1. Trust Board Finance Director’s Update: Month 6 – September 2017
Financial Performance
In month
The Trust’s performance for September was a £1.7m deficit before Sustainability and Transformation Fund (STF), this is £0.2m better than plan.
Year to date
Deficit of £19.4m before STF, in line with plan.
The Trust meets the criterion for the financial element of STF in Q2, earning £2.4m for Q1 and £3.3m for Q2, £5.7m in total.
The Trust met the streaming criterion for Q1, earning £0.5m and foregoing £0.5m related to A&E performance.
NHSI has amended the eligibility criteria related to A&E for Q2, so this is now only received if both the streaming and performance elements are achieved.
The Trust has not met the criterion for the Q2 A&E performance element of STF and therefore foregoes £1.4m in Q2.
For the six months to 30 September :STF of £6.2m earned, £1.9m foregone.
Deficit after STF of £13.1m, £1.9m adverse to plan.
Forecast Outturn
The Trust continues to forecast to meet the control total before STF, but this forecast is subject to a number of material risks including delivery of elective activity; FEP delivery risk; CQUIN; Stroke Rehabilitation contract issue; and the management of budgeted costs.
Performance against total agency cap
Year to date: the Trust has spent £9.3m against the cap of £10.2m (£0.9m below the target).
Performance against medical and dental agency cap
Year to date: the Trust has spent £2.5m against the cap of £2.6m (£0.1m below the target).
Efficiency savings £0.1m, adverse to plan: For the first half of the year delivery of savings was £17.0m, compared to a plan of £17.1m.
Cash
Closing cash balance at September of £10.4m, which is £8.4m higher than forecast due to early receipt of STF funding (£3m) and the timing of the capital programme.
Loan requirement for November: FIC has recommended to Trust Board the approval of the net loan drawdown for November of £687k.
Capital
In month: Total capital expenditure of £1.8m for September.
Year to date: The Trust has invested £7.6m to date in new capital schemes. There is a significant difference in the in-year profile, driven by the delay in approval of the ICT infrastructure project (£9m) and the linear accelerator (£3m). Both of these schemes are expected to recover prior to the end of the financial year.
Review of priorities for the remainder of the year has been completed.

2. Statement of Comprehensive Income
Year to Date: Patient care income, £8.6m favourable to plan: High cost drugs and devices account for £5.1m of the variance and are matched with expenditure in non pay. Strong performance in non-elective £6.4m favourable, is offset by underperformance in planned care (£1.9m) adverse. Other income, £2.8m favourable to plan: £2.1m of this variance is driven by R&I income which is matched with expenditure. Pay costs, £4.6m adverse to plan: £1.3m relates to matched R&I expenditure. The driver of the remainder of the variance is additional pay cost associated with unplanned activity; and vacancies covered by premium pay. Non pay costs, £8.5m adverse to plan: £5.1m relates to high cost drugs and devices. The remainder of the variance is primarily driven by additional activity, including additional PET scans of £1m. Non operating costs, £0.5m favourable to plan: as a result of lower PDC dividend than expected. Efficiency savings £0.1m, adverse to plan: For the first half of the year delivery of savings was £17.0m, compared to a plan of £17.1m. Risk: The key financial risks to delivery of the plan remain under delivery of FEP; non-achievement of CQUIN; delivery of forecast activity levels; and under recovery of Stroke Rehabilitation income.
Year to Date
Forecast Outturn £m
Plan
Actual
Fav / (Adv)
I&E £m
Patient Care Income
404.7
413.3
8.6 2%
813.8
836.9
23.1 3%
Non Patient Care Income
11.6
14.8
3.2
28%
23.2
28.4
5.2
22%
Other Operating Income
42.8
42.4
(0.4)
(1%)
85.7
83.8
(1.9)
(2%)
Total Income
459.0
470.4
11.4
922.7
949.1
26.4
Pay Costs
(289.2)
(294.6)
(5.5)
(578.0)
(590.5)
(12.5)
Pay Costs : Agency
(10.2)
(9.3)
0.9
(9%)
(20.4)
0.0
(0%)
Non Pay
(154.8)
(163.3)
(8.5) 5%
(309.7)
(327.1)
(17.4) 6%
Total Operating Costs
(454.1)
(467.2)
(13.1)
(908.1)
(937.9)
(29.8)
EBITDA
4.9
(1.7)
(34%)
14.6
11.1
(3.5)
(24%)
Non Operating Costs
(23.4)
(23.0)
0.5
(59.4)
(58.4)
1.0
Adjustments for Donated Assets
(0.9)
0.4
1.3
(147%)
10.8
13.3
2.5
23%
Control Total before STF
(19.4)
0.1
(34.0)
Sustainability and Transformation Fund (STF)
8.2
6.2
23.3
21.4
(8%)
Control Total
(11.3)
17%
(10.7)
(12.6)
18%
Ratios
Agency : Total Pay
3.41%
3.05%
3.34%
EBITDA : Income
1.07%
0.69%
1.58%
1.17%
Net Deficit : Income
(2.45%)
(2.79%)
(1.16%)
(1.33%)

3. Statement of financial position: Working Capital
Aged Debt (Sales Ledger)
Sales ledger debt increased by £6.8m to £24.2m, due to the timing of payments for contract over performance.
Over 90 day debts increased by £0.3m to £5.3m. The key themes are:
Debt with UHL stood at £1.2m at 30 September Discussions have taken place with agreement to pay £0.9m of this sum.
Overseas debt stands at £1m. Enhanced processes for debt collection have been enacted. The Trust is also working with the DH on an ID and Eligibility pilot project for Overseas Visitors. 75% of the value of all overseas debt is underwritten by commissioners.
Commissioning debt - £0.8m relating to Vanguard funding (£0.3m-paid in October), NCAs (£0.4m) and GU medicine charges (£0.1m).
Debtor/Creditor Days
Target
Mar 2016
Mar 2017
Qtr 1
Aug 2017
Sep 17
Debtor Days 30 22 23 26 28 29
Creditor Days 14 21
BPPC (Cumulative)
Value
95%
94%
93%
96%
Volume
92%
Aged Debt
£000's
Current less than 30 Days
12,932
16,592
5,369
7,520
12,037
> 30 Days < 60 Days
2,556
2,645
3,181
3,732
5,500
>60 Days < 90 Days
1,020
746
1,589
1,282
1,445
Over 90 Days
<5%
3,427
3,001
5,807
4,915
5,256
Total
19,935
22,984
15,945
17,449
24,239
% Over 90 Days
17%
13%
36%
28%
22%
Liquidity
Liquidity Days
> - 5days
(18.4)
(12.5)
(16.0)
(17.4)
(14.8)
Debtor and Creditor Days
Debtor days increased by 1 day to 29 days, mainly as a result of the increase in non NHS receivables; and creditor days remained unchanged at 23 days.
Liquidity Days
The Trust’s liquidity position improved by 2.6 days to minus 14.8 days, as a result of cash received from the September loan draw down of £7.9m.
BPPC
The Trust achieved 94% against the 95% performance target for value and achieved 92% for the volume of invoices processed in the year to September.

4. Statement of Financial Position
The material in month movements in the Statement of Financial Position are shown below:
Non Current Assets: The value of property, plant and equipment and intangible assets reduced by £1.1m, as September capital additions of £1.5m were exceeded by depreciation and amortisation costs of £2.6m.
Working capital
Inventories: Increased by £0.6m due to seasonal increase in drugs (£0.4m), an increase in cardiac stock (£0.4m) offset by a fall in blood stocks (£0.2m).
Trade and Other Receivables: Increased by £1.2m mainly as a result of NHS England over performance for June (£6.0m) offset by cash received for Q1 STF (£3.0m), MRET (£0.7m) from NHS England and the quarterly HPSN VAT receipt (£1.0m).
Trade and Other Payables: Reduced by £6.2m mainly due to the half-yearly PDC Dividend payment (£5.6m) and a fall in accounts payable creditors (£1.0m), which together with the reduction in accrued expenditure (£0.6m), mirrors the higher than forecast revenue cash expenditure in month.
Deferred income: Increased by £3.6m mainly as a result of the increase in SLA income advanced by the CCG (£9.1m in October compared with £5.1m in September.
Cash: Cash balances increased by £1.9m.
Non Current Liabilities Borrowings: Increased by £7.2m mainly due to a new revenue support loan taken (£7.9m) offset by the half-yearly capital loan repayments (£0.6m).
Taxpayers Equity: The movement in the Income and reserve reflects the September I&E deficit of £1.2m £m
31 Mar 2017
31 Aug 2017
30 Sep 2017
Month on Month Variance
YTD Year Variance
NON CURRENT ASSETS:
Intangible assets
7.9
6.8
6.6
(0.2)
(1.3)
Property Plant and Equipment
462.5
456.7
455.9
(0.8)
(6.6)
Other non current receivables
1.3
1.2
(0.0)
(0.1)
TOTAL NON CURRENT ASSETS
471.7
464.8
463.7
(1.1)
(8.0)
CURRENT ASSETS
Inventories
20.8
21.2
21.8
0.6
1.0
Trade & Other Receivables
57.8
72.5
73.7
15.9
Cash and cash equivalents
13.3
8.5
10.4
1.9
(2.9)
TOTAL CURRENT ASSETS
91.9
102.2
106.0
3.8
14.1
CURRENT LIABILITIES
Trade & Other Payables
(40.6)
(49.0)
(42.8)
6.2
(2.2)
Borrowings
(1.9)
Accruals
(42.0)
(49.4)
(48.7)
(6.7)
Deferred income
(14.6)
(21.2)
(24.8)
(3.6)
(10.2)
Provisions <1 year
(3.0)
(3.1)
0.1
TOTAL CURRENT LIABILITIES:
(102.1)
(124.5)
(121.2)
3.3
(19.1)
NET CURRENT ASSETS/(LIABILITIES)
(22.3)
(15.2)
7.1
(5.0)
TOTAL ASSETS LESS CURRENT LIABILITIES
461.5
442.5
448.5
6.0
(13.0)
NON CURRENT LIABILITIES:
(79.2)
(72.3)
(79.5)
(7.2)
(0.4)
Provision for Liabilities and Charges
(3.2)
0.0
TOTAL NON CURRENT LIABILITIES:
(82.4)
(75.5)
(82.8)
TOTAL ASSETS EMPLOYED
379.1
367.0
365.8
(1.2)
(13.3)
Public dividend capital
(411.1)
(411.2)
Revaluation reserve
(59.0)
(58.3)
0.7
Income and expenditure reserve
91.0
102.6
103.8
12.8
TOTAL TAXPAYERS EQUITY
(379.1)
(367.0)
(365.8)