South Birmingham PCT Provider Board Performance and Finance Report Month 7 2007

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3. 3 The main financial issues to note from Month 7 are as follows:  The operational budgets year to date position is reporting a £109k deficit, which is primarily as a result of non delivery of CIP’s. The M07 position represents a £85k favourable movement in month largely due to non recurrent and un-anticipated income in month. CIP schemes un-met are currently £502k in year. The forecast outturn remains unchanged at £1.3m. The corporate position has moved £61k adverse in month as a result of costs relating to ESR (£35k) and a provision for a pension payment (£25k) – More detail in relation to corporate budgets will be included form M08. Reserves The £1.8m reserves figure includes the £1.3m surplus contained within the 2007/08 financial plan and approximately £600k of un-used infrastructure fund reserves which have been released to fund the shortfall in CIP schemes. The below bridge analysis demonstrates how the final outturn position is maintained also showing how each element is recurring or non recurring. This shows that the recurring surplus position is £0.6m and represents the recurring element of the surplus. The remainder is able to be made up from slippage in non recurrent funding. The recurring elements have to be addressed to maintain the same level of surplus in future years. Summary The operational budgets forecast out turn has remained constant in month 7. These are the directorates ‘realistic’ outturn projections as signed up to by the service directors. The SHA have made it clear to all organisations that the forecast outturn position cannot be deviated from. It is therefore imperative that outturn positions in all areas are met. EXECUTIVE SUMMARY

4. 4 Performance against In Year Income and Expenditure Plan 2007/08 It is a requirement of Monitor to review an in year actual position against an in year plan. The plan, in the future, will be based on the submitted Long Term Financial Model (LTFM) which is completed as part of the Foundation Trust application In the absence of such a model the actuals for Provider Services will be monitored against the in-year budget. This data will measure the Provider Services against a plan that has been agreed by the board (currently this represents the overall budget presented to the board in May 2007). Position The net I&E position as at M07 is a deficit of £109k. This is a favorable in month movement of £85k. This is against an in year planned cumulative position of £206k surplus showing that whilst provider services movement is in the right direction are currently not on target. This does not include the impact of the corporate budgets. – this was not included as part of the original plan and will therefore only be included from next year The graphs below shows the in month and cumulative variance positions against budget. An in year deficit is shown as a result of the required surplus been held against a centrally held reserve and is planned to be released in March 2008. – this needs to be considered in future as it affects the Monitors risk rating (see page 15) Summary This page is currently being developed. It will be reviewed month on month with the aim of achieving a robust reporting tool going forward to represent our actual position against the budgeted plan.

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7. 7 Position against Operational Expenditure Budgets 2007/08 Corporate Budgets The detail included within this area of the report excludes the transferred corporate budgets. These were not included within this years financial plan, and so comparisons with last years expenditure would not be clear. Details of the Corporate Budgets can be seen on page 5, and additional information shall be included from M08. Operational Budgets The expenditure budgets are showing an overspend of £200k which is an adverse movement in month of £22k.. This overspend is a result of non delivery of CIP’s mainly within community, an increased provision for back pay within rehab, and a non recurrent write down of obsolete stock also within rehab. Full details of the performance of each directorate is shown in the table on page 5. Graph 1 below provides a comparison of the position of the operational budgets with the same period last year. Summary Overall operational expenditure is 0.2535% overspent on a total budget of £78.88m

8. 8 Position against Operational Expenditure Budgets 2007/08 (Continued) The net movement in the month is £3k adverse producing a year to date overspend of £169k. Community The overspend is due to two factors: The main cause is due to the unmet CIP - £292k in month 7. This position is off set by a consultant vacancy and under spends on wards at MHH. Pay awards are also a factor along with district nursing cost pressures – 3 posts that are supporting case managers and 3 posts on fixed term contracts covering maternity leave; both are unfunded. PLD High agency and bank usage is causing the overspend, although this is partially offset by income from reducing Void beds with this staffing. Agency spend is continuing to be monitored closely for management action. Children's Vacancy’s have resulted in an improvement in month however consultants on long term sickness will reduce this. The graph below shows the variance in pay and compares this with the same period in 2006/07. The pay variances this year are more stable than last year rather than large fluctuations. As the year progresses the board can commence to utilise this information for trend analysis.. Summary Overall pay expenditure is 0.319% overspent on a total budget of £52.97m

9. 9 Position against Operational Expenditure Budgets 2007/08 (Continued) The overall non-pay position is showing an overspent by £31k; this is an adverse movement of £19k. This move was mainly due to a £30k obsolete stock write off as part of the Re hab M07 stock take. Within the prosthetic’s department a number of individual devices which had been created in previous years and thought to have a future use, had been designated to now be of no future use and were removed from the stock register. This is a non recurrent adjustment. Other directorates are not reporting any other material issues within non-pay areas. The graph provides a comparison of total non-pay variance with the same period in 2006/07; the non pay profile appears much more stable in 2007/08 which is encouraging. Summary Overall non pay expenditure is 0.12% overspent on a total budget of £25,914m.

10. 10 CIP Performance 2007/08 The gaps remains at £0.5m with no further schemes been identified at this stage. The next steps included: Short Term A meeting has taken place with the Community directorate management team to review the overall programme and the resulting gap. The directorate will be setting local plans as part of the delivery of all the project initiative documents that are now completed to identify the schemes that will cover 2008/09 programme. Longer Term PWC are to be exploring different options around the delivery of CIPs via multi-displinary open interactive forums – The first forum will take place on the 4th December and 4 remaining forums will take place before end of December 2007. Some of the next steps will be a review of external support and processes that can be introduced to the Provider Services To revisit all the PID summary documents, review the strategic schemes and assignment of ownership, with a view to a detailed scope being produced and presented to the senior management team. Summary The graph below shows the planned position of CIP’s by month with an actual performance and forecast position against plan. This is demonstrating that the year end position has a shortfall of £0.502m against total. .

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12. 12 Capital Programme 2007/08 Sources of Funds The total capital available to Provider Services in 2007/08 has increased by £1.066m during the month to £6,986k and is shown in the Sources of Funds table below. The increase is due to the SHA not taking back brokerage the PCT received from BSMHT during 2006/07 and a new allocation for decontamination at Birmingham Dental Hospital. The available capital reduced by £4.8m relating to 2006/07 brokerage that will not be returned by the SHA. This is due to the slippage on the PLD reinvestment and unallocated capital within the general provider services programme. The returnable brokerage reduced by £1m. The other £300k should be transferred to BEN PCT during November 2007. Return of the capital undershoot from 2006/07 has been reduced to by £4k to £52k. Application of funds To date a total of £5,407k has been allocated against schemes which are listed below in table 2. The budget allocated increased in month due to the additional CRL for dental decontamination. The current projected undershoot for 2007/08 has increased by c£1m in line with the change in the return of brokerage to £1,589k. Expenditure during October 2007 was £321k compared with a planned expenditure of £566k The detailed expenditure table shows a £692k variation from plan. Expenditure on the West Heath scheme is now with £30k of plan. The PACS spend remains slow although a large payment of c£250k is expected during November to bring the scheme in line with the expected outturn. Expenditure on schemes managed by Estates and Facilities are also behind although budgeted expenditure is expected to be achieved. Spend on PCT managed schemes is slow and the project managers are being chased to ensure that budgeted expenditure is achieved during the year.

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14. 14 Creditors 2007/08 The Public Sector Prompt Payment Policy target is 95% of bills to be paid within 30 days. The PCT as a whole continues to fall below this level and is significantly down on last years performance. This performance indicator represents both commissioning and the provider side of the organisations. Developments currently being implemented to improve our PSPP include: The roll out of E-Procurement, and E-ordering Electronic authorisation of Invoices The SSA are now scanning invoices to relieve the paper burden and speed up the process. Ongoing Actions: As part of the financial separation two officers are going to take the lead with creditor payments and part of their remit will be to ensure that all measures are addressed to ensure that the target is met. A complete review of all creditors that remain unpaid is underway which may result in the actual performance against the target increasing. A full evaluation to be undertaken to identify where the processes are not strong and to recommend if any systems need changing Cash Implication It is estimated that if we were to meet the 95% target for all invoices the additional requirement on working capital (cash) would be approximately £205k per month. This would not have a detrimental effect on our current working capital balances.

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