REPORT TO THE TRUST BOARD OF DIRECTORS MEETING HELD IN PUBLIC ON 25 MARCH 2014

Transcription

1 REPORT TO THE TRUST BOARD OF DIRECTORS MEETING HELD IN PUBLIC ON 25 MARCH 2014 Enc D REPORT FROM THE CHIEF EXECUTIVE PREPARED FOR THE TRUST BOARD Trust objectives supported by this paper The report supports the achievement of all the Trust s Objectives Purpose of the paper To present to the Trust Board of Directors an update from the Chief Executive. Summary of key points The report provides an update for the Board on: Appointment of Chief Finance Officer Confirmation of Monitor risk ratings for quarter three 2013/14 Hospital redevelopment Annual Planning Trust Operational & Financial Plan /15 Contract Negotiations with Commissioners Self-assessment against Information Governance Toolkit Feedback from back to the floor visits Staff Awards results Board Action required The Board are requested to note information contained in this report relating to key issues of concern to the Trust and information received by the Trust. Author: Executive Sponsor: Simon Morritt, Chief Executive FOR INFORMATION 1

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3 Report from the Chief Executive March APPOINTMENT OF CHIEF FINANCE OFFICER The Trust is pleased to announce the appointment of its new Chief Finance Officer. John Somers, originally from Sheffield, will join the Trust in May from The Rotherham NHS Foundation Trust where he is currently the Chief Financial Officer. With eight years experience in senior roles working for the NHS in Rotherham, Lincolnshire and Wakefield, he has worked on a number of major projects and has more than 15 years of board level experience in both the public and private sector. We look forward to welcoming John to the Trust when he joins us in May. 2. CONFIRMATION OF MONITOR RISK RATINGS FOR QUARTER THREE 2013/14 We have received confirmation of our current risk ratings following Monitor s review of our quarter three 2013/14 submission. An executive summary of these results is attached as an appendix which demonstrates that the Trust s current ratings are: Continuity of services risk rating - 4 Governance risk rating - GREEN 3. HOSPITAL REDEVELOPMENT Good progress is being made in respect of enabling works to prepare the site for building work which is due to be completed in spring Contractors have now nearly completed the removal of concrete in the main car park following work to prepare the area for the redevelopment's foundations. Work has been ongoing in the car park since late February to remove concrete masses and now only a small area remains to be cleared. However, cables in the area will have to be moved before the work can be completed. As part of this enabling works in the main car park, the memorial wall has been repositioned in the memorial garden. Extra care was taken by contractors who covered the plaque with a protective board during the move. Work was also carried out to make the wall more stable. After an initial delay caused by identification of asbestos within the building, demolition of the White House has been further delayed as contractors wait for the power supply to be cut off. Some preliminary demolition work has already taken place at the property, however the building cannot be knocked down until the National Grid disconnect the power supply. A date of the 8 April has now been scheduled for the power to be cut off from the White House and 8/10 Northumberland Road. Construction work is also set to start on the new multi-storey car park on Clarkson Street this summer. The car park, which is being built by the University of Sheffield, will provide in excess of 500 spaces. 100 of those will be reserved for patients and families from the hospital and a number allocated to university staff who park in the existing car park. Any remaining spaces will be available to the general public for short stay parking on a pay on exit basis. 3

4 The timetable showing when the different stages of the hospital development are likely to start and finish remains as: March Ongoing demolition and enabling works Spring Starting the main building phase Spring New supplies service yard available Autumn New Outpatients area partially opens and refurbishment stages begin Spring New wards and remainder of Outpatients opens 4. ANNUAL PLANNING - OPERATIONAL & FINANCIAL PLAN Focused work has been taking place over the last few months on the development of the Trust s two-year forward plan which has to be submitted to Monitor by 4 April This year there is a requirement for foundation trusts to make two submissions for review by Monitor as follows: Two year operational and financial plan for submission on April 4th 2014 Five year strategic and sustainability plan - for submission on 30th June 2014 Monitor will use the first submission to assess the strength of the Trust s operational plans to address two-year short-term challenges and the financial projections which will support our plans. Monitor will seek to understand the degree to which the Trust has started planning for, and has begun implementing, transformational initiatives to address the challenges ahead for the NHS as a whole and for provider organisations within the NHS. In terms of the second submission we need to make at the end of June, Monitor has specified that the strategic plan should be a comprehensive summary of the Trust s strategy, the analysis which underpins this and the plans to implement the strategy. We, therefore, need to set out in detail an assessment of the future challenges facing the local health economy and the Trust, the options available to address the identified challenges and our key service line strategic plans. These documents will be published on submission to Monitor /15 CONTRACT NEGOTIATIONS WITH COMMISSIONERS Contracts have not yet been signed with commissioners. While the contract with our Clinical Commissioning Group collaborative has been agreed, the contract with NHS England has not. This will hopefully be resolved shortly. 6. SELF ASSESSMENT AGAINST INFORMATION GOVERNANCE TOOLKIT The Trust's Information Governance Committee is meeting on 25 March 2014 to carry out a final scoring of the Information Toolkit which will be recommended to the Risk & Audit Committee for approval on behalf of the Trust Board on 27 March The Information Toolkit is a performance tool mandated by the Department of Health that all trusts are required to complete annually to measure compliance with a range of requirements, standards and best practice that apply to the handling of information. The Trust will electronically submit its compliance scores to the Health and Social Care Information Centre by 31 March

5 7. FEEDBACK FROM BACK TO THE FLOOR VISITS The programme of Back to the Floor visits for the Board of Directors has continued with the following having taken place: Non-executive Director, Gareth Watkins, visited Becton Children s and Young People s Centre on 4 February Sarah Jones, Non-executive Director, visited the Supplies Department on 11 March Director of HR and Organisational Development, Steven Ned, spent the day as shadowing the car park team on 18 March Neil MacDonald, Non-executive Director, spent time shadowing a Health Visitor based at Woodhouse Clinic on 18 March Directors taking part in these events will be invited to feed their observations into the Board meeting. 8. STAFF AWARDS RESULTS A total of 175 nominations were received for this year s Star Awards. Held on Friday March 7 at Sheffield United Football Club, Bramall Lane, the event was the most successful yet and very popular with staff from across the Trust. The night saw 26 winners and runners up from 8 different categories highlighted for going above and beyond in their duties. The results were: The Children's Star Award Nominees for this award, which was supported by the Sheffield Telegraph, were nominated by patients and families. Winner: Matt Denton Runner up: Julia Broady Make it Better Award The winners and runner up of this award were selected by The Children's Hospital Charity. Winner: Hearing Services Runner up: X-ray Best Contribution to the Delivery of Direct Patient Care This award is for any individual or team who has made an outstanding contribution to the direct care of children and young people. Team Winner: Physiotherapy and Occupational Therapy Runner up: School Nursing - Immunisation Team Winner: Dawn Hallowes Runner up: Jo Searles 5

6 Best Contribution from a Non Clinical Support Service This award is for any individual or team within a non-clinical support service who has made a significant contribution to supporting the delivery of patient care. Team Winner: Gastroenterology Secretaries Runner up: Waiting List Co-ordinators Winner: Kathy Green Runner up: Zoe Lintin Customer Care Award This award is for any team, individual or volunteer who has demonstrated an outstanding commitment to customer care. Customers could be patients, parents, carers, relatives or other Trust staff. Team Winner: Wayne Pickorer and Danny Barton Runner up: Sarah Peckett and the Pharmacy Dispensing Team Winner: Pam Hardy Runner up: Julie Trigg Service Improvement Award This award is for any team, individual or volunteer, who has contributed to improving the service they deliver by innovative ways of reviewing systems and processes to improve the quality of their service. Team Winner: Theatre Admissions Unit Runner up: Claire Pearson and Ann Murphy Winner: Dan Hawley Runner up: Joe Tansley Best Contribution to Patient Safety and Quality This award is for a team or individual who has helped to improve patient safety and/or the quality of patient experience within the Trust. 6

7 Team Winner: Child Protection Team and Sexual Abuse Service Runner up: Medical Equipment Team Winner: Jessica Merrin Runner up: Rachel Tattersall Volunteers Award This award is for a team or individual who has volunteered their time to improve the quality of the patient experience at the Trust. Winner: Margaret Peach, Helen Vause & Iris Lunn Runner up: Julie Austin On behalf of the Trust Board I d like to offer congratulations to all 175 nominees, the runners up and winners. Simon Morritt March

8 Sheffield Children's NHS Foundation Trust Q Reporting Executive Summary Continuity of Service Risk Rating 13/14: YTD Actual 4 Governance Risk Rating: Declared risks at APR: Cdiff YTD Actual: Green Declared Risks in Year: Breaches for Current Period: None None Summary At Q3 the Trust has reported a CoSRR 4, in line with its plan. At 4.05x the Trust s capital service cover was ahead of plan, and whilst the Trust s liquidity metric was slightly under plan at 48 days due to a reduced cash balance at 31 December, liquidity remains strong. YTD EBITDA of 6.1m was 0.1m above plan despite the Trust under-delivering against its YTD CIPs target. The Trust achieved 3.4m (69%) of the YTD CIPs target at Q3. Slippage was experienced on cost savings schemes, whilst anticipated productivity gains did not fully materialise. The Trust met all of its performance targets in Q3 and is fully-compliant with all CQC standards; as such it has reported a Green GRR. Summary Income & Cash Flow vs Plan m 2013/14 Q3 2013/14 YTD Plan Actual Variance Plan Actual Variance Op. Rev for EBITDA (1.0) (0.2) Employee Expenses (28.4) (27.8) 0.6 (85.1) (82.9) 2.3 PFI Op. expense All other Op. costs (9.1) (9.5) (0.3) (27.4) (29.3) (1.9) EBITDA (0.7) Surplus/(Deficit) pre exceptionals (0.8) (0.1) Net Surplus/(Deficit) 0.7 (0.3) (1.0) (0.2) EBITDA % 5.6% 3.9% (1.7%) 5.1% 5.2% 0.1% CapEx (Accruals Basis) (2.9) (2.2) 0.8 (6.8) (5.9) 0.9 Net cash flow 4.3 (0.3) (4.5) 1.6 (2.7) (4.3) Cash & Equiv (4.3) (4.3) CoSRR Liquidity days (2.0) (2.0) CIP % OpEx less PFI 3.6% 2.5% (1.1%) 3.6% 2.2% (1.4%) Net current assets (0.9) (0.9) Borrowing (excluding PFI) (6.6) (6.6) Key risks Action taken / committed Gaps and residual concerns CIP Delivery In recent quarters the Trust has not fully delivered its planned cost savings targets. At Q3 YTD, the Trust has delivered: - 60% of its planned cost savings target of 4.2m; - 113% of its planned productivity target of 0.8m; - 69% of its planned combined target of 5m; and - The Trust has 82k (1%) of unidentified plans. The Trust has attributed this to delays in planned productivity gains and delays in the implementation of schemes such as the Electronic Document Management System (EDMS) project. The Trust is forecasting a full-year CIP underdelivery of approximately 30%. Significant Transaction The Trust has a large capital programme, of which approximately 40m relates to a redevelopment of the Trust s hospital site. In February 2013 Monitor reviewed this significant transaction and rated it as FRR3, GRR Amber-Red, with some concerns in respect of deficits in the transaction s downside scenario. The governance arrangements supporting CIP delivery were strengthened at the end of 12/13, whilst the Trust has invested in additional funding to increase the PMO capacity. The robustness of divisional CIP plans is scrutinised at monthly performance meetings and the Trust is continuing to embed service line reporting to strengthen CIP planning and delivery. The Trust retains a central contingency reserve of 5.7m to mitigate against CIP under-delivery. Trust divisions are continuing to review opportunities to deliver savings in 2013/14, although it appears unlikely that significant progress will be made to address the recurrent position. The Trust has indicated that any undelivered targets from 2013/14 will be carried forward for delivery in 2014/15. The Trust is projecting significant growth going forward, and will closely link CIP targets to opportunities for productivity gains in future years. The Trust has addressed Monitor s concerns regarding the significant transaction s downside scenario. The Trust has secured a 25m loan from the FTFF on a 25-year repayment scheme running from September 2015 to September The interest rate of 2.99% equates to initial repayments starting at 1.8m per annum. Demolition work is ongoing, the Trust is currently negotiating the pricing schedules with the contractor and construction work on the new wing is due to commence in March Due to delays in the contract negotiations, the scheme has revised the expected completion date from late 2015 to early Failure to achieve CIPs targets going forward could undermine the performance required to fund the Trust s capital programme. The Trust should ensure it has clear visibility over CIPs which are underperforming because: - Cuts cannot be made to sustain the current activity growth; versus those schemes that are underperforming but can still be achieved. The Trust faces a challenge in how to identify, plan and ensure delivery of productivity gains in further years. There is a risk that the Trust becomes over-reliant on internal contingencies and other non-recurrent support to top up CIP under-delivery, which is not sustainable in future years. Monitor communicated our residual concerns to the Trust on 4 July 2013 and we will continue to perform a quarterly review of performance against the base case, including normalised net earnings from operations and recurrent CIP delivery. Under-delivery of the Trust s CIP targets (above) could undermine delivery of the transaction. Delays in finalising pricing schedules could lead to cost inflation pressures. Next steps Continue quarterly monitoring. Trust to update Monitor if there are any material changes to the assumptions underpinning the investment business case.

9 5 March 2014 Mr Simon Morritt, Chief Executive Sheffield Children's NHS Foundation Trust Sheffield Children's Hospital Western Bank Sheffield South Yorkshire S10 2TH Wellington House Waterloo Road London SE1 8UG T: E: W: Dear Simon Q3 2013/14 monitoring of NHS foundation trusts Our analysis of Q3 is now complete. Based on this work, the Trust s current ratings are: Continuity of services risk rating - 4 Governance risk rating - Green I have attached a one page executive summary (Appendix 1) of your Trust s Q3 results for your information and a report on the aggregate performance of the NHS foundation trust sector will shortly be available on our website (in the News, events and publications section) which I hope you will find of interest. For your information, we issued a press release on 21 February 2014 setting out a summary of the key findings across the NHS foundation trust sector from the Q3 monitoring cycle. If you have any queries relating to the above, please contact me by telephone on or by (Jenna.Knight@Monitor.gov.uk). Yours sincerely Jenna Knight Senior Regional Manager cc: Mr Nick Jeffrey, Chair Mr Mark Smith, Interim Director of Finance