1. Trust Board Finance Director’s Update: Month 9 – December 2017
Financial Performance
In month I&E
The Trust’s performance for December was a £5.5m deficit before Sustainability and Transformation Fund (STF), this is £0.7m better than plan.
Year to date I&E
The year to date position is a £26.0m deficit (before STF) which is in line with the plan. The Trust has earned the financial element for the quarter but has not achieved the A&E element for Q1 to Q3. The foregone STF to December is £4.0m.
Additional Funding
The Trust has been allocated £2.4m additional income by NHSI to fund urgent and emergency care expenditure already included within the Trust position (tranche 1 funding). NHSI expect this will result in an improvement on the Trust’s submitted M7 financial forecast.
Following tranche 1 income, the Trust is forecasting to deliver a £31.6m deficit, compared to the financial control total of £34m deficit (before STF).
In addition £1.9m winter funding has been notified by NHSI (tranche 2 funding). It is anticipated that the full year income and expenditure for NUH will total £1.5m between December and March (£0.4m community schemes).
Forecast Outturn I&E
The Trust is forecasting a £12.3m deficit after STF and tranche 1 funding, compared to the control total of £10.7m deficit after STF. This forecast is subject to a number of material risks including impact of delivery of elective activity; FEP delivery risk; and the maintenance of budgetary discipline.
Performance against total agency cap
Year to date, the Trust has spent £13.6m against the cap of £15.3m (£1.7m below the target).
Cash
Closing cash balance at end of December of £14.4m, which is £9.1m higher than November, due to planned loan draw down, Q2 STF for financial performance; and reduced payments over the Christmas week.
The forecast cash position, and affordability of the capital programme, for the remainder of the year is dependent upon achieving the income and expenditure control total forecast.
Capital
In month: Total capital expenditure of £1.5m for December.
Year to date: £13.4m expenditure YTD. Key projects including ICT infrastructure upgrade (£9m) and Linear accelerator replacement (£3m).

2. Statement of Comprehensive Income
Year to Date
Forecast Outturn £m
Plan
Actual
Fav / (Adv)
I&E £'000
Patient Care Income
609.7
623.0
13.3 2%
814.0
836.6
22.6 3%
Non Patient Care Income
17.4
22.0
4.6
26%
23.2
29.1
5.9
25%
Other Operating Income
64.3
63.9
(0.4)
(1%)
85.7
84.5
(1.3)
Total Income
691.3
708.8
17.5
922.9
950.1
27.2
Pay Costs
(433.3)
(444.0)
(10.8)
(2%)
(578.2)
(590.2)
(12.1)
Pay Costs : Agency
(15.3)
(13.6)
1.7
11%
(20.4)
0.0 0%
Non Pay
(232.3)
(246.3)
(14.0)
(6%)
(309.7)
(329.9)
(20.2)
(7%)
Total Operating Costs
(680.9)
(704.0)
(23.1)
(3%)
(908.3)
(940.6)
(32.3)
(4%)
EBITDA
10.5
4.9
(5.6)
(53%)
14.6
9.6
(5.0)
(34%)
Non Operating Costs
(35.2)
(31.3)
3.9
(59.4)
(54.1)
5.3 9%
Adjust Donated Assets / Impairment
0.4
131%
10.8
12.9
2.2
20%
Control Total before STF
(26.0)
(34.0)
(31.6)
2.4 7%
Sustainability and Transformation Fund (STF)
15.1
11.1
(4.0)
(27%)
23.3
19.3
(17%)
Control Total
(10.9)
(14.9)
(37%)
(10.7)
(12.3)
(1.6)
(15%)
Ratios
Agency : Total Pay
3.41%
2.97%
3.34%
EBITDA : Income
1.51%
0.69%
1.58%
1.01%
Net Deficit : Income
(1.57%)
(2.10%)
(1.16%)
(1.30%)
Key •
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortisation
Fav refers to a Favourable variance to plan
(Adv) refers to an Adverse variance to plan
Year to Date: Patient care income, £13.3m favourable to plan: High cost drugs and devices account for £6.9m of the variance and are matched with expenditure in non pay. Higher than planned performance in non-elective (£8.5m favourable), is offset by underperformance in other areas (£1.8m adverse). Other income, £4.2m favourable to plan: £3.4m of this variance is driven by R&I income which is matched with expenditure. Pay costs, £9.0m adverse to plan: £2.1m relates to matched R&I expenditure. The driver of the remainder of the variance is additional pay cost associated with unplanned activity; winter pressures expenditure and vacancies covered by premium pay. Non pay costs, £14.0m adverse to plan: £6.9m relates to high cost drugs and devices. The remainder of the variance is primarily driven by additional activity, including £1.4m PET scans; £1.0m blood usage; and £1.4m Theatres consumables. Non operating costs, £5.6m favourable to plan: The Trust has accounted for changes made to asset lives in the revaluation at March Efficiency savings £0.3m, adverse to plan: The Trust has delivered financial efficiency savings of £28.6m year to date, compared to a plan of £28.8m. Forecast: Following tranche 1 funding the Trust is forecast a £31.6 deficit (before STF) but delivering the pre-STF control total is high risk and requires specific management actions and no contingent events.

3. Statement of Financial Position: Working Capital
Aged Debt (Sales Ledger)
Sales ledger debt increased by £2.2m to £22.7m, largely due to invoiced charges raised to NHS England for; contract performance (£0.6m), cancer and Hepatitis C (£0.6m), Quarter 4 AHSN contract (£0.6m) and University Hospitals Leicester service charges (£0.5m).
The over 90 day debt position increased by £1.3m, due to:
the aged debt profile of delayed CQUIN related to the system risk reserve (which has now been resolved);
procedures of limited clinical value (PLCV);
and maternity pathway charges.
Debtor and Creditor Days Debtor days reduced by 1 day to 29 days, largely resulting from payment of quarter 2 STF Creditor days remained unchanged at 24 days. Liquidity Days The Trust’s liquidity position deteriorated by 0.3 days to minus 13.6 days, as a result of December trading . BPPC Trust performance was maintained at 94% and 92% against the 95% performance target for value and volume of invoices processed respectively in the year to December.

4. Statement of Financial Position
The material in month movements in the Statement of Financial Position are shown below:
Non Current Assets
There was a net reduction in the value of property, plant and equipment and intangible assets of £0.7m primarily driven by in month additions of £1.5m, offset by depreciation charges of £2.2m.
Working capital
Trade and Other receivables – the reduction in receivables of £3.8m was mainly driven by the receipt of quarter 2 STF funding (£3.3m).
Accrued Expenditure – The increase of £5.7m resulted from reduced payments transacted and processed in December, due to the Christmas period.
Cash
Cash balances increased by £9.1m due to the planned loan draw down, Q2 STF for financial performance and the Trust also made reduced payments during the Christmas week.
Non Current Liabilities
Borrowings – increased by £2.7m due to a additional new revenue support loan drawn in December.
Reserves
SOFP Reserves - The movement in the I&E reserve reflects the December I&E trading surplus of £3.8m (including STF).