1. Jonathan Wilson Director of Finance
Homerton University Hospital NHS Foundation Trust 2016/17 Financial Highlights
Jonathan Wilson
Director of Finance

2. 2016/17 National NHS Financial Context
NHS hospitals reported deficits of £791million for 2016/17 - £211million worse than planned;
228 out of 238 NHS hospitals signed up to control totals advised by NHS Improvement. The Trust’s control total for 2016/17 was a surplus of £1.4 million;
Savings of £3.1 billion were delivered nationally equating to an expenditure reduction of 3.7% - nearly double the 10 year healthcare average of 2%;
Of the savings delivered, some £798 million was from non-recurrent schemes, thus increasing financial pressure for future years;
The Trust delivered savings of £7.3 million against a target of £10 million for 2016/17 – equating to 2.4%.

3. Outlook for 2017/18
2017/18 is extremely challenging – the planned deficit across NHS hospitals has been set at £496 million – an improvement of £295 million against the prior year;
To deliver this sum even greater financial savings are required in 2017/18, with £3.7 billion (4.3%) of efficiencies required – a £600 million increase on the prior year;
The Trust savings target for 2017/18 is £13.1 million, a £5.8 million increase compared to 2016/17, equating to 4.7%;
This level of saving is required to achieve an increased surplus target of £6.4 million;
The Trust is currently on plan – however this remains a challenging target.

4. 2016/17 Annual Accounts Headlines
The Trust’s reported financial position in the 2016/17 Annual Accounts was a deficit of £2.5 million, however after excluding the impact of asset impairments the underlying position was a surplus of £3.1million;
This position represents an improvement of £8.6 million on the previous financial year and a £1.7 million improvement on the financial plan for 2016/17;
The primary driver behind the over achievement against plan was the receipt of Sustainability and Transformation Funding (STF) in excess of planned levels for 2016/17 due to the Trust’s strong operational and financial performance in-year. STF was awarded to hospitals for achievement against waiting time and financial targets by NHS Improvement;
Asset impairments in 2016/17 related to the annual valuation of the Trust’s land and buildings, which saw an £5.6 million decrease in value, and a further impairment charge of £2.2 million in relation to the aborted Pathology development.

5. Annual Accounts – 2016/17 Reported Position
Following revaluation, the value of the Trust’s estate reduced resulting in an impairment in year
The Trust’s reported position is a £3.1m surplus excluding impairments.

6. Annual Accounts – Highlights of 2016/17
Income – Turnover increased by £24 million (8%) to £308 million in 2016/17, primarily due to activity levels being above plan across the year;
STF funding contributed £8 million to total income in 2016/17, £1.9 million above the planned level of £6.1 million;
The Trust closed the year with a cash position of £20 million, an increase of £11.4 million compared to 2015/16;
Capital expenditure for the year 2016/17 totalled £4.3 million, in line with the control total set by NHS Improvement. The key focus of the capital plan for the year was the replacement of life expired and critical medical equipment, including the installation of a new CT scanner. The full breakdown by area is shown below:-