Annual report and accounts 2020/21 HC 387 Advise / Resolve / Learn NHS Resolution Annual report and accounts 2020/21 Presented to Parliament pursuant to Paragraph 6 of Schedule 15 of the National Health Service Act 2006. Ordered by the House of Commons to be printed 15 July 2021. HC 387 © Crown copyright 2021 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open- government-licence/version/3. Where we have identified any third-party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/official-documents. Any enquiries regarding this publication should be sent to NHS Resolution 8th Floor, 10 South Colonnade, Canary Wharf, London, E14 4PU. ISBN: 978-1-5286-2722-1 CCS: CCS0621775540 07/21 Printed on paper containing 75% recycled fibre content minimum. 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Contents Performance report 7 Accountability report 81 Overview 7 Corporate governance report 82 Chair’s welcome 8 Directors’ report 82 Chief Executive’s report 9 Statement of Accounting Officer’s responsibilities 83 Performance summary 12 Governance statement 84 Understanding our indemnity schemes 14 Performance overview 16 Remuneration and staff report 101 Financial activity 16 Parliamentary accountability and Claims, appeals and advice activity 18 audit report 118 A summary of our activities 20 The certificate and report of the The environment we work in 26 Comptroller and Auditor General to the Houses of Parliament 119 Reform and the legal environment 26 The health landscape 27 Key risks and issues 28 Financial statements 123 Going concern 29 Performance analysis 31 Statement of comprehensive net expenditure for the year ended 31 March 2021 124 Our strategic aims to 2022 32 Key performance indicators 33 Statement of financial position as at 31 March 2021 125 A closer look at our data 40 How we performed against our business Statement of cash flows for the year plan objectives for 2020/21 52 ended 31 March 2021 127 Priority 1: Responding to Covid-19 52 Statement of changes in taxpayers’ Priority 2: Going further to deliver equity for the year ended 31 March 2021 128 early resolution 55 Notes to the accounts 130 Priority 3: Consolidating and communicating our offer to primary care 63 Priority 4: Working with our partners to Glossary 168 strengthen collaboration and share our insight 65 Priority 5: Undertaking operational transformation to restructure our claims service and developing new ways of working to enable a London office move to a government hub 68 Priority 6: Setting our future course and starting work to transform our business intelligence capability and systems architecture 69 An organisation fit for its purpose 70 Finance report 73 6 Contents 7 NHS Resolution Annual report and accounts 2020/21 page Performance report Performance report 8 Chair’s welcome This has been a very strong year for NHS Resolution. We have managed our workload despite the strictures of the coronavirus pandemic, we have supported the response to the pandemic, and we have stayed faithful to our strategic plan. I extend my thanks to our staff, and those they work with across the NHS, for doing so much in such challenging circumstances. We established two Covid-19 specific indemnity schemes However, although we delivered some positive financial that have been fundamental in allowing the health system results in 2020/21, the evidence suggests that the total cost to address the challenges posed by the pandemic. At the of resolving claims will continue to rise, largely due to factors time of writing we have forecast Covid-19 related claims beyond our control. We continue to contribute to the work only in the broadest terms – a £0.5 billion increase to our underway across government to address the rising costs of estimate of future claims. It is too soon to expect any such clinical negligence. claims to have been made by now. 2021/22 is the final year of our five year strategic plan. During the year, we agreed a protocol with claimant lawyers’ We are working now on proposing a new strategy, building organisations to assist in dealing with claims more generally. on our experience and the successes achieved to date. We also switched to remote working without diminishing This report covers a year in which I joined NHS Resolution the breadth or impact of our resolution services. partway through. I have found the organisation to be The recent addition to our portfolio of primary care is the high-performing, professional and ambitious. This is the main factor behind the year on year increase in the number achievement not only of our staff and the executive team of clinical negligence claims that we handled. that leads them but also of the board and most notably my predecessor as chair, whose drive and vision are now The amount we have paid out in resolving claims is down bearing fruit. I am grateful to them all for making a year on year by £120 million. This is due to an improvement newcomer feel welcome. in underlying trends, most notably lower claims inflation (the amount by which the cost of claims is expected to go up over time), and to the fact that - understandably - the process of investigating and resolving claims slowed somewhat during the pandemic. We have tried ever harder to settle claims without going to court. We continue to work with those who act for claimants to promote other ways of resolving disputes, such as mediation, and we have resolved a greater number of claims without going to court than ever before. We resolved a greater proportion of claims without formal proceedings (74.7%, compared to 71.5% in 2019/20). We have appointed a safety and learning expert to work in the mediation space, to make sure we capture the insights those claims reveal, for the benefit of the health system as a whole. Martin Thomas / Chair CONTENTS PAGE BUTTON 9 NHS Resolution Annual report and accounts 2020/21 Chief Executive’s report The main feature of 2020/21 for NHS Resolution, was, as for everyone (and in particular our health service partners), the Covid-19 pandemic and all that came with it. Throughout the year, the demands on our NHS colleagues have been unimaginable and we pay tribute to their incredible efforts to keep us all safe in such an extraordinary year. NHS Resolution moved quickly to home working in As the new healthcare arrangements for the pandemic advance of the first lockdown in March 2020 and we response started to be put into place, indemnity quickly started the year with the twin aims of looking after became a priority for NHS Resolution. We had already our staff and doing all that we could to help the NHS in recently launched new schemes for general practice its response. At the same time we had a significant change with a new scheme, the Clinical Negligence Scheme for programme already underway and a busy operation gearing General Practice, starting to mature and historic claims up to respond to the transfer of several thousand general from two medical defence organisations about to come practice claims arising from new schemes. It remained under our management. This extension of NHS Resolution’s important to continue in our efforts to deliver what role into primary care meant that our existing indemnity we had set out to do before the pandemic took hold. schemes already covered the majority of new healthcare Our annual report therefore sets out how we performed arrangements, such as returning staff and vaccination against objectives and targets we set for ourselves delivery. Where gaps existed however, we worked rapidly pre-pandemic but also describes how Covid-19 inevitably with the Department for Health and Social Care (DHSC), disrupted those plans and brought new challenges, NHS England and NHS Improvement (NHSE/I) and others which we responded to during the year. to put in place solutions, starting with the launch of the Clinical Negligence Scheme for Coronavirus (CNSC) Throughout, our staff and those we work with have which we supplemented later in the year with the responded brilliantly, doing their utmost to deliver the Coronavirus Temporary Indemnity Scheme (CTIS) best possible service to the NHS and its staff and patients as different requirements, such as designated care as well as to support each other through the various settings, emerged. challenges that we experienced during the year. We established a process early on to assess the claims risks attached both to these new indemnities and to changes to healthcare arising from the pandemic. Very few claims associated with the pandemic were lodged in the year and our assumptions on the prospect of future claims are described in this report. The effect of the pandemic on our accounts is assessed as relatively limited as the vast majority of the liability continues to be driven by a small number of high value obstetric claims. A far greater impact is seen in our expenditure for the year which is significantly lower than expected, generating an underspend on the clinical schemes of £430 million (16%) against our budget, which was set in the summer of 2019, before the pandemic. This is a reflection of the impact of the pandemic on the NHS, law firms and the court system. Clinical and Helen Vernon / Chief Executive other NHS staff who would normally support the investigation of a claim were understandably diverted to the frontline response, a number of lawyers acting for claimants furloughed staff, and the usual operation of the court system was constrained.