1. NACT Peter Holt Head of Finance, London and South East Thursday 25 th February 2016

2. National update Developing currencies & prices to support education tariff development Summary of key statistics and output from the 14/15 full year submission Preparation for 15/16 – national guidance HEE and LETB role Role of DH Timing and structure of the collection window Areas to cover

3. National update The big developments in recent months: Tariffs will reduce in 2016/17 to reflect SR settlement Cost collection – real improvements to data quality and generally better engagement at a local level Cost collection – a real positive that we are moving to an integrated collection as this will: Introduce a reconciliation total (through accounts) for education and training Identify any cross subsidisation between service and training Enable discussions around potential changes to budgets Minimise the burden on providers of having to undertake multiple submissions

4. Developing currencies & prices to support education tariff development National update

5. Currency Development Group formed and have met regular to discuss methodology and principles to inform design of groups Proposals developed for non-salaried and updated to reflect new data from 2015 collection Methodology for salaried that incorporates both placement fee and time allocated to training agreed Impact of different options being assessed Consultation due later in 2016 Pricing - Impact of cost collection on 16/17 Requirement to reduce tariff prices to reflect SR settlement Anticipate that the reduction will be 2% across all three existing tariffs, in line with agreements at a senior level (NHSI, NHSE, HEE) No changes to salary support, which will continue to be paid at 50% of basic salary for postgraduates in 2016/17 Draft guidance will have been released by time of meeting (to NHS) for comment Final guidance shared in early March 2016

6. Summary of key statistics and output from the 14/15 full year submission

7. 100% return rate. All 230 NHS providers submitted their education and training costs within the agreed timescales. 84 providers resubmitted in the managed resubmission week following the initial 7 week submission period A reduction of 50% in the number of outstanding validations, resulting in a more consistent dataset than the previous year A difference of approx. £300m between costs and funding, supporting the proposed move to an integrated collection which will inform any potential requirement to re-base budgets (service to E&T or visa versa) Dashboards enable local and national comparison

8. Distribution of MFF adjusted ECIs in 2013/14 and 2014/15

9. Average cost per FTE (high activity areas) non salaried

10. Average cost per FTE (high activity areas) - Salaried

11. The difference between costs and income at NHS providers, by cluster

13. Salaried stats – very high level RegionRCITotal cost (m) Activity (hrs) Cost per hour Trainin g / service split South1039.16216,048£42.3846.8% North1028.90214,844£41.4145.6% London and SE 9711.20276,273£40.5544.2% Midlands & East 1007.75193,165£40.1445.8% National1009.14222,907£40.9845.5%

14. Calculating the costs of Education and Training: Preparation for 15/16: National guidance

15.  The feedback received following the 2014-15 exercise have been used to inform changes to the 2015-16 exercise and aim to: o remove the ambiguities in the guidance to improve consistency in approach and understanding o minimise the burden on NHS providers of the collection o provide additional support and identify sources of information to support the collection process o improve the quality of the data being provided o highlight the importance to data quality of the data submission involving both the education and finance teams  The national guidance document supporting the integrated collection will be released to the NHS at the end of February and the templates shared in March  The reference costs team at the DH will manage the upcoming collection and queries should be directed via the reference costs mailbox

16. Integrated guidance Currently working with colleagues in reference costs to address questions including –Responsibilities for the collection –Inconsistencies in scope / sign-off etc. –Publication of data –Governance –Helpdesk functions These will all be picked up in the guidance should we integrate collection Calculating the costs of E&T, Bristol 03/12/15

17. Summary of main changes The key areas of work being progressed for the guidance are as follows: –Service training splits - increase information available to trusts around expected percentage of time spent in training – as a guide only –Scope of collection - provide further clarification on the definition of a placement –Consistency of cost components – why do the percentage of costs differ so significantly between trusts on overheads and staff teaching costs –Control data - increase awareness around the availability of useful sources of information to inform submission –Validations – a review of the usefulness of the validations and how these are shared with NHS providers Calculating the costs of E&T, Bristol 03/12/15

18. HEE and LETB role

19. Overall Budget (£000) Total is £4.848 Billion

20. HEE - National Contribute to the annual guidance Liaison between local teams and Department of Health Regular meetings with Department of Health Supports education and training workshops Query management HEE is also a user of the data Leads on currency development work

21. HEE - Local Each HEE geography has a representative leading on E&T Provide LDA notification to trusts – activity & £’s Transfer payments to trusts for E&T Receive quarterly reports from trusts to aid reconciliation Provide information to trusts on activity / numbers of students Trust visits made to ensure quality of placements

22. Issues The scope for E&T needs revising to match reference costs E&T collection takes place outside the existing financial system Trusts will need to balance to accounts Staff turnover Constantly reviewing guidance / templates to include new professions (i.e. physicians associates) Trusts will need to think about the approach they take, there is a methodology but this is not mandatory. Timetable for integration Audit of E&T alongside reference costs once moved to integrated collection Data quality Primary Care

23. Role of DH Produce guidance and collection templates Manage cost collection Analyse and publish data from collection Manage feedback Provide a helpdesk function Cost collectionCurrency DesignTariff Development Produce guidance Calculate prices Analyse impact of proposals on providers Manage feedback

24. Timing and structure of the collection window  In response to feedback from NHS providers and other stakeholders, collection window for 2015/16 extended  The collection will end in mid-September, not mid-August, allowing 4 extra weeks for the collection.  Collection window will start in June, at same time as reference costs, so giving NHS Providers flexibility as to when they submit  There will be no formal resubmission window this year, so mid-September is the final opportunity to submit information  The DH will be sharing validation reports specific to individual trusts throughout the collection.  Where the DH have previously shared national level validations, these will not be shared, or where they are these will be based on 2014/15  In a change for 2015/16, the workbooks for E&T will include some trust specific validations, so that those responsible for submission get real time feedback and can consider these prior to upload