance with the Risk Strategy and Risk Assessment Code of Practice. The principle processes and the matrix described in these documents are applied to all risk registers, incident management and risk assessment activity across NHS Herefordshire CCG. These processes are used to identify risks:
• retrospectively following the occurrence of an adverse incident;
• proactively by identifying of potential risks to service delivery; and
• during development of new activities.
It is acknowledged that risks may be shared with other organisations that the CCG works with jointly to deliver services. Consequently, the Board Assurance Framework is discussed with risk management leads and reflects the identified strategic risks of these organisations where appropriate.
The following details are recorded for each risk recorded on a risk register:
• risk category
• risk description
• inherent risk
• existing controls/assurance
• risk grading with controls
• and gaps in controls/assurance
• actions to reduce the risk to an acceptable level • amendments.
Further work is being undertaken on the Board Assurance Framework, following an Internal Audit review. An amended framework will be available for the Governing Body in June.
76
6. The Clinical Commissioning Group Internal Control Framework A system of internal control is the set of processes and procedures in place in the clinical commissioning group to ensure it delivers its policies, aims and objectives. It is designed to identify and prioritise the risks, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically. The system of internal control allows risk to be managed to a reasonable level rather than eliminating all risk; it can therefore only provide reasonable and not absolute assurance of effectiveness. The following control mechanisms are in place:
• Constitution
• Risk management
• Counter Fraud annual plan
• Internal Audit annual plan
• External Audit annual plan
• Performance monitoring of CCG providers and the CCG itself
• IG toolkit submission
• Incident and serious incident reporting
• Quality and financial reporting
• Contract/quality performance monitoring arrangements with providers
• Policies and procedures
• Risk assessments
• Governance reporting between governing body and its committees/sub committees
• Equality Delivery System
• Safeguarding annual report
77
7. Information Governance Information security risks are controlled through the compliance of staff to IG policies adopted by the CCG. Levels of staff understanding of information governance are generally very good, which has been supported by a recent staff survey, testing their understanding of IG. In addition during 2013/14 the CCG has undertaken an Information Security Audit to evaluate the robustness of the controls in place. The outcome of the audit was positive with some minor recommendations for action, which are being taken forward by management. The Senior Information Risk Owner, Corporate Governance Manager and Caldicott Guardian have all completed refresher training within the year to ensure they remain suitably equipped for their roles. The NHS Information Governance Framework sets the processes and procedures by which the NHS handles information about patients and employees, in particular personal identifiable information. The NHS Information Governance Framework is supported by an information governance toolkit and the annual submission process provides assurances to the clinical commissioning group, other organisations and to individuals that personal information is dealt with legally, securely, efficiently and effectively. The CCG places high importance on ensuring there are robust information governance systems and processes in place to help protect patient and corporate information. We have established an information governance management framework and are developing information governance processes and procedures in line with the information governance toolkit. We have ensured all staff undertake annual information governance training. There are processes in place for incident reporting and investigation of serious incidents. We are developing information risk assessment and management procedures and a programme will be established to fully embed an information risk culture throughout the organisation for 2014/2015.
8. Pension Obligations As an employer with staff entitled to membership of the NHS Pension Scheme, control measures are in place to ensure all employer obligations contained within the scheme regulations are complied with. This includes ensuring that deductions from salary, employer’s contributions and payments into the scheme are in accordance with the scheme rules, and that member pension scheme records are accurately in accordance with the timescales detailed in the regulations.
9. Equality, Diversity and Human Rights Obligations
Control measures are in place to ensure that all clinical commissioning group complies with the required public sector equality duty set out in the Equality Act 2010. Please view website for further details.
78
10. Sustainable Development Obligations
The clinical commissioning group is required to report its progress in delivering against sustainable development indicators. The CCG is developing plans to assess risks, enhance our performance and reduce our impact, including against carbon reduction and climate change adaption objectives. This includes establishing mechanisms to embed social and environmental sustainability across policy development, business planning and in commissioning. We will ensure the clinical commissioning group complies with its obligations under the Climate Change Act 2008, including the Adaption Reporting power, and the Public services (Social value) Act 2012. We are also setting out our commitments as a socially responsible employer.
79
11. Risk Assessment in relation to Governance, Risk Management and Internal Control
A summary of the major risks identified, during 2013/14, in the Board Assurance Framework is set out below. As the CCG began as a new statutory body on 1st April 2013 all risks identified below were new in 2013/14:
Description of major risks Existing controls: Further actions: added to the Board Assurance Framework during 2013/14 The CCG not being able to Continual review and Weekly review by Chief Officer demonstrate clear plans to assurance meetings with Area Learning from best practice address the 3 directions and Team. CCGs 15 conditions Lead Executives mapped Continual review and conditions to lead and deliver. assurance meetings Clear improvement plan put in All directions and conditions place with rectification, action cleared by February 2014. plans and timescales put in place to address all the conditions and directions with clear ownership NHS Constitution CCG Strategy and contract Continued engagement with The CCG may not be able to monitoring processes. Providers in particular Wye provide sufficient assurance Performance management Valley Trust and 2GETHER to the Area Team that it will processes Foundation Trust around meet the domains of the Area Team relationships cancer waits, RTT targets, constitution urgent care targets and IAPT targets
Engagement with the Communication and population of Herefordshire involvement strategy in place. Patient experiences to To ensure that the patient Strengthening the Patient Governing body and public involvement Experience part of the Refresh communications and strategy is embedded in the communication and engagement plan whole of the CCG’s work involvement Strategy Work with all partners
Quality of Services through Quality and Patient Safety Continued robust quality Providers Committee reviews monitoring To assure the quality of Quality reviews Appropriate use of Fines and services within main National and local reporting penalties Provides Francis and Keogh reports Review of RRR action plan RRR action plan Continual review of quality risks Assurances through contracted routes do not give certainty that quality targets are sustainably met.
Financial and future CCG leading the clinical This remains a significant risk sustainability of Wye Valley strategy review. for Herefordshire. NHS Trust and future CCG working with Key The CCG has enhanced plans configuration destabilising partners to transform local to engage and involve key Herefordshire Health services stakeholders in this work. This economy and inhibits CCG to work with WVT to includes key clinical forums and delivery of CCG Clinical ensure that the learning from ensuring NHS England/TDA Strategy. WVT’s future programme is are part of the project team and taken forward. board.
80
The scale of the financial Designation to Finance and Major risks actively monitored challenge for 13/14 is Performance Committee for QIPPs demand management significant. The 2013/14 monitoring of monthly finance initiatives in place position. revenue budget paper Develop further work Reporting to NHSE . Working presented to the CCG Board programmes in April identified the risks through and challenging the All key financial targets met for facing the CCG including specialised services deduction. 2013/14. specialised commissioning. Area Team assurance Risk on not achieving the meetings financial control total at year Engagement of clinicians in end demand management initiatives
Capacity and capability Recruitment plan completed. Continued review of resource The transitional nature of Interim capacity sourced to requirements. NHS reforms may result in provide additional senior Substantive COO appointed in stretched capacity and management capacity to the February is currently reviewing capability resulting in non CCG. the structure. delivery of service Revised OD plan developed improvements and financial and implemented efficiencies QIPP QIPP operational group set up Contingency QIPP schemes It will be challenging to meet to review targets developed the QIPP targets for 13/14 QIPP targets have a PMO QIPP target met for 2013/14 approach to delivery and are embedded in the clinical Outcomes and Service Transformational work programmes which are clinically led Commissioning Support Unit Monthly CSU contract Close monitoring of the (CSU) meetings elements of the CSU contract Failure of the CSU to deliver CSU key Performance by Executive leads. effective, timely and Indicators established responsive support functions Ongoing performance will prevent the CCG from meetings meeting its objectives
Internal Controls are outlined in the Constitution and are confirmed to be operating through routine management reporting and through work of the Internal Audit. Risks identified from these various sources are reflected in risk registers; key risks for the organisation are contained in the BAF that is reviewed by the audit committee and reported to the governing body so that risks are understood and managed by the governing body.
The Audit Committee reviews the establishment and maintenance of an effective system of integrated governance, risk management and internal control, across the whole of the Clinical Commissioning Group’s activities that support the achievement of the Clinical Commissioning Group’s objectives. Its work dovetails with that of any quality committee, which the Clinical Commissioning Group establishes to seek assurance that robust clinical quality is in place. In particular, the committee reviewed the adequacy and effectiveness of: • All risk and control related disclosure statements (in particular the governance statement) together with any appropriate independent assurances, prior to endorsement by the Clinical Commissioning Group.
81
• The underlying assurance process that indicate the degree of achievement of Clinical Commissioning Group objectives, the effectiveness of the management of principal risks and the appropriateness of the above disclosure statements.
• The policies for ensuring compliance with relevant regulatory, legal and code of conduct requirements, and related reporting and self-certification.
• The policies and procedures for all work related to fraud and corruption as set out in Secretary of State Directions and as required by the NHS Counter Fraud and Security Management Service.
In carrying out this work the committee primarily utilised the work of internal audit, external audit and other assurance functions, but was not limited to these sources. It sought reports and assurances from officers as appropriate, concentrating on the over-arching systems of integrated governance, risk management and internal control, together with indicators of their effectiveness. This was evidenced through the committee’s use of any effective assurance framework to guide its work and that of the audit and assurance functions that report to it.
The committee ensured that there was an effective internal audit function that met mandatory NHS Internal Audit Standards and provided appropriate independent assurance to the Audit Committee, Accountable Officer and Clinical Commissioning Group.
The CCG’s major risks during 2013/14 can be summarised as:
• meeting the NHS Constitution targets for cancer waiting times
• meeting the NHS Constitution targets for referral to treatment times (RTT)
• meeting the NHS Constitution target for Accident and Emergency 4 hour waiting time
• Financial sustainability of main service provider
• CCG financial risks identified in year linked to meeting the CCG’s control total
• QIPP delivery and mitigation schemes
• Health and Social Care financial system sustainability challenges
• Wye Valley NHS Trust’s quality challenges linked to the Rapid Response Review
82
Emerging risks during 2013/14 have been:
• planning and delivering the Better Care Fund to enable transformation of integrated services between the CCG and Herefordshire Council
• further financial challenges
• Non delivery of transformation and QIPP programmes
• RRR and Quality Risks
• Delivery of urgent care targets
All of these risks have existed during 2013/14, with incremental progress being made on the NHS Constitution risks during the year. There has been considerable planning and preparation for launching the Better Care Fund in 2014/15, with plans being approved at the Health and Wellbeing Board and CCG Governing body in March. The Health and Social Care system’s financial sustainability challenges are well documented and it is known that this remains a major risk for 2014/15.
12. Review of Economy, Efficiency and Effectiveness of the Use of Resources
The Finance and Performance Committee gives detailed consideration to the CCG’s financial and performance issues to provide the CCG governing body with assurance that all issues are being appropriately managed and escalated where necessary. This includes the determination of key financial assumptions to underpin the CCG’s medium term financial strategy and scrutiny of monthly financial reporting including delivery of QIPP schemes through the QIPP Operational Group. The Committee in year reviewed the CCG’s Financial Recovery Plan.
The Governing body in addition receives summary financial reporting at each meeting.
The internal audit plan also provides reports to audit committee throughout the year on financial systems and financial management provided by the CCG and supported by the Commissioning Support Unit (CSU).
13. Review of the effectiveness of Governance, Risk Management and Internal Control
As Chief Officer, I have responsibility for reviewing the effectiveness of the system of internal control within the Herefordshire Clinical Commissioning Group.
83
Capacity to handle risk
Leadership is given to the risk management process by the Chief Officer whose role is to own the Board Assurance Framework. The Board Assurance Framework which documents the principle risks to the CCG’s objectives not being delivered, is underpinned by the Corporate Risk Register which outlines the lower level risks to each Executive Lead not meeting the specific remit objectives. Each Executive lead, or members of their respective teams, will inform the Corporate Risk Register. Both the Chief Officer and Executive Leads are supported by the Head of Business Delivery. CCG staff receive support and training on risk management from the Head of Business Delivery where required.
Review of effectiveness
My review of the effectiveness of the system of internal control is informed by the work of the Internal auditors and the executive managers and clinical leads within the Clinical Commissioning Group who have responsibility for the development and maintenance of the internal control framework. I have drawn on performance information available to me. My review is also informed by comments made by the external auditors in their Management Letter and other reports.
I have been advised on the implications of the result of my review of the effectiveness of the system of internal control by the Governing Body, the Audit and Assurance Committee, Finance and Performance Committee, Service Innovation and Transformation Group and the Quality and Patient Safety Committee and that a plan to address weaknesses and ensure continuous improvement of the system is in place.
The Governing Body has oversight of the control framework and the Audit and Assurance Committee provides assurance to the CCG Governing Body that the organisation’s overall internal control/governance system operates in an adequate and effective way. The Committee’s work focuses not only on financial controls, but also risk management and quality governance controls. The Audit and Assurance Committee has provided assurance to the Board on the effectiveness of the internal control framework and has generally concluded that it is effective‘’. An internal audit review of the Board Assurance Framework and risk management processes was completed in March 2014 this review identified ‘limited’ assurance. It is recognised that the Board Assurance Framework and risk assurance frameworks require further development in the way they are documented and reported and an action plan has been agreed with auditors. This action plan is in the process of being implemented.
Head of Internal Audit Opinion:
In accordance with Public Sector Internal Audit Standards, the Head of Internal Audit (HoIA) is required to provide an annual opinion, based upon and limited to the work performed, on the overall adequacy and effectiveness of the organisation’s risk management, control and governance processes (i.e. the organisation’s system of internal control). This is achieved through a risk-based plan of work, agreed with management and approved by the Audit Committee, which should provide a reasonable level of assurance, subject to the inherent limitations described below.
84
The opinion does not imply that Internal Audit have reviewed all risks and assurances relating to the organisation. The opinion is substantially derived from the conduct of risk-based plans generated from a robust and organisation-led Assurance Framework. As such, it is one component that the Governing Body takes into account in making its Annual Governance Statement.
The Head of Internal Audit Opinion
Following completion of the planned audit work for the financial year for the Clinical Commissioning Group, the Head of Internal Audit issued an independent and objective opinion on the adequacy and effectiveness of the Clinical Commissioning Group’s system of risk management, governance and internal control. The Head of Internal Audit concluded that:
“The purpose of my annual HoIA Opinion is to contribute to the assurances available to the Chief Officer and the Governing Body which underpin the Governing Body’s own assessment of the effectiveness of the organisation’s system of internal control. This Opinion will in turn assist the Governing Body in the completion of its Annual Governance Statement, and may also be taken into account by the Care Quality Commission or other regulators to inform their own conclusions”.
The overall opinion is that ‘Significant’ assurance can be given that there is a generally sound system of internal control on key financial and management processes. These are designed to meet the CCGs objectives, and controls are generally being applied consistently.
The basis for forming my opinion is as follows:
1. An assessment of the design and operation of the key financial processes and those controls directly operated by the CCG;
2. An assessment of the range of individual opinions arising from risk-based audit assignments contained within internal audit risk-based plans that have been reported throughout the year. This assessment has taken account of the relative materiality of these areas; and
3. Our understanding of the level of challenge provided by the Audit Committee as gained throughout attendance at committee meetings throughout the year.
Commentary
The commentary below provides the context for my opinion and together with the opinion should be read in its entirety.
Context for our opinion
Our opinion covers the full year 2013 – 2014 and is based on eight reviews during the year.
85
The design and operation of the Assurance Framework and associated processes.
Our review in relation to the CCGs Risk Management & BAF arrangements included looking at the operation of the assurance framework and risk management. We have provided a limited assurance opinion in relation to this area. The areas for improvement we have highlighted will strengthen the process currently in place, by significantly enhancing the current arrangements in place. The primary issues identified as a result of this review related to the way in which the BAF was documented and reported and the extent to which this provided the necessary assurance to the Governing Body. Minor recommendations were also included to improve the risk management process, although this was considered to be more robust.
The range of individual opinions arising from risk-based audit assignments, contained within risk-based plans that have been reported throughout the year.
As set out above, we have issued one report with ‘limited assurance’ and none with ‘no assurance’ during the year.
In our reviews of the Core Finance Systems we have made an assessment of ‘full’ assurance whilst for Financial Reporting we have made an assessment of ‘Significant’ assurance. We have also provided a ‘significant assurance’ opinion in respect of our risk based review over Healthcare Contracting, running Costs, in relation to our value for money review over QIPP/Cost Improvement Planning & Reporting, and in relation to our development reviews of Quality and Strategic Planning.
Whilst our review of the CCGs Risk Management and BAF processes identified areas for improvement, as outlined above, the prevailing control environment implemented by the CCG is operating such that whilst there are improvements that can be made, we are able to provide a significant assurance opinion.
There is no internal audit work outstanding as at the year-end which would impact upon our opinion.
KPMG LLP Chartered Accountants Bristol
4 March 2014
In the first part of the year, the CCG was unable to undertake validation checks against Non Contract (NCA) invoices as the CCG does not have explicit statutory powers to process patient level data. A solution to the issue was agreed by MNHS England in December 2013, with Section 251 support for invoice validation subject to certain requirements until October 2014. The Commissioning Support Unit (CSU), which processes invoices on behalf of the CCG, has been accredited as a safe haven and approved for invoice validation under Section 251. In order to resolve the
86
data handling problem in the interim the CCG obtained provider agreement to post payment validation checks prior to payment of invoices in order to mitigate the risks of incorrect payments being made.
14. Data Quality
The Governing Body relies on the data quality elements in its contracts with providers, that requires them to quality assure their data prior to submission. The CCG also uses CSU for provider information performance, quality and finance and therefore the CCG's contract with the CSU outlines information reporting expectations. The data sources used by the CSU is the national UNIFY system and SUS data which is verified via the contracting process with providers.
15. Business Critical Models
The CCG relies on centrally provided NHS business planning models, to help it plan future strategy.
16. Data Security
The CCG has submitted a satisfactory level of compliance with the information governance toolkit for 2013/14. During 2013/14 Herefordshire CCG has 1 incident relating to data security breaches reported . This case has now been resolved.
17. Discharge of Statutory Functions
During establishment, the arrangements put in place by the clinical commissioning group and explained within the Corporate Governance Framework were developed with extensive expert external legal input, to ensure compliance with all the relevant legislation. That legal advice also informed the matters reserved for membership and Governing Body decision and the scheme of delegation.
In light of the Harris Review, the clinical commissioning group has reviewed all of the statutory duties and powers conferred on it by the National Health Service Act 2006 (as amended) and other associated legislative and regulations. As a result, I can confirm that the clinical commissioning group is clear about the legislative requirements associated with each of the statutory functions for which it is responsible, including any restrictions on delegation of those functions.
Responsibility for each duty and power has been clearly allocated to a lead senior manager.
And I can confirm that their structures provide the necessary capability and capacity to undertake all of the clinical commissioning group’s statutory duties.
87
18. Conclusion
As Chief Officer I can give assurance that no significant control issues, serious information governance breaches or other serious incidents, have been raised that have not been documented in the Annual Governance Statement.
Signed: ……………………………………………..
Jo Whitehead
Chief Officer for Herefordshire CCG
3 June 2014
88
Annual Accounts
Entity name: Herefordshire Clinical Commissioning Group This year 2013-14 This year ended 31 March 2014 This year commencing: 1 April 2013
89
CONTENTS Page Number
The Primary Statements:
Statement of Comprehensive Net Expenditure for the year ended 31st March 2014 91 Statement of Financial Position as at 31st March 2014 92 Statement of Changes in Taxpayers' Equity for the year ended 31st March 2014 93 Statement of Cash Flows for the year ended 31st March 2014 94
Notes to the Accounts Accounting policies 95 Other operating revenue 106 Revenue 106 Employee benefits and staff numbers 107 Operating expenses 111 Better payment practice code 111 Income generation activities 111 Investment revenue 111 Other gains and losses 111 Finance costs 111 Net gain/(loss) on transfer by absorption 111 Operating leases 112 Property, plant and equipment 113 Intangible non-current assets 116 Investment property 116 Inventories 117 Trade and other receivables 118 Other financial assets 118 Other current assets 118 Cash and cash equivalents 119 Non-current assets held for sale 119 Analysis of impairments and reversals 119 Trade and other payables 119 Other financial liabilities 120 Borrowings 120 Private finance initiative, LIFT and other service concession arrangements 120 Finance lease obligations 120 Finance lease receivables 120 Provisions 120 Contingencies 120 Commitments 121 Financial instruments 121 Operating segments 123 Pooled budgets 123 NHS Lift investments 124 Intra-government and other balances 124 Related party transactions 124 Events after the end of the reporting period 126 Losses and special payments 126 Third party assets 126 Financial performance targets 126 Impact of IFRS 127 Analysis of charitable reserves 127
90
Statement of Comprehensive Net Expenditure for the year ended 31 March 2014
2013-14 Note £000
Administration Costs and Programme Expenditure Gross employee benefits 4 2,445 Other costs 5 209,625 Other operating revenue 2 (2,266) Net operating costs before interest 209,803
Investment revenue 8 - Other (gains)/losses 9 - Finance costs 10 - Net operating costs for the financial year 209,803
Net (gain)/loss on transfers by absorption - Net operating costs for the financial year including absorption transfers 209,803
Of which: Administration Costs Gross employee benefits 4 1,204 Other costs 5 3,024 Other operating revenue 2 (154) Net administration costs before interest 4,075
Programme Expenditure Gross employee benefits 4 1,240 Other costs 5 206,601 Other operating revenue 2 (2,113) Net programme expenditure before interest 205,728
Other Comprehensive Net Expenditure 2013-14 £000 Impairments and reversals 22 - Net gain/(loss) on revaluation of property, plant & equipment 13 - Net gain/(loss) on revaluation of intangibles 14 - Net gain/(loss) on revaluation of financial assets 18 - Movements in other reserves - Net gain/(loss) on available for sale financial assets 18 - Net gain/(loss) on assets held for sale 21 - Net actuarial gain/(loss) on pension schemes 4 - Share of (profit)/loss of associates and joint ventures - Reclassification Adjustments On disposal of available for sale financial assets 18 - Total comprehensive net expenditure for the year 209,803
91
Statement of Financial Position as at 31 March 2014
31 March 2014
Note £000 Non-current assets: Property, plant and equipment 13 161 Intangible assets 14 - Investment property 15 - Trade and other receivables 17 - Other financial assets 18 - Total non-current assets 161
Current assets: Inventories 16 12 Trade and other receivables 17 1,566 Other financial assets 18 - Other current assets 19 -
Cash and cash equivalents 20 29
Total current assets 1,607
Non-current assets held for sale 21 -
Total current assets 1,607 Total assets 1,768
Current liabilities Trade and other payables 23 (14,834) Other financial liabilities 24 - Other liabilities 25 - Borrowings 26 - Provisions 30 -
Total current liabilities (14,834)
Total Assets less Current Liabilities (13,065)
Non-current liabilities Trade and other payables 23 - Other financial liabilities 24 - Other liabilities 25 - Borrowings 26 - Provisions 30 - Total non-current liabilities -
Total Assets Employed (13,065)
Financed by Taxpayers’ Equity General fund (13,065)
Revaluation reserve 13 -
Other reserves -
Charitable Reserves -
Total taxpayers' equity: (13,065)
The notes on pages 95 to 128 form part of this statement The financial statements on pages 91 to 94 were approved by the Governing Body on 3rd June 2014 and signed on its behalf by:
Chief Accountable Officer J Whitehead 92
Statement of Changes In Taxpayers Equity for the year ended 31 March 2014
General Revaluation Other Total fund reserve reserves reserves
£000 £000 £000 £000 Changes in taxpayers’ equity for 2013-14 Balance at 1 April 2013 - - - - Transfer of assets and liabilities from closed NHS Bodies as a result of the 1 216 - - 216 April 2013 transition Transfer between reserves in respect of assets transferred from closed NHS - - - - bodies Adjusted CCG balance at 1 April 2013 216 - - 216
Changes in CCG taxpayers’ equity for 2013-14 Net operating costs for the financial year (209,803) - - (209,803)
Net gain/(loss) on revaluation of property, plant and equipment - - - - Net gain/(loss) on revaluation of intangible assets - - - - Net gain/(loss) on revaluation of financial assets - - - - Total revaluations against revaluation reserve - - - -
Movements in other reserves - - - - Transfers between reserves - - - - Release of reserves to the Statement of Comprehensive Net Expenditure - - - - Transfer between reserves in respect of assets transferred under absorption - - - - Reserves eliminated on dissolution - - - - Net Recognised CCG Expenditure for the Financial Year (209,587) - - (209,587) Net funding 196,522 - - 196,522 Balance at 31 March 2014 (13,065) - - (13,065)
93
Cash Flows from Operating Activities
Net operating costs for the financial year (209,803) Depreciation and amortisation 13 80 Impairments and reversals - Interest paid - (Increase)/decrease in inventories 16 13 (Increase)/decrease in trade & other receivables (1,566) (Increase)/decrease in other current assets - Increase/(decrease) in trade & other payables 14,784 Increase/(decrease) in other current liabilities - Provisions utilised - Increase/(decrease) in provisions - Net Cash Inflow (Outflow) from Operating Activities (196,493)
Cash Flows from Investing Activities Interest received - (Payments) for property, plant and equipment - (Payments) for other financial assets - Proceeds from disposal of assets held for sale: property, plant and equipment - Rental revenue - Net Cash Inflow (Outflow) from Investing Activities -
Net Cash Inflow (Outflow) before Financing (196,493)
Cash Flows from Financing Activities Net funding received 196,522 Capital grants and other capital receipts - Capital receipts surrendered - Net Cash Inflow (Outflow) from Financing Activities 196,522
Net Increase (Decrease) in Cash & Cash Equivalents 29
Cash & Cash Equivalents at the Beginning of the Financial Year - Cash & Cash Equivalents (including bank overdrafts) at the End of the Financial Year 20 29
94
Notes to the financial statements
1 Accounting Policies
NHS England has directed that the financial statements of clinical commissioning groups shall meet the accounting requirements of the Manual for Accounts issued by the Department of Health. Consequently, the following financial statements have been prepared in accordance with the Manual for Accounts 2013-14 issued by the Department of Health. The accounting policies contained in the Manual for Accounts follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to clinical commissioning groups, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the Manual for Accounts permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the clinical commissioning group for the purpose of giving a true and fair view has been selected. The particular policies adopted by the clinical commissioning group are described below. They have been applied consistently in dealing with items considered material in relation to the accounts.
In accordance with the Directions issued by NHS England comparative information is not provided in these Financial Statements.
1.1 Going Concern
These accounts have been prepared on the going concern basis.
Public sector bodies are assumed to be going concerns where the continuation of the provision of a service in the future is anticipated, as evidenced by inclusion of financial provision for that service in published documents.
Where a clinical commissioning group ceases to exist, it considers whether or not its services will continue to be provided (using the same assets, by another public sector entity) in determining whether to use the concept of going concern for the final set of Financial Statements. If services will continue to be provided the financial statements are prepared on the going concern basis.
1.2 Accounting Convention
These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets, inventories and certain financial assets and financial liabilities.
1.3 Acquisitions & Discontinued Operations
Activities are considered to be ‘acquired’ only if they are taken on from outside the public sector. Activities are considered to be ‘discontinued’ only if they cease entirely. They are not considered to be ‘discontinued’ if they transfer from one public sector body to another.
1.4 Movement of Assets within the Department of Health Group
Transfers as part of reorganisation fall to be accounted for by use of absorption accounting in line with the Government Financial Reporting Manual, issued by HM Treasury. The Government Financial Reporting Manual does not require retrospective adoption, so prior year transactions (which have been accounted for under merger accounting) have not been restated. Absorption accounting requires that entities account for their transactions in the period in which they took place, with no restatement of performance required when functions transfer within the public sector. Where assets and liabilities transfer, the gain or loss resulting is recognised in the Statement of Comprehensive Net Expenditure, and is disclosed separately from operating costs.
Other transfers of assets and liabilities within the Department of Health Group are accounted for in line with IAS 20 and similarly give rise to income and expenditure entries.
For transfers of assets and liabilities from those NHS bodies that closed on 1 April 2013, HM Treasury has agreed that a modified absorption approach should be applied. For these transactions only, gains and losses are recognised in reserves rather than the Statement of Comprehensive Net Expenditure.
1.5 Charitable Funds
From 2013-14, the divergence from the Government Financial Reporting Manual that NHS Charitable Funds are not consolidated with bodies’ own returns is removed. Under the provisions of IAS 27: Consolidated & Separate Financial Statements, those Charitable Funds that fall under common control with NHS bodies are consolidated within the entities’ accounts.
95
1.6 Pooled Budgets
Where the clinical commissioning group has entered into a pooled budget arrangement under Section 75 of the National Health Service Act 2006 the clinical commissioning group accounts for its share of the assets, liabilities, income and expenditure arising from the activities of the pooled budget, identified in accordance with the pooled budget agreement.
If the clinical commissioning group is in a “jointly controlled operation”, the clinical commissioning group recognises:
• The assets the clinical commissioning group controls; • The liabilities the clinical commissioning group incurs; • The expenses the clinical commissioning group incurs; and, • The clinical commissioning group’s share of the income from the pooled budget activities.
If the clinical commissioning group is involved in a “jointly controlled assets” arrangement, in addition to the above, the clinical commissioning group recognises:
• The clinical commissioning group’s share of the jointly controlled assets (classified according to the nature of the assets); • The clinical commissioning group’s share of any liabilities incurred jointly; and, • The clinical commissioning group’s share of the expenses jointly incurred.
1.7 Critical Accounting Judgements & Key Sources of Estimation Uncertainty
In the application of the clinical commissioning group’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates and the estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. 1.7.1 Critical Judgements in Applying Accounting Policies
The following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the clinical commissioning group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements. There are no critical judgements that require separate disclosure beyond the key assumptions and estimations disclosed in section 1.7.2. 1.7.2 Key Sources of Estimation Uncertainty
The following are the key estimations that management has made in the process of applying the clinical commissioning group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements:
Estimations have been used for the final expenditure position on GP Prescribing (£2,452k) and the final contract position with NHS Commissioning Providers (excluding WVNHST). The actual charge for GP Prescribing is not available from the Prescription Pricing Authority (PPA) until after the completion of the accounts. The Prescription Pricing Authority (PPA) data for March 2014 is not yet available; therefore the accounts include 11 months actual expenditure and a further estimate for the final month. Final activity for NHS Providers will not be known until after the completion of the accounts.
During 2013/14 for Herefordshire, WVNHST haven't adopted the maternity PBR approach as the operational system was not fully in place. HCCG are working with WVNHST to implement for 2014/15. When implemented, the CCG will make one payment per episode for all antenatal care rather than paying on a visit by visit basis. This will result in a prepayment reflected in the year end accounts for any care not yet received. 1.8 Revenue
Revenue in respect of services provided is recognised when, and to the extent that, performance occurs, and is measured at the fair value of the consideration receivable.
Where income is received for a specific activity that is to be delivered in the following year, that income is deferred.
96
1.9 Employee Benefits 1.9.1 Short-term Employee Benefits
Salaries, wages and employment-related payments are recognised in the period in which the service is received from employees, including bonuses earned but not yet taken.
The cost of leave earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry forward leave into the following period. 1.9.2 Retirement Benefit Costs
Past and present employees are covered by the provisions of the NHS Pensions Scheme. The scheme is an unfunded, defined benefit scheme that covers NHS employers, General Practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical commissioning group of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period.
For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to expenditure at the time the clinical commissioning group commits itself to the retirement, regardless of the method of payment. 1.10 Other Expenses
Other operating expenses are recognised when, and to the extent that, the goods or services have been received. They are measured at the fair value of the consideration payable.
Expenses and liabilities in respect of grants are recognised when the clinical commissioning group has a present legal or constructive obligation, which occurs when all of the conditions attached to the payment have been met. 1.11 Property, Plant & Equipment 1.11.1 Recognition
Property, plant and equipment is capitalised if:
• It is held for use in delivering services or for administrative purposes; • It is probable that future economic benefits will flow to, or service potential will be supplied to the clinical commissioning group; • It is expected to be used for more than one financial year; • The cost of the item can be measured reliably; and, • The item has a cost of at least £5,000; or, • Collectively, a number of items have a cost of at least £5,000 and individually have a cost of more than £250, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; or, • Items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual or collective cost.
Where a large asset, for example a building, includes a number of components with significantly different asset lives, the components are treated as separate assets and depreciated over their own useful economic lives. 1.11.2 Valuation
All property, plant and equipment are measured initially at cost, representing the cost directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets are measured subsequently at fair value.
Land and buildings used for the clinical commissioning group’s services or for administrative purposes are stated in the statement of financial position at their re-valued amounts, being the fair value at the date of revaluation less any impairment.
Revaluations are performed with sufficient regularity to ensure that carrying amounts are not materially different from those that would be determined at the end of the reporting period. Fair values are determined as follows:
97
• Land and non-specialised buildings – market value for existing use; and, • Specialised buildings – depreciated replacement cost.
HM Treasury has adopted a standard approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued.
Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees but not borrowing costs, which are recognised as expenses immediately, as allowed by IAS 23 for assets held at fair value. Assets are re-valued and depreciation commences when they are brought into use.
Fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from fair value.
An increase arising on revaluation is taken to the revaluation reserve except when it reverses an impairment for the same asset previously recognised in expenditure, in which case it is credited to expenditure to the extent of the decrease previously charged there. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit are taken to expenditure. Gains and losses recognised in the revaluation reserve are reported as other comprehensive income in the Statement of Comprehensive Net Expenditure. 1.11.3 Subsequent Expenditure
Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is capitalised. Where subsequent expenditure restores the asset to its original specification, the expenditure is capitalised and any existing carrying value of the item replaced is written-out and charged to operating expenses. 1.12 Intangible Assets 1.12.1 Recognition
Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the clinical commissioning group’s business or which arise from contractual or other legal rights. They are recognised only:
• When it is probable that future economic benefits will flow to, or service potential be provided to, the clinical commissioning group; • Where the cost of the asset can be measured reliably; and, • Where the cost is at least £5,000.
Intangible assets acquired separately are initially recognised at fair value. Software that is integral to the operating of hardware, for example an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software that is not integral to the operation of hardware, for example application software, is capitalised as an intangible asset. Expenditure on research is not capitalised but is recognised as an operating expense in the period in which it is incurred. Internally-generated assets are recognised if, and only if, all of the following have been demonstrated:
• The technical feasibility of completing the intangible asset so that it will be available for use; • The intention to complete the intangible asset and use it; • The ability to sell or use the intangible asset; • How the intangible asset will generate probable future economic benefits or service potential; • The availability of adequate technical, financial and other resources to complete the intangible asset and sell or use it; and, • The ability to measure reliably the expenditure attributable to the intangible asset during its development. 1.12.2 Measurement
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is recognised in the period in which it is incurred.
Following initial recognition, intangible assets are carried at fair value by reference to an active market, or, where no active market exists, at amortised replacement cost (modern equivalent assets basis), indexed for relevant price 98 increases, as a proxy for fair value. Internally-developed software is held at historic cost to reflect the opposing effects of increases in development costs and technological advances. 1.13 Depreciation, Amortisation & Impairments
Freehold land, properties under construction, and assets held for sale are not depreciated.
Otherwise, depreciation and amortisation are charged to write off the costs or valuation of property, plant and equipment and intangible non-current assets, less any residual value, over their estimated useful lives, in a manner that reflects the consumption of economic benefits or service potential of the assets. The estimated useful life of an asset is the period over which the clinical commissioning group expects to obtain economic benefits or service potential from the asset. This is specific to the clinical commissioning group and may be shorter than the physical life of the asset itself. Estimated useful lives and residual values are reviewed each year end, with the effect of any changes recognised on a prospective basis. Assets held under finance leases are depreciated over their estimated useful lives.
At each reporting period end, the clinical commissioning group checks whether there is any indication that any of its tangible or intangible non-current assets have suffered an impairment loss. If there is indication of an impairment loss, the recoverable amount of the asset is estimated to determine whether there has been a loss and, if so, its amount. Intangible assets not yet available for use are tested for impairment annually.
A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit are taken to expenditure. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable amount but capped at the amount that would have been determined had there been no initial impairment loss. The reversal of the impairment loss is credited to expenditure to the extent of the decrease previously charged there and thereafter to the revaluation reserve. 1.14 Donated Assets
Donated non-current assets are capitalised at their fair value on receipt, with a matching credit to Income. They are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations, impairments and sales are as described above for purchased assets. Deferred income is recognised only where conditions attached to the donation preclude immediate recognition of the gain. 1.15 Government Grants
The value of assets received by means of a government grant are credited directly to income. Deferred income is recognised only where conditions attached to the grant preclude immediate recognition of the gain. 1.16 Non-current Assets Held For Sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met when:
• The sale is highly probable; • The asset is available for immediate sale in its present condition; and, • Management is committed to the sale, which is expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Fair value is open market value including alternative uses.
The profit or loss arising on disposal of an asset is the difference between the sale proceeds and the carrying amount and is recognised in the Statement of Comprehensive Net Expenditure. On disposal, the balance for the asset on the revaluation reserve is transferred to the general reserve.
Property, plant and equipment that is to be scrapped or demolished does not qualify for recognition as held for sale. Instead, it is retained as an operational asset and its economic life is adjusted. The asset is de-recognised when it is scrapped or demolished. 1.17 Leases
99
Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases. 1.17.1 The Clinical Commissioning Group as Lessee
Property, plant and equipment held under finance leases are initially recognised, at the inception of the lease, at fair value or, if lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate on interest on the remaining balance of the liability. Finance charges are recognised in calculating the clinical commissioning group’s surplus/deficit.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term.
Contingent rentals are recognised as an expense in the period in which they are incurred.
Where a lease is for land and buildings, the land and building components are separated and individually assessed as to whether they are operating or finance leases. 1.17.2 The Clinical Commissioning Group as Lessor
Amounts due from lessees under finance leases are recorded as receivables at the amount of the clinical commissioning group’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the clinical commissioning group’s net investment outstanding in respect of the leases.
Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. 1.18 Private Finance Initiative Transactions
HM Treasury has determined that government bodies shall account for infrastructure Private Finance Initiative (PFI) schemes where the government body controls the use of the infrastructure and the residual interest in the infrastructure at the end of the arrangement as service concession arrangements, following the principles of the requirements of IFRIC 12. The clinical commissioning group therefore recognises the PFI asset as an item of property, plant and equipment together with a liability to pay for it. The services received under the contract are recorded as operating expenses.
The annual unitary payment is separated into the following component parts, using appropriate estimation techniques where necessary:
• Payment for the fair value of services received; • Payment for the PFI asset, including finance costs; and, • Payment for the replacement of components of the asset during the contract ‘lifecycle replacement’. 1.18.1 Services Received
The fair value of services received in the year is recorded under the relevant expenditure headings within ‘operating expenses’. 1.18.2 PFI Asset
The PFI assets are recognised as property, plant and equipment, when they come into use. The assets are measured initially at fair value in accordance with the principles of IAS17. Subsequently, the assets are measured at fair value, which is kept up to date in accordance with the clinical commissioning group’s approach for each relevant class of asset in accordance with the principles of IAS 16. 1.18.3 PFI Liability
A PFI liability is recognised at the same time as the PFI assets are recognised. It is measured initially at the same amount as the fair value of the PFI assets and is subsequently measured as a finance lease liability in accordance with IAS 17.
100
An annual finance cost is calculated by applying the implicit interest rate in the lease to the opening lease liability for the period, and is charged to ‘finance costs’ within the Statement of Comprehensive Net Expenditure.
The element of the annual unitary payment that is allocated as a finance lease rental is applied to meet the annual finance cost and to repay the lease liability over the contract term.
An element of the annual unitary payment increase due to cumulative indexation is allocated to the finance lease. In accordance with IAS 17, this amount is not included in the minimum lease payments, but is instead treated as contingent rent and is expensed as incurred. In substance, this amount is a finance cost in respect of the liability and the expense is presented as a contingent finance cost in the Statement of Comprehensive Net Expenditure. 1.18.4 Lifecycle Replacement
Components of the asset replaced by the operator during the contract (‘lifecycle replacement’) are capitalised where they meet the clinical commissioning group’s criteria for capital expenditure. They are capitalised at the time they are provided by the operator and are measured initially at their fair value.
The element of the annual unitary payment allocated to lifecycle replacement is pre-determined for each year of the contract from the operator’s planned programme of lifecycle replacement. Where the lifecycle component is provided earlier or later than expected, a short-term finance lease liability or prepayment is recognised respectively.
Where the fair value of the lifecycle component is less than the amount determined in the contract, the difference is recognised as an expense when the replacement is provided. If the fair value is greater than the amount determined in the contract, the difference is treated as a ‘free’ asset and a deferred income balance is recognised. The deferred income is released to the operating income over the shorter of the remaining contract period or the useful economic life of the replacement component. 1.18.5 Assets Contributed by the Clinical Commissioning Group to the Operator For Use in the Scheme
Assets contributed for use in the scheme continue to be recognised as items of property, plant and equipment in the clinical commissioning group’s Statement of Financial Position. 1.18.6 Other Assets Contributed by the Clinical Commissioning Group to the Operator
Assets contributed (e.g. cash payments, surplus property) by the clinical commissioning group to the operator before the asset is brought into use, which are intended to defray the operator’s capital costs, are recognised initially as prepayments during the construction phase of the contract. Subsequently, when the asset is made available to the clinical commissioning group, the prepayment is treated as an initial payment towards the finance lease liability and is set against the carrying value of the liability. 1.19 Inventories
Inventories are valued at the lower of cost and net realisable value using the first-in first-out cost formula. This is considered to be a reasonable approximation to fair value due to the high turnover of stocks. 1.20 Cash & Cash Equivalents
Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the clinical commissioning group’s cash management. 1.21 Provisions
Provisions are recognised when the clinical commissioning group has a present legal or constructive obligation as a result of a past event, it is probable that the clinical commissioning group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the end of the reporting period, taking into account the risks and uncertainties. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows using HM Treasury’s discount rate as follows:
101
• Timing of cash flows (0 to 5 years inclusive): Minus 1.90% • Timing of cash flows (6 to 10 years inclusive): Minus 0.65% • Timing of cash flows (over 10 years): Plus 2.20% • All employee early departures: 1.80%
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of the receivable can be measured reliably.
A restructuring provision is recognised when the clinical commissioning group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with on-going activities of the entity.
The accounting arrangements for balances transferred from predecessor PCTs ("legacy" balances) are determined by the Accounts Direction issued by NHS England on 12 February 2014. The Accounts Directions state that the only legacy balances to be accounted for by the CCG are in respect of property, plant and equipment (and related liabilities) and inventories. All other legacy balances in respect of assets or liabilities arising from transactions or delivery of care prior to 31 March 2013 are accounted for by NHS England. The impact of the legacy balances accounted for by the CCG is disclosed in note 11 to these financial statements. The CCG's arrangements in respect of settling NHS Continuing Healthcare claims are disclosed in note 30 to these financial statements. 1.22 Clinical Negligence Costs
The NHS Litigation Authority operates a risk pooling scheme under which the clinical commissioning group pays an annual contribution to the NHS Litigation Authority which in return settles all clinical negligence claims. The contribution is charged to expenditure. Although the NHS Litigation Authority is administratively responsible for all clinical negligence cases the legal liability remains with the clinical commissioning group.
1.23 Non-clinical Risk Pooling
The clinical commissioning group participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the clinical commissioning group pays an annual contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses as and when they become due. 1.24 Carbon Reduction Commitment Scheme
Carbon Reduction Commitment and similar allowances are accounted for as government grant funded intangible assets if they are not expected to be realised within twelve months, and otherwise as other current assets. They are valued at open market value. As the clinical commissioning group makes emissions, a provision is recognised with an offsetting transfer from deferred income. The provision is settled on surrender of the allowances. The asset, provision and deferred income amounts are valued at fair value at the end of the reporting period. 1.25 Contingencies
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group, or a present obligation that is not recognised because it is not probable that a payment will be required to settle the obligation or the amount of the obligation cannot be measured sufficiently reliably. A contingent liability is disclosed unless the possibility of a payment is remote.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the clinical commissioning group. A contingent asset is disclosed where an inflow of economic benefits is probable.
Where the time value of money is material, contingencies are disclosed at their present value. 1.26 Financial Assets
Financial assets are recognised when the clinical commissioning group becomes party to the financial instrument contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the contractual rights have expired or the asset has been transferred. 102
Financial assets are classified into the following categories:
• Financial assets at fair value through profit and loss; • Held to maturity investments; • Available for sale financial assets; and, • Loans and receivables.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. 1.26.1 Financial Assets at Fair Value Through Profit and Loss
Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial assets at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in calculating the clinical commissioning group’s surplus or deficit for the year. The net gain or loss incorporates any interest earned on the financial asset. 1.26.2 Held to Maturity Assets
Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, and there is a positive intention and ability to hold to maturity. After initial recognition, they are held at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. 1.26.3 Available For Sale Financial Assets
Available for sale financial assets are non-derivative financial assets that are designated as available for sale or that do not fall within any of the other three financial asset classifications. They are measured at fair value with changes in value taken to the revaluation reserve, with the exception of impairment losses. Accumulated gains or losses are recycled to surplus/deficit on de-recognition. 1.26.4 Loans & Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method.
Fair value is determined by reference to quoted market prices where possible, otherwise by valuation techniques.
[Disclose valuation techniques as appropriate.]
The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, to the initial fair value of the financial asset.
At the end of the reporting period, the clinical commissioning group assesses whether any financial assets, other than those held at ‘fair value through profit and loss’ are impaired. Financial assets are impaired and impairment losses recognised if there is objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset.
For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. The loss is recognised in expenditure and the carrying amount of the asset is reduced through a provision for impairment of receivables.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through expenditure to the extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. 1.27 Financial Liabilities
Financial liabilities are recognised on the statement of financial position when the clinical commissioning group becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the
103 goods or services have been received. Financial liabilities are de-recognised when the liability has been discharged, that is, the liability has been paid or has expired.
Loans from the Department of Health are recognised at historical cost. Otherwise, financial liabilities are initially recognised at fair value. 1.27.1 Financial Guarantee Contract Liabilities
Financial guarantee contract liabilities are subsequently measured at the higher of:
• The premium received (or imputed) for entering into the guarantee less cumulative amortisation; and, • The amount of the obligation under the contract, as determined in accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets. 1.27.2 Financial Liabilities at Fair Value Through Profit and Loss
Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial liabilities at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the clinical commissioning group’s surplus/deficit. The net gain or loss incorporates any interest payable on the financial liability.
1.27.3 Other Financial Liabilities
After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method, except for loans from Department of Health, which are carried at historic cost. The effective interest rate is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest is recognised using the effective interest method. 1.28 Value Added Tax
Most of the activities of the clinical commissioning group are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT. 1.29 Foreign Currencies
The clinical commissioning group’s functional currency and presentational currency is sterling. Transactions denominated in a foreign currency are translated into sterling at the exchange rate ruling on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the spot exchange rate on 31 March. Resulting exchange gains and losses for either of these are recognised in the clinical commissioning group’s surplus/deficit in the period in which they arise. 1.30 Third Party Assets
Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the clinical commissioning group has no beneficial interest in them. 1.31 Losses & Special Payments
Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled.
Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis, including losses which would have been made good through insurance cover had the clinical commissioning group not been bearing its own risks (with insurance premiums then being included as normal revenue expenditure). 1.32 Subsidiaries
Material entities over which the clinical commissioning group has the power to exercise control so as to obtain economic or other benefits are classified as subsidiaries and are consolidated. Their income and expenses; gains and losses; assets, liabilities and reserves; and cash flows are consolidated in full into the appropriate financial 104 statement lines. Appropriate adjustments are made on consolidation where the subsidiary’s accounting policies are not aligned with the clinical commissioning group or where the subsidiary’s accounting date is not co-terminus.
Subsidiaries that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair value less costs to sell’. 1.33 Associates
Material entities over which the clinical commissioning group has the power to exercise significant influence so as to obtain economic or other benefits are classified as associates and are recognised in the clinical commissioning group’s accounts using the equity method. The investment is recognised initially at cost and is adjusted subsequently to reflect the clinical commissioning group’s share of the entity’s profit/loss and other gains/losses. It is also reduced when any distribution is received by the clinical commissioning group from the entity.
Joint ventures that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair value less costs to sell’. 1.34 Joint Ventures
Material entities over which the clinical commissioning group has joint control with one or more other parties so as to obtain economic or other benefits are classified as joint ventures. Joint ventures are accounted for using the equity method.
Joint ventures that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair value less costs to sell’. 1.35 Joint Operations
Joint operations are activities undertaken by the clinical commissioning group in conjunction with one or more other parties but which are not performed through a separate entity. The clinical commissioning group records its share of the income and expenditure; gains and losses; assets and liabilities; and cash flows. 1.36 Research & Development
Research and development expenditure is charged in the year in which it is incurred, except insofar as development expenditure relates to a clearly defined project and the benefits of it can reasonably be regarded as assured. Expenditure so deferred is limited to the value of future benefits expected and is amortised through the Statement of Comprehensive Net Expenditure on a systematic basis over the period expected to benefit from the project. It should be re-valued on the basis of current cost. The amortisation is calculated on the same basis as depreciation. 1.37 Accounting Standards That Have Been Issued But Have Not Yet Been Adopted
The Government Financial Reporting Manual does not require the following Standards and Interpretations to be applied in 2013-14, all of which are subject to consultation:
• IAS 27: Separate Financial Statements • IAS 28: Investments in Associates & Joint Ventures • IAS 32: Financial Instruments – Presentation (amendment) • IFRS 9: Financial Instruments • IFRS 10: Consolidated Financial Statements • IFRS 11: Joint Arrangements • IFRS 12: Disclosure of Interests in Other Entities • IFRS 13: Fair Value Measurement
The application of the Standards as revised would not have a material impact on the accounts for 2013-14, were they applied in that year.
105
2 Other Operating Revenue
2013-14 2013-14 2013-14 Total Admin Programme £000 £000 £000
Recoveries in respect of employee benefits - - - Patient transport services - - - Prescription fees and charges - - - Dental fees and charges - - - Education, training and research - - - Receipt of Government grants for capital acquisitions - - - Non-patient care services to other bodies 1,745 - 1,745 Income generation - - - Rental revenue from finance leases - - - Rental revenue from operating leases - - - Other revenue 522 154 368 Total other operating revenue 2,266 154 2,113
Admin revenue is revenue received that is not directly attributable to the provision of healthcare or healthcare services.
Revenue in this note does not include cash received from NHS England, which is drawn down directly into the bank account of the CCG and credited to the General Fund.
3 Revenue
2013-14 2013-14 2013-14 Total Admin Programme £000 £000 £000 From rendering of services 2,266 154 2,113 From sale of goods - - - Total 2,266 154 2,113
Revenue is totally from the supply of services. The clinical commissioning group receives no revenue from the sale of goods.
106
4. Employee benefits and staff numbers
4.1.1 Employee benefits
2013-14 Total Admin Program me Total Permanent Other Total Permanent Other Total Permanent Other Employees Employees Employees £000 £000 £000 £000 £000 £000 £000 £000 £000 Employee Benefits Salaries and wages 1,958 1,640 319 1,045 740 304 914 899 14 Social security costs 243 243 - 107 107 - 136 136 - Employer Contributions to NHS 243 243 - 53 53 - 190 190 - Pension scheme Other pension costs ------Other post-employment benefits ------Other employment benefits ------Termination benefits ------Gross employee benefits 2,445 2,126 319 1,204 900 304 1,240 1,226 14 expenditure
Less recoveries in respect of ------employee benefits (note 4.1.2) Total - Net admin employee benefits 2,445 2,126 319 1,204 900 304 1,240 1,226 14 including capitalised costs
Less: Employee costs capitalised ------Net employee benefits 2,445 2,126 319 1,204 900 304 1,240 1,226 14 excluding capitalised costs
107
4.1.2 Recoveries in respect of employee benefits
2013-14 Total Permanent Other Employees £000 £000 £000 Employee Benefits - Revenue Salaries and wages - - - Social security costs - - - Employer contributions to the NHS Pension Scheme - - - Other pension costs - - - Other post-employment benefits - - - Other employment benefits - - - Termination benefits - - - Total recoveries in respect of employee benefits - - -
4.2 Average number of people employed
2013-14 Permanently Total employed Other
Number Number Number
Total 28 28 -
Of the above: Number of whole time equivalent people engaged on capital projects - - -
4.3 Staff sickness absence and ill health retirements
2013-14 Number Total Days Lost 108 Total Staff Years 28 Average working Days Lost 4
2013-14 Number Number of persons retired early on ill health grounds - Total additional Pensions liabilities accrued in the year -
Ill health retirement costs are met by the NHS Pension Scheme
108
4.4 Exit packages agreed in the financial year
There were no exit packages agreed in 2013/14.
4.5 Pension costs Past and present employees are covered by the provisions of the NHS Pension Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at www.nhsbsa.nhs.uk/pensions.
The Scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The Scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities.
Therefore, the Scheme is accounted for as if it were a defined contribution scheme: the cost to the clinical commissioning group of participating in the Scheme is taken as equal to the contributions payable to the Scheme for the accounting period.
In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal valuations shall be four years, with approximate assessments in intervening years”. An outline of these follows:
4.5.1 Accounting valuation
A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period, and are accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2014, is based on valuation data as 31 March 2013, updated to 31 March 2014 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been used. The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Pension Accounts, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office.
4.5.2 Full actuarial (funding) valuation
The purpose of this valuation is to assess the level of liability in respect of the benefits due under the scheme (taking into account its recent demographic experience), and to recommend the contribution rates. The last published actuarial valuation undertaken for the NHS Pension Scheme was completed for the year ending 31 March 2004. Consequently, a formal actuarial valuation would have been due for the year ending 31 March 2008. However, formal actuarial valuations for unfunded public service schemes were suspended by HM Treasury on value for money grounds while consideration is given to recent changes to public service pensions, and while future scheme terms are developed as part of the reforms to public service pension provision due in 2015.
109
The Scheme Regulations were changed to allow contribution rates to be set by the Secretary of State for Health, with the consent of HM Treasury, and consideration of the advice of the Scheme Actuary and appropriate employee and employer representatives as deemed appropriate The next formal valuation to be used for funding purposes will be carried out at as at March 2012 and will be used to inform the contribution rates to be used from 1 April 2015.
4.5.3 Scheme Provisions
The NHS Pension Scheme provides defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the Scheme or the specific conditions that must be met before these benefits can be obtained: The Scheme is a “final salary” scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last three years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service; With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HM Revenue & Customs rules. This new provision is known as “pension commutation”; Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. From 2011-12 the Consumer Price Index (CPI) has been used and replaced the Retail Prices Index (RPI). Early payment of a pension, with enhancement, is available to members of the scheme who are permanently incapable of fulfilling their duties effectively through illness or infirmity. A death gratuity of twice final year’s pensionable pay for death in service, and five times their annual pension for death after retirement is payable. For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to the employer. Members can purchase additional service in the NHS Scheme and contribute to money purchase AVC’s run by the Scheme’s approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers.
110
5. Operating expenses
2013-14 2013-14 2013-14 Total Admin Programme £000 £000 £000 Gross employee benefits Employee benefits excluding governing body members 1,978 827 1,150 Executive governing body members 467 377 90 Total gross employee benefits 2,445 1,204 1,240
Other costs Services from other CCGs and NHS England 2,743 1,783 960 Services from foundation trusts 31,218 - 31,218 Services from other NHS trusts 112,472 - 112,472 Services from other NHS bodies - - - Purchase of healthcare from non-NHS bodies* 31,044 - 31,044 Chair and lay membership body and governing body members 140 140 - Supplies and services – clinical 340 - 340 Supplies and services – general 2,289 414 1,875 Consultancy services 290 290 - Establishment 952 34 918 Transport 9 0 9 Premises 284 101 183 Impairments and reversals of receivables - - - Inventories written down - - - Depreciation 80 80 - Amortisation - - - Impairments and reversals of property, plant and equipment - - - Impairments and reversals of financial assets - - - · Assets carried at amortised cost - - - · Assets carried at cost - - - · Available for sale financial assets - - - Impairments and reversals of non-current assets held for sale - - - Impairments and reversals of investment properties - - - Audit fees 60 60 - Other auditor’s remuneration · Internal audit services 35 35 - · Other services - - - General dental services and personal dental services - - - Prescribing costs 26,272 - 26,272 Pharmaceutical services - - - General opthalmic services 98 - 98 GPMS/APMS and PCTMS 983 - 983 Other professional fees excl. audit 172 82 90 Grants to other public bodies - - - Clinical negligence - - - Research and development (excluding staff costs) - - - Education and training 22 6 16 Change in discount rate - - - Other expenditure 121 - 121 Total other costs 209,625 3,024 206,601
Total operating expenses 212,070 4,229 207,841
Admin expenditure is expenditure incurred that is not a direct payment for the provision of healthcare or healthcare services.
* Purchase of Healthcare from Non NHS bodies includes payments to all Welsh healthcare NHS bodies, this totals £885k.
111
6. Better Payment Practice Code
6.1 Better Payment Practice Code
Measure of compliance 2013-14 2013-14 Number £000 Non-NHS Payables Total Non-NHS Trade invoices paid in the Year 6,939 34,205 Total Non-NHS Trade Invoices paid within target 6,598 32,155 Percentage of Non-NHS Trade invoices paid within target 95.09% 94.01%
NHS Payables Total NHS Trade Invoices Paid in the Year 1,844 148,908 Total NHS Trade Invoices Paid within target 1,812 148,221 Percentage of NHS Trade Invoices paid within target 98.26% 99.54%
The Better Payment Practice Code requires the CCG to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later.
6.2 The Late Payment of Commercial Debts (Interest) Act 1998
2013-14 £000
Amounts included in finance costs from claims made under this legislation - Compensation paid to cover debt recovery costs under this legislation - Total -
7 Income Generation Activites The clinical commissioning group does not undertake any income generation activities.
8. Investment revenue The CCG received no investment revenue in 2013/14.
9. Other gains and losses
The CCG has not had any other gains or losses in 2013/14
10. Finance costs
The CCG has not incurred any finance costs in 2013/14
11. Net gain/(loss) on transfer by absorption The CCG has incurred no gains or losses on transfer by absorption in 2013/14
112
12. Operating Leases
12.1 As lessee
The CCG has an agreement with Herefordshire Council to pay for its accommodation at Brockington on a desk basis. The CCG will be moving to new accommodation in 2014-15 to be co-located with the Local Authority at Plough Lane with a charge on a similar basis as Brockington will cease to exist in its current form. Whilst this is not a formal operating lease, it has the characteristics of an operating lease under IFRIC 4 and as such is analysed under the operating leases note.
The CCG has an agreement to pay NHS Property Services for accommodation in respect of community buildings. Whilst there is no lease formally in place, the arrangement has the characteristics of an operating lease under IFRIC 4 and as such is analysed under the operating leases note.
12.1.1 Payments recognised as an Expense
2013-14 Land Buildings Other Total £000 £000 £000 £000 Payments recognised as an expense Minimum lease payments - 101 42 143 Contingent rents - - - - Sub-lease payments - - - - Total - 101 42 143
12.1.2 Future minimum lease payments
2013-14 Land Buildings Other Total £000 £000 £000 £000 Payable:
No later than one year - 29 16 45 Between one and five years - - 4 4 After five years - - - - Total - 29 20 49
12.2 As lessor
The CCG does not act as a lessor and therefore has no transactions to disclose.
113
13 Property, plant and equipment
2013-14 Land Buildings Dwellings Assets under Plant & Transport Information Furniture & Total excluding construction machinery equipment technology fittings dwellings and payments on account £000 £000 £000 £000 £000 £000 £000 £000 £000 Cost or valuation at 1 April 2013 ------Transfer of assets from closed NHS bodies as a result of the ------191 - 191 1 April 2013 transition Adjusted Cost or valuation at 1 April 2013 ------191 - 191
Addition of assets under construction and payments on ------account Additions purchased ------50 50 Additions donated ------Additions government granted ------Additions leased ------Reclassifications ------Reclassified as held for sale and reversals ------Disposals other than by sale ------Upward revaluation gains ------Impairments charged ------Reversal of impairments ------Transfer (to)/from other public sector body ------Cumulative depreciation adjustment following revaluation ------At 31 March 2014 ------191 50 241
Depreciation 1 April 2013 ------Adjusted depreciation 1 April 2013 ------
Reclassifications ------Reclassified as held for sale and reversals ------Disposals other than by sale ------Upward revaluation gains ------Impairments charged ------Reversal of impairments ------Charged during the year ------80 - 80 Transfer (to)/from other public sector body ------Cumulative depreciation adjustment following revaluation ------
114
At 31 March 2014 ------80 - 80
Net Book Value at 31 March 2014 ------111 50 161
Purchased ------111 50 161 Donated ------Government Granted ------Total at 31 March 2014 ------111 50 161
Asset financing:
Owned ------111 50 161 Held on finance lease ------On-SOFP Lift contracts ------PFI residual: interests ------Total PFI & LIFT assets ------
Total at 31 March 2014 ------111 50 161
Revaluation Reserve Balance for Property, Plant & Equipment Land Buildings Dwellings Assets under Plant & Transport Information Furniture & Total construction machinery equipment technology fittings & payments on account £000's £000's £000's £000's £000's £000's £000's £000's £000's Balance at 1 April 2013 ------Transfer of assets from closed NHS bodies as a result of the ------191 - 191 1 April 2013 transition Adjusted balance at 1 April 2013 ------191 - 191
Revaluation gains ------Impairments ------Release to general fund ------Other movements ------At 31 March 2014 ------191 - 191
115
13 Property, plant and equipment cont'd
13.1 Additions to assets under construction The CCG does not have any assets under construction.
13.2 Donated assets The CCG does not have any donated assets.
13.3 Government granted assets The CCG does not have any government granted assets.
13.4 Property revaluation The CCG has not undertaken any property revaluation in year.
13.5 Compensation from third parties The CCG has not received any compensation for third parties.
13.6 Write downs to recoverable amount The CCG has not written down any assets.
13.7 Temporarily idle assets The CCG does not have any temporarily idle assets
13.8 Cost or valuation of fully depreciated assets The CCG does not have any fully depreciated assets
13.9 Economic lives
Minimum Life Maximum Life (years) (Years)
Information technology 3 5 Furniture & fittings 5 5
116
14 Intangible non-current assets The CCG does not have any intangible non-current assets
14.1 Donated assets The CCG does not have any donated assets.
14.2 Government granted assets The CCG does not have any government granted assets.
14.3 Revaluation The CCG does not have intangible non-current assets and so there have been no revaluations.
14.4 Compensation from third parties The CCG has not received any compensation for third parties.
14.5 Write downs to recoverable amount The CCG has not written down any assets.
14.6 Non-capitalised assets The CCG does not have any non-capitalised assets.
14.7 Temporarily idle assets The CCG does not have any temporarily idle assets.
14.8 Cost or valuation of fully amortised assets The CCG does not have any fully amortised assets.
14.9 Economic lives The CCG does not have any intangible non-current assets
15 Investment property The CCG has no investment property
117
16 Inventories
Drugs Consum Energy Work in Loan Other Total ables Progress Equipmen t £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2013 - - - - - 25 25 Transfer of assets from closed NHS bodies as a ------result of the 1 April 2013 transition Adjusted balance at 1 April 2013 - - - - - 25 25
Additions ------Inventories recognised as an expense in the period - - - - - (13) (13) Write-down of inventories (including losses) ------Reversal of write-down previously taken to the ------statement of comprehensive net expenditure Transfer (to)/from other public sector body ------At 31 March 2014 - - - - - 12 12
118
17 Trade and other receivables
Current Non-current 2013-14 2013-14 £000 £000
NHS receivables: Revenue 806 - NHS receivables: Capital - - NHS prepayments and accrued income - - Non-NHS receivables: Revenue 628 - Non-NHS receivables: Capital - - Non-NHS prepayments and accrued income 0 - Provision for the impairment of receivables - - VAT 64 - Private finance initiative and other public private partnership - - arrangement prepayments and accrued income Interest receivables - - Finance lease receivables - - Operating lease receivables 11 - Other receivables 57 - Total 1,566 -
Total current and non current 1,566
Included above: Prepaid pensions contributions -
The great majority of trade is with NHS England. As NHS England is funded by Government to provide funding to clinical commissioning groups to commission services, no credit scoring of them is considered necessary.
17.1 Receivables past their due date but not impaired The CCG had no receivables past their due date but not impaired.
17.2 Provision for impairment of receivables The CCG has not made a provision for impairment of receivables.
18 Other financial assets The CCG had no other financial assets as at 31 March 2014.
19 Other current assets The CCG had no other current assets as at 31 March 2014.
119
20 Cash and cash equivalents
2013-14 £000 Balance at 1 April 2013 - Net change in year 29 Balance at 31 March 2014 29
Made up of: Cash with the Government Banking Service 29 Cash with Commercial banks - Cash in hand - Current investments - Cash and cash equivalents as in statement of financial position 29
Bank overdraft: Government Banking Service - Bank overdraft: Commercial banks - Total bank overdrafts -
Balance at 31 March 2014 29
Patients’ money held by the clinical commissioning group, not included above -
21 Non-current assets held for sale The CCG had no non-current assets held for sale at 31 March 2014.
22 Analysis of impairments and reversals The CCG has not impaired any assets in the year to 31st March 2014.
23 Trade and other payables Current Non-current 2013-14 2013-14 £000 £000
Interest payable - - NHS payables: revenue 3,117 - NHS payables: capital - - NHS accruals and deferred income - - Non-NHS payables: revenue 3,699 - Non-NHS payables: capital 50 - Non-NHS accruals and deferred income 6,291 - Social security costs 19 - VAT - - Tax 23 - Payments received on account - - Other payables 1,634 - Total 14,834 -
Total payables (current and non-current) 14,834
120
24 Other financial liabilities The CCG had no other financial liabilities at 31 March 2014
25 Other liabilities The CCG had no other liabilities at 31 March 2014
26 Borrowings The CCG had no borrowings in 2013/14
27 Private finance initiative, LIFT and other service concession arrangements The CCG had no private finance initiative, LIFT or other service concession arrangements.
28 Finance lease obligations The CCG had no finance lease obligations at 31 March 2014.
28.1 Finance leases as lessee The CCG had no Finance leases as lessee at 31 March 2014.
29 Finance lease receivables The CCG had no finance lease receivables at 31 March 2014.
29.1 Finance leases as lessor The CCG does not act as a lessor and therefore has no transactions to disclose.
29.2 Rental revenue The CCG has not received rental revenue from finance leases in 2013/14.
30 Provisions Under the Accounts Direction issued by NHS England on 12 February 2014, NHS England is responsible for accounting for liabilities relating to NHS Continuing Healthcare claims relating to periods of care before establishment of the clinical commissioning group. However, the legal liability remains with the CCG. The total value of legacy NHS Continuing Healthcare provisions accounted for by NHS England on behalf of this CCG at 31 March 2014 is £740k.
31 Contingencies The CCG had no contingent liabilities or contingent assets at 31 March 2014.
121
32 Commitments
32.1 Capital commitments The CCG had no capital commitments at 31 March 2014.
32.2 Other financial commitments The CCG had no other financial commitments at 31 March 2014.
33 Financial instruments
33.1 Financial risk management Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities.
Because the clinical commissioning group is financed through parliamentary funding, it is not exposed to the degree of financial risk faced by business entities. Also, financial instruments play a much more limited role in creating or changing risk than would be typical of listed companies, to which the financial reporting standards mainly apply. The clinical commissioning group has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the risks facing the clinical commissioning group in undertaking its activities. Treasury management operations are carried out by the finance department, within parameters defined formally within the clinical commissioning group’s standing financial instructions and policies agreed by the Governing Body. Treasury activity is subject to review by the clinical commissioning group’s internal auditors.
33.1.1 Currency risk The clinical commissioning group is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and sterling based. The clinical commissioning group has no overseas operations. The clinical commissioning group therefore has low exposure to currency rate fluctuations.
33.1.2 Interest rate risk The clinical commissioning group borrows from government for capital expenditure, subject to affordability as confirmed by NHS England. The borrowings are for 1 to 25 years, in line with the life of the associated assets, and interest is charged at the National Loans Fund rate, fixed for the life of the loan. The clinical commissioning group therefore has low exposure to interest rate fluctuations.
33.1.3 Credit risk Because the majority of the clinical commissioning group’s revenue comes parliamentary funding, the clinical commissioning group has low exposure to credit risk. The maximum exposures as at the end of the financial year are in receivables from customers, as disclosed in the trade and other receivables note.
33.1.3 Liquidity risk The clinical commissioning group is required to operate within revenue and capital resource limits agreed with NHS England, which are financed from resources voted annually by Parliament. The clinical commissioning group draws down cash to cover expenditure, from NHS England, as the need arises. The clinical commissioning group is not, therefore, exposed to significant liquidity risks.
122
33 Financial instruments cont'd
33.2 Financial assets
At ‘fair value Loans and Available for Total through profit Receivables Sale and loss’
2013-14 2013-14 2013-14 2013-14 £000 £000 £000 £000
Embedded derivatives - - - - Receivables: - - - - · NHS - 806 - 806 · Non-NHS - 628 - 628 Cash at bank and in hand - 29 - 29 Other financial assets - 57 - 57 Total at 31 March 2014 - 1,520 - 1,520
33.3 Financial liabilities
At ‘fair value Other Total through profit and loss’
2013-14 2013-14 2013-14 £000 £000 £000
Embedded derivatives - - - Payables: - - - · NHS - 3,117 3,117 · Non-NHS - 10,041 10,041 Private finance initiative, LIFT and finance lease obligations - - - Other borrowings - - - Other financial liabilities - - - Total at 31 March 2014 - 13,157 13,157
123
34 Operating segments The clinical commissioning group and consolidated group consider they have only one segment: commissioning of healthcare services.
Gross Income Net Total assets Total liabilities Net assets expenditure expenditure £'000 £'000 £'000 £'000 £'000 £'000 Commissioning of 212,070 (2,266) 209,803 1,768 (14,834) (13,065) Healthcare Services
212,070 (2,266) 209,803 1,768 (14,834) (13,065)
34.1 Reconciliation between Operating Segments and SoCNE 2013-14 £'000 Total net expenditure reported for operating segments 209,803
Total net expenditure per the Statement of Comprehensive Net Expenditure 209,803
34.2 Reconciliation between Operating Segments and SoFP 2013-14 £'000 Total assets reported for operating segments 1,768
Total assets per Statement of Financial Position 1,768
2013-14 £'000 Total liabilities reported for operating segments (14,834)
Total liabilities per Statement of Financial Position (14,834)
35 Pooled budgets The CCG entered into pooled budget arrangements with Herefordshire County Council. Under the arrangement funds were pooled under s75 of the NHS Act 2006 for activities as per the table below As a commissioner of healthcare services, the CCG made contributions to the pools, which were then used to purchase heathcare services. The CCG accounted for its share of the income and expenditure of the pools as determined by the pooled budget arrangements. The CCG's shares of the income and expenditure handled by the pooled budget in the financial year were as below. 2013-14 2013-14 2013-14 £000 £000 £000 Gross Expenditure Gross Income Net Contribution
Children's Respite 917 0 917 Safeguarding 45 0 45 Carers Hub 50 0 50 Multi-Agency Safeguarding Hub 31 0 31 MIND Shires 277 0 277 Kington 894 (366) 528 Integrated Community Equipment 164 0 164 Children with Complex Needs 509 0 509
2,887 (366) 2,521 124
36 NHS Lift investments The CCG does not have NHS Lift investments.
37 Intra-government and other balances Current Non-current Current Non- Receivables Receivables Payables current Payables 2013-14 2013-14 2013-14 2013-14 £000 £000 £000 £000
Balances with: · Other Central Government bodies - - - - · Local Authorities 619 - 785 -
Balances with NHS bodies: · NHS bodies outside the Departmental Group 394 - 48 - · NHS Trusts and Foundation Trusts 412 - 3,069 - Total of balances with NHS bodies: 806 - 3,117 -
· Public corporations and trading funds - - - - · Bodies external to Government 141 - 10,932 -
Total balances at 31 March 2014 1,566 - 14,834 -
38 Related party transactions
During the year none of the Department of Health Ministers, clinical commissioning group Governing Body members or members of the key management staff, or parties related to any of them, has undertaken any material transactions with the clinical commissioning group. The Department of Health is regarded as a related party. During the year the clinical commissioning group has had a significant number of material transactions with entities for which the Department is regarded as the parent Department.
Payments Receipts from Amounts Amounts due to Related Related Party owed to from Related Party Related Party Party £000 £000 £000 £000
2Gether NHS Foundation Trust 16,000 0 475 (11) Gloucestershire Hospitals NHS Foundation Trust 3,402 0 29 (76) NHS England 462 (1,031) 0 (394) NHS Staffordshire and Lancashire CSU 2,347 (127) 0 (4) North Bristol NHS Trust 421 0 142 0 Robert Jones & Agnes Hunt Orthopaedic Hospital 649 0 9 0 NHS Foundation Trust The Royal Orthopaedic Hospital NHS Trust 390 0 0 (2) University Hospital Birmingham NHS Foundation Trust 2,063 0 0 (214) West Midlands Ambulance Service NHS Foundation 6,658 0 62 0 Trust Worcester Acute Hospital NHS Trust 4,200 0 197 0 Worcestershire Health and Care NHS Trust 574 0 0 0 Wye Valley NHS Trust 105,976 0 1,180 0
125
In addition, the clinical commissioning group has had a number of material transactions with other government departments and other central and local government bodies. Most of these transactions have been with Herefordshire Unitary Authority in respect of the purchase of Continuing Care, HM Revenue and Customs for the payment of income tax and national insurance and with NHS Pensions Scheme for the payment of superannuation.
A number of GP's are members of the CCG governing body. The total amount of transactions made with their practices are detailed below:
£'000
Dr I Tait - Nunwell Surgery 563 Dr A Watts - Sarum House Surgery 22 Dr R Kippax - Belmont Medical Centre 3 Dr C Fisher - The Marches Surgery 29 Dr A Black - Mortimer Medical Practice 486
Dr Ian Tait, Governing Body Member and Quality and Patient Safety Lead, has declared that he is a shareholder in Taurus (a GP Provider consortium) with which the CCG has had transactions. The value of these transactions is £278k
Dr Crispin Fisher, Governing Body Member and Primary Care Liaison Lead has declared that he is a shareholder in Taurus (a GP Provider consortium) with which the CCG has had transactions. The value of these transactions is £278k. Dr Fisher has received payments for work with Wye Valley Trust, who the CCG have transactions with as notified above
Dr Richard Kippax, Finance and Contract Lead, has declared that he is a shareholder in Taurus (a GP Provider consortium) with which the CCG has had transactions. The value of these transactions is £278k. His wife is employed as a specialist nurse at 2gether NHS Foundation Trust who the CCG has transactions with as notified above
Alison Talbot-Smith, Head of Clinical Outcomes and Service Transition has declared she is a speciality doctor in respiratory medicine at Wye Valley NHS Trust, who the CCG have transactions as notified above. Her husband is employed as clinical director of anaesthesia and SUD elective care at Wye Valley NHS Trust.
Fiona Nikitik, Practice Manager Lead has declared that she is the Practice Manager at Colwall Surgery with which the CCG has had transactions. The value of these transactions is £6k.
Dr Andrew Black, GP, Finance and Contracting Lead, has declared that his practice receives payments for '4us' clinics provided to Wye Valley NHS Trust, who the CCG have transactions with as notified above. His wife is employed as a social worker with Wye Valley NHS Trust.
Christine Daws has declared that her brother is a Non Executive director of Hoople Limited with which the CCG has had transactions. The value of these transactions is £917k.
Jill Sinclair has declared that her cousin is married to a GP who is in practice at Wargrave House Surgery and is also chair of Taurus (a GP Provider consortium) with which the CCG has had transactions. The value of these transactions with Wargrave Surgery is £97k and with Taurus £278k.
39 Events after the end of the reporting period
There are no post balance sheet events which will have a material effect on the financial statements of the clinical commissioning group or consolidated group.
126
40 Losses and special payments 40.1 Losses
The CCG had no losses to report in the year to 31 March 2014. 40.2 Special payments
The CCG had no special payments to report in the year to 31 March 2014.
41 Third party assets
The clinical commissioning group held cash and cash equivalents which relate to monies held by the clinical commissioning group on behalf of other parties. This has been excluded from the cash and cash equivalents figure reported in these financial statements. These monies relate to an historical clinical negligence settlement. The arrangement was that the income from annuities is handled by the local health body.
2013-14 £'000 Third party assets held by the clinical commissioning group 42
42 Financial performance targets
Clinical commissioning groups have a number of financial duties under the National Health Service Act 2006 (as amended).
The clinical commissioning group’s performance against those duties was as follows:
National Duty 2013-14 2013-14 Duty Health Maximum Performance Achieved? Service £'000 £'000 Act Section 223H(1) Expenditure not to exceed income 213,157 212,119 Yes 223I(2) Capital resource use does not exceed the amount specified in 50 50 Yes Directions 223I(3) Revenue resource use does not exceed the amount specified 210,841 209,803 Yes in Directions 223J(1) Capital resource use on specified matter(s) does not exceed - - Yes the amount specified in Directions 223J(2) Revenue resource use on specified matter(s) does not exceed - - Yes the amount specified in Directions 223J(3) Revenue administration resource use does not exceed the 4,570 4,075 Yes amount specified in Directions
Note: For the purposes of 223H(1); expenditure is defined as the aggregate of gross expenditure on revenue and capital in the financial year; and, income is defined as the aggregate of the notified maximum revenue resource, notified capital resource and all other amounts accounted as received in the financial year (whether under provisions of the Act or from other sources, and included here on a gross basis).
127
43 Impact of IFRS 2013-14 £'000
Depreciation charges 80 Interest expense - Impairment charge: Annually Managed Expenditure - Impairment charge: Departmental Expenditure Limit - Other Expenditure - Revenue receivable from subleasing - Total IFRS Expenditure (IFRIC 12) 80 Revenue consequences of private finance initiative/LIFT schemes under UK GAAP/ESA95 - (net of any sublease revenue) Net IFRS Change (IFRIC 12) 80 Capital Consequences of IFRS: private finance initiative/LIFT and other service concession arrangements under IFRIC 12 Capital expenditure 2013-14 - UK GAAP capital expenditure 2013-14 (reversionary interest) -
44 Analysis of charitable reserves
The CCG does not have charitable reserves.
128
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF HEREFORDSHIRE CLINICAL COMMISSIONING GROUP
We have audited the financial statements of Herefordshire Clinical Commissioning Group for the year ended 31 March 2014 under the Audit Commission Act 1998. The financial statements comprise the Statement of Comprehensive Net Expenditure, the Statement of Financial Position, the Statement of Changes in Taxpayers’ Equity, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and the accounting policies directed by the NHS Commissioning Board with the approval of the Secretary of State.
We have also audited the information in the Remuneration Report that is subject to audit, being:
the table of salaries and allowances of senior managers and related narrative notes on page 45
the table of pension benefits of senior managers and related narrative notes on page 46 and 47
the statement on pay multiples and related narrative notes on page 47 and 48.
This report is made solely to the members of Herefordshire CCG in accordance with Part II of the Audit Commission Act 1998 and for no other purpose, as set out in paragraph 44 of the Statement of Responsibilities of Auditors and Audited Bodies published by the Audit Commission in March 2014. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Clinical Commissioning Group (CCG)'s members and the CCG as a body, for our audit work, for this report, or for opinions we have formed.
Respective responsibilities of the Accountable Officer and auditor
As explained more fully in the Statement of Accountable Officer’s Responsibilities, the Accountable Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards also require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the CCG’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the CCG; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the annual report which comprises the Foreword, Member Practices' Introduction, Strategic Report, Sustainability Report, Equality Report, Members Report, Remuneration Committee Report, Membership Body and Governing Body Profiles, Statements by the Accountable Officer and Governance Statement to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. 129
In addition, we are required to obtain evidence sufficient to give reasonable assurance that the expenditure and income reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.
Opinion on regularity
In our opinion, in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them .
Opinion on financial statements
In our opinion the financial statements:
give a true and fair view of the financial position of Herefordshire Clinical Commissioning Group as at 31 March 2014 and of its net operating costs for the year then ended; and have been prepared properly in accordance with the accounting policies directed by the NHS Commissioning Board with the approval of the Secretary of State.
Opinion on other matters
In our opinion:
the part of the Remuneration Report subject to audit has been prepared properly in accordance with the requirements directed by the NHS Commissioning Board with the approval of the Secretary of State; and the information given in the annual report for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we report by exception
We report to you if : in our opinion the governance statement does not reflect compliance with NHS England’s Guidance; we refer a matter to the Secretary of State under section 19 of the Audit Commission Act 1998 because we have reason to believe that the CCG, or an officer of the CCG, is about to make, or has made, a decision involving unlawful expenditure, or is about to take, or has taken, unlawful action likely to cause a loss or deficiency; or we issue a report in the public interest under section 8 of the Audit Commission Act 1998.
We have nothing to report in these respects.
130
Conclusion on the CCG’s arrangements for securing economy, efficiency and effectiveness in the use of resources
We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the CCG has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice issued by the Audit Commission requires us to report any matters that prevent us being satisfied that the audited body has put in place such arrangements.
We have undertaken our audit in accordance with the Code of Audit Practice, having regard to the guidance issued by the Audit Commission in October 2013. We have considered the results of the following:
our review of the Governance Statement; and
the work of other relevant regulatory bodies or inspectorates, to the extent that the results of this work impact on our responsibilities at the CCG;
As a result, we have concluded that there are no matters to report.
Certificate
We certify that we have completed the audit of the accounts of Herefordshire Clinical Commissioning group in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice issued by the Audit Commission.
James Cook
Director for and on behalf of Grant Thornton UK LLP, Appointed Auditor Colmore Plaza 20 Colmore Circus Birmingham
4 June 2014
131