1. 2014/15 FINANCIAL OUTLOOK AND CHALLENGES

2. Overview Financial Context Summary of 2014/15 position:  Key pressures/service developments  Savings opportunities 2015/16 and future outlook Implications for 2014/15 and Choices

3. Scale of Financial Challenge in 2014/15 Additional funding of £420m needed to meet all identified costs of meeting existing policies and expectations DHSSPS budget due to increase by £90m Savings of £170m have been identified by DHSSPS A funding gap of £160m still needs to be resolved

4. DHSSPS Budget 2010 Profile Budget 2011-15 Settlement 2011/12 £m 2012/13 £m 2013/14 £m 2014/15 £m Current Expenditure4,383.14,447.64,569.24,659.4 % Uplift- 1.5%2.7%2.0% Real Terms % (updated April 2014)- -0.3%0.9%-0.2% Capital Expenditure325.4224.8200.5

5. Efficiencies Already Delivered 2011/122012/132013/14Total £m Trusts/LCGs106137101 Family Health Services304233 Other non-HSC opportunities 3265 168185139492

6. Efficiency Indicator Trends Average Length of Stay 2009/10 Days 2012/13 Days HSC IMPROVEMENT General Surgery5.04.60.4 Days General Medicine7.26.01.2 Days Obstetrics2.7 2.30.4 Days 2009/10 % 2012/13 % HSC IMPROVEMENT Day case rate (all admissions) 30.232.1+1.9%

7. Opening position for 2014/15 Significant unresolved challenges experienced in 2013/14 Significant unresolved challenges experienced in 2013/14 Reliance on non-recurrent measures in 2013/14: In Year Monitoring Managed slippage/deferral of expenditure Reliance on non-recurrent measures in 2013/14: In Year Monitoring Managed slippage/deferral of expenditure The HSC is carrying deficits of £115m into 2014/15

8. Latest Assessment of 2014/15 2014/15 £m 2013/14 HSC pressures carried forward(115) HSC identified pressures(275) DHSSPS identified pressures(30) Total Funding Requirement(420) Measures identified to address funding requirement: DHSSPS additional allocation for 2014/1590 Opportunities in Local Economies130 Regional Opportunities25 Non-HSC Opportunities15 Total Opportunities260 Unresolved Funding Gap(160)

9. Key Pressures in 2014/15 Pay & non-pay inflation £52m Pay & non-pay inflation £52m Demography £35m Demography £35m Service Developments £76m Service Developments £76m Family Health Services £37m Family Health Services £37m Public Health Agency £4m Public Health Agency £4m NICE Drugs £19m NICE Drugs £19m MH and LD Resettlement £17m MH and LD Resettlement £17m Specialist Hospital Services £7m Specialist Hospital Services £7m Transforming Your Care £21m Transforming Your Care £21m Revenue Costs of Capital £7m Revenue Costs of Capital £7m

10. Service Developments in 2014/15 Elective Care £15m Elective Care £15m Cath labs £4.5m Cath labs £4.5m Psychological Therapies £2.5m Psychological Therapies £2.5m Normative Nursing £12m Normative Nursing £12m Family and Child Care £7m Family and Child Care £7m ED Capacity Planning £5m ED Capacity Planning £5m NICE Drugs £19m NICE Drugs £19m

11. Savings Opportunities 2014/15 2014/15£m Trusts130 Regional Opportunities25 Other non-HSC opportunities15 170

12. Savings Opportunities at Trusts – 2014/15 ACUTE REFORM Reduce Excess Bed Days Increase in day case rates Reduce Did Not Attends Improve theatre utilisation Reduce level of cancellations ACUTE REFORM Reduce Excess Bed Days Increase in day case rates Reduce Did Not Attends Improve theatre utilisation Reduce level of cancellations SOCIAL CARE REFORM Reablement Shift to lower cost provision Reform of Social Care SOCIAL CARE REFORM Reablement Shift to lower cost provision Reform of Social Care STAFF PRODUCTIVITY Review of skill mix Reduction in backfill (whilst maintaining safe staffing levels) Reduce sickness absence Unit cost management STAFF PRODUCTIVITY Review of skill mix Reduction in backfill (whilst maintaining safe staffing levels) Reduce sickness absence Unit cost management OTHER PRODUCTIVITY Rationalisation of the estate Procurement Management costs/shared services OTHER PRODUCTIVITY Rationalisation of the estate Procurement Management costs/shared services

13. 2015/16 Outlook Total additional pressures are estimated at £317m There is a growing trend of cost pressures: 2011/122012/132013/142014/152015/16 Cost pressures as % of total DHSSPS Budget 5.1%5.5%5.6%6.1%6.6%

14. Population The 2011 Census, indicates that 20% of the resident population were aged 60+. By 2021 it is projected that this will increase to 23.2% and by 2051 almost one third (32.6%) of the population will be aged 60+. Between 2011 and 2051, the proportion of the population aged 85+ is expected to increase from 1.7% to 6.7%.

15. Unplanned Admissions to HSC Hospitals in Northern Ireland with a Long Term Condition for those aged 65 and Over by HSC Trust, 2010/11 By 2020: Number of adults with LTC will increase 40% in RoI, 30% in Northern Ireland 80% of GP consultations & 60% of hospital bed days relate to LTC and complications.* * Source: Making Chronic Conditions Count IPHI

16. Key Reform Initiatives Under TYC Shifting 5% of hospital expenditure with reinvestment in primary, community and social care services Shifting 5% of hospital expenditure with reinvestment in primary, community and social care services Maximising the potential of technology Improving integration of care through the development of integrated care partnerships – reducing need for unnecessary hospital visits Building a model of care which is focused on the individual rather than the institutions Building a model of care which is focused on the individual rather than the institutions

17. Impact of budget allocation – 2014/15 Deterioration in waiting times for elective services – which would exacerbate the health inequalities we are committed to addressing Compromising the safety and quality of services provided to patients and clients Compromising the delivery of statutory requirements, Programme of Government commitments and key Ministerial priorities and commitments A growing parity gap between Northern Ireland and the rest of the UK by not funding all demand led pressures

18. Choices For Executive Constraining pay for HSC staff 2 2 Reducing the range and/or standard of services offered 3 3 Impose additional charges or co-payments for services 4 4 Provide additional recurrent resources to DHSSPS 5 5 Increase even further the extent of savings required across the HSC 1 1