Financial Risk Assessment & Assurance Group (FRAAG)

1. Financial Risk Assessment & Assurance Group (FRAAG) Programme Committee 23 August 2012 Reporting Period: 17 August – 22 August 2012

2. FRAAG Programme Status Update Programme Priorities / Decisions A Current Programme RAG: • Immediate priorities at a programme level are: • Approval of updated Systems & Reporting PID – distributed with FRAGG 16 Aug papers • Agreement on new milestone dates for relevant workstreams as shown in milestone plan (QIPP & Systems and Reporting) • Delivery of the Financial strategy and first cut financial modelling for the 1st September 2012 • Ongoing mobilisation and commitment of ‘delivery’ resources for each work-stream • Ensure commitment of these and existing resources during period of transition to ensure continuity and effective transfer • The programme is in the delivery phase: • Initial run of 11/12 data using the IR has been shared with the programme lead and work is underway to explain the variances • Review current strategies to identify best practice – meeting to take place 23 Aug • Delay in QIPP scheme template being completed – COOs to follow up with CRGs • Month 3 supply returns using the new reporting format has been slightly delayed as a result of the identification of some issues with the formulas and was sent out on 21 August with a return date of 28 August • Delay in the set up of the central repository for all programme documentation and interfaces to ensure continuity in Convergence Risk, to be distributed to all members 24 Aug Key Areas of Concern • No response to date from DH on the next iteration of the specialised service financial envelope, impact is that FRAAG would not understand the financial risk and the final financial envelope • CRG capacity - need to give appropriate attention to QIPP at the same time as contributing to a number of CRG support group work streams • Risk of the loss of key staff during prolonged HR process • Cover for each workstream during the Olympics and holiday period • Mobilisation of the Contract Validation and PCT Baseline workstream delivery /execution resources, concerns on capacity prioritisation, back-fill at local level and skill mix within SCGs to deliver 2

3. July September October December August November Milestone Key Deliverable New Milestone FRAAG – Delivery plan Key Milestone slippage Milestone complete 2012 June Establish Contract Repository website Populate contract repository with SCG 12/13 contracts 19 25 25 All 11 organisations loading lead content Liaise with DH on IFR 9 Reconciliation by SCGs of contract output to financial envelope Produce template and guidance surrounding IFR/NCA collection 2 31 Review/analyse contract data (by gross value) 2 Next steps of iteration of development of specialised services envelope, 23 Review/analyse contract data (by: provider, SCG, service, activity, currency) 2 PwC analysis / final report TBC Agree and implement IFR collection across PCTs and SCGs 20 Agree next iteration of PCT deadline including specialised activity 23 Agree with DoH a mechanism for NCA collection across PCTs and SCGs 18 2012 / 2013 Contract validation Agree the timeline next iteration of development of specialised services envelope to transfer to NHS CB (will inform allocations) Await advice from DoH on next steps of iteration of development of specialised services envelope, 23 3 6 Guidance for next data collection for Gateway 17726 Agree guidance for Gateway 17726 9 20 Utilise findings of review as part of SHA review of PCT Baseline Exercise SCG to produce report to inform PCT Financial Baseline TBC 27 Report on QIPP opportunities TBC 1 31 Benchmark contract prices and currencies to identify potential rebasing opportunities FRAAG Review DH exercise on contractual spend, identify potential synergies 20 Identified synergies with David Flory work 6 Validate initial assessment of the financial impact/risk of moving to a single scope 15 Validate initial estimate of the financial impact/risk of moving to single policies for identified services by Service Support Team 15 Produce a detailed risk register of CRG policies, standards and specifications 14 Preliminary costing of impact of IR rules 23 14 Final IR and CRG risk registers Prioritised list of specialist providers 31 30 1 Develop stakeholder engagement / communications strategy 14 25 14 14 23 Convergence Risk Agree 2nd draft of full take Spec com estimates of IR rules Sign off IR guidance and SpecComm manual Delivery of final IR guidance and SpecComm manual (draft 4) Agree 3rd (final) draft of full take Spec com estimates of IR rules 30 1 Local testing of IR tool Validate preliminary costing of impact of IR rules 9 Full assessment of the financial risk/impact of moving to a single policies and specifications Produce a final summary of the risks and mitigating for the 2013/14 contracting round. 7 14 14 Initial assessment of the financial impact of moving to a single scope 31 1 23 Summary of the risks and mitigating actions as a result of the implementation of the IR rules Initial estimate of the financial impact/risk of moving to single policies for identified services by Service Support Team 31 23 1 Assurance of IR tool with providers 30 1 Creation of single IR tool (Grouper) Produce a final summary of the risks and mitigating actions as a result of the implementation of the IR rules for the 2013/14 contracting round 1 31 31 Financial assurance of the manual developed 30 1 Full list of prescribed services identified in manual Produce a detailed risk register of CRG policies, standards and specifications as above 31 Estimate the financial support required to do the costing of moving to single policies /specifications 30 Calculate actual financial support required to do the costing of moving to single policies / specifications 30 Estimate of financial envelope for Group 3 service 31 Running the algorithm against SUS data for 10/11 Running the algorithm against SUS data for 11/12 23 6

4. July November September October December August Milestone Key Deliverable New Milestone FRAAG – Delivery plan Milestone slippage Milestone complete KEY 2012 June 6 10 30 TBC Review current strategies Financial strategy reviewed in line with Operating framework First draft financial strategy 6 Sign off agreed final Financial Strategy (COOs, Regional Directors, TDG) Preliminary workshops to develop strategy 15 Financial strategy Financial strategy 15 Innovation expenditure badge against innovation fund identified 15 Agree output from QIPP workstream sufficient to find headroom 30 Changes in commissioning intentions to providers identified and agreed QIPP and Financial strategy 10 23 x1 QIPP scheme template completed per CRG Identify gaps in 12/13 Pick list to inform overall QIPP Standard QIPP template 20 14 30 Output from CRG groups on QIPP proforma List of Identified of x5 devices to procure at better value for money 7 Target list of existing pipeline scheme to inform overall QIPP 14 List of identified high cost drugs to procure at better value for money 7 Report on min/max take opportunities 14 7 Compiled report of SCG clusters local ideas for 13/14 Draft overall QIPP programme 14 31 Establish expert panel to assess QIPP schemes Review current strategies 10 23 31 Issue commissioning intentions to providers and other stakeholders 31 Engagement with providers and other stakeholders QIPP 15 23 Prioritised list of QIPP schemes with costing, currencies and monitoring mechanisms 30 Schedule procurement initiatives to delivery led times to secure savings in 2013/14 QIPP monitoring framework QIPP robust framework documents that actually deliver cash 31 31 1 FRAAG Develop robust PIDs for all schemes Prioritise best practice schemes f11/12 and 12/13 for roll out across country 6 23 10 Draft letter to inform commissioning 30 Identify potential opportunities for price rebasing from output of contract validation workstream 10 Audit and review of current systems completed Audit and review of current systems 31 Audit 24 28 Month 3 reporting data returns submitted to work stream manager Adapt and review collection tool 13 24 14 31 Collate responses Star Chamber workshop NCR tool 13 Send tool to SGE’s Liaise with Maria/Paul for feedback 30 31 21 Recommendations for potential interim/long term contract monitoring, validation and reporting and reconciliation to payments solutions Systems & reporting 31 Arrangements for central monitoring of 2012/13 performance established 20 Design template / adapt existing one 30 Delivery of reporting mechanism including analysis of potential outturn risk 30 Proposing how services are stratified 30 Agree proposal 17 21 Stratification of services for validation 30 Analysis of outrun risk (1) TBC Review migration plan onto new finance ledger and ensure appropriate resource in place to deliver 31 Review of proposal for migration to common financial ledger to ensure functionality of reporting is available 30 Monthly report TBC Closure plan for legacy finance systems

5. 2012/13 Contract Validation and PCT Baseline Status Update Status Update / Key Achievements in current reporting period Key activities due to be performed in next reporting period • Current PC RAG: • Previous PC RAG: A G • VW and FC need to sign off template and guidance for IFR / NCA collection – 30 Aug • PwC and FC to discuss benchmarking review • Information awaiting from DH needs to wait for Veronica to return (28 Aug). • QIPP Opportunities awaiting information from CRGs Key Concerns • Concerns over resource whilst VW is on holiday, • Possibility of resource constraints when dovetailing with the QIPP workstream following outputs from CRG’s • Do not have a respond from DH on the next iteration of the specialised service financial envelope, impact is that FRAAG would not understand risk and the final financial envelope Reporting Period Milestones

6. Convergence Risk Status Update Status Update / Key Achievements in current reporting period Key activities due to be performed in next reporting period • Current PC RAG: • Previous PC RAG: A Full assessment of the financial risk/impact of moving to a single policies and specifications (Phase 2) – 30 October g Work on validating the desktop exercise continues with the standard script produced and a briefing session held with all finance and information support leads. Meetings with CRGs will commence shortly. A summary report outlining work to date and the outcome of the sense check of the desktop exercise was shared with the programme lead last week. The initial run of 11/12 data using the IR has been shared with the programme lead and work is underway to explain the variances. Key Concerns The workstream lead will be on leave next week but there are no time critical products to be delivered. Reporting Period Milestones

7. Financial Strategy Status Update Status Update / Key Achievements in current reporting period Key activities due to be performed in next reporting period A • Financial Modelling resource secured from NHSL – date to be confirmed • Commence work on outline strategy to be with PB 1st week September • Collate responses on growth and pressures from CRGs w/c 13th August • First cut high level financial model to scope potential QIPP requirement • Current PC RAG: Previous PC RAG: A • No update Key Concerns • Need to determine workstream lead • To deliver to PB timescales need to work across a number of interfaces to collate information eg differential growth for specialised services • Need to establish links with wider strategy development • Timescales very tight Reporting Period Milestones

8. QIPP Status Update Status Update / Key Achievements in current reporting period Key activities due to be performed in next reporting period • Current PC RAG: Previous PC RAG: • Notify CRGs of schemes for later work up • Review meeting 24/08/2012 of 2011/12 & 2012/13 schemes • Circulation of output from review meeting to FRAAG members and Expert Panel • Agree QIPP financial targets A • Agree new milestones at FRAAG • COOs to follow up “No progress” CRGs with lead commissioners. • Follow up the “Later” CRGs, ie those that said they would be submitting after the 31/07 deadline. • Follow up any missing 2011/12 information. • Analyse 2011/12 schemes. • Request and validate missing 2012/13 information Key Concerns • CRGs need to give appropriate attention to QIPP at the same time as contributing to a number of CRG support group work streams • Financial support for CRGs Reporting Period Milestones

9. Systems & Reporting Status Update Status Update / Key Achievements in current reporting period Key activities due to be performed in next reporting period • Regular reporting using new format commences (Month 4 onwards) - ongoing • Star Chamber workshop held to: • Showcase best practice systems and select systems for recommended national adoption as per audit report recommendation • Develop proposal for contract validation and monitoring systems to be adopted by identifying current systems and describing key features, describing the process to be followed in each area to use databases for monitoring – 14 September date TBC • Recommendations for potential interim/long term contract monitoring, validation and reporting and reconciliation to payments solutions by 21 September • Delivery of reporting mechanism including analysis of potential outturn risk by 30 September. Current PC RAG: • Previous PC RAG: A A A meeting has been held to revise the Systems and Reporting workstream initiation document which was circulated with the FRAAG (16 Aug) for formal approval. The new milestones shown below are taken from the revised document. A request to supply returns for month 3 using the new reporting format has been slightly delayed as a result of the identification of some issues with the formulas and was sent out on 21 August with a return date of 28 August. FRAAG members are asked to ensure that these returns are completed. Key Concerns • The workstream manager will be on leave next week Reporting Period Milestones

10. Programme Risks & Issues Key Issues & Risks

11. Programme Risks & Issues Key Issues & Risks

12. Appendix 1: Programme Holiday Chart (for the next reporting period) PCC – 17/02/2012