ANNUAL REPORT AND ACCOUNTS 2006 - 2007

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Welcome...... 1. Chairman’s foreword ...... 2. Chief Executive’s foreword...... 4. Celebrating Foundation Trust status...... 6. Governors’ Council ...... 7. Performance review ...... 9. Investing in buildings and equipment...... 10 Capital expenditure ...... 12 The artwork in this annual report The year at a glance...... 13 and accounts has been inspired by the work of local artist Don Cameron (pictured above, centre). Operational Review 06/07: Ten Key Aims Annual Accounts 06/07 ‘A Leaf in Life’ was installed in the new Renal Outpatients Building Service delivery...... 15 Finance Director’s review ...... 27 at the Northern General Hospital Clinical service improvements...... 16 Public interest disclosure...... 30 in May 2006 and is based on Managing Trust business...... 17 Remuneration report...... 35 conversations the artist had with patients about how they feel Staff...... 18 Independent auditor’s report ...... 37 when they attend the hospital for Hospital environment...... 19 Statement of responsibilities...... 39 treatment. Health informatics ...... 20 Foreword to the accounts...... 40 Patient experience...... 21 Financial statements ...... 41 Academic excellence...... 22 Notes to the accounts...... 43 Governance and healthcare standards...... 23 Statement on internal control...... 65 Foundation status and community involvement...... 24 Learning from our patients...... 25 Welcome B%!, \5 1

In 2004, Sheffield Teaching Hospitals became one of the first NHS Foundation Trusts. Now in its third year, the Foundation Trust has succeeded in providing high quality, value for money services at all of its five hospitals; the Northern General, Royal Hallamshire, Charles Clifford, Weston Park and Jessop Wing hospitals.

Sheffield Teaching Hospitals needs of the local, regional and Clockwise: employs nearly 12,000 staff in national populations that we Charles Clifford Dental Hospital a wide range of occupations serve . Jessop Wing and professions . Each year, Northern General Hospital A strong commitment to Royal Hallamshire Hospital more than 175,000 operations teaching and research with Weston Park Hospital and day case procedures are close links to the Universities of performed and over 825,000 Sheffield and Sheffield Hallam outpatient appointments are has established the Trust as a provided across the hospitals . national and international centre Among the Trust’s main priorities of excellence; new treatments are ensuring financial stability, and services pioneered in investing more in patient care Sheffield have changed the face and setting appropriate health of medicine across the world . targets that help us to meet the

Presented to Parliament pursuant to Schedule 1, paragraph 25(4) of the Health and Social Care (Community Health and Standards) Act 2003 . Chairman’s foreword B%!, \5 2

far exceeded the target set by Solomon Tesfaye who became one of them and thank them for In last year’s annual report we pledged the government . We succeeded the lead for the NeuroDiab their continued commitment to in maintaining our good international research group; pushing forward the boundaries to maintain and further improve our record for cases of Clostridium Dr Marios Hadjivassliou and his of healthcare in Sheffield . excellent standards of health care whilst difficile infection; we recognise, team whose specialist Ataxia There have been some changes however, that the control of clinic was named a national at the Trust this year; Chief becoming more productive and efficient these types of infections is an Centre of Excellence; and Executive Andrew Cash took and maintaining our excellent financial ongoing challenge and we will Mr John Getty who became up a secondment to the not become complacent . New the President of the British Department of Health in July track record. initiatives are being put in place Orthopaedic Association . The as Director General for Provider on a regular basis and, as I write community midwifery team were Development . Medical Director this, the Trust is finalising plans named Sheffield’s Best Carers Chris Welsh became Acting Chief I am pleased to announce that Overall our achievements were to introduce new technologies and the GU medicine team Executive at a very challenging all of these aims were achieved, confirmed in the first Annual that will help us to improve were short-listed for a Nursing time for the Trust but has largely due to the determination Health Check; a comprehensive further infection control . Times award for their dedication successfully carried forward our of staff in ensuring patient new system managed by All our staff have worked to improving access to sexual culture of greater efficiency and services were delivered more the Healthcare Commission exceedingly hard this year to health services . improved patient care across efficiently and to the same which measures the financial help us attain national and I would also like to make special the organisation, which has high standards that patients and clinical performance of international recognition for the mention of the neurosurgery helped us to meet our financial of Sheffield Teaching Hospitals healthcare organisations . The services we provide to patients . team who became the first commitments whilst further have come to expect . Trust received high ratings for Special acknowledgement in the country to introduce improving the standard of the quality of care provided and We succeeded in meeting our must be given to Consultant a state of the art Sonowand patient care we provide . key targets for cancer; over was also rated one of the top 3% Geriatrician Jane Liddle and her scanner bought with proceeds This year we have also said 7000 suspected cancer patients of trusts in the country for the team who were named Hospital from the Neurocare ‘Brainwave goodbye to one of our Non- who were referred by their GP way finances and resources are Doctor “Parkinson’s Disease Appeal ’. The scanner is already Executive Directors . John for urgent diagnosis were seen managed . Team of the Year”, affirming the significantly improving outcomes Stoddart retired in July after five within two weeks and 100% We were also successful in Trust’s commitment to ensuring for patients with brain tumours years with the Trust . Prior to this of those found to have cancer becoming one of the best older people receive care that is and another scanner will be he was also a Non-Executive started their treatment within 31 performing trusts in the country tailored to their needs, delivered introduced over the next year or Director at the Northern General days of the date agreed by them in the challenge to reduce MRSA with dignity and focuses on the so to further improve our world- Hospital . I would like to take this for treatment . We also ensured infections . In 2006/07, the Trust importance of providing quality leading neurosurgery service . opportunity to thank John for that no patients waited more further reduced the number of end of life care . Many other teams and his contribution to the Trust’s than 13 weeks for diagnostic MRSA bacteraemia infections Recognition should also be given individuals have experienced development over the years and tests such as X-rays and MRI by 24%; an overall reduction of to; Specialist Nurse Jill Dean who similar successes as those I have wish him well for the future . I am scans . 42% since 2005 . It is the second was named Nurse of the Year by mentioned here and I would like very pleased that Chris Suddes year running that the Trust has the Stoma Care Forum; Professor to congratulate each and every has joined the team as Non- B%!, \5 3

Executive Director . Chris was states that by December 2008 previously one of the Trust’s first all patients should start their Foundation Trust Governors . He hospital treatment within 18 has a background in business weeks of their GP referral . This management and I am sure requires a considerable amount he will prove to be a valuable of work for a Teaching Trust such member of our Board . as Sheffield Teaching Hospitals The Governors’ Council goes and collaboration between our from strength to strength; using individual departments and their breadth of experience and with colleagues in primary care expertise the 37 members of the but we are prepared for the Council have helped us to form significant challenge that lies the Trust’s corporate strategy . ahead . The Governors also sit on Finally, can I say once again, various Boards and Committees thank you to our staff, governors which are responsible for and everyone who has informing the Trust’s direction contributed to the Trust’s success and further improving patient over the past year . Let us look care . These include the Essence forward to even better patient of Care Group, Clinical Audit care in 2007/08 and beyond . Committee, and Patient and Public Involvement Strategy . Their input into these work- streams is valued by all involved in delivering our services . David Stone OBE The merger of the four Sheffield Chairman Primary Care Trusts (PCTs) has been a significant event in 2006 and we are already working closely with the new Sheffield PCT to ensure the changes have a positive impact on the way healthcare is provided across the city . Our next major challenge is the introduction of a new ‘18 week patient pathway’, which Chief B%!, \5 4 Executive’s foreword

costs by £30 million over the with more choice about their The Metabolic Bone Centre During 2006/07, the Trust experienced a year . treatment and care . played a significant part in number of significant changes to the way We have also enhanced patient Some notable achievements an international study which care by introducing new services were made in the field of has found a new and effective it operates; not least the introduction and making improvements research and development this treatment for reducing bone of a three year programme of change to existing systems to ensure year . fractures in post-menopausal that Sheffield patients receive Dr Andrew Hopper published women . The outcomes of both that focuses on improving efficiency and the best hospital care in the a significant piece of research of these studies will undoubtedly ensuring that the services provided by the country . Work to improve the in the British Medical Journal change the way patients care pathway for patients with which presents a 100% effective are treated in Sheffield and Trust are value for money for the tax payer. Deep Vein Thrombosis was method of diagnosis for patients nationally . undertaken and a new specialist with coeliac nurse appointed to provide disease . a single point of contact for Staff members have taken the to receive all of the information patients . We also launched a lead in instilling this culture of and advice they need in a single new diabetes and obesity change within the organisation . visit . New day case procedures management service to help Many new initiatives have been have been introduced to enable overweight patients with developed and implemented by patients to return home the type 2 diabetes to lose frontline staff; the very people same day as their operation weight safely . Both of that know first hand how to instead of staying overnight these developments maintain excellent patient care . in hospital . Greater emphasis enhance our existing has been given to reducing We firmly believe that what is services and enable the length of time people stay right for our patients is right us to provide patients for the Trust and consideration in hospital; closer working of the patient experience has relationships with community been at the core of all changes agencies have helped us to implemented over the year . We discharge patients more quickly . have developed sexual health All of these achievements and services to provide a ‘one stop more have helped us to improve shop’ system, allowing patients service delivery whilst meeting our financial target to reduce B%!, \5 5

Our commitment to research We did, however, struggle in conjunction with the to meet some of the key Universities of Sheffield and milestones; whilst more than Sheffield Hallam was further 97% of patients were treated demonstrated with the opening within 20 weeks of being listed of a new clinical research facility for surgery we recognise that which will help us to become a further work is needed to enable leading centre for research and us to achieve our ultimate goal development of new medicines of treating all patients within 18 and treatments . We also weeks of their GP referral . opened a cardiology research Again, the Government’s target facility at the Northern General to admit or treat and discharge Hospital, which supports the 98% of accident and emergency excellent international studies patients within four hours of the Nevertheless, Sheffield Teaching already being undertaken by our attendance to the department Hospitals is a forward-thinking cardiologists . has been a significant challenge . and innovative trust and I know At the time of writing this, Despite seeing nearly 120,000 that our staff will endeavour to the Trust had achieved all patients over the year - 3000 meet these challenges head on of the targets, which form more than expected - the with vigour and determination . the assessment criteria for emergency services team rose the Annual Health Check . As to the challenge and helped the explained in the Chairman’s Trust to successfully meet this foreword, our infection requirement . prevention and control is still The Trust is facing many more among the best in the country challenges over the coming Chris Welsh and we have again reduced year . We will need to make a Acting Chief Executive incidences of MRSA bacteraemia further £30million saving if we among patients . Other targets, are to remain financially stable including our aim to provide all and maintain our excellent track diagnostic tests such as blood record . This will be a difficult task tests, diagnostic endoscopies but we have plans in place to and ultrasound within 13 weeks help us achieve this target whilst and for all outpatients to have maintaining high standards of their first appointment within 11 patient care . weeks have also been met this year . Celebrating B%!, \5 6 Foundation Trust status

Each Governor is expected Work is currently in progress Sheffield Teaching Hospitals has been to take reasonable steps to to merge the committees to maintain a dialogue with their form a single Nominations a very successful NHS Foundation Trust Membership Constituencies Committee . A joint meeting of for over two years now; continuously and/or sponsoring organisation the two Committees agreed wherever possible . This is to to recommend acceptance achieving financial balance and making enable them to canvass views on of the proposal to establish a positive progress towards improving significant strategic issues and Nominations Committee and the services for patients. report back on decisions made . recommendation will be taken The Governors’ Council appoints to the Governors’ Council for Public Governor Richard the Trust’s Non-Executive approval in 2007/08 . Chapman on a tour of the Directors, including the Chair, via Medical Records department. Part of our success has been the values and principles . an Appointments Committee introduction of Foundation Trust The Governors’ Council meets supported by an independent Governors; ordinary members formally as a full Council assessor . The Council also of the public who live in the four times a year and these determines the remuneration local area or have received meetings are attended by the of the Chair and Non-Executive treatment at the hospitals and Executive Directors . This enables Directors via a Remuneration are committed to helping ensure the sharing of information, Committee advised by the that the Trust is accountable to progress reports and specialist Director of Human Resources . the people it serves . knowledge to support the The Governors’ Council approves The Governors’ Council is functions of the Governors’ the appointment or removal made up of 37 Governors and Council . It also enables members of the Trust’s auditor following oversees and advises on the of the Governors’ Council to a recommendation from a strategic direction of the Trust . be involved in early discussions nominated sub-group of the The Council holds the Board of regarding strategic business Board of Directors . Directors to account and seeks plans . Individual members of to ensure the continued success the Governors’ Council input The Trust’s nominations of the Trust through effective into specific projects where function is currently discharged management, partnership their particular expertise or via the Governors’ Council working and maintaining NHS perspectives are valuable . Remuneration Committee and Appointments Committee . Governors’ Council B%!, \5 7

Expiration of Constituency Elected Governors All public and patient governors are Term of Office elected for a three year term of office Patient Diana Chadwick 1st July 2008 Susan Coldwell 9th June 2009 and all governors representing partner Heather Gordon 1st June 2008 organisations are nominated by their John Holden 9th June 2009 Kenneth Murta 1st July 2008 employer for a negotiable term of office. Clare Rawding 9th June 2009 Helen Wilde 1st July 2007

Kaye Meegan 16th October 2009 For a meeting of the Governors’ Each Governors’ Council meeting Public - Sheffield North Sharon Tabberer 1st July 2008 Council to be considered quorate held during the year was Margaret Whiteley 1st July 2007 at least one third of Governors attended by between seven and are required to be present ten members of the Board of Public - Sheffield South West Sylvia Bennett 1st July 2007 at each quarterly meeting Directors . Philip Seager 1st July 2007 Susan Wilson 9th June 2009 and each constituency must The full Governors’ Council as be represented by at least at the end of March 2007 is as Public - Sheffield West Martin Colclough 1st July 2008 one member . Attendance for follows: James Smith 1st July 2008 meetings held in the financial Beryl Wilson 9th June 2009 year 2006/07 has varied between 62% and 72% and Public - Sheffield South East Richard Chapman 1st July 2007 each meeting has been attended Elaine Hill 9th June 2009 by at least one representative of John Hulse 9th June 2009 each constituency . The Board of Directors is also Staff - Medical & Dental Mike Collins 9th June 2009 invited to attend the Governors’ Council meetings to enable them Staff - Nursing & Midwifery Rose Bollands 9th June 2009 to identify with patients and Staff - Allied Health Professionals, Stephen Westby 9th June 2009 members of the public and gain Scientists & Technicians a greater understanding of their views of the Foundation Trust . Staff - Managerial, Mark Hattersley 9th June 2009 Administrative & Clerical

Staff - Ancillary, Works & Maintenance Dave Weston 9th June 2009 B%!, \5 8

Foundation Trust Organisation Partner Governors At the end of March Sheffield Primary Care Trust Jeremy Wight Membership 2007, membership of the Vacant Over 18,500 people are now Foundation Trust stood at: members of the Foundation Public Constituency Sheffield City Council Bob Kerslake Trust . Members of the Jan Wilson Foundation Trust are entitled 2,512 members to receive a free copy of NHS Yorkshire And The Humber SHA Jayne Jack the quarterly newspaper Patient Constituency ‘GoodHealth’ which provides University Of Sheffield Bob Boucher health information and general 3,433 members Sheffield Hallam University Diana Green advice from doctors and nurses at the hospitals who are national Staff Constituency Sheffield College John Taylor experts in their field . members The Trust also runs a series 12,649 South Yorkshire Police Jon House of exclusive Members’ Events, Total membership Sheffield Care Trust Martin Rosling including lectures and discussions on hot topics such 18,594 members Sheffield First Partnership Vacant as MRSA and infection control, diabetes and forensic science . Voluntary Action Sheffield Tim Plant An ongoing strategy for the Summer 2007 Issue 12 recruitment of members for ion Trust healthWorld Kidney Day ield Teaching Hospitals NHS Foundat Other Primary Care Trust (Non-Sheffield) Jayne Brown STH welcomes new the coming year will focus on Head of Chaplaincy The members’ newsletter of Sheff Teenage Cancer Unit at good Weston Park Hospital encouraging more patients and Opening of the Sir Robert Hadfield Wing Behind the bugs younger people to join the Trust . 10 8 This will ensure that membership 6 is more representative of the 5

3 communities served by the Inside hospitals . Membership of the Foundation E n g l a n d Trust is completely free of charge . To become a member, b e c o m e s please contact Jane Pellegrina, Membership Manager on 0114 s m o k e - 2714322

The new law will help to support f r e e ! the Trust’s own campaign of smoky atmosphere is smoke-free buildings and grounds the single biggest which aims to promote a healthier reason for avoiding a and more pleasant environment for pub or bar, according staff, patients and visitors alike. to a survey published Richard Parker is the Trust’s lead have been successful in raising the profile of the dangers of cigarette Aby the Department of Health, for smoke-free hospitals. smoking. They have included the which also showed a high level of “We are confident that the new dripping fat cigarette, the impact of support for the smoke-free legisla- legislation and surrounding smoking related illnesses on the tion which will came into force on publicity will help us to get our family and more recently the 1st July 2007. message of being a smoke-free “hooked” campaign (which, inciden- From 1st July virtually all enclosed organisation across to the public tally notched up 1671 complaints to public places and workplaces in and patients. So far, our smoke-free the Advertising Standards England became smoke-free ensur- policy has gone well, but we still Authority). DH figures show that ing a healthier environment, so have some challenging areas, more than 820,000 contacts were everyone can socialise, relax, travel, particularly outside B floor at the made to the DH smoking cessation shop and work free from second- Royal Hallamshire Hospital and the website and telephone line during hand smoke. Huntsman main entrance at the this particular campaign. A recent Department of Health Northern General Hospital. For further information about survey of 1700 adults shows that “On a positive note, we know Smoke-free England go to 36% of people cite a smoke-filled that our policy has given many www.smokefreeengland.co.uk atmosphere as the main turn-off people the motivation to quit and when avoiding a bar or pub. Over I would like to personally wish For advice on stopping smoking two thirds (67%) of people would them well with this. I know this contact the Sheffield Stop Smoking rather spend the evening in a can not be easy for them.” Service on 0800 068 4490. smoke-free venue, than one where A number of hard-hitting TV smoking is allowed, and 91% campaigns sponsored by the DH (including 83% of smokers) now consider lighting-up in a non-smoking place unacceptable. Performance review B%!, \5 9

The table below provides a summary of the Trust’s activity in 2006/07 in comparison with the previous year . The increase in activity for outpatients has helped us meet our targets to drive down waiting times meaning no patient waited over 11 weeks for an outpatient appointment by the end of March 2007 .

Target Actual Activity Actual Activity 2006/07 2006/07 2005/06

Inpatient and day case episodes 176,483 175,566 174,932

Outpatient attendances 820,679 827,466 797,295

During 2006/07 our total inpatient waiting list decreased significantly . This was achieved through a combination of a number of different initiatives that have enabled the Trust to become more efficient .

Actual List as at Actual List as at Target 31st March 2007 31st March 2006

Total inpatient waiting list 9,727 10,103 11,414

Inpatients waiting over 20 weeks 0 106 742

Outpatients waiting over 11 weeks 0 0 192

Infection Control Accident and Emergency This year the Trust has The Trust achieved its target This was achieved despite exceeded the Government’s of assessing and admitting, significant increases in the target to reduce cases of MRSA treating or discharging 98% of number of patients attending bacteraemia by 20% . Overall, patients within four hours of the department meaning 60 cases of MRSA bacteraemia their attendance to the accident that 3000 more patients than were recorded during the year, and emergency department . expected were seen during the representing a 24% reduction year . for 2006/07 and an overall 42% reduction since 2005 . Investing in buildings B%!, \5 10 and equipment

and provides a dedicated unit and post-operative surgical units, Post-Operative At Sheffield Teaching Hospitals we firmly for investigators undertaking providing a maximum of 36 beds Surgical Unit all types of clinical research for patients requiring extra care . believe that having the best equipment Following on from the success of involving adult patients and The funding for the project has the first Post-Operative Surgical and most appropriate hospital settings healthy volunteers . been secured from two sources: Unit (POSU), which opened at Clinical research is vitally a £3m contribution from the are vital to ensuring a high quality the Northern General Hospital important in the development of South Yorkshire Strategic Capital in 2005, another POSU with patient experience. new treatments and medicines Programme and £18 .3m through 14 dedicated critical care beds before they are used more the Foundation Trust Financing was introduced at the Royal widely in patients . The Facility is Facility . The unit is one of the Hallamshire Hospital . This new fully equipped in a similar way first schemes in the country to special ward area helps us to Through significant investment The Cardiology Research Facility to a normal ward setting with get funding from the Financing reduce the number of planned in key areas the Trust has seen was developed with input from a nurse’s station, piped oxygen Facility . many new developments, which patients past and present to and resuscitation facilities; will dramatically improve patient ensure that it provides a friendly the capability to monitor care, come to fruition during and welcoming atmosphere patients to High Dependency 2006/07 . for people taking part in Unit (HDU) standards and the this important research . The capacity to cope with overnight Cardiology Research research conducted within stays or straightforward clinic Facility the facility plays a vital role in appointments . international efforts to improve The Cardiology Research Facility Critical Care was opened in September 2006 the effectiveness of treatments as part of the development for heart disease . Development of the Chesterman Wing . The Clinical Research Facility In 2006 we also began a new facility is divided into four £21 .3 million project to expand rooms and boasts an impressive A £252,000 Clinical Research critical care facilities at the area for sample analysis with Facility was officially opened Northern General Hospital . A sophisticated equipment such as at the Royal Hallamshire brand new two-storey building special freezers and analysers for Hospital in 2007 . It is a joint constructed to the latest venture between the Trust How the Critical research on blood clotting . requirements will house the Care Unit will look. and the University of Sheffield hospital’s general intensive care B%!, \5 11

operations cancelled at short facilities, modern waiting areas has agreed a series of ward is minimised and much work notice by ensuring that patients and assessment rooms . The refurbishments for the coming has been carried out to meet that need high dependency development has improved four years which will upgrade this commitment . The Estates care have a dedicated area for patient dignity and privacy existing wards and departments Department has campaigned recovery after their operation . by providing much improved to bring them more in line with to ensure staff members make changing room facilities and newer areas of the hospitals and the most effective use of energy Renal Unit has enabled staff to provide a ensure all patients receive their across the Trust to reduce The £9 million expansion of very high standard of care in the treatment in a modern, clean carbon emissions . The Earthcare renal services was completed most up to date surroundings . environment . and Energy Campaign is being and a brand new, dedicated Ward refurbishment M2 Caring for the refreshed and re-launched outpatients building was in 2007 to further improve officially opened by local Ward M2 at the Royal Environment awareness among staff of the football managers Neil Warnock Hallamshire Hospital was The Trust has a duty to ensure effective use of resources . given a £2 .2 million make- and Brian Laws . The new its impact on the environment building brings together all over to enhance the patient outpatient services into a clean, experience, reduce energy comfortable environment for the consumption and improve hundreds of renal patients who the flow of patients through regularly visit the hospitals for the ward . The refurbishment treatment . programme included replacing old bathrooms with modern, Therapy Services clean designs and decorating The Northern General Hospital’s the bed bays to make the ward physiotherapy and occupational a more pleasant environment therapy services were brought for patients . Particular emphasis together in a brand new building has been given to cleanliness with state-of-the-art gymnasium and the estates design team worked together with ward staff and infection control nurses to design the ward with infection control very much in mind . In recent years the Trust has spent millions of pounds on new buildings and departments . Now that most of the larger projects are nearing completion the Trust Capital expenditure B%!, \5 12

£000 £000 The total capital expenditure for Medical Equipment 3,802 the year was £32.1m. Operating Tables 783 Multi-slice CT Scanner (RHH) 729 Haemodialysis Machines 400 The key focus of expenditure Total capital income available Endoscopy Research Equipment 205 was to purchase new and to the Trust for the year was Other 1,685 replacement medical equipment, £36 .6m, including £5 1m. Statutory Compliance 2,787 support information technology from donations and other Upgrade of RHH Ward M2 2,058 advances and new service contributions towards capital RHH Emergency Lighting 247 developments associated with expenditure . The capital income Other Firecode Works 82 the Trust’s service development is analysed as shown in the table Other (eg Disability Discrimination, Infection Control, Legionella etc) 400 plans and statutory compliance below . Information Technology 2,501 and infrastructure improvements . Radiology Information System 741 The 2006/07 capital expenditure Upgrade NGH Computer Room Environments 209 is analysed as shown in the table 1,551 on the right . Other Infrastructure 6,934 Basic Sciences Project 3,417 Expansion of NGH Electrical Capacity and Infrastructure 1,794 £000 Replacement Boiler 396 Other 1,327 Resources available from the Department of Health/ 31,486 Internally Generated Service Development 16,036 NGH Critical Care Expansion 4,423 Sheffield University investment 3,426 RHH Post Operative Surgical Unit 3,173 (largely in respect of Basic Sciences Project) Renal Facilities Expansion 2,469 Other Donations/Contributions 1,668 WPH Site Redevelopment 1,714 Total Income 36,580 NGH Cardiology Capacity Expansion 966 Genito-Urinary Medicine Expansion, Phase 1 776 Charles Clifford Dental School Expansion 434 Office Accommodation 332 Clinical Decisions Unit, A&E 271 Other smaller schemes 1,478 Total Expenditure 32,060 The year at a glance B%!, \5 13

May July The Trust has experienced many A national survey of inpatients An innovative community- achievements over the last 12 months. found that overall patients at based clinic was introduced in Sheffield Teaching Hospitals conjunction with the Sheffield Much of this work goes on behind the were very pleased with the South West PCT to provide scenes and is the result of the dedication care they received . Improved convenient care for patients with access to pain relief and reduced Chronic Obstructive Pulmonary and hard work of front-line staff. waiting times for operations Disease (COPD) . The new service were hailed as two of the major has enabled some patients to improvements . be looked after by a dedicated and the importance of keeping multi-disciplinary team in the During the year… The Trust, along with Sheffield’s June active . Members of the primary care trusts and other community . April Sheffield Steelers Wheelchair health agencies, was praised The Spinal Injuries and Neuro Basketball Team were on hand for the care given to people Rehab Unit hosted a special to encourage disabled and with Hepatitis C . Sheffield was Easter camp for children to able-bodied children to join among only a dozen areas across raise awareness of disability together and learn a range of the country that had been new and exciting sports such found to have implemented the as golf, cricket, rounders, bowls, national Hepatitis C action plan April wheelchair basketball and “exceptionally well” by the All archery . Party Parliamentary Group on The Trust teamed up with the Hepatology . University of Sheffield Centre for Stem Cell Biology to open a new June facility for stem cell research Lord Mayor of Sheffield at the Jessop Wing . The ultra- Councillor Mrs Jackie Drayton clean laboratory facilities are officially opened the Clinical used to develop stem cells from Immunology and Allergy Unit at donated embryos for clinical the Northern General Hospital . purposes and could help lead to The unit provides a specialist new treatments for conditions immunology and allergy service including juvenile diabetes, for the people of Sheffield and Alzheimer’s disease, Parkinson’s the North Trent region and disease, congenital or retinal offers comprehensive specialist investigation of all forms of blindness and myocardial May infarction (heart attack) . common and rare allergies . B%!, \5 14 September

October

August to the Eye Department’, which groundbreaking surgical January March aims to reduce anxiety and techniques that allow for Professor Ron Purkiss, Clinical STH became a smoke-free trust Figures released by the Health improve the hospital experience the very early detection and Director of Medication on 1st January 2007 . Protection Agency show that for patients with learning treatment of bowel cancer . Management and Pharmacy Sheffield Teaching Hospitals disabilities . This means that smoking is no was presented with a prestigious December longer allowed in any of the is one of the best trusts in the Guild of Healthcare Pharmacists October country for infection prevention A series of refurbishments that hospitals or surrounding grounds solid gold medal for ‘outstanding and control . From April to World IBF Light Heavyweight will improve the environment managed by the Trust . contributions to pharmacy’ in September 2006 cases of MRSA Champion Clinton Woods visited for patients and staff in the recognition of his dedication to February had reduced by 40% making the the Northern General Hospital to accident and emergency developing hospital pharmacy Trust the second most improved officially unveil two state of the department got underway in The Royal Hallamshire Hospital services . He has worked in the in the country . art scanners which are enabling December . The £1 .5 million received official accreditation field of pharmacy for over 37 radiographers to undertake facelift includes a dedicated as a centre of excellence for the years and has spent the last 22 much more complex and clinical decisions unit to provide diagnosis and management years at the Northern General accurate diagnostic tests . a more appropriate area for the of the rare condition ataxia by Hospital . leading charity Ataxia UK . The November management of patients with September chest pain and suspected deep hospital’s Ataxia Clinic was Consultant Endoscopist Paul vein thrombosis (DVT) . set up 12 years ago and now Two nurses and a hospital Hurlstone was presented with manages the ongoing care of volunteer were presented with a national award for ‘best more than 400 patients . the British Medical Association emerging medical researcher’ Patient Information Award for by the BUPA Foundation . Paul their leaflet entitled ‘Welcome and his team have pioneered Service delivery B%!, \5 15

people with the condition to so that people with Parkinson’s In 2006/07 we focused on treating National Service walk, talk or write things down . in the Sheffield area can now Framework for patients with urgent conditions such as Steve Ford, Chief Executive benefit from integrated services of the Parkinson’s Disease in hospital and in the community . Older People heart disease and cancer quickly, whilst Society: “Dr Jane Liddle and Parkinson’s is a difficult The National Service also making improvements for elderly her team were worthy winners condition to manage effectively, Framework for Older People of the Hospital Doctor Award’s so we’re delighted that the is a comprehensive strategy people and those with life-long conditions. ‘Parkinson’s Disease Team of the Sheffield team is so committed to ensure that the NHS Year’ . Outpatient and inpatient to improving the quality of life of provides fair, high quality, services have been developed people living with the condition ”. integrated health and Quality of life is an important They were recognised for their social care services for older aspect of care for people with achievements in improving Quality of life is an important aspect of care people . It addresses a wide life-long conditions and we access to Parkinson’s disease range of issues including recognise that these patients services and ensuring care for people with life-long conditions and we dignity in care, complex must be able to access is fully integrated into other recognise that these patients must be able and urgent needs, and the integrated services that provide older people’s services to to access integrated services that provide the provision of services for the most appropriate, expert improve continuity of care . most appropriate, expert care for their needs. people with needs relating care for their needs . The development of specific to stroke, falls and bone At Sheffield Teaching Hospitals referral guidelines for GPs has health, and mental health . Dr Jane Liddle and colleagues such consideration is given to ensured that patients are now The Trust has a all patients . However, particular referred to the most appropriate well-established recognition was received by the geriatrician or neurologist with multidisciplinary group, Parkinson’s disease team this an interest in Parkinson’s disease . which leads and oversees year who were praised by judges Parkinson’s disease is a the implementation of of the National Hospital Doctor progressive condition which is the National Service Awards for the introduction of caused by the loss of nerve cells Framework across the Trust, various initiatives to improve in part of the brain called the promotes collaborations cross-city care for people with substantia nigra . These cells and integrated working, the condition . produce dopamine, a chemical and links with city-wide Geriatrician Dr Jane Liddle that allows messages to be sent groups and partnership and her team, who are based between different parts of the bodies . The group includes at the Northern General brain to co-ordinate movement . representatives from the Hospital, provide one of the Parkinson’s affects this Patients’ Council, the country’s leading services for co-ordination of movement Sheffield Primary Care Trust the treatment and care of making it more difficult for and Age Concern . patients with the condition . Clinical service B%!, \5 16 improvements Dr Hadjivassiliou with patient Darran Winfield-Stanesby

are committed to raising the We continued to develop specialised profile of ataxia so that more services including treatments for cancer, research can be undertaken into the condition to help us improve kidney disease, heart disease and care for future patients ”. neurological disease. Chair of Ataxia UK Pit Rink said, “The Sheffield Ataxia Centre will ensure that people with ataxia The Trust is a world-leading ago, with the majority remaining receive the best possible quality centre for the diagnosis and under the care of the team of care and a co-ordinated management of a number of until the present day . As part service combining diagnosis, uncommon illnesses including of the accreditation the Trust treatment, support and research ataxia, a rare condition which was awarded nearly £87,000 into these little known conditions . affects co-ordination and over three years to fund an Our plan is to open a UK network impairs movement and is the ataxia specialist nurse to further of Accredited Ataxia Centres common symptom/sign of a improve support for these of Excellence with consistently group of neurological disorders existing patients and to ensure excellent services and it is of known as “cerebellar ataxias” . that the service can continue great credit to Sheffield that the The Royal Hallamshire Hospital is to offer a high standard of care Royal Hallamshire Hospital is one of only a few in the country and follow-up support to new one of the very first ”. to provide a comprehensive patients with ataxia . service for the diagnosis and Consultant Neurologist Dr treatment of ataxia and in Marios Hadjivassiliou leads Look Good, Feel Good February 2007 was officially the ataxia team, which places named the UK’s third centre a strong emphasis on the The Look Good, Feel Good Suite in the Chemotherapy Unit at Weston Park Hospital was developed of excellence by the national importance of research into using funds from the hospital’s Cancer Appeal . charity Ataxia UK . cerebellar ataxias . He says, “We The Suite helps patients who have experienced hair loss due to chemotherapy treatment by providing Over 400 patients with ataxia are delighted to be named a a dedicated area where they can go to try on a selection of wigs, scarves and hair pieces . Patients have been assessed by the centre of excellence for the care can also choose from facial and body massages which help to relax the mind, boost morale and service since it began 12 years of patients with ataxia and we create a sense of personal well-being . Managing B%!, \5 17 Clinical Imaging Assistant Ann Sweeting in the MRI suite services closer to home and significantly reducing waiting Trust business times . The re-organisation of the service was so successful that at the end of 2006/07 fewer than We increased the value of everything we 1100 patients were waiting for did through concentrating on reducing an MRI scan and all patients requiring a scan waited just 13 unnecessary steps such as waiting for a weeks for their appointment . test, waiting for an appointment, waiting Next year patients will wait a maximum of six weeks . for an operation and waiting to go home. Dental School Expansion Waiting times for MRI (Magnetic patients were still waiting more Resonance Imaging) scans have than two years for their MRI The Dental School based at been dramatically reduced at appointment . the Charles Clifford Dental Hospital is undergoing the Trust and since the end of The Trust felt that the waiting an expansion and March all patients needing a times patients were experiencing improvement of existing routine scan wait no longer than were unacceptable and buildings to enable the 13 weeks for their scan . subsequently set about re- Trust and University of In previous years patients at the designing the way it manages Sheffield to almost double hospital had experienced long its’ business to reduce waiting the number of dental waits for MRI scans and at one times and the high costs students by 2010 . time over 4500 patients were associated with sending on the waiting list . Due to high thousands of patients to other The £8 .8 million re- demand the Trust held contracts organisations for their MRI scans . development is already with other NHS hospitals By purchasing more scanners underway and will include and outside agencies; they and bringing the imaging a new wing built onto the performed a proportion of the service back in-house, the Trust side of the existing building, MRI imaging work in order to try has succeeded in reducing the an enlargement of the and reduce the waiting times for cost of medical imaging and dental practice unit and an Sheffield patients but this was dramatically improving the £800,000 improvement of an expensive system and some patient experience by bringing the clinical skills facility . Staff B%!, \5 18

We attracted staff of the highest calibre and Themes on the programme such as Managing Difficult Situations offered quality training and development and Motivation are particularly opportunities for all. This included a new helpful in improving participants’ leadership development programme which aims self-awareness and awareness of others . Stacey says, “The to further nurture our leaders of the future. launch of this programme is a really positive step by the Trust . It encourages and enables staff Strong leadership is vital for She says, “The Leadership to undertake training to progress ensuring an effective and Programme has made me their careers . I believe I have efficient workforce, which aware of how to assert myself gained knowledge and skills is ultimately responsible for and made me not take things through this programme, which providing patients with care at face value . I am now aware are of great importance to me that is of a high standard and of how I perceive people and at this stage of my career ”. With constantly evolves to incorporate how others may perceive and the framework programmes new and better ways of working . respond to me . I’ve been able to as a sound basis, Stacey is Stacey (left) with Janis Parker and Valerie Kirkby Stacey Hunter recently look at managers in a different now looking at undertaking a completed the Trust’s Leadership light and I am now able to management qualification . and Management Development better understand the decisions programme . As a Team Leader they have made . It gave me within the Children and Young an insight into how I would like Person’s Social Care Directorate, to see myself and be seen as a Improving Working Lives programmes for individuals from disadvantaged Stacey supervises the work future manager at this Trust ”. In June 2006 the Trust was awarded Improving backgrounds . They also commended the Trust of three people who provide Staff members who attend the Working Lives (IWL) Practice Plus status . A on the amount of training and development administrative support . The Leadership and Management validation team made up of staff with particular available for staff and the range and variety of team are involved in looking Development programme expertise in aspects of the IWL standards from flexible working patterns being used both to help after children who are to be put benefit from meeting colleagues across the NHS interviewed some 600 staff staff to strike a balance between work and home in foster care and placed for from other areas of the Trust . members during a validation visit to the Trust life and to improve patient care . adoption as well as children who Each staff member has similar to look at the improvements which had been In December 2006 the Trust published its first are on the “at-risk” register . experiences or completely made since the Trust achieved Practice status in Disability Equality Scheme and associated Stacey was interested in different examples of leadership November 2002 . action plan which were developed in conjunction progressing her career and that they can bring to the group The validation team were impressed with the with disabled employees and service users . The moving into management . as examples of good or bad Trust’s commitment to equality and diversity scheme and action plan can both be found practice . issues, particularly the development of training online at www .sth .nhs .uk Hospital environment B%!, \5 19

We continued to build new facilities so that we Arts for Hospitals can expand and improve services. These included The Arts Team aims to work with patients, staff and the the expansion of critical care and renal services community to provide a range of appropriate visual and performing arts that enhance the care and service that the Trust plus improvements to the A&E department. provides . The Team manages a picture lending service, history project and garden galleries as well as lending their knowledge and We also opened the Sir Robert for predominately older patients expertise to the development of new wards and departments . Hadfield Wing; a brand new on Victorian-style ‘Nightingale’ Recently the Arts Team were responsible for purchasing over £30 million development that wards . 100 pieces of unique artwork for the Sir Robert Hadfield Wing has revolutionised the patient Six wards provide 168 beds in Matron Glenis Wasteney was and have secured a grant from the Arts Council for England, experience . The new building, a mixture of single rooms and involved in the development of which will pay towards a unique piece of artwork for the main which houses six medical wards three-bedded bays, each with the new building . She said, “This entrance to the building . at the Northern General Hospital, en-suite bathroom facilities state-of-the-art accommodation was undertaken through the designed to improve dignity provides excellent facilities for new Private Finance Initiative and privacy for older patients . both patients and staff . The light (PFI) system, enabling the Trust Specially designed ‘Assessment and spacious wards ensure that to ‘lease’ the building over a 30 for Daily Living’ rooms enable our patients are cared for in an year period of time rather than occupational therapists and environment where their privacy bear the immediate costs of physiotherapists to assess and dignity can be maintained construction . This has ensured patients’ abilities in simulated - something which was very that we can continue to provide ‘home’ environments such as difficult to maintain in the old the highest quality care and the kitchen or bathroom to Vickers Corridor accommodation . service in the most up-to-date ensure that any support and Staff now also benefit from surroundings . assistance they will require to rest rooms, excellent changing The Sir Robert Hadfield Wing live at home can be organised facilities and well-equipped has been built to the highest before leaving hospital . Special resource areas ”. specification, incorporating the ‘barrier nursing’ rooms provide latest innovation and making dedicated accommodation for use of natural daylight to patients with infections such as improve the patient experience MRSA and Clostridium difficile and reduce environmental which will help further reduce impact . The facility replaces the the spread of infections to other old Vickers Corridor, which cares patients . Health informatics B%!, \5 20

We improved the electronic ordering A&E Sister Vicky Pilbery and reporting of results from diagnostic tests and the sharing of this information to reduce unnecessary repeat tests.

Digital Revolution The Trust is in the process of introducing a major new Picture Archiving and Communication System (PACS) which will revolutionise the way diagnostic images are stored and accessed by clinical staff . The multi-million pound system will enable all images to be stored on a giant computer system so that doctors, nurses and other clinical staff can instantly access a patient’s X-rays, MRI scans or other images from computer terminals across the hospitals . Using the latest computer technology images will be viewed as a digital file, which enables staff to zoom in and take The system enables images to a closer look at areas of concern . It also means that images can be taken, downloaded onto a be shared with other hospitals across the country at the press of computer within seconds and a button . stored digitally so that it can The PACS will be in use across the Trust by January 2008 . be accessed instantly from other computer terminals in the department . The Northern General Hospital’s diagnosis . Previously, patients A&E Matron Kath Adnett is accident and emergency would be required to wait in the impressed with the new system, department is one of the busiest department until the films had “One of the main benefits is department’s of its kind in the been processed and sent back to that patients flow through the country and last year saw more their assessing doctor . department much quicker and than 120,000 people . Many Staff in the department now more easily . Once the rest of the of the people attending the have access to a new, smaller Trust is PACS-enabled we will be department require some form version of the Picture Archiving able to view and share images of imaging such as an X-ray or and Communications System for diagnostic purposes across CT scan to enable an accurate (PACS) called Fusion . the hospitals ”. Patient experience B%!, \5 21

We involved patients and the public in the running of the hospitals by recruiting directorate lay representatives.

Lay representatives are my heart operation for which I become a very valued member invaluable members of the am very thankful . I wanted to of the multi-disciplinary team . hospital workforce and provide show my appreciation by giving It has been most beneficial a breadth of experience and something back to the hospitals . having someone on board who knowledge that is important in There is a real sense of pleasure is as passionate about patient helping the Trust take its services to be had from helping patients care and getting it right for the forward . and the local community ”. patient as the rest of the team in Former heart patient Derwent works independently the ophthalmology department ”. Derwent Levick has been from the department to ensure There are currently 18 lay a lay representative in the that patients feel they can representatives in different ophthalmology department for give honest comments and roles across the Trust . Lay over a year and since then has suggestions; he is responsible representatives work in a co-ordinated a significant piece for mailing out and collating voluntary capacity for an of work to help the department questionnaires, making follow- initial period of twelve months, ensure that it meets the up calls and generally listening although this is often extended changing needs of patients with to patient’s views of every after review . conditions affecting the eyes . stage of their journey through For one morning each week the department . This is then Derwent cycles to the Royal fed back to the department Hallamshire Hospital from his to enable them to make Improving the environment improvements to patient care . home in Walkley to undertake The Muslim Working Group is made up of staff, local a “customer relations” project Matron for Ophthalmology, Joy community leaders and volunteers and has been involved in the which has already involved Barnes says, “Derwent has only development of a dedicated area for Muslim prayer at the Royal contacting over 100 patients to been with the department for Hallamshire Hospital . The group advises the estates department find out about their experiences a relatively short period of time and provides recommendations for the development of the of the cataract service . Derwent but he has already made a huge prayer area to meet the needs of Muslims and to ensure the says, “My interest in the difference . He is very enthusiastic Trust meets the best practice guidelines of the NHS . hospitals really stemmed from and conscientious and he has Academic excellence B%!, \5 22

Research Fellow Dr John Leeds International Recognition We were involved in world class is leading the study, “We will be Sheffield is an internationally renowned centre for research research, education and teaching which looking at the extent of nerve into diabetic neuropathy (nerve damage) and the Trust has damage - a common yet painful published many significant papers on the subject which have will benefit patients now and in the and debilitating side-effect influenced the treatment of the condition worldwide . future. We continued to maintain an of diabetes – among patients before they adopt the diet and In recognition of this, the Trust’s lead for diabetic neuropathy environment where innovation and again after a year to see whether was this year appointed as the Chairman of the prestigious creativity are encouraged to flourish for the diet can help to halt nerve Neurodiab group; the largest diabetic neuropathy study group damage over time . Importantly, in the world . Professor Solomon Tesfaye was asked to take the the benefit of patients across Sheffield, we will also assess the patients’ lead role in recognising and sharing important findings among nationally and internationally. quality of life to see whether colleagues across the globe with the aim of finding better ways they feel their overall well- of managing and treating patients with the condition . being is improved by changes Gastroenterologist Dr David Sanders has also been appointed to diet and lifestyle, regardless as the Chairman for the Small Bowel and Nutrition section Staff from the departments of The results have indicated of the clinical outcomes of the of the British Society of Gastroenterology as well as being gastroenterology and diabetic that over 3% of people with research ”. Associate Medical Advisor for Coeliac UK as a result of his medicine are at the forefront of diabetes could be affected The findings of the research research into coeliac disease . research into the link between compared to just 1% of the diabetes and another auto- project, which ends in June local Sheffield population . This 2008, could pave the way for immune disease known as offers an important insight into coeliac disease, which causes other major research studies the prevalence of the disease and influence the management a person to have intolerance and could influence the routine to gluten (a protein found in and treatment of patients with screening of diabetic patients for diabetes and coeliac disease wheat, barley and rye) and other conditions in the future . significantly increases the risk of across the world . gastrointestinal cancers . The next phase of the project is now underway to discover In the largest study of its kind whether the patients that ever undertaken in the UK, were found to have both type researchers from the Royal 1 diabetes and coeliac disease Hallamshire Hospital and the could benefit from following University of Sheffield have a strict gluten-free diet, which screened over 1000 patients is already known to reduce to find the incidence of coeliac symptoms associated with disease among people with type coeliac disease . Research Fellow 1 diabetes . Dr John Leeds Governance and B%!, \5 23 healthcare standards

We are ensuring that the Trust has • Fully informing patients of delivered by the pharmacy systems and processes in place to identify the medicines they are being team . Key to this success is the and deal with risks to patient safety and given, the reasons for being very close working relationships given the drugs and their side- between the different well-being. Through audit and review effects . professions which enables us to we are able to make sure we continue to The Trust also scored highly ensure that patients receive the provide high standards of quality care. in the patient focus category optimal drug therapy for their for “making progress towards condition in a safe and timely self-administration in hospitals” . manner ”. Many patients who are used The Trust is committed to a medicines safety committee to administering their own ensuring high quality patient which ensures that the benefits medicines at home can find it care and has a track record of and potential risks of unlicensed stressful and disempowering to success in terms of governance, drugs and drugs licensed to treat have their medication managed meeting national targets and some illnesses but not others are by staff while they are in standards as demonstrated fully considered before being hospital . Through supporting by the ratings awarded in used on patients . The Trust also patients to self-administer some September 2006 by the performed well in other areas: medicines in hospital, the Trust Standard prescription chart Healthcare Commission during • Introducing effective aims to empower patients and Minimising risks to patients and learning from mistakes and its Annual Health Check . safety practices to prevent improve their confidence in self- “near misses” is a Trust priority . Another important aspect of The Annual Health Check is a prescribing or administration administering in preparation for work carried out this year looked at incidents and near misses new system of assessment for errors related to patients with their discharge from hospital . involving medicines . As a result of a thorough review, STH also NHS organisations and replaces allergy to certain medicines Professor Ron Purkiss, Clinical took the lead to introduce a standard prescription chart for all the old system of ‘star ratings’ . • Providing training Director of Medication inpatients across the South Yorkshire region . This will make it One aspect where the Trust opportunities for pharmacy Management and Pharmacy, easier and safer for prescribing doctors who work between the performed particularly well in staff to ensure they are said, “We are very pleased with hospitals within the region and will ensure that patients at STH the latest Annual Health Check able to maintain current the results of the study which do not miss doses of medication when they are transferred was in medicines management . competencies and learn new demonstrate the commitment between hospital sites . The Trust is one of only a few skills to reflect changing roles to high quality patient care hospitals in the country to run Foundation status and B%!, \5 24 community involvement

As a Welcomer, Hope is In 2006/07 we expanded the young people’s responsible for providing a volunteer project with the aim of engaging signposting service, which generally entails escorting hard to reach communities such as those patients to the right who are long term unemployed or disabled departments so that they arrive on time for their appointment and black and minority ethnic groups. and helping visitors to find their way to the wards . Young Peoples’ Volunteer Co- The young people’s volunteer more about health care while ordinator Alan Smith explains, project has gone from strength I am doing my studies . I like “We have around 700 volunteers to strength this year and volunteering here because it across the Trust and they all around 150 young people are feels good to work as a team work extremely hard to support now volunteering across the and you get experience of the hospitals . The Welcomers Trust . Volunteering offers many working with all sorts of people” . provide an invaluable service to opportunities to people of all Hope is currently undertaking patients, visitors and staff . ages; it can improve social and a health and social care course By directing and escorting team-working skills, increase at Hillsborough College . She people to their intended Investing in Volunteers confidence and help young destination it means that clinics has recently been offered a The Trust has also been working towards ‘Investing in people to kick start their career are able to see the patients on part time position as a domestic Volunteers’ status, the UK quality standard for all organisations in healthcare . time and visitors can find the at the Trust and has vowed which involve volunteers in their work . The Standard enables correct ward when visiting their Nineteen year old Hope Kibuuka to continue in her role as a organisations to comprehensively review their volunteer relatives ”. joined the Trust in October 2006 volunteer in her spare time . management and publicly demonstrate their commitment to as a volunteer Welcomer at “I am originally from Uganda Volunteers at the Trust now volunteering; ensuring that volunteers’ are valued and their skills the Royal Hallamshire Hospital so working as a volunteer and have access to a much more utilised . to help her achieve her long talking to people everyday is comprehensive training The Trust has passed all of the assessments and once officially term ambition of becoming a really helping me to improve my programme which includes fire approved will be the largest and one of the first organisations in nurse . She says, “My aim is to English language skills which will safety, moving and handling Sheffield to receive the Investing in Volunteers accreditation . train to be a nurse so I joined help me to get a job in nursing in training and health and safety the hospital to help me learn the future ”. training . Learning from B%!, \5 25

our patients “I was very happy with all the amenities at Northern “The staff could not have General. Doctors, nurses, been better. No complaints food staff, plus cleaners, I of any kind. Could not have was very impressed with been in better hands, I The Trust has in place a comprehensive, them all. They were all very don’t think I would still be easy to access complaints system which friendly and helpful. The here if it hadn’t been for enables patients, their families or carers food was also good.” the staff.” Patient on Chesterman Patient on Osborn ward, to tell us about their experiences and Ward, Northern General Spinal Injuries Unit, provide comments and suggestions. Hospital Northern General Hospital

The feedback we receive is • The introduction of personal The Trust also receives a great then used to make important stereos for patients having many compliments from “I recently had major “My father has spent the improvements to the services surgery performed under patients that have undergone surgery at the Hallamshire last five weeks in ward N1 we provide . This year, the Trust spinal or epidural anaesthesia, a wide variety of treatment . - admitted via GP referral at the Hallamshire and I received 649 complaints of which will provide a more A lot of the patients at Sheffield to emergency admissions would like to thank all the which 88% were resolved within soothing sensory environment Teaching Hospitals are under and then to Ward K2 nurses and doctors who our target of 20 working days . • New guidelines on the correct the Trust’s care for many years where I stayed for 10 days. looked after him who were Fifty requests for independent management of babies and continue to be satisfied From admission, through absolutely brilliant.” review were received this year with a tongue-tie . This will with their care . Here are just a differential diagnosis, Relative of patient treated from the Healthcare Commission, include information about the few comments which have been to pre-op, post-op and on N1, Royal Hallamshire but none progressed to full established referral pathway posted on the national Patient discharge I was extremely Hospital independent review . for these babies Opinion website: impressed with care at the Hallamshire. In particular From these complaints, a • The introduction of an the nursing and support number of improvements have information pack which care was highly impressive.” been made to ensure future gives clear information and patients receive the highest nutritional advice to nurses Patient on K2, Royal quality of care . Some of these caring for renal patients on Hallamshire Hospital changes include: the vascular wards . Annual Accounts B%!, \5 26 2006/07

In consideration of the organisation’s performance against Monitor’s risk ratings, provision for risk built into the financial plan and good performance management processes, the Trust Board of Sheffield Teaching Hospitals NHS Foundation Trust considers the Trust a going concern for 2007/08 . The following annual accounts have been prepared on the basis that the Sheffield Teaching Hospitals NHS Foundation Trust will continue to operate in business for the foreseeable future . The accounts have been prepared in accordance with the relevant accounting rules, which are set out in the Accounting Standards Board’s Financial Reporting Standards (FRSs) as interpreted by the NHS Foundation Trust Financial Reporting Manual . Finance Director’s B%!, \5 27 review

Cash balances amounted to its Prudential Borrowing Limit as • Underlying deficits in General Since its creation on 1st April 2001, the £37 .6m at 31st March 2007 . Of set by Monitor, the foundation Surgery and Orthopaedics Trust has maintained financial balance this, £24 .6m can be attributed trust regulator . On Monitor’s which both improved by to Agenda for Change pay financial risk rating of one to five, around £1m over 2005/06 in every accounting period, initially as an assimilation costs, capital where one represents very high levels but which, at £1 .6m and NHS Trust and since 1st July 2004 as an programme slippage and other risk and five reflects extremely £2 .3m respectively, remained NHS Foundation Trust. provisions which are expected to low risk, the Trust was assessed significant result in payments in 2007/08 . as a four at both the 2006/07 • A major pressure from energy Whilst the balance of £13 .0m is a plan and outturn stages . price increases significant sum, it represents just Whilst the 2006/07 outturn • A reduction in staff in post of Whilst the Income and The Trust’s income grew seven days worth of expenditure position was a very satisfactory 258 WTEs over the year and Expenditure (I&E) Account significantly again in 2006/07 as for the Trust . As an autonomous one, there were many key a £4m reduction (34%) in surplus in 2006/07 of £2 97m. shown in the table below . entity it would be imprudent issues to highlight including the bank and agency expenditure, is the largest achieved by the However, in real terms, taking to operate with a lower level of following: despite an increase in activity Trust, it still represents just account of inflation and national cash balances . Overall the Trust • The general NHS challenge of and services provided 0 46%. of turnover for the year cost pressures, the overall growth had net assets of £439 4m. at moving away from the deficit which is the equivalent of is fairly minimal . 31st March 2007 and net current • Slippage on the opening of just under 1 7. days worth of position in 2005/06 the Sir Robert Hadfield Wing Total capital investment for assets of £28 .5m . The latter expenditure . The surplus will • The impact of the Sheffield which released funding on a the year amounted to £32 1m. . will deteriorate significantly in be used for future investment PCT(s) addressing underlying non-recurrent basis Detailed information is provided 2007/08 due to the Agenda for with £2m having already been financial difficulties and elsewhere in the Annual Report Change, capital expenditure • The continued reliance on committed to commence a Ward beginning to pay off historic but planning and operational and other provisions referred to non-recurrent PbR transitional Refurbishment Programme in debts pressures again caused slippage above . funding amounting to 2007/08 . with an underspend of £4 .5m . During the 2006/07 financial • Income constraints from the £20 .5m . year, the Trust secured approval very low tariff uplift and a for an £18 .3m loan to fund the top-slice on education and % Increase over £M new Critical Care Facility at training contract values 2005/06 the Northern General Hospital . • The need for the Trust to Income from Patient Service Activities 535 .0 5 .9 However, none of the loan was deliver unprecedented levels utilised in 2006/07 . The Trust (£32m) of productivity and Total Income 646 .5 5 .7 was compliant at all times with efficiency savings B%!, \5 28

Operational Issues Looking Ahead • Implementation of the Picture • 2007/08 and 2008/09 Archiving and Communication represent the second and As detailed elsewhere in the There are many positives for the System (PACS) third years of the Trust’s Annual Report, the Trust had a Trust to contemplate moving programme to deliver £90m very successful year in delivering forwards into 2007/08 and • The commencement of a of productivity and efficiency national service targets and beyond . The Trust continues to programme to refurbish savings over a three year developing the quality of provide a wide range of high wards and other clinical period . Whilst the first £30m services . The margins between quality secondary and tertiary accommodation across the or so has been delivered in success and failure remain very services from good facilities and Trust 2006/07, the cumulative fine and the Trust will continue to is a key provider of services for These and many other smaller nature of the requirement will be challenged to deliver all of the the people of Sheffield and the schemes will continue to improve make delivery in the next two requirements and expectations North Trent region . It also has the Trust’s facilities and services years much more difficult . placed upon it in terms of: many talented and committed for the benefit of patients, • Having faced the pressure of Finance - Maintaining financial members of staff who will be although there remain key issues expansion to deliver waiting stability and the ability to fundamental to addressing the to be addressed in areas such time targets over several years invest whilst making major challenges ahead . The Trust as car parking capacity and the Trust faces uncertainty improvements in productivity can also look forward to some laboratory reconfiguration . over future income levels and efficiency . key developments in 2007/08 In addition, access times will due to ongoing “demand including: continue to improve in many Access - Ensuring short waiting management” initiatives, the • The construction and opening areas, particularly as the Trust times for inpatient, outpatient, policy aim to move activity of the new Northern General continues to progress towards diagnostic, cancer, accident and out of hospitals, potential Hospital Critical Care Facility the 18 week patient journey emergency, GUM and other competition from a range of target . Investment from our services . • Improved and expanded NHS and private hospitals commissioners and the efforts Quality - Providing high quality Haematology and GUM and potentially a reduced of our staff will also continue to patient care, environment and facilities at the Royal activity requirement in many improve services . patient experience in all areas . Hallamshire Hospital elective areas once the 18 However, the Trust continues to Teaching - Maintaining high • Completion of schemes to week patient journey target is face many risks and challenges standards of teaching and refurbish and reconfigure achieved in December 2008 . in the future, particularly relating education at both undergraduate large parts of Weston Park • The current inadequacy to maintaining financial stability and postgraduate levels in many Hospital and the Northern of national tariffs in fully whilst delivering key patient professional disciplines . General Hospital Accident and reflecting the complex services, teaching and research Emergency department treatments undertaken in Research - Developing the and development requirements . • Commencement of a scheme teaching hospitals, and the Trust’s Research Strategy and The key financial risks are as to expand and upgrade inequity of the current Market ensuring high quality research follows: leading to improved patient care . the Charles Clifford Dental Forces Factor applied to tariffs Hospital at local hospital level . B%!, \5 29

• An expected less favourable its planning and performance NHS funding settlement from management processes, to 2008/09 which may well maximise productivity and impact on funding provided efficiency gains through the to the Trust for inflation, Adding Value Programme and cost pressures and service to influence national financial developments . policies . This latter area will be • The complete loss of PbR crucial if the Trust is to have a transitional funding by realistic chance of delivering the 2008/09 . service, teaching and research requirements placed upon it in • The loss of £7.5m of NHS a financially sustainable way . research and development The Trust has a fantastic track funding over three years from record of delivery over many 2007/08 with no clarity on years and there is every reason any funding and associated to believe that it can continue requirements from the on the same basis if the national revised national research financial and policy frameworks and development funding are supportive . arrangements . • Uncertainty over current funding streams in respect of NHS education and training arrangements . The Trust has every expectation Neil Priestley that 2007/08 will be another very Director of Finance challenging year . However, the May 2007 potential combination of factors for 2008/09 gives even greater cause for concern . The Trust will continue to identify risks and take action to manage and/or mitigate them . In particular, the Trust will continue to develop Public interest B%!, \5 30

The Chairman The Executive Directors disclosure David Stone OBE Andrew Cash OBE Chairman Chief Executive David Stone has been Chairman (Seconded to Department of of the Board since the formation Health from 30th June 2006) The Board of Directors comprises the of Sheffield Teaching Hospitals Andrew Cash was a graduate Chairman, six non-executive directors and in 2001 . He was previously entrant to the NHS on the Chairman of Weston Park national management training six executive directors. Each director brings Hospital and Central Sheffield scheme . He has been an NHS a range of different skills and experience University Hospitals NHS Trusts . chief executive for 18 years His professional career was in and has worked at regional and that enables the Trust to achieve balance the steel industry and he has national level . Mr Cash was and completeness at Board level. held posts in several Sheffield seconded to the Department of steel manufacturing companies Health as Director General for including Managing Director of Provider Development in July . British Steel Engineering Steels The Non-Executives (including Other Interests and is available on our Internet Governors are able to express and Stocksbridge Engineering the Chairman) are not full-time site for public access at www .sth . concerns through a route other Steels . Mr Stone was awarded • Visiting Professor to the employees of the Teaching nhs .uk . than that of the normal channels the OBE in 1997 . University of York’s Centre for Hospitals . They are people who of the Chairman, Chief Executive Leadership and Development, live or work in the area and have The Board of Directors can be Other Interests or Finance Director . A Senior Department of Health Studies shown a genuine interest in contacted by writing to: Trust • Trustee of Weston Park Cancer Independent Director, Mr Vic • Non-Executive Director, helping to improve the health of Secretary, Sheffield Teaching Care Appeal Hospitals NHS Foundation Trust, Powell, was appointed in April Medilink (Yorkshire & The local people . The Non-Executive • Trustee of Freshgate 8 Beech Hill Road, Sheffield, 2007 from the six Non-Executive Humber) Ltd Directors are determined by Foundation Directors who currently sit on the • Chair, Foundation Trust the Board to be independent in S10 2SB . Board . • Trustee of Sheffield Botanical Network (hosted by the NHS character and judgement . Senior Independent Gardens Trust Confederation) The Chairman, Executive and Director • Guardian, Sheffield Assay • Professor (Visiting Chair) at Non-Executive Directors have Office the University of Sheffield declared their interests as set In January 2007 the Board • Honorary Consul, Republic of Leadership Centre out below and the Board are of Directors agreed the Finland satisfied that there are no requirement for a Senior conflicts of interest indicated by Independent Director to act • Chairman, Cutlers Hall any external involvement . This with ‘independence of mind’ Preservation Trust disclosure is updated regularly and provide a channel by which Foundation Trust members and B%!, \5 31

Professor Chris Welsh Hilary Scholefield Chris Linacre Neil Priestley Dr Graham Davies Medical Director Chief Nurse Director of Service Development Director of Finance Deputy Medical Director (Acting Chief Executive from 1st Hilary Scholefield joined the (Appointed Deputy Chief Neil Priestley previously held the (Acting Medical Director from July 2006) Trust in March 2006 as Chief Executive from 1st July 2006) post of Head of Finance at the 1st July 2006) Professor Chris Welsh trained Nurse . Hilary began her nursing Chris Linacre joined the NHS in NHS Executive Trent Regional Graham Davies has been a as a Vascular Surgeon and was career at the Northern General 1971 and has worked in hospital Office . He had been seconded to Deputy Medical Director at appointed to a consultant post Hospital, where she undertook management and specialist the Northern General Hospital the Trust since its formation at the Northern General Hospital her training and worked as Staff personnel management wholly prior to the Trust merger where in 2001 and he held a similar in 1984 . Before becoming Nurse and then Sister in both the within Sheffield since that time . he was acting as Director of post at the Northern General Medical Director in 2001, cardiothoracic and critical care He has held posts as Director of Finance before being appointed prior to the merger . Dr Davies Professor Welsh held the post areas . Before her appointment Organisational Development at to the post of Director of Finance was appointed as a Consultant of Regional Postgraduate Dean as Chief Nurse, Mrs Scholefield the Royal Hallamshire Hospital upon the merger of the trusts Cardiothoracic Anaesthetist in for the NHS Trent Region for six held the post of Chief Nurse at and General Manager of in 2001 . Mr Priestley is a Fellow 1981 and in addition has worked years . He was seconded to the the University Hospitals Coventry Lodge Moor and King Edward of the Chartered Association of in the chronic pain service and post of Acting Chief Executive in and Warwickshire NHS Trust . She Hospitals prior to becoming Certified Accountants . palliative care . Dr Davies took July 2006 . chairs the National Association Director of Corporate Strategy Other Interests: N/A on the role of Acting Medical of UK University Hospitals Nurse for the former Central Sheffield Director in July 2006 . Other Interests Directors’ Group . University Hospitals NHS Trust John Watts Director of Human Resources Other Interests: N/A • In Private Medical Practice Other Interests: when it was formed in 1992 . based at Claremont Hospital John Watts has a 30 year • Associate Fellow, Warwick Other Interests: • Tutor Medical Leadership career in NHS personnel and University • Non Executive Director of Programme – NHS Leadership executive management and • Nurse Advisor to Engaging Medipex Ltd Centre and Keele University, has held senior posts in NHS Quality, part of the Health Centre for Health Planning • Non Executive Director of organisations around the Foundation and Management Aperio Diagnostics Ltd (a country . Prior to joining the team • Member, Secretary of State’s company partly owned by the • Part owner and Director of C. at Sheffield Teaching Hospitals, Sounding Board Trust) L . Welsh and Company Ltd Mr Watts was Director of Human • Member, SDO Programme Resources at the Northern Board General Hospital . Other Interests: N/A B%!, \5 32

Directors in Attendance of the Board of Directors Meetings

The following employees attend Neil Riley for black and Asian people . Ms Vickie Ferres Other Interests the Board of Directors meetings Trust Secretary Bright is also part of the ethnic Vickie Ferres is Director of • Member of Foundation Trust but do not sit on the Trust (from August 2006) programmes team at BBC Radio Age Concern in Doncaster - Finance Facility Executive Group . Sheffield where she presents a Neil Riley is a graduate of the a position held since 1983 . John Stoddart CBE Queens College, Oxford and in weekly show . She was formerly A Sheffield resident, Vickie John Simpson a Non-Executive Director at (retired 30th June 2006) Director of Estates Management 1981 joined the National Health has extensive experience in Central Sheffield University Trust Vice Chairman John (until 30th March 2007) Service as a Management working with elderly people and Trainee . He has subsequently Hospitals NHS Trust . understanding the health and Stoddart has a background in John Simpson has held a number worked in a number of NHS social care issues that affect higher education and was Vice of Estates Management posts Other Interests settings across the country them . Vickie was formerly a Chancellor of Sheffield Hallam in both the public and private N/A and in 1995 was appointed as Non-Executive Director at the University until his retirement . sector . He was the Director of Chief Executive of Weston Park John Donnelly Northern General Hospital NHS He holds honorary degrees from Estates Management at the both the University of Sheffield Hospital . John Donnelly was a Chief Trust . Northern General Hospital prior and Sheffield Hallam University . In 2002 Mr Riley was appointed Superintendent with South to the merger in 2001 . He was Other Interests He is a Director of Sheffield to the post of Assistant Chief Yorkshire Police and Commander subsequently appointed as the • Chief Executive, Age Concern Assay Office . Mr Stoddart retired Executive at Sheffield Teaching for the district that covers the Director of Estates Management (Doncaster) from his role as Non-Executive Hospitals NHS Trust and, most Trust’s hospitals . He joined the for the Sheffield Teaching • Director and Chair Disability Director in June 2006 . Hospitals NHS Trust . recently, was appointed to the Police as a cadet in 1966 and, post of Trust Secretary for the in time, headed up the Force’s Doncaster Other Interests Mr Simpson left the Trust in Sheffield Teaching Hospitals Research & Development, • Director and Chair, South March 2007 to take up the • National Extension College NHS Foundation Trust . Community Relations, and Yorkshire Centre for post of Director of Estates and • Bolton Institute Police Traffic Departments . Mr Integrated Living Facilities Management at the Other Interests: Donnelly’s term of office as non- • Guardian, Sheffield Assay recently merged Nottingham • Visiting Professor, Sheffield • Director and Chair, John executive director was extended Office Universities Hospitals NHS Trust . Hallam University William Chapman Trust in July for a further four years . Chris Suddes He is a Chartered Engineer and • Associate, PACT consultancy Vic Powell a member of the Chartered Other Interests (appointed 1st July 2006) Victor Powell is an accountant Institute of Building Services Chris Suddes has an MBA from The Non-Executive • Associate Investigator by profession and worked for Engineers . the University of Sheffield and Directors working for the Parliamentary KPMG in Sheffield throughout over 20 years experience in Other interests & Health Service Ombudsman his professional career . He was contract logistics organisations, Ony Bright • Trustee, Sheffield Hospitals involved in the management of • Member of the Chartered most recently as Operations & IT Onyema Bright had a Charitable Trust the North-East Region in general Institute of Building Engineers director for Bibby Distribution . background in mental health and the Sheffield office in (CIBSE) • Lay Panellist, General Medical Chris has previously held the nursing before becoming Project particular where he was Business Council Fitness to Practice Non-Executive Director post at Manager for a management and Unit Managing Partner for nine Panel North Sheffield Primary Care professional training initiative years until retiring . B%!, \5 33

Trust . He was also one of the first Director with both Sheffield Committees of Meetings of the Board Public Governors to be appointed Health Authority and the the Board The Board of Directors meets to the Sheffield Teaching Northern General Hospital NHS every month; four of these Hospitals NHS Foundation Trust Trust . The Management Audit meetings are held in public and in 2004 . Chris was appointed as Committee (MAC) is appointed Other Interests the remaining meetings, plus a Non-Executive Director in July by the Board of Directors and any extraordinary meetings, 2006 . • University Representative consists of more than three are held privately with only the • Medical Advisor and Trustee, Non-Executive Directors of the Other Interests Board of Directors, associated British Thyroid Foundation Foundation Trust . The meetings • Non-Executive Director, are normally attended by the employees, and employees of • Private Medial Practice at Patient Opinion Chief Executive, Director of the Trust making presentations Thornbury Hospital to the Board, in attendance . • Communications and Media Finance, the Chief Internal Non-Executive Directors Public meetings are open to staff Officer, British Disabled Flying Auditor and a representative are appointed via an open and the general public and focus Association from the external auditor . advertisement and formal on themes which are of interest The MAC plays a role in internal • Managing Director, Antipas interview process . This is to the public including infection control and management Designworks Ltd managed on behalf of the control and new buildings and reporting, internal audit, external • Associate Director, Prism Trust by the NHS Appointments developments . audit, financial reporting, special Associates business Commission . assignments and corporate The individual attendance consultancy Terms of Office governance . It meets regularly by Directors is noted at each (not less than three times a meeting and reviewed by the Professor Anthony The Non-Executive Directors’ year), is authorised by the Board Chairman . Attendance may be Weetman Terms of Office are for a set of Directors to investigate any affected by sickness or annual Professor Anthony Weetman period and finish as follows: activity within its terms of leave . Individual attendance for is Dean of the Medical School 1st July 2007 Vic Powell and reference and is authorised to 2006/07 is as follows: at the University of Sheffield Ony Bright seek any information it requires and is the appointed academic 1st July 2008 David Stone from a Trust employee in representative on the Board of achieving this objective . Outside Directors . Professor Weetman 1st July 2009 Vickie Ferres legal or other independent is Professor of Medicine and and Anthony professional advice may also be an Honorary Consultant at the Weetman sought if considered necessary Trust with a special interest in 1st July 2010 Chris Suddes by the Committee . thyroid disease and autoimmune 1st July 2010 John Donnelly endocrine disorders . He was formerly a Non-Executive B%!, \5 34

Board Member Attendance Rate (out of 18 meetings unless otherwise stated)

Mr David Stone Governance Code Remuneration 17/18 Chairman The Board has considered the Further details of remuneration Monitor Governance Code and are given in the remuneration Mr Andrew Cash 4/5 (before commencement Chief Executive is compliant with the Code report on the following pages . of secondment) (with effect from 30th June 2006) as evidenced in the relevant The accounting policies for Professor Chris Welsh sections of the Annual Report pensions and other retirement 18/18 (in current and previous Acting Chief Executive post of Medical Director) with the exception of the benefits are set out in the (with effect from 1st July 2006) following: accounts on the following page Dr Graham Davies (page 35) . 13/13 (from commencement The Trust currently relies on the Acting Medical Director of secondment) existing NHSLA provisions in (with effect from 1st July 2006) respect of insurance to cover Mr Chris Linacre 15/18 Directors’ liability . Director of Service Development The Board does not believe Mrs Hilary Scholefield 16/18 that the re-appointment of Chief Nurse Executive Directors at no more Mr Neil Priestley than five years is required, given 16/18 Director of Finance the existence of robust annual Mr John Watts appraisal arrangements for 16/18 Director of Human Resources Directors . Mrs Ony Bright So far as the Board of Directors 12/18 Non-Executive Director is aware, all possible steps have Mr John Donnelly been taken to ensure that all 18/18 relevant audit information has Non-Executive Director been disclosed in full to the Mrs Vickie Ferres 14/18 auditors . Non-Executive Director Mr Vic Powell Appointments 17/18 Non-Executive Director Recommendations for Mr John Stoddart appointments are made Non-Executive Director 5/5 (before retirement) by the Foundation Trust’s (retired July 06) Appointments Committee and Mr Chris Suddes 12/13 (from commencement approved by the Governors’ (appointed July 06) of post) Council . Professor Anthony Weetman 13/18 Non-Executive Director Remuneration report B%!, \5 35

remuneration are discussed . The take place to discuss progress Performance Pay Remuneration of Executive Directors decisions of the Remuneration and there is an end of year No element of the Executive Committee are reported to review to assess achievements is carried out through the Board of and Non-Executive Directors’ the Governors’ Council . In and performance . The Executive Remuneration is performance- Directors’ Remuneration Committee. determining the remuneration Directors are assessed by the related . Remuneration for Non-Executive for the Chairman and Non- Chief Executive, following which Executive Directors, account is there is a meeting between Duration of Contracts Directors (including the Chairman) is also taken of the guidance provided the Chairman and each of the All Executive Directors have by the Foundation Trust Executive Directors to discuss considered by the Governors’ Council a substantive Contract of Network . their performance . Remuneration Committee and approved Employment with a 12 month Remuneration of The Chairman undertakes the notice provision in respect of by the Governors’ Council. performance review of the Chief termination . This does not Senior Managers Executive and Non-Executive affect the right of the Trust to In determining the Pay and Directors . terminate the contract without Remuneration attendance at all meetings Conditions of Employment for Individual performance review is notice by reason of the conduct Committee to advise the Committee and Senior Managers, the Board well established in the Trust and of the Executive Director . ensure that an appropriate of Directors’ Remuneration is an integral part of developing The Chairman and the Non- The Board of Directors’ Pay and record of proceedings is kept . Committee takes account of the Executive and Non- Executive Director appointments Remuneration Committee is a National Pay Awards given to the Executive Directors’ Personnel are due for renewal as shown formally appointed Committee Remuneration of Pay and Non-Pay Review staff Development Plans . below . of the Board of Directors . Its Chairman and Non- groups, together with the “NHS Terms of Reference comply with Board Room Pay Report” findings Executive Directors Expiry the Secretary of State’s “Code of for Executive Directors produced Name Designated date of Conduct and Accountability for The Remuneration of the by Incomes Data Services Ltd . NHS Boards” . Chairman and Non-Executive appointment The membership of the Directors is determined by Assessment of Mr D R Stone Chairman 1st July 2008 Committee comprises the Non- a Remuneration Committee Performance Mrs O Bright Non-Executive Director 1st July 2007 Executive Directors of the Board of the Governors’ Council . The Committee comprises All Executive and Non-Executive of Directors together with the Mr J Donnelly Non-Executive Director 1st July 2010 six Governors and the Trust’s Directors are subject to Chairman and Chief Executive Individual Performance Review . (except where matters relating Chairman . The Chairman does Ms V Ferres Non-Executive Director 1st July 2009 not attend or participate in any This involves the setting and to the Chief Executive are under Mr V G W Powell Non-Executive Director 1st July 2007 meetings of the Governors’ agreeing of objectives for a 12 discussion) . month period running from 1st Council Remuneration Mr C Suddes Non-Executive Director 1st July 2010 The Directors of Finance Committee when matters April to the following 31st March . Professor A P Weetman Non-Executive Director 1st July 2009 and Human Resources are in relating to the Chairman’s During the year regular reviews B%!, \5 36

Early Termination Other Information Liability Please refer to the notes in the Depending on the circumstances 06/07 Accounts contained on of the early termination the pages 43 - 64 of this Annual Trust would, if the termination Report in respect of the was due to redundancy, apply following: redundancy terms under • Salaries and Allowances Section 45 of the General • Benefits in Kind Whitley Council Handbook or • Increases in Pension at age 60 consider severance settlements during 06/07 in accordance with HSG94(18) and HSG95(25) . In addition, • Value of the cash equivalent there may be an entitlement transfer value at the to early retirement benefits beginning of the year under the provisions of the NHS • Increase in the cash (Compensation for Premature equivalent transfer value Retirement) Regulations 1981 during 06/07 . if the dismissal is on grounds of Signed redundancy and the individual is over 50 with at least five years service in the Superannuation Scheme .

C L Welsh Professor Chris Welsh Acting Chief Executive 6th June 2007 Independent B%!, \5 37 Auditor’s report

Independent Auditor’s Report to the Governors’ Council of Sheffield Teaching Hospitals NHS Foundation Trust.

I have audited the financial statements of Sheffield Teaching Independent Regulator of NHS Foundation Trusts, are set out in the Hospitals NHS Foundation Trust for the year ended 31st March 2007 Statement of Accounting Officer’s Responsibilities . under the Health and Social Care (Community Health and Standards) My responsibility is to audit the financial statements in accordance Act 2003, which comprise the Income and Expenditure Account, the with statute, the Audit Code for NHS Foundation Trusts and Balance Sheet, the Cash Flow Statement, the Statement of Total International Standards on Auditing (UK and Ireland) . I report to you Recognised Gains and Losses and the related notes . These financial my opinion as to whether the financial statements give a true and statements have been prepared under the accounting policies set out fair view in accordance with the accounting policies directed by the within them . Independent Regulator as being relevant to NHS Foundation Trusts . This report is made solely to the Governors’ Council of Sheffield I review whether the Accounting Officer’s statement on internal Teaching Hospitals NHS Foundation Trust as a body in accordance control reflects the compliance with the requirements of the with paragraph 24(5) of Schedule 1 of the Health and Social Independent Regulator contained in the NHS Foundation Trust Care (Community Health and Standards) Act 2003 . My work was Financial Reporting Manual 2006/07 . I report if it does not meet undertaken so that I might state to the Governors’ Council those the requirements specified by the Independent Regulator or if the matters I am required to state to it in an auditor’s report and for no statement is misleading or inconsistent with other information I am other purpose . In those circumstances, to the fullest extent permitted aware of from my audit of the financial statements . I am not required by law, I do not accept or assume responsibility to anyone other than to consider, nor have I considered, whether the Accounting Officer’s the Foundation Trust as a body, for my audit work, for the audit report statement on internal control covers all risks and controls . Neither or for the opinions I form . am I required to form an opinion on the effectiveness of the Trust’s Respective responsibilities of the corporate governance procedures or its risk and control procedures . I read the other information contained in the Annual Report and Accounting Officer and Auditor considered whether it is consistent with the audited financial The Accounting Officer’s responsibilities for preparing the financial statements . This other information comprises only the Chairman’s statements in accordance with directions made by Monitor, the Statement, the Chief Executive’s Statement, Background Information, B%!, \5 38

Operating and Financial Review, the sections on the Governors’ Opinion Council, the Board of Directors, membership and public interest In my opinion the financial statements give a true and fair view of the disclosures and the un-audited part of the Remuneration Report . state of affairs of Sheffield Teaching Hospitals NHS Foundation Trust I consider the implications for my report if I become aware of as at 31st March 2007 and of its income and expenditure for the year any apparent mis-statements or material inconsistencies with the then ended in accordance with the accounting policies adopted by financial statements . My responsibilities do not extend to any other the Trust . information . Certificate Basis of audit opinion I certify that I have completed the audit of the accounts in I conducted my audit in accordance with the Health and Social Care accordance with the requirements of the Health and Social Care (Community Health and Standards) Act 2003 and the Audit Code for (Community Health and Standards) Act 2003 and the Audit Code for NHS Foundation Trusts issued by the Independent Regulator, which NHS Foundation Trusts issued by the Independent Regulator . requires compliance with International Standards on Auditing (United Kingdom and Ireland) issued by the Auditing Practices Board . An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements . It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, JG Prentice FCCA and of whether the accounting policies are appropriate to the Trust’s Officer of the Audit Commission circumstances, consistently applied and adequately disclosed . Littlemoor House, I planned and performed my audit so as to obtain all the information Littlemoor, Eckington, and explanations which I considered necessary in order to provide Sheffield, S21 4EF me with sufficient evidence to give reasonable assurance that 8th June 2007 the financial statements are free from material mis-statement, whether caused by fraud or other irregularity or error . In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements . Statement of B%!, \5 39 Responsibilities

• Observe the Accounts that the accounts comply The Health and Social Care (Community Direction issued by Monitor, with requirements outlined Health and Standards) Act 2003 (‘2003 including the relevant in the above mentioned Act . accounting and disclosure The accounting officer is also Act’) states that the chief executive requirements, and apply responsible for safeguarding the is the accounting officer of the NHS suitable accounting policies assets of the NHS Foundation Foundation Trust. on a consistent basis Trust and hence for taking • Make judgements and reasonable steps for the estimates on a reasonable prevention and detection of basis fraud and other irregularities . The relevant responsibilities of in the form and on the basis set To the best of my knowledge and accounting officer, including their out in the Accounts Direction . • State whether applicable belief, I have properly discharged responsibility for the propriety The accounts are prepared on accounting standards as set the responsibilities set out in and regularity of public finances an accruals basis and must give out in the NHS Foundation Monitor’s NHS Foundation for which they are answerable, a true and fair view of the state Trust Financial Reporting Trust Accounting Officer and for the keeping of proper of affairs of Sheffield Teaching Manual have been followed, Memorandum . accounts, are set out in the Hospitals NHS Foundation and disclose and explain any accounting officers’ Trust and of its income and material departures in the Signed expenditure, total recognised financial statements Memorandum issued gains and losses and cash flows • And prepare the financial by the Independent for the financial year . statements on a going Regulator of NHS In preparing the accounts, the concern basis Foundation Trusts Accounting Officer is required to The accounting officer is C L Welsh comply with the requirements responsible for keeping proper Professor Chris Welsh (‘Monitor’). of the NHS foundation trust accounting records which Acting Chief Executive Under the 2003 Act, Monitor has Financial Reporting Manual and disclose with reasonable 6th June 2007 directed the Sheffield Teaching in particular to: accuracy at any time the Hospitals NHS Foundation Trust financial position of the to prepare for each financial NHS foundation trust and year a statement of accounts to enable him/her to ensure Foreword to B%!, \5 40 the Accounts

These accounts for the year ended 31st March 2007 have been prepared by the Sheffield Teaching Hospitals NHS Foundation Trust in accordance with schedule 1 paragraphs 24 and 25 of the Health and Social Care (Community Health and Standards) Act 2003 in the form which Monitor, the Independent Regulator of NHS Foundation Trusts, has, with the approval of HM Treasury, directed . Signed

Professor Chris Welsh Acting Medical Director 6th June 2007 Financial statements B%!, \5 41

Income and Expenditure Account Balance Sheet as at 31 March 2007 for the 12 months ended 31 March 2007 2006/07 2005/06 31 March 2006 (restated) Note £000 £000 NOTE £000 £000 Income from activities 3 535,332 505,482 FIXED ASSETS Intangible assets 10 764 798 Other operating income 4 111,187 106,090 Tangible assets 11 436,288 434,091 Operating expenses 5-7 (632,961) (599,324) Investments 12 0 0 437,052 434,889 OPERATING SURPLUS 13,558 12,248 CURRENT ASSETS Surplus on sale of fixed assets 8 0 103 Stocks 13 7,904 8,097 Debtors 14 30,880 34,791 SURPLUS BEFORE INTEREST 13,558 12,351 Investment 15 0 0 Interest receivable 2,217 1,078 Cash 19.3 37,568 22,055 Interest payable 9 0 0 76,352 64,943 CREDITORS: Amounts falling due 16 (47,830) (50,315) Other finance costs - unwinding of discount (55) (45) within one year Other finance costs - change in discount rate on provisions 0 (253) NET CURRENT ASSETS 28,522 14,628 TOTAL ASSETS LESS CURRENT 465,574 449,517 SURPLUS FOR THE YEAR 15,720 13,131 LIABILITIES Public Dividend Capital dividends payable (12,753) (12,529) CREDITORS: Amounts falling due 16 (2,472) (2,888) after more than one year RETAINED SURPLUS FOR THE YEAR 2,967 602 PROVISIONS FOR LIABILITIES 17 (23,740) (13,328) AND CHARGES TOTAL ASSETS EMPLOYED 439,362 433,301 The notes on pages 43 to 64 form part of these accounts . FINANCED BY: All income and expenditure is derived from continuing operations . TAXPAYERS’ EQUITY Public Dividend Capital 18.2 305,119 305,119 Revaluation reserve 18.3 82,524 86,183 Donated asset reserve 18.3 39,289 37,024 Income and expenditure reserve 18.3 12,430 4,975 Professor Chris Welsh, Acting Chief Executive TOTAL TAXPAYERS’ EQUITY 439,362 433,301 6th June 2007 Professor Chris Welsh, Acting Chief Executive 6th June 2007 B%!, \5 42

Statement of Total Recognised Gains and Losses Cash Flow Statement for the 12 months ended 31 March 2007 for the 12 months ended 31 March 2007

2006/07 2005/06 2006/07 2005/06 £000 £000 Note £000 £000 Surplus for the year before dividend payments 15,720 13,131 OPERATING ACTIVITIES Unrealised surplus / (loss) on fixed asset revaluations/indexation 170 (3,186) Net cash inflow from operating activities 19.1 54,013 39,899 RETURNS ON INVESTMENTS AND SERVICING Increases in the donated asset reserve due to receipt of donated assets 5,094 6,864 OF FINANCE: Reductions in the donated asset reserve due to depreciation, (2,131) (2,459) Interest received 2,244 1,048 impairment, and / or disposal of donated assets Interest paid 0 0 Other recognised gains and losses (39) 0 Net cash inflow from returns on investments 2,244 1,048 Total recognised gains for the year 18,814 14,350 and servicing of finance Prior Period Adjustment (note 29) (3,052) 0 CAPITAL EXPENDITURE Total gains and losses recognised since last annual report 15,762 14,350 (Payments) to acquire tangible assets (32,925) (46,595) Receipts from sale of Tangible Fixed Assets 0 149 (Payments) to acquire intangible assets (170) (144) Net cash (outflow) from capital expenditure (33,095) (46,590) DIVIDENDS PAID (12,753) (12,529) Net cash inflow (outflow) before management 10,409 (18,172) of liquid resources and financing MANAGEMENT OF LIQUID RESOURCES (Purchase) of current asset investments (165,000) (180,000) Sale of current asset investments 165,000 180,000 Net cash flow from management of liquid resources 0 0 Net cash inflow / (outflow) before financing 10,409 (18,172) FINANCING Public dividend capital received 0 24,844 Other capital receipts 5,104 6,426 Net cash inflow from financing 5,104 31,270 Increase in cash 15,513 13,098 Notes to the Accounts B%!, \5 43

1 Monitor has directed that the financial statements 1.2 Acquisitions and discontinued operations Partially completed spells for patient episodes of NHS Foundation Trusts shall meet the accounting Activities are considered to be ‘discontinued’ where are accounted for as required under FRS 5 . requirements of the NHS Foundation Trust Financial they meet all of the following conditions: An asset in the form of a debtor is therefore Reporting Manual which shall be agreed with HM recognised together with the corresponding income a . The sale (this may be at nil consideration for Treasury . Consequently, the following financial adjustments . activities transferred to another public sector statements have been prepared in accordance body) or termination is completed either in the The NHS Foundation Trust changed the form with the 2006/07 NHS Foundation Trust Financial period before the earlier of three months after of its contracts with NHS commissioners to Reporting Manual issued by Monitor, the body the commencement of the subsequent period and follow the Department of Health’s Payment by responsible for overseeing Foundation Trust the date on which the financial statements are Results methodology from 2004/05 . To manage activities . The accounting policies contained approved; the financial impact of this change on the NHS in that manual follow UK generally accepted Foundation Trust and its commissioners the b . If a termination, the former activities have ceased accounting practice for companies (UK GAAP) and Department of Health has implemented transitional permanently; HM Treasury’s Financial Reporting Manual to the gain and clawback arrangements . These are on extent that they are meaningful and appropriate c . The sale or termination has a material effect on the a sliding scale, as the change is phased in over to the NHS, as determined by HM Treasury, which nature and focus of the reporting trust’s operations the four year period to 2008/09 . Under these is advised by the Financial Reporting Advisory and represents a material reduction in its operating arrangements the Trust received income protection Board . The accounting policies have been applied facilities resulting either from its withdrawal from of £20,511,000 from the Department of Health consistently in dealing with items considered a particular activity or from a material reduction in during 2006/07 (2005-06 £16,114,000) . material in relation to the accounts . income in the Trust’s continuing operations; 1.4 Expenditure 1.1 Accounting convention d . The assets, liabilities, results of operations and activities are clearly distinguishable, physically, Expenditure is accounted for by applying the These accounts have been prepared under the operationally and for financial reporting purposes . accruals convention . historical cost convention modified to account for the revaluation of fixed assets at their value to Operations not satisfying all of these conditions are 1.5 Intangible fixed assets the business by reference to their current costs . classified as continuing . Intangible assets are capitalised when they are NHS Foundation Trusts, in compliance with HM Activities are considered to be ‘acquired’ whether or capable of being used in a Trust’s activities for more Treasury’s Financial Reporting Manual, are not not they are acquired from outside the public sector . than one year; they can be valued; and they have a required to comply with the FRS 3 requirements to 1.3 Income Recognition cost of at least £5,000 . report “earnings per share” or historical profits and Intangible fixed assets held for operational use are Income is accounted for applying the accruals losses . valued at historical cost and are depreciated over convention . The main source of income for the the estimated life of the asset on a straight line Trust is from commissioners in respect of healthcare basis, except capitalised Research and Development services provided under local agreements . Income which is revalued using an appropriate index figure . is recognised in the period in which services are The carrying value of intangible assets is reviewed provided . Where income is received for a specific for impairment at the end of the first full year activity which is to be delivered in the following following acquisition and in other periods if events financial year, that income is deferred . B%!, \5 44

or changes in circumstances indicate the carrying value periodically . The carrying values of tangible Assets in the course of construction are valued at value may not be recoverable . fixed assets are reviewed for impairment in periods cost and are valued by professional valuers as part Purchased computer software licences are if events or changes in circumstances indicate the of the five or three yearly valuation or when they capitalised as intangible fixed assets where carrying value may not be recoverable . are brought into use . expenditure of at least £5,000 is incurred . They are All land and buildings are restated to current value Residual interests in off balance sheet private amortised over the shorter of the term of the licence using professional valuations in accordance with finance initiative properties are included in assets and their useful economic lives . FRS15 every five years . A three yearly interim under construction within tangible fixed assets at valuation is also carried out . the amount of unitary charge allocated for the 1.6 Tangible fixed assets The costs arising from financing the construction of acquisition of the residual with an adjustment . The Capitalisation the fixed asset are not capitalised but are charged adjustment is the net present value of the change in Tangible assets are capitalised if they are capable of to the income and expenditure account in the year fair value of the residual as estimated at the start of being used for a period which exceeds one year and to which they relate . the contract and at the balance sheet date . they: Professional valuations are carried out by the Operational equipment other than IT equipment, • Individually have a cost of at least £5,000; or Valuation Office . The valuations are carried out in which is considered to have nil inflation, is valued at accordance with the Royal Institute of Chartered net current replacement cost through annual uplift • Collectively have a cost of at least £5,000 and by the change in the value from the GDP deflator . individually have a cost of more than £250, where Surveyors (RICS) Appraisal and Valuation Manual insofar as these terms are consistent with the Equipment surplus to requirements is valued at net the assets are functionally interdependent, they recoverable amount . had broadly simultaneous purchase dates, are agreed requirements of the Department of anticipated to have simultaneous disposal dates Health and HM Treasury . In accordance with the Depreciation, amortisation and impairments requirements of the Department of Health, the last and are under single managerial control; or Tangible fixed assets are depreciated at rates asset valuations were undertaken in 2004 as at the calculated to write them down to estimated residual • Form part of the initial equipping and setting up prospective valuation date of 1st April 2005 and value on a straight-line basis over their estimated of a new building, ward or unit irrespective of their were applied on 31st March 2005 . individual or collective cost useful lives . No depreciation is provided on freehold The valuations are carried out primarily on the basis land and assets surplus to requirements . • Digital hearing aids were capitalised in accordance of Depreciated Replacement Cost for specialised Assets in the course of construction and residual with the direction of the Secretary of State in 2004- operational property and Existing Use Value for interests in off-balance sheet PFI contract assets 05 and the first quarter of 2004-05, and will be non-specialised operational property . The value of are not depreciated until the asset is brought into written down over five years . land for existing use purposes is assessed at Existing use or reverts to the Trust, respectively . Valuation Use Value . For non-operational properties including surplus land, the valuations are carried out at Open Buildings, installations and fittings are depreciated Tangible fixed assets are stated at the lower of Market Value . on their current value over the estimated replacement cost and recoverable amount . On remaining life of the asset as advised by the Trust’s Additional alternative open market value figures initial recognition they are measured at cost (for professional valuers . Leaseholds are depreciated have only been supplied for operational assets leased assets, fair value) including any costs such as over the primary lease term . installation directly attributable to bringing them scheduled for imminent closure and subsequent into working condition . They are restated to current disposal . Equipment is depreciated on current cost evenly over the estimated life of the asset . B%!, \5 45

Where the useful economic life of an asset is 1.8 Government Grants Where the balance of risks and rewards of reduced from that initially estimated due to the Government grants are grants from Government ownership of the PFI property are borne by the revaluation of an asset for sale, depreciation is bodies other than income from primary care trusts Trust, it is recognised as a fixed asset along with charged to bring the value of the asset to its value or NHS trusts for the provision of services . Grants the liability to pay for it which is accounted for as a at the point of sale . from the Department of Health, including those finance lease . Contract payments are apportioned Fixed asset impairments resulting from losses of for achieving three star status, are accounted between an imputed finance lease charge and a economic benefits are charged to the Income and for as Government grants as are grants from the service charge . Expenditure Account . All other impairments are Big Lottery Fund . Where the Government grant 1.10 Stocks and work-in-progress taken to the revaluation reserve and reported in the is used to fund revenue expenditure it is taken to Stocks and work-in-progress are valued at the lower statement of total recognised gains and losses to the Income And Expenditure account to match of cost and net realisable value . This is considered the extent that there is a balance on the revaluation that expenditure . Where the grant is used to fund to be a reasonable approximation to current reserve in respect of the particular asset . capital expenditure the grant is held as deferred cost due to the high turnover of stocks . Work-in- income and released to the income and expenditure The economic life of buildings is based on the progress comprises goods in intermediate stages of account over the life of the asset on a basis assessment of the District Valuer . The economic life production . of equipment ranges between five and 10 years . consistent with the depreciation charge for the asset . 1.11 Research and development 1.7 Donated fixed assets 1.9 Private Finance Initiative (PFI) transactions Expenditure on research is not capitalised . Donated fixed assets are capitalised at their current Expenditure on development is capitalised if it The NHS follows HM Treasury’s Technical Note 1 value on receipt and this value is credited to the meets the following criteria: Donated Asset Reserve . Donated fixed assets are (Revised) “How to Account for PFI transactions” • there is a clearly defined project; valued and depreciated as described above for which provides definitive guidance for the purchased assets . Gains and losses on revaluations application of note F to FRS 5 . • the related expenditure is separately identifiable; are also taken to the Donated Asset Reserve and, Where the balance of the risks and rewards of • the outcome of the project has been assessed with each year, an amount equal to the depreciation ownership of the PFI property are borne by the reasonable certainty as to: charge on the asset is released from the Donated PFI operator, the PFI obligations are recorded - its technical feasibility; Asset Reserve to the Income and Expenditure as an operating expense . Where the Trust has - its resulting in a product or service which will account . Similarly, any impairment on donated contributed assets, a prepayment for their fair value eventually be brought into use; assets charged to the Income and Expenditure is recognised and amortised over the life of the PFI Account is matched by a transfer from the Donated contract by a charge to the Income and Expenditure - adequate resources exist to enable the project to Asset Reserve . On sale of donated assets, the value Account . Where, at the end of the PFI contract, a be completed and to provide any consequential of the sale proceeds is transferred from the Donated property reverts to the Trust, the difference between increases in working capital . Asset Reserve to the Income and Expenditure the expected fair value of the residual on reversion Expenditure so deferred is limited to the value Reserve . and any agreed payment on reversion is built up of future benefits expected and is amortised over the life of the contract by capitalising part of through the Income and Expenditure Account on a the unitary charge each year, as a tangible fixed systematic basis over the period expected to benefit asset . from the project . It is revalued on the basis of B%!, \5 46

current cost . The amortisation charge is calculated the only charge to operating expenditure in relation Additional pension liabilities arising from early on the same basis as used for depreciation i .e . to clinical negligence in 2006/07 relates to the retirements are not funded by the scheme except on a quarterly basis . Expenditure which does not Trust’s contribution to the Clinical Negligence where the retirement is due to ill-health . The full meet the criteria for capitalisation is treated as an Scheme for Trusts . amount of the liability for the additional costs is operating cost in the year in which it is incurred . charged to the Income and Expenditure Account at NHS trusts are unable to disclose the total amount Non-clinical risk pooling the time the Trust commits itself to the retirement, of research and development expenditure charged The Trust participates in the Property Expenses regardless of the method of payment . Scheme and the Liabilities to Third Parties Scheme . in the Income and Expenditure Account because The NHS pension scheme is subject to a full Both are risk pooling schemes under which the Trust some research and development activity cannot be valuation every four years by the Government pays an annual contribution to the NHS Litigation separated from patient care activity . Actuary . However, the last published valuation Authority and, in return, receives assistance with Fixed assets acquired for use in research and relates to the period 1st April 1994 to 31st March the costs of claims arising . The annual membership development are amortised over the life of the 1999; contributions, and any ‘excesses’ payable in respect associated project . of particular claims, are charged to operating The valuation as at 31st March 2003 has not yet 1.12 Provisions expenses as and when they become due . been published and it is not expected that it will be published before the 2006/07 NHS Foundation The Trust provides for legal or constructive 1.13 Pension costs Trust accounts are prepared . Between valuations, obligations that are of uncertain timing or amount Past and present employees are covered by the the Government Actuary provides an update of the at the balance sheet date on the basis of the best provisions of the NHS Pension Scheme . The Scheme scheme liabilities which is contained in the scheme estimate of the expenditure required to settle the is an unfunded, defined benefit scheme that actuary report, which forms part of the annual NHS obligation . Where the effect of the time value of covers NHS employers, General Practices and other Pension Scheme (England and Wales) Resource money is material, the estimated risk-adjusted cash bodies, allowed under the direction of Secretary Account, published annually . These accounts can be flows are discounted using the Treasury’s discount of State, in England and Wales . As a consequence viewed on the NHS Pensions Agency website at rate of 2 .2% in real terms . it is not possible for the Trust to identify its share www .nhspa gov. .uk . Clinical negligence costs of the underlying Scheme assets and liabilities . Employer contribution rates are reviewed every four The NHS Litigation Authority (NHSLA) operates Therefore, the Scheme is accounted for as a years following the scheme valuation, on advice a risk pooling scheme under which the NHS Trust defined contribution scheme and the cost of the from the actuary . At the last valuation on which pays an annual contribution to the NHSLA which in Scheme is equal to the contributions payable to contribution rates were rebased (31st March 1999) return settles all clinical negligence claims . Although the Scheme for the accounting period . The total employer contribution rates from 2003-04 were the NHSLA is administratively responsible for all employer contribution payable in the 12 months to set at 14% of pensionable pay . Employees pay clinical negligence cases the legal liability remains 31st March 07 was £37,344,418 ( 31st March 2006 contributions of 6% (manual staff 5%) of their with the Trust . The total value of clinical negligence £35,353,772) . pensionable pay . provisions carried by the NHSLA on behalf of the Employer’s pension cost contributions are charged Trust is disclosed at note 17 . to operating expenses as and when they become Since financial responsibility for clinical negligence due . cases transferred to the NHSLA at 1st April 2002, B%!, \5 47

1.14 Liquid resources exclude monies held in the NHS Foundation Trust’s on the forecast average carrying amount of all Deposits and other investments that are readily bank account belonging to patients (see “third assets less liabilities, except for donated assets and convertible into known amounts of cash at or close party assets” above) . Account balances are only cash with the Office of the Paymaster General . The to their carrying amounts are treated as liquid set off where a formal agreement has been made average carrying amount of assets is calculated as resources in the cashflow statement . with the bank to do so . In all other cases overdrafts a simple average of opening and closing relevant are disclosed within creditors . Interest earned on net assets . Details are disclosed in note 28 to the The Trust does not hold any investments with bank accounts and interest charged on overdrafts accounts . maturity dates exceeding one year from the date of is recorded as, respectively, “interest receivable” purchase . and “interest payable” in the periods to which they 1.21 Losses and Special Payments 1.15 Value Added Tax relate . Bank charges are recorded as operating Losses and Special Payments are charged to the relevant functional headings on a cash basis, Most of the activities of the Trust are outside the expenditure in the periods to which they relate . including losses which would have been made scope of VAT and, in general, output tax does not 1.19 Leases good through insurance cover had NHS trusts apply and input tax on purchases is not recoverable . Where substantially all risks and rewards of not been bearing their own risks (with insurance Irrecoverable VAT is charged to the relevant ownership of a leased asset are borne by the NHS premiums then being included as normal revenue expenditure category or included in the capitalised Trust, the asset is recorded as a tangible fixed asset expenditure) . Details are disclosed in note 27 to the purchase cost of fixed assets . Where output tax is and a debt is recorded to the lessor of the minimum accounts . charged or input VAT is recoverable, the amounts lease payments discounted by the interest rate are stated net of VAT . implicit in the lease . The interest element of the 1.22 Corporation Tax 1.16 Foreign Exchange finance lease payment is charged to the Income The NHS Foundation Trust has carried out a review of Corporation Tax liability of its non-healthcare Transactions that are denominated in a foreign and Expenditure Account over the period of the activities . At present all activities are either ancillary currency are translated into sterling at the exchange lease at a constant rate in relation to the balance to patient care activity or are below the de-minimis rate ruling on the dates of the transactions . outstanding . Other leases are regarded as operating level at which corporation tax is due . Resulting exchange gains and losses are taken to leases and the rentals are charged to the Income the Income and Expenditure Account . and Expenditure Account on a straight-line basis 2 Segmental Analysis over the term of the lease . 1.17 Third Party Assets All of the Trust’s activities are in the provision of 1.20 Public Dividend Capital (PDC) healthcare, therefore no segmental analysis is Assets belonging to third parties (such as money and PDC Dividend required of the Trust’s income and net assets under held on behalf of Patients) are not recognised in the this note . accounts since the Trust has no beneficial interest in Public Dividend Capital represents the outstanding them . Details of third party assets are given in Note public debt of an NHS Trust . At any time the 26 to the accounts . Secretary of State can issue new PDC to, and require repayments of PDC from, the NHS Trust . 1.18 Cash, Bank and Overdrafts A charge, reflecting the forecast cost of capital Cash, bank and overdraft balances are recorded utilised by the NHS Trust, is paid over as public at the current values of these balances in the NHS dividend capital dividend . The charge is calculated Foundation Trust’s cash book . These balances at the real rate set by HM Treasury (currently 3 .5%) B%!, \5 48

3 Income

3.1 Income from Activities 3.2 Private patient income 4 Other Operating Income

2006/07 2005/06 2006/07 Base year (2002-03) 2005/06 2006/07 £000 £000 £000 £000 (restated) Elective income 119,569 121,901 Private patient income 3,188 2,774 £000 £000 Non-elective income 139,313 155,292 Total patient related income 535,332 367,782 Research and Development 8,001 7,764 Outpatient income 83,020 81,250 Proportion (as percentage) 0.60% 0.75% Education and Training 52,690 52,044 Other types of activity income 160,633 117,860 Transfers from the donated asset reserve in respect of Section 15 of the 2003 Act requires that the Trust’s 2,131 2,112 A&E income 9,098 9,804 depreciation, impairment, and proportion of private patient income in relation to its PbR transitional relief 20,511 16,114 disposal of donated assets total patient-related income does not exceed that same Non-patient care services to Private patient income 3,188 3,261 percentage whilst the Trust was an NHS Trust in 2002/03 . 36,550 33,487 other bodies TOTAL 535,332 505,482 This requirement has been met . Other 11,815 10,683 TOTAL 111,187 106,090 In previous years the profile of healthcare income has been based on apportionments derived from reference cost analysis . 3.3 Income from Activities During 2006/07 the Trust, in association with its main healthcare commissioners, has reviewed the profile 2006/07 2005/06 of services provided through it’s main commissioning £000 £000 contracts . This has resulted in a more accurate definition Primary Care Trusts 485,620 473,468 of the source of income from activities for 2006/07, but the figures are not directly comparable with those for the Local Authorities 201 216 previous year . Department of Health 43,213 25,533 NHS Other 1,253 1,096 Non-NHS: Private patients 2,417 2,319 Non-NHS: Overseas patients 771 942 (non-reciprocal) Road Traffic Act 1,784 1,840 Non-NHS: Other 73 68 TOTAL 535,332 505,482 B%!, \5 49

5 Operating Expenses 5.1 Operating expenses comprise: 5.2 Operating leases

2006/07 2005/06 5.2/1 Operating expenses include: £000 £000 2006/07 2005/06 Services from other NHS 3,770 2,417 Foundation Trusts £000 £000 Services from other NHS Trusts 6,667 6,016 Other operating lease rentals 1,800 1,728 Services from other NHS bodies 5,593 5,266 TOTAL 1,800 1,728 Purchase of healthcare from non 4,186 5,029 NHS bodies 5.2/2 Annual commitments under non-cancellable operating leases are: Directors’ costs 1,142 1,209 Staff costs 415,450 396,021 Operating leases which expire: Drugs costs 55,868 50,294 Land and Other leases Land and Other leases Supplies and services - clinical 62,221 60,700 buildings buildings Supplies and services - general 6,813 7,193 £000 £000 £000 £000 Establishment 6,807 7,094 Within 1 year 12 79 0 276 Transport 778 683 Between 1 and 5 years 223 574 236 724 Premises 21,562 19,476 After 5 years 158 549 157 247 Bad debts 61 840 TOTAL 393 1,202 393 1,247 Depreciation and amortisation 27,781 23,145 Fixed asset impairments and 2,286 1,346 reversals Audit fees 80 115 Other auditor’s remuneration 3 20 Clinical negligence 5,757 5,819 Other 6,136 6,641 TOTAL 632,961 599,324 B%!, \5 50

5.3 Salary and Pension entitlements of senior managers A) Remuneration

To 31st March 2007 Salary Other Remuneration Benefits in Kind Name and Title (bands of £5000) (bands of £5000) Rounded to the £000 £000 nearest £100 Mr A J Cash, Chief Executive (seconded to Department of Health 30th June 2006) 45-50 - - Mr J Watts, Director of Human Resources 115-120 - - Mr N Priestley, Director of Finance 130-135 - - Mr G Davies, Acting Medical Director (from 1st July 2006) 110-115 - - Mrs H Scholefield, Chief Nurse 115-120 - - Mr C Welsh, Medical Director (Acting Chief Executive from 1st July 2006) 155-160 - - Mr C C Linacre, Director of Service Development (appointed Deputy Chief Executive 1st July 2006) 125-130 - - Mr C Suddes, Non-Executive Director (appointed with effect from 1st July 2006) 10-15 - - Mr J P Donnelly, Non-Executive Director 10-15 - - Ms V R Ferres, Non-Executive Director 10-15 - - Mr V G W Powell, Non-Executive Director 10-15 - - Mr J M Stoddart, Non-Executive Director (left 30th June 2006) 0-5 - - Professor A P Weetman, Non-Executive Director 10-15 - - Ms O V Bright, Non-Executive Director 10-15 - - Mr D Stone, Chairman 50-55 - - B%!, \5 51

5.3 Salary and Pension entitlements of senior managers B) Pension Benefits

Total accrued Real increase in pension and related pension and related Cash Equivalent Cash Equivalent Real Increase in Cash Employer’s lump sum at age 60 lump sum at age 60 Transfer Value at Transfer Value at Equivalent Transfer Contribution to Name and title at 31st March 2007 31st March 2007 31st March 2006 Value Stakeholder Pension (bands of £2500) (bands of £5000) £000 £000 £000 £000 £000 To nearest £100 Mr A J Cash, Chief Executive 0 - 2.5 275 - 280 1,117 1,022 12 6,500 (Seconded to Department of Health from 30th June 2006) Mr J Watts, Director of Human Resources 5 - 7.5 200 - 205 946 814 78 16,200 Mr N Priestley, Director of Finance 7.5 - 10 155 - 160 519 467 28 18,700 Mr G Davies, Acting Medical Director 12.5 - 15 245 - 250 998 888 46 16,800 (appointed with effect from 1st July 2006) Mrs H Scholefield, Chief Nurse 25 - 27.5 150 - 155 472 391 50 16,200 Mr C Welsh, Acting Chief Executive 15 - 17.5 265 - 270 N/a 1,086 N/A 22,400 (appointed with effect from 1st July 2006) Mr C C Linacre, Director of Service Development 17.5 - 20 225 - 230 1,026 917 60 17,900 (appointed Deputy Chief Executive 1st July 2006)

As Non-Executive members do not receive pensionable The CETV figures, and from 2004-05 the other pension details, remuneration there are no entries in respect of pensions for Non- include the value of any pension benefits in another scheme or Executive members. arrangement which the individual has transferred to the NHS A Cash Equivalent Transfer Value (CETV) is the actuarially pension scheme. They also include any additional pension benefit assessed capital value of the pension scheme benefits accrued accrued to the member as a result of their purchasing additional by a member at a particular point in time. The benefits valued years of pension service in the scheme at their own cost. CETVs are the member’s accrued benefits and any contingent spouse’s are calculated within the guidelines and framework prescribed by pension payable from the scheme. A CETV is a payment made the Institute and Faculty of Actuaries. by a pension scheme, or arrangement to secure pension benefits Real increase in CETV - this reflects the increase in CETV in another pension scheme or arrangement when the member effectively funded by the employer. It takes account of the leaves a scheme and chooses to transfer the benefits accrued increase in accrued pension due to inflation, contributions paid in their former scheme. The pension figures shown relate to the by the employee (including the value of any benefits transferred benefits that the individual has accrued as a consequence of their from another pension scheme or arrangement) and uses common total membership of the pension scheme, not just their service in market valuation factors for the start and end of the period. a senior capacity to which the disclosure applies. B%!, \5 52

6 Staff costs and numbers 6.1 Staff costs 6.3 Employee benefits

2006/07 2006/07 2006/07 2005/06 2005/06 2005/06 2006/07 2005/06 Permanently Permanently Total Employed Other Total Employed Other £000 £000 £'000 £'000 £'000 £'000 £'000 £'000 None 0 0 Salaries and wages 349,869 346,177 3,692 331,258 325,877 5,381 0 0 Social Security Costs 24,875 24,875 0 23,716 23,716 0 Employer contributions to NHSPA 37,344 37,344 0 35,354 35,354 0 Other pension costs 33 33 0 (81) (81) 0 Agency/contract staff 4,326 0 4,326 6,804 0 6,804 TOTAL 416,447 408,429 8,018 397,051 384,866 12,185

The above figure of £416,447k is net of the amount of £1,062k (12 months to 31.3.2006, £929k) in respect of capitalised salary costs included in fixed asset additions (note 11.1).

6.2 Average number of persons employed

2006/07 2006/07 2006/07 2005/06 2005/06 2005/06 Total Permanently Other Total Permanently Other Employed Employed Number Number Number Number Number Number Medical and dental 1,380 1,340 40 1,325 1,273 52 Administration and estates 2,418 2,306 112 2,433 2,310 123 Healthcare assistants and other support staff 1,269 1,269 0 1,308 1,308 0 Nursing, midwifery and health visiting staff 4,738 4,556 182 4,815 4,426 389 Scientific, therapeutic and technical staff 1,883 1,869 14 1,873 1,853 20 Total 11,689 11,340 349 11,754 11,170 584 B%!, \5 53

6.4 Early Retirements Due to Ill Health 8 Profit on Disposal of Fixed Assets

Profit/loss on the disposal of fixed assets is made up as follows: 2006/07 2006/07 2005/06 2005/06 £000 Number £000 Number 2006/07 2005/06 Number of early retirements agreed 28 23 Total Total on the grounds of ill health £000 £000 Cost of early retirements agreed on 1,174 802 Profit on disposal of equipment 0 103 grounds of ill health TOTAL 0 103 As explained in note 1.13, these costs were borne by the NHS Pensions Agency.

9 Interest Payable and similar charges 7 Performance on payment of debts

The Better Payment Practice Code requires the Trust to pay all undisputed invoices by the due date 2006/07 2005/06 or within 30 days of receipt of goods or a valid invoice, whichever is later. The Trust’s performance £000 £000 against this code is set out below: No interest was payable in 2006-07 0 0 or the previous financial year 2006/07 2005/06 TOTAL 0 0 Number of non-NHS invoices paid 143,777 144,803 Number of non-NHS invoices paid within 30 days 137,892 136,713 Percentage of invoices paid within 30 days 95.91% 94 .41%

£000 £000 Value of non-NHS invoices paid 211,444 207,946 Value of non-NHS invoices paid within 30 days 200,986 196,705 Percentage of invoices paid within 30 days 95.05% 94.59% Amounts included within Interest Payable (Note 9) arising from claims 0 0 made under the Late Payment of Debts (Interest) Act 1998 Compensation paid to cover debt recovery costs under this legislation 0 0 B%!, \5 54

10.1 Intangible fixed assets:

Total Software licences £000 £000 Gross cost at 1st April 2006 1446 1446 Impairments 0 0 Reclassifications 27 27 Other revaluations 0 0 Additions - purchased 143 143 Additions - donated 0 0 Disposals (14) (14) Gross cost at 31st March 2007 1602 1602

Amortisation at 1st April 2006 648 648 Amortisation at start of period for new FT’s 0 0 Provided during the year 204 204 Impairments 0 0 Reversal of impairments 0 0 Reclassifications 0 0 Other revaluations 0 0 Disposals (14) (14) Amortisation at 31st March 2007 838 838

Net book value - Purchased at 1st April 2006 787 787 - Donated at 1st April 2006 11 11 Total at 1st April 2006 798 798

Net book value - Purchased at 31st March 2007 756 756 - Donated at 31st March 2007 8 8 Total at 31st March 2007 764 764 B%!, \5 55

11 Tangible Fixed Assets 11.1 Tangible fixed assets at the balance sheet date comprise the following elements:

Total Land Buildings exc Dwellings Assets under Plant & Transport Information Furniture dwellings construction machinery equipment technology & fittings £000 £000 £000 £000 £000 £000 £000 £000 £000 Cost or valuation at 1st April 2006 528,075 26,444 335,569 2,601 37,279 93,583 830 13,855 17,914 Cost or valuation at start of period for new FT’s 0 0 0 0 0 0 0 0 0 Additions - purchased 26,823 0 2,505 0 20,740 2,706 29 570 273 Additions - donated 5,094 0 71 0 4,492 452 0 0 79 Impairments (2,007) (595) (1,009) 0 (403) 0 0 0 0 Reclassifications (27) 0 37,660 0 (46,310) 7,194 0 1,131 298 Other revaluations (578) 0 (3,709) 0 185 2,442 23 0 481 Disposals (6,626) 0 (475) 0 0 (5,182) (7) (690) (272) Cost or valuation at 31st March 2007 550,754 25,849 370,612 2,601 15,983 101,195 875 14,866 18,773

Depreciation at 1st April 2006 93,984 0 13,720 109 0 57,301 615 10,177 12,062 Depreciation at start of period for new FT’s 0 0 0 0 0 0 0 0 0 Provided during the year 27,577 0 17,617 110 0 7,277 58 1,233 1,282 Impairments 286 0 1 0 0 260 0 18 7 Reversal of impairments (7) 0 (7) 0 0 0 0 0 0 Reclassifications 0 0 24 0 0 (24) 0 103 (103) Other revaluations (748) 0 (2,537) 0 0 1,449 17 0 323 Disposals (6,626) 0 (475) 0 0 (5,182) (7) (690) (272) Depreciation at 31st March 2007 114,466 0 28,343 219 0 61,081 683 10,841 13,299

Net book value - restated - Purchased at 1st April 2006 397,078 25,098 295,888 2,312 31,700 32,737 198 3,646 5,499 - Donated at 1st April 2006 37,013 1,346 25,961 180 5,579 3,545 17 32 353 Total at 1st April 2006 434,091 26,444 321,849 2,492 37,279 36,282 215 3,678 5,852

Net book value - Purchased at 31st March 2007 397,008 24,503 309,234 2,211 15,001 36,777 181 4,002 5,099 - Donated at 31st March 2007 39,280 1,346 33,035 171 982 3,337 11 23 375 Total at 31st March 2007 436,288 25,849 342,269 2,382 15,983 40,114 192 4,025 5,474 B%!, \5 56

11.2 Analysis of tangible fixed assets:

Total Land Buildings exc Dwellings Assets under Plant & Transport Information Furniture dwellings construction machinery equipment technology & fittings £000 £000 £000 £000 £000 £000 £000 £000 £000 Net book value Protected assets at 31st March 2007 370,500 25,849 342,269 2,382 0 0 0 0 0 Unprotected assets at 31st March 2007 65,788 0 0 0 15,983 40,114 192 4,025 5,474 Total at 31st March 2007 436,288 25,849 342,269 2,382 15,983 40,114 192 4,025 5,474

11.3 Assets held at open market value 13 Stocks There were no assets held at open market value at 31st March 2007 31st March 2006 the Balance Sheet date or at 31st March 2006 . £000 £000 11.4 Net book value of assets held under finance Raw materials and consumables 7,904 8,097 leases and hire purchase contracts at the Balance Sheet date: Total 7,904 8,097 No assets were held under finance leases or hire purchase contracts at the Balance Sheet Date or at 14 Debtors 31st march 2006 . 12 Fixed asset investments 31st March 2007 31st March 2006 During 2006/07 the Trust acquired an 18% holding £000 £000 in Aperio Diagnostics, a company commercially Amounts falling due within one year: developing intellectual property . NHS debtors 16,563 23,064 The Trust holding carries a minimal value at the Provision for irrecoverable debts (1,144) (1,400) Balance Sheet Date . Other prepayments and accrued income 1,396 1,751

Other debtors 11,702 8,955 Sub Total 28,517 32,370 Amounts falling due after more than one year: NHS debtors 272 277 Other debtors 2,091 2,144 Sub Total 2,363 2,421 Total 30,880 34,791 B%!, \5 57

15 Current Asset Investments

2006/07 2005/06 NHS creditors include; Total Total • £0k (31 March 2006, £0k) for payments due in future years under arrangements to buy out the liability for early retirements; and £000 £000 • £4,670k (31st March 2006, £4,411k) outstanding pensions contributions at Balance at start of period 0 0 31st March 2007 . Investments purchased 165,000 180,000 Investments sold (165,000) (180,000) 16.2 Prudential Borrowing Limit At end of period 0 0 2006/07 2006/07 31st March 31st March 2006 2006 16 Creditors Limit Actual Limit Actual 16.1 Creditors at the balance sheet date are made up of: £000 £000 £000 £000 Long-Term Borrowing Limit set by Monitor 146,700 0 85,200 0 31st March 2007 31st March 2006 Working Capital Facility 46,000 0 46,000 0 Amounts falling due within one year: £000 £000 (Restated) Total Prudential Borrowing Limit 192,700 0 131,200 0 NHS creditors 9,457 10,727 Minimum Dividend Cover >1 3.41 >1 2.92 Non-NHS trade creditors - revenue - other 11,044 13,738 Non-NHS trade creditors - capital 4,472 6,554 The NHS Foundation Trust is required to comply and remain within a prudential Tax and social security costs 8,855 8,076 borrowing limit . Other creditors 491 558 This is made up of two elements: Accruals and deferred income 13,511 10,662 • The maximum cumulative amount of long-term borrowing. This is set by reference to 47,830 50,315 the five ratio tests set out in Monitor’s Prudential Borrowing Code . The financial risk rating set under Monitor’s Compliance Framework determines one of the ratios and therefore can impact on the long-term borrowing limit . 31st March 2007 31st March 2006 • The amount of any working capital facility approved by Monitor. Amounts falling due after one year: £000 £000 Further information on the NHS Foundation Trust’s Prudential Borrowing Code & Accruals and deferred income 2,472 2,888 Compliance Framework can be found on the website of Monitor, the Independent 2,472 2,888 Regulator of Foundation Trusts . The financial ratios for 2006/07 (2005/06) as published in the Pudential Borrowing Code are shown above with the actual level of achievement for the period . During 2006/07 the Trust received approval for an £18 .3 million long-term loan to fund its critical care expansion scheme . This facility was not used during the year . B%!, \5 58

17 Provisions for liabilities and charges

31st March 31st March Pensions relating to other staff represents liability relating to 2007 2006 staff retiring before April 95 (£612k) and Injury Benefit Liabilities (£2,024k) . Pensions relating to Injury Benefits are payable to current and former members of staff other staff Legal claims Other Total Total who have suffered injury at work . These cases have been adjudicated £000 £000 £000 £000 £000 by the NHS Pensions Authority . At start of period 2,516 895 9,917 13,328 6,829 The value shown is the discounted present value of payments due to the individuals for the term indicated by Government Actuary life Change in discount rate 0 0 0 0 253 expectancy tables, and the actual value of this figure represents the Arising during the year 217 452 12,490 13,159 8,006 main uncertainty in the amounts shown . Utilised during the year (152) (269) (2,135) (2,556) (1,331) Legal claims relate to claims brought against the Trust for Employers Reversed unused 0 (246) 0 (246) (474) Liability or Public Liability . These cases are handled by the NHSLA, Unwinding of discount 55 0 0 55 45 who provide an estimate of the Trust’s probable liability . At 31st March 2007 2,636 832 20,272 23,740 13,328 Actual costs incurred are subject to the outcome of legal action . Costs in excess of £10,000 per case are covered by the NHSLA and not included above . Expected timing of cashflows Other provisions relate to: Within one year 155 832 20,272 21,259 10,958 • Costs likely to be incurred under the ‘Agenda for Change’ pay Between one and five years 589 0 0 589 553 award (£13,329k) After five years 1,892 0 0 1,892 1,817 • Costs likely to be incurred under the Trust workforce reduction scheme (£5,217k) • Costs likely to be incurred due to equal pay claims (£1,111k) • Costs likely to be incurred under the ‘Non-Consultant Medical Staff pay award’ (£463k) • Costs likely to be incurred under the Consultants’ contract pay award (£152k) The consultation with staff in respect of the pay awards and the staff reduction project is continuing . Of the above total provision and related payments, some £330,652 has been covered by “back-to-back” income arrangements with the Trust’s major purchasers . £25,614,737 is included in the provisions of the NHS Litigation Authority at 31st March 2007 in respect of clinical negligence liabilities of the Trust (31st March 2006 £23,006,752) . B%!, \5 59

18 Reserves 18.1 Movement in taxpayers’ equity: 18.2 Movements in public dividend capital

31st March 2007 31st March 2006 31st March 2007 31st March 2006 £000 £000 £000 £000 Taxpayers’ equity at start of period 433,301 409,688 Public Dividend Capital at start of period 305,119 280,275 Surplus for the financial year 15,720 13,131 New Public Dividend Capital received 0 24,844 Public dividend capital dividend (12,753) (12,529) Public Dividend Capital at 31st March 2007 305,119 305,119 Gains / (losses) from revaluation of purchased fixed assets 829 (776) New public dividend capital received 0 24,844 Transfers from donated asset reserve 2,265 1,995 Taxpayers’ equity before Prior Period Adjustment (Note 29) 439,362 436,353 Prior Period Adjustment - transfer of Big Lottery Fund 0 (3,052) Closing Government Funds 439,362 433,301

18.3 Movements on Reserves

Movements on reserves in the year comprised the following: Revaluation Reserve Donated Asset Income and 2006/07 Reserve Expenditure Reserve Total £000 £000 £000 £000 At start of period 86,022 40,208 5,004 131,234 Prior period adjustment 161 (3,184) (29) (3,052) 1st April 2006 (restated) 86,183 37,024 4,975 128,182 Transfer from the Income and Expenditure Account 0 0 2,967 2,967 Loss on other revaluations/indexation of fixed assets 868 (698) 0 170 Transfer of realised profits (losses) to the Income and Expenditure Reserve (34) 0 34 0 Receipt of donated assets 0 5,094 0 5,094 Transfers to the Income and Expenditure Account for depreciation, 0 (2,131) 0 (2,131) Note that £39k was impairment, and disposal of donated assets transferred from Revaluation Other transfers between reserves (4,493) 0 4,454 (39) Reserve to the Government Grant Reserve in respect of At 31st March 2007 82,524 39,289 12,430 134,243 realised surpluses. B%!, \5 60

19 Notes to the Cash Flow Statement 19.1 Reconciliation of operating surplus to net cash flow 19.3 Analysis of changes in net debt from operating activities: At 1st April Cash changes At 31st March 2006/07 2005/06 2006 in year 2007 £000 £000 (restated) £000 £000 £000 Total operating surplus 13,558 12,248 OPG cash at bank 21,189 (2,094) 19,095 Depreciation and amortisation charge 27,781 23,145 Commercial cash at bank and in hand 866 17,607 18,473 Fixed asset impairments and reversals 2,286 1,346 22,055 15,513 37,568 Transfer from donated asset reserve (2,131) (2,112) Decrease in stocks 193 834 Third party assets held by the NHS Foundation Trust (note 26) 19 Decrease / increase in debtors 2,826 (3,959) (Decrease) / increase in creditors (857) 2,196 20 Capital Commitments Increase in provisions 10,357 6,201 Net cash inflow from operating activities 54,013 39,899 Commitments under capital expenditure contracts at the balance sheet date were £21 4. million (31st March 2006, £12 7. million) . 19.2 Reconciliation of net cash flow to movement in net debt The major components of these commitments are as follows: Scheme £000 2006/07 2005/06 Critical Care Expansion Scheme 12,700 £000 £000 Picture Archiving and Communication System 4,839 Increase in cash in the period 15,513 13,098 Medical Equipment 1,432 Change in net debt resulting from cashflows 15,513 13,098 Net funds at start of period 22,055 8,957 Net funds at 31st March 2007 37,568 22,055 21 Post-Balance Sheet Events

There were no material Post-Balance Sheet events . B%!, \5 61

22 Contingencies Professor C Welsh and Professor A P Weetman 24 Private Finance Transactions have clinical commitments at Thornbury and Claremont private hospitals, both of which are sited 24.1 PFI schemes deemed to be off-balance sheet 2006/07 2005/06 in Sheffield . In the period the Trust purchased £000 £000 healthcare from these two hospitals in the sum of 2006/07 2005/06 Gross value (313) (413) £714k and £99k respectively . £000 £000 Amounts recoverable (if any) 0 0 The Trust also purchased orthopaedic healthcare Amounts included within operating from Sheffield Orthopaedics Ltd, a limited company expenses in respect of PFI Net contingent liability (313) (413) 42 0 who manage healthcare provided at the above transactions deemed to be off- Contingencies represent the consequences of losing all current hospitals . This amounted to £2 .0m during the balance sheet - gross third party legal claim cases. period . Certain of the Trust’s clinical employees Amortisation of PFI deferred asset 0 0 have an interest in this company . Net charge to operating expenses 42 0 Certain members of the Trust’s Governors’ Council are appointed from key organisations with which The Trust is committed to make the payment of £2,686k the Trust works closely . during the next financial year . Future annual payments 23 Related Party Transactions These governors represent the views of the staff will be increased by the Retail Prices Index on 1 April in Sheffield Teaching Hospitals NHS Foundation Trust and of the organizations with and for whom they each year . is a body corporate established by order of the work . Secretary of State for Health . This representation on the Governors’ Council £000 The Trust considers other NHS Foundation Trusts to gives important perspectives from these key be related parties as they and the Trust are under organizations on the running of the Trust, and is not Estimated capital value of the PFI scheme 29,800 the common control of Monitor . considered to give rise to any potential conflicts of Contract start date December 2004 During the year the Trust contracted with certain interest . Contract handover date March 2007 other Foundation Trusts for the provision of clinical The Trust is a significant recipient of funds from Length of project (years) 32 and non-clinical support services . Sheffield Hospitals Charitable Trust . Grants received Number of years to end of project 29.75 The value of activity undertaken with these in the year from this Charity amounted to £1 1m. . Contract end date December 2036 organisations was not material to the accounts . The Trust has also received revenue and capital payments from a number of other charitable funds . During the year none of the Board Members or members of the key management staff or parties Certain of the trustees of the charitable trusts from related to them has undertaken any material whom the Trust has received grants are members of transactions with Sheffield Teaching Hospitals NHS the NHS Foundation Trust Board . Foundation Trust . B%!, \5 62

The PFI scheme is a scheme to build a new medical typical of the listed companies to which FRS 13 Interest Rate Risk ward block on the Northern General Hospital site mainly applies . The NHS Foundation Trust has 8 .85% of the Trust’s financial assets and 100% of (Sir Robert Hadfield Wing) . limited powers to borrow or invest surplus funds and its financial liabilities disclosed under this note carry The residual interest projected value at December financial assets and liabilities are generated by day- nil or fixed rates of interest . There is a risk therefore, 2036 is based on an average percentage for similar to-day operational activities rather than being held in terms of assets, however this risk is considered schemes, and will shortly be replaced by projections to change the risks facing the NHS Foundation Trust minimal owing to rates of interest tracking Bank of from professional valuers now practical completion in undertaking its activities . England base rates . Sheffield Teaching Hospitals of the scheme has been achieved . As allowed by FRS 13, debtors and creditors that are NHS Foundation Trust is not, therefore, exposed to There are no deferred assets associated with this due to mature or become payable within 12 months significant interest rate risk . The two tables on the scheme . from the balance sheet date have been omitted following page show the interest rate profiles of the from all disclosures other than the currency profile . Trust’s financial assets and liabilities: Detail; £,000 Provisions are shown gross . Any amounts expected in reimbursement against a provision (and included - Value of deferred asset 0 in debtors) are separately disclosed . - Value of residual interest 17,658 Liquidity risk The NHS Foundation Trust’s net operating costs 24.2 ‘Service’ element of PFI schemes are incurred under annual service agreements deemed to be on-balance sheet with local Primary Care Trusts, which are financed There are no PFI schemes deemed to be from resources voted annually by Parliament . The on-balance sheet . NHS Foundation Trust also largely finances its capital expenditure from funds made available from Government under an agreed borrowing limit . 25 Financial Instruments Sheffield Teaching Hospitals NHS Foundation Trust FRS 13, Derivatives and Other Financial is not, therefore, exposed to significant liquidity Instruments, requires disclosure of the role that risks . financial instruments have had during the period in creating or changing the risks an entity faces in undertaking its activities . Because of the continuing service provider relationship that the NHS Trust has with local Primary Care Trusts and the way those Primary Care Trusts are financed, the NHS Foundation Trust 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 B%!, \5 63

25.1 Financial Assets Foreign Currency Risk Non-interest Fixed rate bearing The Trust has negligible foreign currency income or Weighted expenditure . Weighted Non-interest average Weighted Currency Total Floating rate Fixed rate a v e r a g e 25.3 Fair Values bearing period for average term interest rate which fixed Set out below is a comparison, by category, of book values and fair values of the NHS Foundation Trust’s At 31st March 2007 £000 £000 £000 £000 % Years Years financial assets and liabilities as at 31st March Sterling 37,840 34,491 272 3,077 2.2% n/a n/a 2007 . Gross financial assets 37,840 34,491 272 3,077 Basis of fair Book Value Fair Value Currency valuation At 31 March 2006 £000 £000 £000 £000 % £000 £000 Sterling 22,332 21,648 277 407 2.2% n/a n/a Financial assets Gross financial assets 22,332 21,648 277 407 Cash 37,568 37,568 Debtors over 1 year: 25.2 Financial Liabilities Agreements with commissioners to cover 272 272 Note a creditors and provisions Non-interest Fixed rate bearing 37,840 37,840 Weighted Weighted Financial liabilities Non-interest average Weighted Currency Total Floating rate Fixed rate a v e r a g e bearing period for average term Provisions under contract (20,272) (20,272) Note b interest rate which fixed Public dividend capital (305,119) (305,119) Note c At 31st March 2007 £000 £000 £000 £000 % Years Years Total (325,391) (325,391) Sterling (325,391) 0 (20,272) (305,119) 2.2% n/a n/a Gross financial liabilities (325,391) 0 (20,272) (305,119) Notes Currency £000 £000 £000 £000 % a. These debtors reflect agreements with commissioners to cover creditors over 1 year for early retirements and provisions under At 31 March 2006 contract, and their related interest charge/unwinding of discount. Sterling (315,036) 0 (9,917) (305,119) 2.2% n/a n/a In line with note b below, fair value is not significantly different Gross financial liabilities (315,036) 0 (9,917) (305,119) from book value. b. Fair value is not significantly different from book value since, in the calculation of book value, the expected cash flows have been Note: The public dividend capital is of unlimited term. discounted by the Treasury discount rate of 2.2% in real terms. c. The figure is the full value of PDC in the balance sheet and ‘book value’ equals ‘fair value’. B%!, \5 64

26 Third Party Assets 31st March 2007 31st March 2006 The Trust held £18,587 (31st March 2006, £21,168) £000 £000 at bank and in hand at 31st March 2007 which Total Capital and Reserves 439,362 433,301 relates to monies held by the NHS Trust on behalf of patients . This has been excluded from the cash at Less - Donated Asset Reserve (39,289) (37,024) bank and in-hand figure reported in the accounts . Less - Cash held at Office of the Paymaster General (19,095) (21,189) 27 Losses and Special Payments Ner Relevant Assets 380,978 375,088 There were 366 (562 in the year to 31st March Average Net Relevant Assets 378,033 363,839 2006) cases of losses and special payments Dividend paid per Cash Flow statement 12,753 12,529 totalling £327k (12 months to 31st March 2006, Percentage 3.4% 3.4% £1,106k) approved during the financial year . There were no cases (12 months to 31st March 2006 The Trust’s actual rate of return of 3.4% (12 months to 31.3.2006 3.4%) is not materially different from its forecast rate of 3.5%. - 2 cases) of losses exceeding £100,000 . Note: The total costs included in this note are on a cash basis and will not reconcile to the amounts 29 Prior Period Adjustment - in the accounts which are prepared on an accruals Change in Accounting Policy basis . New Opportunities and Big Lottery Fund grants 28 Public Dividend Capital Dividend used to finance fixed assets are now credited to the deferred income account, included within the The Trust is required to absorb the cost of capital at creditors balances . a rate of 3 .5% of average net relevant assets . The rate is calculated as the percentage that dividends In previous years, these funds were credited to the paid on public dividend capital totalling £12,753k Donated Asset Reserve, but from 2006/07 onwards, Total Assets (12 months to 31st March 2006 £12,529k) bear to NHS Foundation Trusts are required to account for Employed the average net relevant assets during the 12 month these grants in accordance with SSAP 4 . period of £378,033k (12 months to 31st March 2006 The accounts therefore include a prior year 31st March 2006 £363,839k), that is 3 4%. (2005-06 - 3 4%). . adjustment to move New Opportunities and Big £000 This is calculated as follows: Lottery Funds held to finance fixed assets from As previously reported 436,353 the Donated Asset Reserve to deferred income Effect of the change in accounting policy (3,052) (Creditors) . As a result, comparative figures for the Year ended 31st March 2006 have been adjusted as As restated 433,301 follows: Statement on B%!, \5 65 internal control

1. Scope of responsibility Progress against the objectives • Engaging stakeholders and • Identify and prioritise the risks have in place governance and of the Trust are measured, making accountability real to the achievement of the management arrangements As Accounting Officer, I have monitored and assessed by the policies, aims and objectives across the whole organisation, responsibility for maintaining a • These principles underpin Independent Regulator of NHS of Sheffield Teaching which includes a Healthcare sound system of internal control the need for absolute Foundation Trusts (Monitor), Hospitals NHS Foundation Governance Committee that that supports the achievement accountability, probity and the Chairman and the Board of Trust operates as a sub-group to of the NHS Foundation Trust’s transparency within the NHS . Directors, External and Internal the Board of Directors . During policies, aims and objectives, The Trust also applies the • Evaluate the likelihood of Audit Services who monitor the past 12 months the Trust whilst safeguarding the public NHS Foundation Trust Code those risks being realised and progress against the assurance has taken steps to further funds and departmental assets of Governance issued by the impact should they be framework as well as ensuring the delivery of integrated for which I am personally Monitor which brings together realised, and to manage them that the organisation operates governance, particularly in responsible, in accordance with best practice advice of public efficiently, effectively and within the six principles of Good relation to the arrangements in the responsibilities assigned and private sector corporate economically . Governance in Public Services place for the Trust as a whole . to me . I am also responsible governance . This process forms the basis of which are set out below: for ensuring that the NHS the Trust’s assurance framework . I have also taken steps to • Focusing on the organisation’s ensure that roles, functions Foundation Trust is administered 2. The purpose The system of internal control purpose and on outcomes for and objectives of Directors prudently and economically of the system of has been in place in Sheffield citizens and service users and Directorate Management and that resources are applied Teaching Hospitals NHS internal control Teams are unambiguous, clearly efficiently and effectively . I also • Performing effectively in Foundation Trust for the year The system of internal control detailed and understood . acknowledge my responsibilities clearly defined functions and ended 31 March 2007, and up is designed to manage risks to These objectives are regularly as set out in the NHS Foundation roles to the date of approval of the a reasonable level rather than monitored and reviewed by my Trust Accounting Officer • Promoting values for the annual report and accounts . to eliminate all risk of failure Executive Director colleagues Memorandum . whole organisation and to achieve policies, aims and This system has been subjected and myself . I am also personally accountable demonstrating good to independent audit and objectives; it can therefore The Governors’ Council is now for all governance related governance through verification by the Internal Audit only provide reasonable and well established and contributing issues . These responsibilities behaviour Service . not absolute assurance of effectively to the governance of are reflected in the Trust’s • Taking informed, transparent effectiveness . The system of the Trust . governance arrangements decisions and managing risk internal control is based on an 3. Capacity to including its Financial Strategy The leadership and • Developing the capacity and ongoing process designed to: handle risk and Risk Management Strategy . accountability arrangements capability of the governing To allow me to discharge my concerning risk management are body to be effective personal accountabilities I included in the Risk Management B%!, \5 66

Strategy, job descriptions and staff within the organisation place for Sheffield as a whole to ensure that risk-based by the Board, supported by its identified risk-related objectives . who have specific responsibility under the aegis of Sheffield First decisions can be made in relation Finance Committee . An Annual A number of structures and for the management of risk . and particularly Sheffield First to service developments and Plan is submitted to Monitor, committees exist to oversee The overall Risk Management for Health in which myself and capital allocation . reflecting financial, service and and monitor the effectiveness Strategy is widely supported the Trust play an active role . governance aspects, each of of these arrangements . These by policies, procedures and 5. Review of economy, which is ascribed a risk rating by include the: guidelines that are subject to 4. The risk and efficiency and Monitor . This plan incorporates • Management Audit scrutiny and dissemination by control framework effectiveness of the projections for the following two Committee the Controlled Document Unit The integration of the assurance years, which facilitates forward operated by the Chief Executive’s use of resources planning by the Trust . • Healthcare Governance framework into the business office . The Trust produces detailed Committee planning of the Trust is ongoing . The in-year use of resources is The Trust recognises the annual plans reflecting its monitored by the Board and • Finance Committee In particular the principal importance and benefits of objectives, based upon the key service and operational its sub-committees via a series • HR Committee initiatives such as the Knowledge themes identified in the Trust’s requirements and its financial of detailed monthly reports, The above are formal sub- and Skills Framework and Strategic Direction document targets in respect of income covering finance, activity, committees of the Board Improving Working Lives (in and the Patient Services Plan, and expenditure and capital capacity, human resource of Directors with Executive which the Trust has achieved have been aligned directly to the investments . These plans management and risk . These and Non-Executive Director Practice Plus status) and the domains within the Healthcare incorporate the Trust’s plans documents are a consolidation membership . role of personal development Commission Standards for Better for improving productivity and of detailed reports that are efficiency in order to offset the Each significant risk theme planning in promoting and Health . provided at Directorate and income losses arising from the is owned by an Executive achieving a competence-based Department level to allow active Risks identified as part of this national efficiency target applied Director and my office, through workforce . management of resources on process are graded in line with to all NHS providers and the the Trust Secretary, has an Monitor has established a an operational level . Quarterly the methodology detailed in the implementation of the Payment overarching responsibility for risk-based approach towards monitoring returns are submitted Risk Management Strategy and by Results funding system; plus the development of a cohesive regulation and the Trust’s to Monitor from which a risk regularly and routinely reported local investment proposals . and integrated framework compliance with the terms of rating is again attributed to the to the Board of Directors who The financial plans reflect and shared processes for the authorisation . This consists of financial, service and governance monitor progress against organisational-wide plans and management of all risk . A top three main components; the aspects . Director-led action plans . Whilst initiatives but are also translated risks action plan is reviewed and annual plan, in-year monitoring The Trust has established the the strategy identifies a level into Directorate budgets and monitored by the Trust Executive and, where appropriate, Adding Value programme to of acceptable risk, the Board of productivity and efficiency plans . Group on a monthly basis and interventions . Throughout drive enhanced productivity Directors utilise risk reports and Increasingly, financial planning formally reported to the Board of 2006/07 the Trust has satisfied and efficiency through better other sources of information to at all levels is influenced Directors each quarter . the requirements of the information, targeting areas for consider their risk appetite . by income assumed from Compliance Code . improvement and developing Very detailed, specialised and The business planning process national tariffs and local prices capability and capacity . A key externally accredited training is There are well-established within the Trust has been agreed with Commissioners . element of the programme is to provided for the managers and partnership arrangements in reviewed and revised in 2006/07 Financial plans are approved B%!, \5 67

seek improvements to patient updated in accordance with been reviewed . As part of this care alongside productivity and the time scales detailed in the process the Executive Directors efficiency gains . Regulations . have been actively engaged in All the above is underpinned by considering and reviewing the the Trust Scheme of Delegation, 6. Review of system of internal control . Standing Orders and Standing effectiveness My review is also informed by: Financial Instructions, which As Accounting Officer, I have • The Management Letter to allow the Board to ensure responsibility for reviewing the Directors from the District resources are controlled only by effectiveness of the system of Auditor those appropriately authorised . internal control . My review of the • Self-assessment against the The Trust also makes use of effectiveness of the system of Standards for Better Health both Internal and External Audit internal control is informed by • Internal Audit Reports functions to ensure the controls the work of the internal auditors are operating effectively and to and the executive managers • External Audit Reports advise on areas for improvement . within the NHS Foundation Trust My review of the effectiveness All action plans agreed are who have responsibility for the of the system of internal control monitored and implementation development and maintenance is assisted by the deliberation is reviewed regularly and of the internal control of the Management Audit reported to the Management framework, and comments made Committee . The Management Audit Committee as appropriate . by the external auditors in their Audit Committee has been Any high-risk issues identified are management letter and other receiving and monitoring corrected immediately . reports . I have been advised on relevant audit reports and the As an employer with staff the implications of the result of Internal Audit Service continues entitled to membership of the my review of the effectiveness to work against a risk-based NHS Pension Scheme, control of the system of internal audit plan . measures are in place to control by the board and the Signed ensure all employer obligations audit committee and a plan to contained within the Scheme address weaknesses and ensure Regulations are complied continuous improvement of the with . This includes ensuring system is in place . that deductions from salary, The Assurance Framework itself employers contributions and provides me with evidence that C L Welsh payments in to the Scheme the effectiveness of controls Professor Chris Welsh are in accordance with Scheme intended to manage the risks Acting Chief Executive rules, and that member pension to the organisation achieving Accounting Officer scheme records are accurately its principal objectives have 6th June 2007 This annual report and accounts has been produced by Sheffield Teaching Hospitals NHS Foundation Trust . For further information on any aspect of this report or enquiries regarding our services, please visit www .sth .nhs .uk or write to: Trust Headquarters Sheffield Teaching Hospitals NHS Foundation Trust 8 Beech Hill Road Sheffield S10 2SB In the interests of the environment please do not throw away this annual report . If you no longer require it please return it to the STH Communications Office .