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Business planning and budget management

Business planning and budget management. MRCPath Study day 22/11/2007. Business planning. Strategic plan – 3yrs / 5 yrs Direction of the service Workload / developments LDP Business plan Fall out of the strategic plan Actual work plan - annual Business case Equipment

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Business planning and budget management

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  1. Business planning and budget management MRCPath Study day 22/11/2007

  2. Business planning • Strategic plan – 3yrs / 5 yrs • Direction of the service • Workload / developments • LDP • Business plan • Fall out of the strategic plan • Actual work plan - annual • Business case • Equipment • Service development

  3. Business planning • Need to know the environment that you are working in • Financial framework • Need to know the format that audience wants • e.g. WP bids prescriptive • Need to know what you are and what you want

  4. Advice on the web site(not all of it good!) • www.teneric.co.uk • http://www.networkrail.co.uk/aspx/3085.aspx • http://www.internalbusinessplans.co.uk/ • http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_4130735 • http://www.institute.nhs.uk/index.php?option=com_joomcart&Itemid=194&main_page=document_product_info&products_id=257 • http://www.bnmsonline.co.uk/index.php?option=com_content&task=view&id=7&Itemid=15

  5. What is a business case? • Decision making tool • Decide between a range of options • Consistent with aims • Affordable • Viable • Achievable

  6. What are business cases for • Anything that requires investment ! • Investing in new facilities • Developing a new clinical service • Recruitment of new staff • IT • Anything really • Designed to address a particular issue

  7. Developing a business case • Strategic context • Local picture – agreed local priorities e.g. MR, cancer • National picture – e.g. turnaround times – 18 week wait • Define objectives • e.g. reduce waiting times etc in line with national guidelines • Generate options • Do nothing • Several plans

  8. Developing a business case • Measure the benefits • Benefits of options – option appraisal • Identify costs and savings • Management accountant • Assess risk • Staff/ building new facilities • Cost overrun • Timescale

  9. Developing a business case • Identify the preferred option • secure wide support for your plans • Present outline • Present FBC • SHA 5M • 25-100M DH • Over 100M Treasury approval

  10. Business cases and Genetics • WP bids – were all business cases • Slide making robot • Robotics in molecular genetics • DNA sequencers • IT • Skillmix • Essentially anything that changes or develops our dept

  11. BC for a DNA sequencer • Background / intro • What are they • What do they do • What would we use one for • Tying in national demand for TATs etc • Capacity plan • Workflow • Throughput

  12. BC for DNA sequencer • Option appraisal • Beckman v ABI v fancy new ones v nothing • Function • Costings • Actual costs • Consumables • Maintenance costs • Capital charges

  13. BC DNA sequencer • Benefits • Faster turnaround • Increased productivity • Decreased consumable costs? • Actual patient benefit • Economics • Outlay v benefits • Savings via skill mix – • Payback for investment • “spend to save “

  14. BC DNA sequencer • Conclusions • Which one • Why • Summary of benefits • Costing summary / benefits • Improvement to service

  15. Managing a budget

  16. What is a budget • Cost allocated to you to run a service • Doesn’t include Trust overheads • Contribution to infrastructure • HR , finance , cleaning etc • Usually about 25% of budget value • Contract value = budget + Trust overhead

  17. Managing a budget • Not a lot of flexibility within the NHS – is not very exciting !! • Revenue • Staff costs • Salary + overheads • Non – pay costs • Consumables • Travel expenses • Maintenance costs • Hidden costs eg criminal clearances

  18. Staff costs • Establishment • WTE for each staff group • Important to manage resources within that envelope • Change the envelope would require business case and approval • Skill mix then need an establishment change

  19. Non – Pay • Needs more direct management • Ordering done within dept therefore direct impact on spending • Agreed level of funding for given workload • Important to monitor expenditure • Cannot generally move money easily between pay and non pay

  20. Capital • Non- recurrent monies • Equipment replacement • Buildings refurbishment • Vary annually depending on Trust capital plan • Can definitely not move monies between revenue and capital

  21. Budget Management • Good financial practice to break even at end of year • Surplus is poor management as you loose it

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