This gallery contains the financial performance Powerpoint presentation made to the Norfolk & Suffolk NHS Foundation Trust (NSFT) Board of Directors meeting on 23 October 2014:
We analysed NSFT’s business plans and privately told NSFT many weeks ago that we believed that Monitor would be in by Christmas. Sadly, it looks as though we were correct, give or take a month. The radical redesign has been catastrophic for finances and services at NSFT.
You can ask questions in the comments section below.
- NSFT is heading towards a deficit of at least £4.74 million in the current year
- NSFT is forecasting a deficit next year of nearly £3 million
- NSFT is maintaining its financial position with a range of legitimate but short-term or artificial measures, e.g. transferring reserves to fill in some of the hole in the Cost Improvement Programme (CIP) on a non-recurring basis, reducing the capital budget, eliminating provisions, calling in money owed early and reducing debts, etc.
- NSFT is massively overspent on temporary staff – it spent £2.24 million in September alone. In the first six months of the financial year, NSFT has spent £12.95 million, £5.6 million more than in the first half of the previous year. Net recruitment is ‘minimal’ despite NSFT’s undertaking to replace temporary staff with permanent. The bank and agency ratio is worsening each month.
- NSFT is massively overspent on out of area beds (it spent £190,000 in September alone). Out of area placements were supposed to stop in September but demand is rising rather than eliminated and the CCGs are not providing any funding at all. Now NSFT plans to halve spending to £100,000 per month but this seems to be wishful thinking (last week there were 35 people in out of area beds). The new ten bed assessment unit will not open until January 2015 at the earliest and there is as yet no funding from CCGs to staff it.
- In September, NSFT took a block contract for 80 bed days with a private provider but only used 45, wasting we estimate in the region of £17,500
- The Cost Improvement Programme is unable to deliver the required cost savings without artificial measures. The CIP is supposed to deliver efficiencies which recur year after year, which the artificial measures do not. Hence the CIP grows every year, demanding greater and greater cuts. Of this year’s CIP, £4.9 million is at gateway zero which means that NSFT has no idea at all how it can be delivered.
- NSFT is haemorrhaging cash, with the end of year cash position forecast to be £12.6 million below plan
- The loss of the Section 75 Agreement with Norfolk County Council is costing NSFT £830,000
- NSFT is forecasting the COSRR, Monitor’s financial risk measure, to hit the lowest possible rating of 1 in January 2015 without a raft of drastic changes, many of which seem far-fetched. A COSRR of 1, according to NSFT’s financial regulator, Monitor, indicates ‘High risk – possible licence breach & investigation’ – i.e. Armageddon.
- NSFT notes its ‘financial recovery plan has been developed and published however there appears to have been little to no impact to the overall position as a result, up to the end of September’
- NSFT has provisions of £4.4 million ‘to offset possible HMRC liabilities’ – i.e. tax. This appears a very strange provision for a public body.
- An interim finance person is back. Last time they were at NSFT on this basis, they were paid more than the Prime Minister.
- NSFT is being forced to consider massive cuts: ‘As can be seen from the figures, and based on the assumptions used, the Trust will not attain a break even position until 2016/17, which in turn will be dependent on the ability to achieve very high levels of cost improvements across the Trust compared to those originally submitted to Monitor for future years. It is these outer year cost improvement assumptions that need to be developed further as a matter of urgency due to the lack of recurrent savings in this financial year and this work is being picked up by the Cost Improvement Steering Group.’