Annual Report and Accounts - Nottingham University Hospitals NHS ... [PDF]

Annual Report and Accounts 2014/15

Contents Directors’ report

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Strategic review: 08 • About NUH 08 • Vision, values and strategy 08 • Review of the year 14/15 15 Our workforce: 20 • Rewarding and recognising our staff 23 Equality and diversity

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Our commitment to sustainability

26

Research and innovation

27

Emergency planning

28

Nottingham Hospitals Charity

30

Patient focus

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Performance: 35 • Progress on finance 35 • Progress on waiting times 36 • Improving safety & quality 39 Governance: 40 • Accountability 40 • Trust information & Board committees 40 Accounts and finances: 47 • Annual accounts 14-15 68 Appendix 1 – Sustainability Report 14/15

148

Appendix 2 – Annual Governance Statement 14/15

152

Glossary of terms

If you have any questions about this Report or would like to receive it in another language or format please contact 0115 9249924 x70411.

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166

Directors’ report Welcome to our 14/15 annual report. This report complements our Quality Account and summarises some of our main achievements and challenges over the last year. It covers our finances and other important measures of our overall performance. Our Quality Account provides a more in-depth review of how we are improving quality, safety and patient experience at our hospitals yearon-year, including how we do in each key area compared to our peer hospitals.

Operational challenges We face the paradox of being among the strongest performers in the country for the national ‘referral to treatment’ waiting times target for planned operations, yet we have not been able to deliver the national emergency access standard. Whilst we must recognise the exceptional achievements with ‘18 weeks’ and the 27% reduction of ‘on-the-day’ cancelled operations, it is deeply disappointing that we underachieved against the national standard for the timely care of emergency patients again this year. Our challenge and determination going into 15/16 is that we ensure we are organised as best we can within NUH and work ever more closely with the wider health and social care community, with the aim of simultaneously achieving both of these standards.

The digital hospital We took considerable steps in 14/15 towards our goal of becoming a paperless hospital. One of our most significant achievements was the roll-out of electronic devices to doctors and nurses across each of our inpatient wards within 12 months. This is enabling staff to better communicate the needs of patients, record observations and do handovers – all electronically. The better use of technology is further improving patient safety. New touchscreen kiosks have arrived in outpatient clinics to speed up the check-in process and to reduce waits for patients. We have expanded text message reminders to minimise the number of missed appointments.

Our fragile finances We started the year with an underlying deficit of £19.1m, largely as a result of the increased demand on our emergency services and the impact of the emergency tariff which means we lose in excess of £1.5m income every month. We were very fortunate to receive £11m external support from the Trust Development Authority and a further £4m later in the year from our Commissioners to help close the gap. A contribution of £4m from contingency reserves held by the Trust has resulted in the Trust achieving a break-even year-end position for a further year.

As a result of the hard work of very many staff, for the third successive year we have achieved savings of considerable magnitude – in excess of £40m. Our financial challenge for 15/16 will be tougher still with a forecast year deficit of £49.2m.

Celebrating three years of our Major Trauma Centre We celebrated the third anniversary of QMC’s Major Trauma Centre, which now serves the entire region. In this time, our teams have responded to over 4,000 major trauma calls and saved the lives of 172 patients who were not expected to survive. Expanded critical care facilities opened at QMC over the last year for our major trauma patients.

Superb new facilities As work on our longer-term strategy for QMC and City Hospitals progresses, we continue to spend the limited capital funds we do have very wisely and increasingly welcome the input from our hospital charity and other charities to help NUH build new facilities for patients. In the last year we have opened a new Cystic Fibrosis Unit at City Hospital and firstclass wards in QMC’s Nottingham Children’s Hospital for our young cancer and neurosciences patients.


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The work has been funded by NUH, the Teenage Cancer Trust and a £1.1m donation from our Nottingham Hospitals Charity. Thank you to each of these charities for their generous donations and to the people of Nottingham and beyond for supporting these fundraising appeals.

Looking ahead to 15/16 We have further strengthened how we work with patients and staff to continually improve our services. Shared Governance has taken a big step forward in the last year among nursing and midwifery colleagues, with some 23 Unit Practice Councils, each led by frontline staff, now in operation across the Trust. Last summer we held a series of engagement events (known as the ‘events in the tents’) to seek the views of our patients, volunteers, members, partners and staff on what we do well and check that we are concentrating on the right areas. This has informed our future focus. And ‘Better for You,’ our established Trust-

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wide transformation programme, continues to go from strength to strength this year, supporting improvements in Outpatients and the emergency pathway, to give just a few examples. For the fourth year running, staff voted NUH one of the best trusts in which to work. Our staff survey results put NUH in the top 25% for: job satisfaction, motivation at work, feeling able to contribute to improvements and feeling satisfied with the quality of patient care, which is testament to the wide-ranging and proactive communications and engagement work we do throughout the year. In 2015, nine years after NUH was formed, we will complete a review of our management structures and processes to ensure we are set up in the best way to deliver our vision of being the best for patients. Our staff have told us very clearly that they want faster decision-making that is closer to patients and the frontline. We will also ensure our structures are set up in a way that improves our operational performance and maximises our efficiency.

Like many providers across the country, our finances remain very precarious. Our savings are more challenging to deliver year-on-year and there is little sign in the near future of any significant change in the levels of emergency activity (attendances and admissions) we have seen in recent years. We have challenges and difficult decisions to make as we adapt to a changing external environment. Yet, we have very much to look forward to, which we mustn’t lose sight of as we look to the coming year and beyond. This includes our exciting plans to build a helipad at QMC to support our major trauma centre and increase car parking capacity at QMC and the opening of our new elective orthopaedic theatres at City Hospital. With the testing phase of the tram development in full swing, we are one step closer to the tram service operating at QMC. This is welcome news for our patients, visitors and staff. The tram will fundamentally change how people access our hospitals and make travelling to

“Our relationship with NUH, its clinicians and Executive Team has been strengthened during the last year through joint working and developing a ‘whole health and care system’ approach. “Acknowledging that we all have a part to play in providing high quality, safe, efficient and effective services for patients and service-users, we have worked together in managing urgent care demand against a challenging backdrop of increased pressure on local services. “We continue to enjoy a good working relationship with the NUH team based on openness, integrity and accountability to each other and the patient population we serve. We would like to congratulate NUH on all of its achievements over the last year and very much look forward to continued productive working with the Trust in 2016.” Dawn Smith, Chief Officer at NHS Nottingham City Clinical Commissioning Group

QMC faster and easier for many due to the line’s links to the city centre and park and ride facilities. The new entrance will not be in place for day one of the tram’s arrival at QMC this coming summer, however, we have worked closely with patients to strengthen wayfinding to help those who arrive by tram to find their way around. In the meantime, we are finalising our plan to develop a new entrance at QMC that will provide direct access into the hospital from the tram platform and main patient and visitor car parks. We hope to have a dedicated tram entrance in place within 18 months. We are excited knowing that, when completed, Nottingham will become the first hospital in England to offer such public access direct from a tram stop into a major hospital.

We are very fortunate to have exceptional staff at NUH. We thank them for all they do and the dedication and commitment they show throughout the year – very often in the most pressured and challenging circumstances. We appreciate that this year, arguably more than any other, has been tough, not least because of relentless pressures on our emergency services and the wider health system. Yet, our staff have worked tirelessly to do the best possible job for those we serve.

We will welcome the Care Quality Commission back to NUH to inspect our services in Autumn 2015, after which we will receive a rating. This will indicate to our patients, partners, members and staff where we are on our journey of continuous improvement.

We are immensely grateful to our members, partners, and those whom we work closely with throughout the year for the part they play. We consider each to be part of team NUH and team Nottinghamshire – and a central part in ensuring we don’t waiver from our determination to do the very best job for those we serve.

We also greatly appreciate the work of our dedicated team of volunteers who work across QMC, City Hospital and Ropewalk House. They each make an important and valued contribution to the experience of our patients, their families and carers.

Peter Homa Chief Executive

Louise Scull Chair Statement: All NUH Executive Directors can confirm that they have taken all appropriate steps to ensure there is no relevant audit information of which the NHS body’s auditors are unaware.


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Our Year

in numbers 2014-15

£42.5M

financial savings efficiency

2,100

2,000

Facebook likes

more Twitter followers (now 7,700)

108,206 emergency operations

£4M

£3M

£4M

raised by Nottingham hospitals charity

£2M

£

Invested

.n3ewM 4 nurses on

75

We see 500 new cancer patients each week

kidney transplants

1,858

major trauma patients 6

One of the largest cancer services in the country

£1M

7,290

complimen received

m

0

nts

19%

FEWER FALLS

27% FEWER

‘on the day’

21% ful m r a h s les pared m o c s fall 1/12 to 201

cancelled operations

52% LESS

Grade 3 pressure sores. No grade 4 (the most severe) for over 24 months

2M oard switchb calls

4,500 m obile devices used by staff to record e-obs and handovers

700,000 e-ob s recorded on 20,000 pati ents

187,892 ED attendances

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extra ED cubicles

Achieved the ‘on cancelled ope the day’ ratio standard for 1 ns consecutive m 5 onths Annual Report and Accounts 2014/15

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Strategic review

About NUH: Who we are We are one of the biggest employers in the region, with around 14,000 people working across Queen’s Medical Centre, Nottingham City Hospital and Ropewalk House and in the community. Our portfolio of specialist services includes major trauma, cancer, stroke, renal, neurosurgery, heart and spines. QMC is home to the Nottingham Children’s Hospital, where 40,000 young patients from Nottinghamshire and beyond are cared for annually.

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We are at the forefront of many world-leading research programmes and new surgical procedures. In partnership with the University of Nottingham, we operate two National Institute for Health Research (NIHR) Biomedical Research Units - in hearing and digestive diseases. NUH hosts the East Midlands Academic Health Science Network.

Our values Our promise to patients is: ‘we are here for you.’ Our commitment is that we will do our best to ensure patients feel cared for, safe and confident in their treatment.

Our vision In 2014, following extensive consultation with our patients, members, partners and staff, we launched a new vison. Our vision and determination is to work together to do the best for patients. We will focus our efforts in three key areas: team work, continuous improvement and innovation and proud people, in our quest to be the best.

How we did in 14/15 against our main objectives:

ENHANCE PATIENT EXPERIENCE AND SAFETY OBJECTIVE 1

ACTION

Attitude: embed our values and behaviours

Complete a values-based audit on how well we live our values.

NUH Academy: 466 clinical leaders (Vs (target of 250) complete relevant programmes with the Academy with a focus on compassionate care. 92% of patients have responded ‘yes’ to the question: “Staff always friendly, caring and polite.”

Work underway to bring improvements includes multidisciplinary pre-ward round meetings on our surgical wards to discuss patients’ needs and status ahead of the ward rounds to aid better communication and listening to patients.

We have rolled-out the staff ‘friends and family’ (FFT) test and expanded the use of the test to outpatient and day case areas. Our target was to improve Vs 2013. NUH’s overall staff engagement score (considered a key indicator in measuring staff satisfaction and motivation) was 3.83 Vs national average of 3.74 in 2014. NUH remains in the best 20% of acute trusts. Four staff FFTs were completed in 14/15.

In April 2014, we launched a new e-learning module for values and behaviours. Staff yet to be trained will be required to complete this module. This will be monitored through the Better for You Steering Group.

Improve patient involvement. We achieved our target of more than 90% of patients responding ‘yes’ to the question: “were you involved as much as you wanted to be?” We achieved >43% response rate for FFT.

We narrowly missed our >25% target for the ED FFT response rate (14/15 performance 23.7%).

75% of wards use the ‘About me’ documentation. We achieved this target.

We did not achieve our target of improving the experience of carers, as measured by the response to the survey question: “How likely are you to recommend NUH?” The score for dementia carers was 55.9 (target: >66.2) and for other carers 61.1 (Vs target was >61.6).

We successfully rolled-out the electronic nursing handover, e-observations and Early Warning Score escalation to all wards.

Behaviour: better communication by staff and patients

HOW WE DID HOW WE WILL IMPROVE IN 15/16

We will improve response rates by making the FFT more inclusive to all patients.

Further actions to improve the response rate to this question incorporated into Directorates’ Patient & Public Involvement 15/16 work plans.


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ENHANCE PATIENT EXPERIENCE AND SAFETY

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OBJECTIVE 1

ACTION


Combat harms

Our new approach to mandatory training increased attendance over the last year. We still, however, fell slightly short of our target (88% staff attended against our 90% target).

Developed a tool to track harm in medicines and the impact of safety actions.

In April 15 a new version of the Medicines Safety Thermometer will be implemented, which aims to further reduce harm associated with medicines through early medicines reconciliation.

We have completed an omitted doses audit.

The outputs of the audit will inform our medicines safety priorities for 15/16.

Further reduce inpatient falls. We had 19% fewer falls and 21% fewer harmful falls (vs our 15% target for each).

Fewer pressure ulcers. We have achieved our targets with 52% fewer grade three pressure ulcers reported compared to 13/14. We have not had a grade four (the most severe) pressure ulcer for over two years.

Recognise and rescue: we have trained medical and nursing staff in the use of Early Warning Score (EWS) tools in our acute admission areas.

Recognise and rescue: staff supported to better recognise patients whose condition deteriorates and escalate.

We had fewer delays in the management of high risk emergency surgical patients, resulting in a reduction in hospital mortality.

ENHANCE PATIENT EXPERIENCE AND SAFETY OBJECTIVE 1

ACTION

Decrease distress

We developed a business case to expand our dementia wards but did not progress due to insufficient funds available for implementation.

Sharing best practice from our dementia ward with other healthcare of the elderly medicine wards.

We fell short of our target to expand dementia screening to all emergency admissions over age 75 (we reached 88.8% against our 90% target), and to elective admissions, although much progress has been made.

Targeted improvement work underway.

We made some progress reducing noise from staff but insufficient progress reducing noise from other patients.

Further actions and plans have been incorporated into Directorate PPI work plans for 15/16. A Trust-wide communications campaign will launch early 15/16.

We achieved our target of reducing smoking outside our hospitals and improved responsiveness when areas are not clean/cluttered.

Phase two of our no smoking campaign, led by patients, continues in 15/16.

Implement the improvements recommended in the 2014 Patient-Led Assessment of the Care Environment (PLACE) Audits. This was achieved.

We have launched the new ’5 SAFER actions for flow’ to reduce discharge delays due to medications and transport.

Redesign outpatient services, and roll-out best practice across all outpatient services, resulting in the delivery of £650K savings. We achieved this target.

Reduce readmissions from 13/14 baseline of 8.7% to 8.1% by the end of June 15. We remain on track to achieve this target.

Environmental improvements

Fewer waits



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ENHANCE PATIENT EXPERIENCE AND SAFETY

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OBJECTIVE 1

ACTION


Improve the quality of care provided for patients with cancer

We achieved five of the eight national standards (see page 38). Achieve cancer access standards. Capacity plans and recruitment to clinical posts completed.

Partially achieved

Ensure the extra capacity is in place by year-end, with patients fully informed of treatments and outcomes, and outstanding recommendation of peer review reports implemented. The acute oncology service team has significantly improved patient experience. There have been fewer oncology admissions/outliers and there is now a single point of contact for all treatment and side effect queries.

The extended chemotherapy suite will be completed by June 15.

DEVELOP NEW INTEGRATED MODELS OF CARE IN PARTNERSHIP WITH OTHER ORGANISATIONS OBJECTIVE 2

ACTION


Redesign services to enable more care in the community

Senior decision-makers for all nonelective admissions resulting in a 5% reduction in emergency admissions compared with 13/14. From November 2014, a telephone call from the responsible GP to a Consultant was required for all potential Acute Medicine admissions. This has reduced medical admissions to NUH by more than 5%.

To identify patients where other providers will provide the services needed to enable transfer of care: • 65% of ‘supported transfers of care’ recorded electronically as ‘medically safe for transfer’ • 90% of transfers of care recorded as medically safe timed from identification to time of leaving We have achieved these targets (>70% and 100% respectively).

Better use of technology for patient consultations and follow-ups and more patient consultations using technology to reduce hospital appointments via phone clinics etc. We achieved this target.

Review and refresh specialty level pathways which support primary care to meet the needs of patients, resulting in 5% reduction of inappropriate referrals to the Acute Medicine Receiving Unit at QMC.


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OBJECTIVE 3

ACTION

Deliver sustainable financial plan including meeting financial efficiency objectives

Reduce our reference costs by 1% by the end of 14/15.

We will continue to improve our reference costs through our financial efficiency programme in 15/16.

Improve theatre efficiency. Although performance has improved, we did not meet the targets of 85% for in-session (76.9%), and 95% for session utilisation (94.3%)

The next phase of the theatre productivity improvement will focus on in-session utilisation through: 1. Pre-operative assessment development - aims to reduce clinical cancelled operations. 2. Theatre scheduling model rollout to more accurately schedule operating lists to utilise more of the available theatre time.

OBJECTIVE 4

ACTION

Implement key service developments

A new children’s cancer ward (QMC) was completed in February 15.

We successfully relocated and developed our emergency gynaecology ward at QMC in November 14.

We increased critical care capacity at QMC in 2014.

Our new elective orthopaedic theatres at City Hospital opened to the first patients in May 15.

Replacement and upgrading of equipment. We replaced four CT scanners. The Angio Room and Linear Accelerator will be operational by May 2015. The Cath Lab business case has been approved and works will be completed in 15/16.

Our objectives for 15/16 include: • Further enhancing patient experience and safety (see our Quality Account for our priorities) • Developing new integrated models of care in partnership with other organisations, including: - Ongoing participation in the South Nottinghamshire transformation programme with partners to redesign service pathways and enable more care in the community

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• Improving efficiency and effectiveness: - Delivering a £44m financial efficiency programme - Developing a financial recovery plan with system partners to tackle the Trust’s significant year-end forecast deficit position (see page 35) - Further improve theatre productivity

• Implementing key service developments, including: - New MRI scanners at QMC and MRI refurbishment at City - Progressing the business case for the new multi-storey car park and helipad at QMC - Development of a decant ward facility at QMC Our full and detailed 15/16 Annual Plan is available on our website at www.nuh.nhs.uk.

Review of the Year 14/15 It has been another successful year for NUH. Below is a snapshot of some of the highlights.

APRIL 2014: CF centre opens to first patients Our new £6.6m Wolfson Cystic Fibrosis centre opened at City Hospital and has cared for over 230 patients in the first year. This excellent facility, jointly funded by the Nottingham Hospitals Charity, is a ‘home in hospital,’ where patients can receive all the treatment they need in one place, in a comfortable and home-like environment during the long periods of time they have to spend in hospital.

MAY 2014: Nurse of the Year winner named on tram We teamed up with the Nottingham Post and Tramlink for the second people’s Nurse and Midwife of the Year Awards to recognise the very best of NUH, as judged by the people of Nottingham. The overall winner, Julie Poulter, was chosen to have one of the new trams named after her for a year.

Tramlink Nottingham has worked to forge a strong and effective partnership with the Trust. The dedicated QMC tram stop will create a significant new access point to the campus for patients, visitors and staff, and work is continuing to ensure that appropriate wayfinding information is available when services launch in the middle of 2015. “We have developed a special information base near the main entrance reception area and Tramlink will be engaging with staff to encourage them to use the tram network’s free park and ride facilities to travel to and from work. “The organisation was proud to support the 2014 Nurse of the Year Award and is delighted to be continuing its sponsorship of the Award in 2015.” Steve Lowe, Chief Executive of Tramlink


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SUMMER 2014: Celebrating 25 years of cochlear implants

SUMMER 2014: NUH among first in England to ‘sign up to safety’

We celebrated this major milestone in cochlear implantation - a life changing treatment that has helped severe to profoundly deaf patients all over the UK improve their hearing.

We were one of the first 12 Trusts to support NHS England’s ‘Sign up to safety’ campaign which emphasises the importance of listening to patients, carers and staff, and learning when things go wrong, in order to improve patient safety. This campaign will be a central part of our patient safety programme in 15/16. Please see our Quality Account for more details.

Professor Gerry O’Donoghue, Consultant Ear, Nose and Throat Surgeon, pioneered cochlear implantation for children in the UK at NUH. Since the programme was set up in 1989 over 1,600 cochlear implant operations have been provided.

SUMMER 2014: E-Obs roll-out underway & kiosks arrive in outpatients for patient check-ins In the last 12 months we have rolledout electronic devices to doctors and nurses across each of our inpatient wards to enable staff to better communicate the needs of patients, record observations and do handovers. NUH is the first Trust in the country to introduce a single electronic system for this purpose. Another major step forward in the better use of technology in 2014 was the introduction of self check-in kiosks in our outpatient clinics to reduce waiting times when patients attend for appointments.

SEPTEMBER 2014: New vision for the future launched We held a series of engagement events last summer to ask our patients, members, volunteers, partners and staff their views on what we do well and where we need to focus in the future. We received 5,000 comments, 15,000 postcards and 190,000 words of feedback. These events helped to develop our new vision for the future of working together to do the best for patients.

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DECEMBER 2014: Key role in cancer research project NUH partnered with University Hospitals of Leicester and Cambridge University to become one of the first eleven NHS Genomic Medicine Centres (GMC), in a major national initiative (the 100,000 Genome Project) that aims to transform diagnosis and treatment for patients with cancer and rare diseases. NUH will contribute almost 5,000 genomes to the project which should enable the development of new and better predictive and diagnostic tests for diseases, and allow drugs and other treatments to be tailored precisely to the individual patient.

JANUARY 2015: Planning application submitted for new multi-storey car park and helipad We submitted our planning application for these new facilities at QMC. The onsite helipad will be located on the rooftop of the new car park, and will support our major trauma centre. It will reduce journey times from the helicopter to our Emergency Department from 20 minutes to less than five minutes. The new 650-space car park will bring much-needed additional parking capacity to QMC. Due to open in 2016, the car park will add a further 100 spaces to those we have presently for patients and visitors. The planning application was approved in March 2015.

MARCH 2015: First tram tests at QMC The first tests started at QMC as the countdown to the opening of the new line continued. The tram will improve access to QMC for everyone. We are finalising our plan to develop a new south entrance that will provide direct access into the hospital from the tram platform and main patient and visitor car parks and hope this will open in the next 18 months. When completed, Nottingham will become the first hospital in England to offer public access direct from a tram stop into a major hospital.


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“We’re proud to work with NUH. In our experience, it’s a very professional, well-run organisation. Although Nottingham’s hospitals undoubtedly suffer the same problems as those elsewhere in the country, NUH seems to have created an unusually positive culture among its staff. This is a culture that shines through in much of the tremendous work that is done there. “Like most local newspapers, we regularly carry headline stories about the difficulties faced by hospital patients. In Nottingham, they include stories about the lack of car parking and the increase in A&E waiting times. But we are also able to publish several articles that indicate the extent to which local people are proud of their local NHS. These include detailed pieces about nurses, doctors and other hospital staff who have performed great deeds, over and above their normal duties – acts of compassion, bravery, even heroism. “In the last 12 months, we have continued to build solid working relationships at all levels of our two organisations. They are among the closest we enjoy with any local organisation. Initiatives such as Inside Your Hospitals and Nurse and Midwife of the Year, have gone from strength to strength. “One observation we would make is that in any organisation of the size and complexity of NUH, constant change is not only inevitable but should be embraced. In our experience NUH does this well. “We regularly report on the Trust’s continuous change programme, and its drive to maximise efficiency and minimise costs. “Perhaps communication with patients should be better. There needs to be a better understanding, among the wider populous, of when hospital treatment is required and the other options that are available for treatment. “In coming years, hospitals probably need to be brave enough to relinquish some of their budget (and their traditional duties) so that aspects of health care and education are carried out elsewhere. There needs to be innovative and creative thinking and a willingness to have a difficult debate.” Mike Sassi, Editor, Nottingham Post

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MARCH 2015: Major Trauma Centre celebrates its third anniversary Our major trauma centre at QMC is now serving every county in the region. Since it opened two years ago, we have saved the lives of 172 patients who weren’t expected to survive (10% higher than the national target). It is among the top 5% of highest performing Major Trauma Centres in the country across all disciplines and services.

Gary Topliss’ life was saved by the team at the Major Trauma Centre following a car crash in which three people died. The 29-year-old had broken both legs, an ankle, a shoulder and a cheekbone and needed surgery on his stomach and bowel. “I’m just so grateful to all the staff at the Major Trauma Centre. I can’t thank them enough for what they did for me. To think that more people will be saved is great. I’ve still a long way to go with my recovery but I’m just so grateful to still be here. They really did save my life.”


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Our workforce At the end of March 15, the workforce at NUH was 14,470 (12,192 full-time equivalents). This compares to 14,151 (12,546) at the end of March 2014. Over 1,000 staff transferred from NUH to Carillion in the summer of 2014, when our new strategic partner took over the running of our Estates and Facilities services. Staff groups (%)

Disability (%)

Gender (%)

0.01

2.4

4.61

21.14

13.19

4.36

5.02 0.86

No Not declared

Female

22.7

Male

Unspecified Yes

33.9 59.8

77.3

0

34.91

Scientific and Technical Additional Clinical Services Administrative and Clerical Allied Health Professionals Estates and Ancillary Healthcare Scientists Medical and Dental Nursing and Midwifery (Registered) Students

4.

15.90

Employee category/gender (%)

Ethnicity (%)

Age band (%) 0.12

2.9 4

37

7. 2

Full Time Female

Black 1.4

0.80 11.23

90%) which mean that beds are not always readily available through the day for new admissions (including those from ED). There was a 3% increase in ED attendances last year. Especially because we cannot easily expand the size of our ED, this has a similar impact on ED efficiency as the increase in admissions has on ward bed efficiency and availability. Our ED was designed for up to 350 patients a day. We now regularly see over 550 patients daily.

2. Bed capacity and efficient patient flow through it We increased our capacity by 70 beds and 12 ED cubicles. The cubicles improved patient privacy and dignity in our ED. We have devoted very significant attention, resource and energy to improving the efficiency and consistency of our ward processes, to improve flow of patients and make beds more readily available. Specific actions have included: • A new dedicated phone line for GPs to NUH clinicians has significantly reduced admissions to our Acute Medicine Receiving Unit at QMC • Further reducing the interval between a patient being medically safe to transfer from our care and their transfer (including reducing delays in our notifications of patient needs and readiness to Community Health or Social Care partners)

• A strengthened Leaving Hospital Policy across the health and social care system which acknowledges patients will be transferred to out of hospital for any necessary ongoing care as soon as it is medically safe to do so (as they no longer need acute care in hospital). Patient information has been developed to explain to patients, their families and carers what happens next when patients transfer from their care at NUH • With the support of the Emergency Care Intensive Support Team (ECIST), we held two ‘Breaking the Cycle’ weeks in May and October 2014 to help improve our performance and trial new ways of working across the health and social care community (a third Breaking the Cycle took place at QMC and City April-June 15 with further ECIST input). Unfortunately, we were unable to sustain the modest improvements we saw during these weeks in May and October • Centralising our respiratory service at City Hospital at the end of 2014 • Opening a new surgical triage unit at QMC. This new facility avoids the need for these patients to attend the Emergency Department

3. Workforce capacity Not only is bed capacity important for the 4-hour standard, but so is the capacity of nurses and doctors. We have faced challenges recruiting medical staff in Acute Medicine (including ED) and staff nursing across NUH. We take a proactive approach to nursing recruitment, including overseas recruitment. We have significantly fewer vacancies in Acute Medicine (for nursing and consultant posts) in March 15 compared to the same month the previous year. In the Emergency Department, at the end of March 15, we had 18 vacancies from 124 whole-time equivalent nursing posts (compared to 40 vacancies in August 14) and three vacancies from 19 whole-time equivalent consultants.

“The local health and social care community have committed to improving links between organisations and information sharing. GPs are now able to directly contact consultants in a number of specialities within the hospital through dedicated phone lines which allow a twoway discussion on how best to support or treat an individual patient. “This has helped us to ensure that referrals and treatment plans are clinically appropriate and unnecessary admissions are avoided. This sharing of knowledge and information between the community and acute sector also speeds up processes and impacts positively on the experience our patients have of the NHS. “Primary care doctors very much appreciate the input and expertise of their specialist colleagues at NUH and we will continue to develop these relationships over the coming year for the benefit of patients and their care.” Dr Hugh Porter, Chair and Clinical Lead at NHS Nottingham City Clinical Commissioning Group


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Progress on cancer We achieved the 14/15 national cancer performance standards for the following areas: • 31 day first treatment 96.6% (national target 96%) • 31 day subsequent surgery 96.7% (national target 94%) • 31 day subsequent drug treatment 99.5% (national target 98%) • 31 day subsequent radiotherapy treatment 99.3% (national target 94%) • 62 day screening (bowel, cervical and breast) 93% (national target 90%) We did not achieve the two-week wait, breast symptomatic and 62 day referral to treatment targets. The requirement for new cancer referrals and breast symptomatic (to be seen with 14 days of referral) is 93%. NUH performance was 90.4% and 91.3% respectively. The national standard for the 62 day target (for patients to be seen and treated for their cancer within 62 days of referral) is 85%. 81.3% of patients were treated within 62 day over the last year. Our underachievement is attributed to four main areas:

Capacity and demand In 14/15 the overall demand for two week wait referrals increased by 15% (15,425 compared to 13,073 in 13/14 and 12,291 in 12/13). This represents a 20.3% increase in demand over a two year period, which was significantly more than forecast. The numbers of patients treated under the 62 day target has increased by 9.8% in 14/15 (1,900), when compared to 13/14 (1,713). There has been an increase in the number of complex/rare cancers referred to the Trust, which require complicated treatment plans, including specialist surgical procedures and complex radiotherapy/chemotherapy treatments. The chemotherapy suite at City Hospital is being refurbished to provide additional capacity.

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Late tertiary referrals Many of our cancer patients commence their care at another hospital (outside Nottingham) and are transferred to NUH for all or part of their specialist cancer treatment. Where such a transfer occurs we share responsibility for the patient’s journey on the pathway with the transferring hospital. The national standard is that 85% of patients will commence definitive treatment within 62 days of their urgent referral with suspected cancer. The 85% standard (rather than 100%) is to allow for patients choosing to delay their first attendance or treatment, or being unfit for the definitive treatment treatment/surgery, or it being clinically inappropriate to treat a patient by 62 days. Where it takes longer than 62 days and two hospitals are involved in the pathway each hospital is given half of the failure. Even if the referral to NUH occurs after (or shortly before) 62 days we receive half of the failure (ie half of a breach of the standard). Late transfers of care to NUH (near or beyond 62 days) is currently a significant factor in our underperformance against the national standard. We continue to work closely with our tertiary, network and CCG colleagues to reduce late tertiary referrals. We implemented a new tertiary referral policy in April 2015.

Patient choice Over 70% of breaches for the two week wait target in 14/15 were due to patient choice, due to holidays, previous commitments and childcare arrangements. There has been a 36% increase in referrals in the last year. To ensure capacity meets demand, we have put on additional clinics (including on Saturdays) and recruited additional clinical staff. NUH provides a “one stop” service, where a patient can be seen by all health care professionals in one visit. We will expand this service in 15/16.

We are working closely with our commissioning colleagues to raise awareness among patients of the importance of attending GP appointments as early as possible.

18 weeks We are proud of our consistent achievement of the 18-week wait referral to treatment waiting time target at Trust level. We have among the shortest waiting times for planned operations in the country (as measured by ‘referral to treatment’ within 18 weeks). We are committed to delivering care in a timely manner for all of our patients and are one of the strongest performers in the country for this standard.

Cancelled operations improvement Numbers of cancelled operations are lower than ever. NUH has exceeded the national standard (less than 0.8%) for ‘on the day’ cancellations for 15 consecutive months. In 14/15, we had 27% fewer ‘on the day’ cancellations (after a 21% improvement in 13/14). We remain the only Trust in the country to publish both ‘on the day’ and ‘prior to the day’ cancelled operations on our website monthly.

Improving safety & quality We have further improved patient safety. 14/15 headlines included: • Further reducing inpatient falls by 19% and 21% less falls resulting in harm • 52% fewer grade three pressure ulcers • We have not had a grade four (most serious) pressure ulcer for over two years • We are better at supporting our staff to recognise patients whose condition deteriorates and escalating and handing over to more senior staff • Many more of our frontline staff are leading vital safety improvements. We are doing this through the Staff Improving Patient Safety (SIPS) group, which has made a strong start since its launch in 2014. We have also, expanded the roll-out of shared governance – which involves frontline staff leading positive changes. We now have 23 active Unit Practice Councils across NUH, including those in acute medicine, maternity, oncology, and other areas of our hospitals • Further expanded the use of the ‘Friends and Family’ Test to our outpatient and day case areas. We now use the same test to measure the experience of our staff. We perform better than most of our peers for both scores and response rates for Emergency Department patients and inpatients. Most patients would recommend our hospitals and services For full details about our extensive quality and safety programme see our 14/15 Quality Account at www.nuh.nhs.uk. See appendix 2 for how we performed against national quality standards and targets in 14/15 compared to our peer hospitals.


39

Governance We want to make sure that our patients receive the highest quality care possible and are always working to ensure this, looking at our internal systems and learning from national assessments, which examine the services we provide and how we handle our resources.

Accountability The Trust Development Authority is responsible for appointing Trust chairs and other Non-Executive Directors. All these appointments are subject to annual review and appraisal. The remuneration of NonExecutive Directors is determined nationally. All substantive Executive Directors and advisors to the Board are appointed through national advertisement, on permanent contracts. The contract may be terminated by their retirement, resignation or dismissal. Performance of the Chief Executive is evaluated by the Chair and is reported to the Remuneration and Terms of Service Committee (see committees below). The performance of other Executive Directors and senior managers is evaluated by the Chief Executive and is reported to the Remuneration and Terms of Service Committee. Any changes in remuneration for Executive Directors and advisors to the Board are agreed by the Remuneration and Terms of Service Committee.

The Board and its committees The Trust Board discharges its responsibilities through monthly Board meetings, an annual public meeting and a number of formal

40

committees.

E-mail: [email protected]

Board meetings

Annual Public Meeting

The Board meets each month and these meetings are open to the public, subject to the proviso that the Board may go into confidential session as appropriate. Information about Board meetings, including agendas and papers, is posted on the Trust’s website, www.nuh.nhs.uk.

The Trust’s annual public meeting for the year ending 31 March 2014 was held on 22 September 2014 in the Postgraduate Education Centre at City Hospital. We shared with our patients, members and partners our responsibilities and good stewardship of public funds in the previous financial year. We celebrated a number of our achievements and recognised the hard work of our staff. Executive colleagues asked a range of questions about the way we run the Trust and our plans for the future. There were presentations on our new vision and presentations from patients, as we celebrated 40

It is also available from: Mike O’Daly Trust Secretary Trust Headquarters Nottingham City Hospital Nottingham NG5 1PB Tel: (0115) 9691169 x 76001

years of renal transplants. There have been significant changes in the senior team in the last year, summarised as follows. Non-Executive Directors • Mr Stephen Thomas started as a Non-Executive Director on 7 April 2014 • At the end of 14/15 (from 26 March 2015), NUH appointed two Associate Non-Executive Directors, David Cartwright and Edwina Grant. These new post-holders attend Board meetings, and some committee meetings, in a nonvoting capacity Executive Directors and other officers • Miss Jenny Leggott retired as Director of Nursing & Midwifery, Service Improvement and Operations on 31 October 2014 • Mrs Daljit Athwal acted as Director of Nursing & Midwifery

between1 November 2014 and 1 February 2015 • Ms Mandie Sunderland commenced post as Chief Nurse on 2 February 2015 • Mr Daniel Mortimer, Director of Workforce and Strategy, ceased his appointment on 14 November 2014 • Ms Bel Rowe acted as Director of Workforce and Organisational Development between 15 November 2014 and 6 April 2015 • Ms Nicky Hill commenced post as Director of Human Resources on 7 April 2015 • Mr Tim Guyler, Acting Chief Operating Officer, commenced post on 1 December 2014. This post replaced the Director of Workforce and Strategy post

as the fifth executive director of the Board • Mr Doug Ward and Mr Shaun Kerfoot acted (separate periods in 14/15) as Director of Estates and Facilities Management until Mr Andrew Chatten was appointed to the substantive post on 2 February 2015 • Ms Caroline Shaw joined NUH as Director of the Emergency Pathway in November 2014 (this is a fixed-term arrangement) All other advisors to the Board remain unchanged, as below: • Mr Andrew Fearn Director of ICT Services • Mr Mike O’Daly Trust Secretary • Ms Laura Skaife-Knight Director of Communications & External Relations


41

Board Meetings The Board meets each month. Meetings are open to the public (except for those matters which the Board resolves to consider in private). Information about Board meetings, including agendas and papers, is posted on the Trust’s website.

Cumulative Record of Board Directors’ Attendance (14/15) NAME

POSSIBLE

ACTUAL

L. Scull

12

12

A. McKee

12

J. Pomeroy

NAME

POSSIBLE

ACTUAL

R. Egginton

12

11

10

S. Fowlie

12

12

12

12

P. Homa

12

11

H. Sewell

12

10

J. Leggott

8

6

J. Tabreham

12

9

D. Mortimer

8

8

S. Thomas

12

8

D. Athwal

3

3

T. Guyler

3

2

M. Sunderland

1

1

Audit Committee The committee meets about six times a year. It reviews systems of integrated governance, risk management and internal control, ensures that there is an effective internal audit function, reviews the findings of the external auditor, reviews the findings of other significant assurance functions, and considers the draft annual report and financial statements before their submission to the Board.

Cumulative Record of Audit Committee Members’ Attendance (14/15) NAME

42

POSSIBLE

ACTUAL

Mr A. McKee

5

5

Dr J. Tabreham

5

4

Mrs J Pomeroy

5

5

Remuneration and Terms of Service Committee The committee meets as and when required. In relation to the Chief Executive, other Executive Directors and other senior employees, it advises the Board about appropriate remuneration and terms of service, all aspects of salary, provisions of other benefits and arrangements for termination of employment and other contractual terms. It receives an annual report, from the Trust Chairman, on the performance of the Chief Executive and an annual report on each of the Executive Directors from the Chief Executive.

Cumulative Record of Committee Attendance (14/15) NAME

POSSIBLE

ACTUAL

Mr A. McKee

9

7

Mrs J. Pomeroy

9

9

Ms L. Scull

9

9

Professor H. Sewell

9

7

Dr J. Tabreham

9

6

Mr. S. Thomas

9

5

Finance & Investment Committee The Finance and Investment Committee meets monthly. It monitors, on behalf of the Board, the Trust’s financial position with particular regard to the achievement of its statutory breakeven duty and the continuing progress being made with regard to its service efficiency plans.


POSSIBLE

ACTUAL

Mr R. Egginton

11

9

Dr S. Fowlie

11

4

Dr P. Homa

11

6

Miss J. Leggott

7

5

Mr A. McKee

11

10

Mr D. Mortimer

7

2

Mrs J. Pomeroy

11

10

Mr S. Thomas

10

7

Mrs D. Athwal

2

1

Ms M. Sunderland

2

1


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Quality Assurance Committee The Quality Assurance Committee meets monthly. It monitors, reviews and reports on the quality of services provided by the Trust in each of the quality domains: safety, outcome and experience, and on the quality of the Trust’s risk management processes and arrangements.


POSSIBLE

ACTUAL

Ms L Scull

12

10

Prof H Sewell

12

11

Dr J Tabreham

12

10

Dr P. Homa

12

10

Miss J Leggott/Mrs D Athwal

10

8

Ms M Sunderland/Mrs D Athwal

2

2

Dr S Fowlie/Dr K Girling

12

12

Mr D. Mortimer/Ms B Rowe

2

2

There are five other committees of the Trust Board. They are: • Appointment of CEO – no meeting in 14/15 • Appointment of Other Executive Directors – met to appoint our new Chief Nurse in October 2014 • Advisory Appointments – continues to meet as and when necessary to appoint medical consultants • (Organ) Donation Committee – continues to meet as and when necessary • Ethics of Clinical Practice Committee – continues to meet as and when necessary

Fit and proper person test During the year we have incorporated all of the requirements of the fit and proper person test, extending this to our Board directors and advisors.

44

Declarations of Interest of Board Directors NAME

JOB TITLE

DECLARED INTEREST

DATE OF DECLARATION/ UPDATE

Ms Louise Scull

Chair

• Partner is employed in research - (Nottingham University, Department of Academic Rheumatology) • Director of Long Ford Close Management Company (property management Company, Oxford) • Nursing and Midwifery Council – Council Member and Chair of Audit Committee • Nursing and Midwifery Council – member of Revalidation Strategic Advisory Group

27 March 2014

Dr Julia Tabreham

Non-Executive Director

• Chief Executive Officer of Carers’ Federation • Carers Federation has been awarded the contract for Healthwatch within: the North East, North West, Yorkshire and Humberside and Independent Advocacy for NHS complaints within the North East, North West, Yorkshire and Humberside • Carers Federation has established a clinic for Nottingham patients and their carers in partnership with City Care. The clinic will operate from Carers Federation Head Office, Pelham Road, Nottingham • The organisation also runs a number of local carer support schemes from its Nottingham premises

27 February 2014

Mr Alec McKee


• Trustee, Nottingham University Hospitals Charity • Director and Shareholder - Cornthwaite Investments (Ag) Ltd • Member, Patients’ Partnership Group, Keyworth Medical Centre • Stanton on the Wolds Parish Council – Parish Councillor

27 February 2014

Mrs Julie Pomeroy


• Dillistone Group PLC , plus subsidiaries– director • Secantor – small share holding • Nemaura Pharma Ltd – Part Time Consultant

27 February 2014

Professor Herb Sewell


• Medical Research Council – Grant Holder • Oncimmune Ltd – On-going research collaboration • Oncimmune Ltd – Member International Scientific Advisory Board • Nuffield Council on Bioethics – Network of Affiliates

3 March 2014


45

46

NAME

JOB TITLE

DECLARED INTEREST

DATE OF DECLARATION/ UPDATE

Dr Peter Homa

Chief Executive

• Visiting Chair of University of Lincoln • Member of the Association of UK University Hospitals Executive Committee • Member of Editorial Board – British Journal of Healthcare Management • Wife works with April Strategy Consultants • Honorary Professor of the Business School, University of Nottingham • Chair of Research and Development Leadership Forum of National Institute for Health Research/ Biopharmaceutical Industry

27 March 2014

Miss Jenny Leggott

Director of Nursing, Midwifery and Service Improvement

• Member of the Association of UK University Hospitals Executive Committee

4 March 2014

Dr Stephen Fowlie

Medical Director

• Spouse is research nurse employed by University of Nottingham

6 March 2014

Mr Daniel Mortimer

Director of Workforce and Strategy

• Wife employed as occupational health nurse advisor to Derbyshire Fire & Rescue Service • East Midlands Social Partnership Forum – Chair

17 March 2014

Mr Rupert Egginton

Director of Finance and Procurement

• J.T. Egginton Ltd – shareholder • Hospital Pharmacy Services (Nottingham) Ltd – Director

13 March 2014

Accounts & Finances

Financial Review 14/15 NUH met all of it statutory duties and responsibilities set by the Department of Health (DH) in 14/15. The Trust reported a full year surplus of £3.5m, excluding an impairment benefit of £3.7m. Impairment costs or benefits relate to falls and rises in the value of Trust assets as a result of undertaking an annual revaluation exercise of Trust land and property. The operating surplus (or trading surplus) excludes impairments as does the control total used by the DH to monitor the Trust’s financial performance. The DH also requires the Trust to exclude the benefit of any charitable donations received for capital schemes from its control total (£3.8m), although does allow for the benefit of the depreciation on these donated assets to be released back to the Trust’s position annually (£1m). After these adjustments, NUH achieved an operating surplus against its control total with the DH of £750,000, which included the performance of its private subsidiary (£735,000), Hospital Pharmacy Services (Nottingham) Ltd, in accordance with the new Group accounting standards which

applied to the NHS for the first time in 2014/15 (IFRS 10). The Trust therefore maintained its track record of delivering financial balance in each year since it was formed as a single entity. The Trust remained on target with many of the assumptions made in the original plan, but improved on the planned deficit of £19.1m submitted at the start of the year. This represents an excellent result and is a reflection of effective operational management supported by strong financial control, but was underpinned by £38m of nonrecurrent funding received from the DH and its commissioners. NUH, including its private subsidiary, had a cash and cash equivalent balance of £37m at the year end. This was £13m better than plan, although it represented a reduction compared with the position at the end of 13/14 (£67.7m). The fall in cash resulted from capital expenditure exceeding internally generated resources and the deferment of payments at the end of the previous year to April 14 to allow the Trust to hit its cash target in 13/14. The Trust also accelerated revenue and capital payments processed in the run up to this year end in order to deliver this year’s cash limit obligations.

Capital expenditure for the year was £43m, £2.9m behind plan. The shortfall was primarily due to slippage in both scheme progress and approval processes for a small number of projects. The cash resource associated with the capital underspend has been carried forward to fund these developments in 15/16. This has been factored into the proposed capital plan of £37.1m for 15/16. The Trust generated financial efficiency savings of £42.5m against a target of £44.4m. This represented 96% of our target and is consistent with delivering cost improvement plans of over £40m (5%) for the third successive year. The continuity of service risk rating was reported as a 4, which was an improvement on the plan of 2. This is the highest a Trust or Foundation Trust can achieve. The continuity of service rating is a key financial performance indicator as it measures the liquidity of the Trust, in terms of its ability to meet its costs on a dayto-day basis as well as its ability to cover its debt obligations through its trading position.


47

7.2

3.8

3.5

NUH delivered a surplus of £750,000 and met its statutory break even duty

3.7

Total retained surplus (Before impairment)

Impairment

Total retained surplus (Before impairment)

1.0

Charity Funded for capital schemes

A further £3.8m of charitable funding for capital projects was received

0.8

Donated Depreciation

8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0 -1.0 -2.0

Operating Surplus (Control Total)

Millions

Trading Position

Cash: £37m (31 March 15) £67.7m (31 March 14)

Capital investment: £43m (14/15) £34.9m (13/14)

The value of the Surplus presented in the Accounts is £7.2m after impairment

The Trust remained within its cash limit set by the DH

The Trust invested in capital infrastructure (including new Theatres and Paediatric Oncology wards) and equipment (including digitised health records and new medical equipment) funded from internally generated resources and charitable donations within the limit the set by the DH

CIP 50

Millions

40 30

The Trust delivered cost improvements of £42.5m, which was more than last year, but less than had been planned of £44.4m

20 10 0 12/13

13/14 Plan

14/15 Actual

Capital Investment: £43.0m (2014/15) £34.9m (2013/14)

NUH Achieved a Risk Rating of 4 - the best possible

However, despite these positive outcomes, the Trust has an underlying financial deficit. Non-recurrent funding of £38m, including central DH financial support (£11m), winter resilience funding (£9m), and emergency care pathway (£14m) all contributed to securing a break even position. This funding will not be available to the Trust in 15/16. Managing increases in emergency demand, in particular, represented the Trust’s main operational and financial challenge in 14/15, as it was across the whole acute sector in the NHS. The impact of the national emergency tariff, meant our emergency services ‘lost’ £23m, hence the requirement for this additional funding.

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Income

Income by category 14/15

The Trust earned income of £874m in 14/15 of which £745m (85%) came from the delivery of acute and specialised patient care activities. The largest component of the Trust’s clinical income came from the local CCG Consortia (£416m) for acute services and NHS England (£284m) for specialised services. Clinical care income increased by £50m in 14/15, mainly as a result of; pricing changes and growth in activity for all points of delivery (elective, emergency, outpatient attendances and specialised services) (£17m); an increase in pass through medicines and devices (£12m), as new drugs were approved and patient numbers increased; and additional non recurrent financial support (£9m). Emergency Admissions activity continued to only attract a payment of 30% over the 08/09 Emergency Rate Threshold (ERT) baseline, squeezing the Trust’s margins, although at a lower level than in 13/14 (£3m) and there was some reinvestment of ERT by commissioners (£2m). The Trust also benefited from a reduction in emergency re-admissions (£4m) and additional transformation funding (£3m) from its Commissioners.

9%

CCGs NHS England

49%

Education, training and research Non patient care services to other bodies

33%

Other

Expenditure Expenditure of £867m was incurred in delivering its services in 14/15. Staff costs consumed the largest amount of resources, equating to £523m (60% of total expenditure). An analysis of operating expenses by type is shown in the graph below:

Expenditure by category 14/15 (£m) 3%

Staff costs Clinical supplies and services

2%

3%

1% 2%

3%

Other operating income for the period was £128.7m, with the majority of this income received to fund education, training and research activities (£75m), as well as trading and commercial activities. Other operating income reduced by £10.2m in 14/15 due to; reduced undergraduate and post graduate medical education and training contract income, following the move to a national tariff (£1.5m); lower research and development income (£2.4m) (matched by a reduction in expenditure); the full year impact of reduced Trust services provided to Treatment Centre (£3.9m); the transfer of catering, car parking and Medilink services to an external provider (Carillion PLC); and a reduction in compensation for the NET Tram works compared to the prior year (£2.7m). Carillion are contractually obligated to pay NUH a ‘profit’ as part of the contract for those activities that transferred to them.

6% 3%

Premises, transport and establishment

4%

Depreciation & amortisation 60% Public Dividend Capital 22%

General supplies and services Clinical negligence Research and Development Other


49

The Trust outsourced the provision of Estates and Facilities services during 14/15, which resulted in the transfer of over 1,000 WTE staff under TUPE arrangements to Carillion PLC. This had the impact of deflating the Trust’s pay bill by £19m and increasing non pay costs associated with payment of an external contract. In real terms (excluding this component) underlying pay costs increased by £21m. Most significantly, the growth was driven by an increase in qualified nursing staff of 348 WTE as the Trust recruited nurses to comply with safer staffing standards and ensure there was sufficient resilience built into the service provided over the winter period to support the opening of 70 beds in Acute Medicine and to support the operational increases in numbers of patients and complexity. There has been a great deal of activity in nursing recruitment, linked to the safer staffing agenda following the Francis review. Safer staffing funding £3.7m which was applied to extra ward PAs, the patient safety team and additional ward based nursing. The Trust’s recruitment of 54 ward administrator posts will release nursing time for ward managers to focus on nonadministrative duties. The investment in the patient safety team will ensure patient safety standards are delivered including reduction in falls, pressure ulcer prevention and improved patient experience/ outcomes, giving flexibility to meet fluctuating acuity across wards and reducing reliance on agency. Similarly the recruitment of more doctors (69 WTE) ensured that the Trust continued to invest more resources in direct patient care. Pay awards and incremental drift factors accounted for a £7m increase in the pay budget for 14/15. The Trust recognises the need to convert reliance on premium rate agency nursing and medical staff to permanent recruitment. The DH issued a directive to all NHS providers in June 2015 to enhance controls over the use of agency staff, by ensuring that all agency staff are procured from existing NHS framework contracts (using nationally agreed rates) and a there will be a maximum rate set for grades

50

and specialities of staff. The Trust is rolling-out these controls over agency staff, which will be fully in place by the start of September 2015. The Trust is competing in a finite pool with forecasts indicating that the normal supply of nurses will not meet demand. We continue to work in partnership with NHS professionals on the recruitment of nurses and have successfully recruited several groups from abroad. The Trust’s underlying operational non pay expenditure position increased by £38 million (14% year on year), excluding the impact of impairments. The main components of this growth were associated with the commencement of the outsourced Estates and Facilities contract (£16m) and clinical supplies expenditure (£22m). The increase in clinical supplies related to; additional pass through drugs, cancer care drugs and medical devices costs (£10m), as patients benefited from further investment from NHS England; planned activity growth and service developments (£4m); non recurrent investment from the CCG’s in winter resilience (£2m); investment in Theatres equipment, (£4m) and inflationary pressures.

Working with our health partners NUH recognises and supports the importance to its patients and the local community of developing integrated service models which better meet their needs and which mitigate demand for acute care. We welcome the steps being taken by commissioners to radically transform local services for the communities we serve. This includes the investments planned through the Better Care Fund programme and the necessary and important service changes planned through the South Notts Transformation Programme. To support the delivery of these important plans the Trust will continue to actively engage with its health and social care providers. Our workforce will play their part alongside partners in delivering the required change, building upon the various pathways where

they already support the delivery of community-based care. We also recognise the scale of the transformational and financial challenges these processes present and understand the part we must play in delivering changes to our own services and ways of working. At the same time we have identified the very real risk that the impact of services developed via the Better Care Fund and the South Nottinghamshire programme are not sufficient to support the totality of the reduction of capacity and cost base required within acute services, with consequent quality, financial and performance risks. There is a particular concern that there is little financial flexibility to support transition between present and desired service models and we are keen to work with the wider system to understand how such transition will be managed. The Trust works closely with partners in primary care and in the community in support of the national NHS Quality, Innovation, Productivity and Prevention (QIPP) programme. This is a large scale programme developed by the Department of Health to drive forward quality improvements in NHS care, at the same time as making up to £20 billion of efficiency savings. The QIPP initiative rests on the assumption that improving productivity will improve health via better, more productive health services and lead to a reduction in unwarranted variation in healthcare delivery in the NHS. The QIPP Delivery Group (QDG) which represents both the Trust and Commissioners was established in June 12 to monitor NUH and Commissioner QIPP targets and the use of non-recurrent transformation funds that support QIPP delivery. The QDG is in existence to ensure the scope and plans for each scheme are delivered and the financial trajectory is fully met. The NUH process for identifying QIPP schemes involves gaining clinical engagement and expertise from across the Trust to develop innovative pathways and improve patient care. Clinical pathways promote organised and efficient patient care based on

evidence based practice. This has recently been achieved through the development of a Dragons’ Den type forum at which clinicians pitch their ideas to NUH Board and CCG members. Each project is subject to a bidding process and shortlisted by both management and clinical representatives to ensure that projects improve patient experience and outcomes. Projects are then ratified at QDG and monitored over the following twelve months to determine the long-term benefits and sustainability of the services and pathways. Over the past three years NUH projects have improved patient care and saved £29.6m for the health economy.

NUH cumulative QIPP savings 2012-2014 FINANCIAL YEAR 12/13 Schemes

12/13 In Year

FYE

13/14 In Year

£5.8m

13/14 Schemes

FYE

CUMMULATIVE EFFECT

14/15 In Year

FYE

£7.2m £2.1m

14/15 Schemes

£2.4m

£7.2m

£20.2m

£3.1m

£5.2m

£4.2m

£4.2m

Cummulative QIPP Saving

£29.6m

The Trust and its partners have focused in particular on improving the integrated navigation pathways for patients in a number of specialties to: • Reduce the variability in clinical practice and improve outcomes, by ensuring that care takes place in the most appropriate setting, be that in acute care, in the community or at home • Improving patient care through innovation • Supporting staff to develop pathways and services and to lead change • Providing financial benefits to the overall health economy Financial benefits with a full year benefit of £4.2m have been delivered during 14/15, through the following schemes:

NUH QIPP programme 14/15 AREA/SPECIALTY

OBJECTIVES

14/15 TOTAL (£000S)

FORECAST FULL YEAR EFFECT (£000S)

Outpatient Parenteral Antibiotic Therapy (OPAT) - phase II

Reduction in length of stay and excess bed days

267

534

Haemo-Oncology - Clinical Psychology input

Reduction in outpatient attendances

13

17

HPB hot clinics

Reduction in emergency operations

3

4

283

555

13/14 Schemes Carried Forward OPAT - phase II expansion follow-ups


147

196

Telephone FUP to replace face-to-face outpatient follow-ups


122

209

Linden Lodge reablement team

Reduction in length of stay

283

283


51

AREA/SPECIALTY

Epilepsy clinics - non-epileptic attack disorder

OBJECTIVES

14/15 TOTAL (£000S)

FORECAST FULL YEAR EFFECT (£000S)

Reduction in outpatient attendance

62

74

613

762

14/15 CCB approved schemes Oncology pharmacist-led patient review

Provision of specialist advice

16

16

Emergency gynaecology treatment room

Reduction in theatre procedures

34

135

Parkinsons disease pathway development


214

214

Complex stroke rehabilitation service

Reduction in excess bed days and attendances

74

179

Stroke (Band 4 proposal)


9

14

Dietetic Lead Adult FODMAP service for patients suffering from IBS

Reduction in IBS outpatients

19

75

Adult Critical Care Outreach Team (CCOT) - phase I


100

400

Nurse-led Virtual Lung Nodule Clinic


4

25

Haematology pharmacist-led review

Provision of specialist advice

9

85

Improving phosphate levels in our dialysis population

Reduction in primary care medication

5

32

Multidisciplinary-led weight loss programme for morbidly obese patients

Prevention of hospital admission

2

23

Pregnancy weight management

Prevention of birth complications

17

199

A clinical navigation hub to support referrals into the Children’s Hospital


17

202

Expansion of NUH traumatic brain injury Service


9

56

Therapy support workers in Critical Care


6

135

535

1,790

Dragon’s Den Scheme

52

Colorectal (Lower GI)


98

131

Haemostasis and Thrombolysis (ACORDS Anticoagulation Remote Dosing Service)


23

23

Clinical Haematology


696

696

IBD pathway


26

26

Orthopaedics


137

137

Alcohol - HVSU (reducing hospital admissions and ED attendances)


84

84

2015 Follow-Up Reduction Schemes

1,065

1,097

TOTAL

2,496

4,203

Alongside these discussions the Trust continues to work with NHS England to maintain a range of specialist, tertiary services. Priority areas include the continued development and roll-out of the East Midlands Major Trauma Centre (based at QMC) and joint work to develop services with University Hospitals of Leicester NHS Trust. The Trust is in constructive dialogue to understand the implications of the recent service standards for specialised services.

Trust is able to report the profit (or loss) generated by each service, supported by the capability to ‘drill down’ to individual patient level to understand what the cost drivers are.

Understanding Our margins

The table below presents a summary of the margins achieved by each of the Trust’s service lines in 14/15 and provides a clear indication of the underlying financial pressures experienced by Trust. All four front line service lines delivered financial deficits, most notably the emergency pathway. Although the central and corporate directorates appear to show a ‘healthy’ margin, this belies that most of the nonrecurrent funding received by the Trust is included within this service line. The group surplus of £750,000 was largely driven by the surplus generated by the Pharmacy Company (£735,000).

We highlighted in our Annual Report last year, the development of business partnering and the more commercial approach that has been adopted at the Trust to better understand the costs at patient and service line level that will help the Trust make informed decisions about the service changes and service delivery required to sustain financial stability. Through the implementation of service line reporting (SLR) and patient level costing (PLICS), the

The Trust continues to working closely with HfMA and DH to develop the use of patient level costs to inform the development of the national tariff, which will ensure future national tariffs more accurately reflect the cost of service delivered.

SERVICE LINE

SERVICE LINE

Emergency pathway

(22.7)

Cancer

(2.1)

Planned Care

(2.4)

Family Health

(1.7)

Support Services (Diagnostics, Theatres and Critical Care)

2.0

Central and Corporate (including non-recurrent funding)

26.9

Pharmacy Company (HPSN)

0.8

Total

0.8


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In 14/15, the Trust maintained the cost efficiency of the services it provided, measured by its national reference cost index of 101. The index represents a measure of the relative efficiency of NHS providers, by comparing the healthcare provision costs for all NHS providers.

Property valuation A full revaluation exercise of Trust property was completed by the Trust Valuers, Gerald Eve. During 14/15 national building tender prices increased significantly. Build costs in Nottingham increased by 21.9% - this is higher than the national average, driven partly by major local construction projects like the NET tram and major road construction projects. Under NHS rules, building assets must be valued on a modern equivalent value basis. Although these indices could therefore not be ignored as part of the valuation process, the full impact of these potential inflationary pressures were mitigated by taking into account the Trust’s NHS specialised status, its locality and quality of its building stock. The Valuer also impaired the value and lives of a number of the Trust’s buildings, particularly on the City campus, to more accurately reflect their age and condition.

Our new elective orthopaedic theatres at City Hospital opened May 15

During the year the Trust completed £42.9m of capital investments which has improved services to patients and staff and continued to modernise and maintain its estate, medical equipment and IT infrastructure. A summary of the capital investment undertaken in the year is provided in the table below, with key highlights being: • The City Theatre Development progressed in line with the project plan and will be operational in May

The 14/15 valuation resulted in an overall increase of 1.3% in value of land and buildings.

• The refurbishment of the children’s cancer and neurosciences wards and the Teenager Cancer Trust Wards

Capital Investment Programme

• The Emergency Gynaecology ward was completed in November 14. The service is now fully operating out of the ward as planned

The Trust is required to contain capital expenditure within an annual limit agreed with the Department of Health. This limit is informed by the Trust’s long-term capital plan which must ensure that sufficient resources are generated from operating activities and borrowing to finance the Trust’s future capital investment programme.

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• Additional Critical Care beds opened in the spring of 14/15 providing an increase in capacity and up to date critical care beds • The Major Medical Equipment replacement programme is progressing well. The Trust has replaced four CT Scanners, a Linear Accelerator and Catheterisation

Lab and an Angiography Room is being refurbished with a second Angiography Room business case in development. The MRI business cases for the City Hospital and QMC have been approved by the Trust Board • The expansion of the Emergency Department was completed in December 15 as planned. The key issue addressed by the development was the lack of physical capacity for the adult majors area within ED. This is an interim expansion that increased the cubicle capacity within ED majors by 11 from 25 to 36 cubicles. ED has 51 adult cubicles • The development of the Major Business Cases is continuing, but pressures on the Trust Capital programme will make the affordability of the development difficult. However this is being addressed within the development of the business cases and is a key focus of the project teams

CAPITAL INVESTMENT SCHEME

BENEFITS

VALUE IN 2015/16 (£M)

City Theatres (Orthopaedics)

Theatre refurbishment and modernisation programme

8.5

Digitising Health Records and Clinical Noting

Replacment of paper based records and processes via electronic capture to eliminate inefficiencies such as accessibility, security, manual processing and the costs of storage and transportation of physical documents

9.2

Other IT investment

Hardware and software additions improving clinical and corporate information and services

1.1

Paediatric Oncology

The provision of sympathetically improved age-appropriate paediatric oncology and neuroscience inpatient facilities within the Nottingham Children’s Hospital at QMC

4.7

Estates regulatory compliances

General improvements to buildings and infrastructure, patient environments and health and safety compliance

3.5

QMC capacity scheme (C32 to A23)

The provision of improved facilities to meet the needs of the Emergency Gynaecology service and its patients

2.2

Linear Accelerator replacement programme Purchase of CT scanners Angiography 2 replacement

2.6

Replacement of medical equipment that has reached the end of its useful life to modernise services

Other medical equipment replacement Emergency Department expansion

1.6 1.1 3.4

The provision of additional cubicles in order to meet privacy and dignity requirements in ED

0.9

Other developments

3.9

Total

42.7

The level of capital expenditure in the next two to three years will be dependent upon extent to which the Trust is able to address its underlying deficit trading position as this will determine the value of internally generated resources available for investment.


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Better Payments Performance (BPPC) All NHS trusts are required to pay their suppliers promptly, by ensuring that payment is made within 30 days of receipt of invoice for 95% of invoices. The Trust achieved of 92% and 93% for number and value of invoices paid respectively for the year. Performance was adversely affected in the first quarter by the deferment of payments at the end of the previous financial year. However, the Trust paid 95% of invoices within terms in each individual month from October onwards for both volume and value, but was not sufficient to recover the performance cumulatively for the first quarter.

2014-15

2014-15

2013-14

2013-14

NUMBER

£000S

NUMBER

£000S

Total Non-NHS trade invoices paid in the year

154,536

411,649

155,668

309,283

Total Non-NHS trade invoices paid within target

142,800

381,260

149,843

295,768

Percentage of NHS trade invoices paid within target

92.41%

92.62%

96.26%

95.63%

Total NHS trade invoices paid in the year

4,776

74,393

4,421

70,349

Total NHS trade invoices paid within target

3,854

68,841

4,334

69,671

80.70%

92.54%

98.03%

99.04%

Non-NHS Payables

NHS Payables

Percentage of NHS trade invoices paid within target

The Better Payment Practice Code requires the NHS body to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later.

The Trust is also an approved signatory of the Prompt Payment Code, which encourages and promotes best practice between organisations and their suppliers. Signatories to the Code commit to paying their suppliers within clearly defined terms and commit also to ensuring there is a proper process for dealing with any issues that may arise.

Balance sheet events In the opinion of the Directors of the Trust there are no post balance sheet events.

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Financial outlook and risks for 15/16 In a climate of financial austerity for the NHS and public services in general, the achievement of a break even position in 14/15 is a notable achievement by the Trust. However, this was only achieved through receiving significant non-recurrent funding from the Department of Health (£11m) and its Commissioners (£27m) to meet underlying financial and operational pressures. The Trust plan does not deliver a break even position in 15/16. The Trust has submitted a planned £49.2m deficit. The gap between the breakeven position in 14/15 and the plan for 15/16 should be set against the context of the movement in the Trust’s underlying position (which excludes the non-recurrent funding).

Contracts and tariff The Department of Health offered providers two choices regarding the tariff payment system, which determines the price at which services and activity is reimbursed by commissioners. This was the Default Tariff Rollover (DTR) or the Enhanced Tariff Option (ETO). The DTR option would effectively allow the Trust to receive funding under the same tariff regime as 14/15, which meant no 15/16 tariff deflator would be applied (efficiency less inflationary uplift) and the Trust would continue to be reimbursed for additional emergency hospital admissions activity at a marginal rate of 30% and specialised activity growth at 100% of tariff above an agreed baseline. However, the Trust would no longer receive CQUIN (Commissioning for Quality and Innovation) funding of 2.5%.

The ETO option offered the incentive of a marginal rate for emergency activity of 70% (as opposed to 30%), but would only be reimbursed for additional specialised activity of 70% (rather than 100%). The Trust would also continue to be reimbursed for CQUIN and the tariff would be reduced by the 15/16 deflator. The Trust Board decided not to adopt the Enhanced Tariff Option (ETO) as its preferred method of tariff payment and so continued to be reimbursed on the default tariff. This was consistent with the choice made by the Trust’s peer group of 10 major teaching and specialist trusts. There are a number of factors influencing this decision. The Trust’s assessment indicated a similar financial outcome for the two options based on a set of assumptions at that time. The determining factor was a view that there would continue to be growth in specialised activity with NHS England and pass through medicines (currently going through NICE approval) being funded at 100%. The contracting round in 15/16 proved to be very challenging for all parties involved in the process. It ended with binding mediation on a number of issues. The final contractual agreement with our local CCG consortia resulted in a contract valued at £416m, a reduction of £11m compared to the 14/15 outturn, whilst also requiring an increase in activity (spells) of £13m (a growth of 5%).

Financial recovery and efficiency The Trust expects to deliver £44m of financial efficiencies in 15/16. This represents 5% of the Trust’s overall income. This is significantly in excess of the implied efficiency level of 3.5% included in the 15/16 ETO tariff. In addition, this is higher than that historically achieved by the NHS (2% per annum) although broadly consistent with the level expected to be delivered in 14/15 of £42m.

The financial efficiency delivery in our annual plan represents the Board’s view of what is achievable whilst maintaining quality standards and delivering our operational requirements. The Trust’s strong track record of delivery over recent years has meant that achieving savings of this magnitude again requires a move to transformational change. Similarly the recent publication of the NICE staffing guidance has led the Trust to review its nursing levels with an expectation that these will rise as a result. In meeting these challenges, it is essential that the Trust achieves an appropriate balance between financial control, operational pressures and quality of care. The focus on the service essentials – quality, access, innovation and value for money – all remain, despite the Trust’s financial challenges.

Financial risks and mitigation The key risks for the Trust in 15/16 are the prospect of delivering substantial operating loss, cash outflows and failure to achieve its financial duties. Over and above these risks, the main challenges to the delivery of the financial plan are: • Uncertainty over whether a new national tariff are implemented during the year- the Trust could be adversely impacted by the outcome of the Competition and Markets Authority decision. • Financial Efficiency Programme delivery • Managing activity to contract levels • Cost inflation • Quality cost pressures

A consistent theme of our negotiations with commissioners was our provision of unfunded and underfunded services.

• Operational performance pressures and costs associated with avoiding fines and penalties

Cash

The Trust is in a phase of financial recovery which will require a system based approach and radical service transformation. It is essential that the Trust continues to work with its health community partners and commissioners to address the changes required to service provision and care pathways and to determine the best and most cost effective way to deliver services for local patients. The creation of a modern model of integrated NHS care, with care provided in the most appropriate setting remains the goal of the Trust and its health care partners.

As a result of the forecast deficit, at certain points of 15/16, particularly as the year progresses, the Trust will require cash support to ensure the Trust continues to meet its day to day liabilities. This will be achieved through accessing additional cash support funding from the Department of Health, underpinned by an agreed recovery plan.

Going concern There are potential adverse indicators of uncertainty in 15/16 associated with financial position of the Trust, in terms of forecast operating losses, financial support, cash flow pressures and failure to achieve financial duties. However, it is reasonable for the Directors of NUH to assume the Trust has adequate resources to continue as a going concern for at least 12 months from the date of preparation of the 14/15 accounts from a cash perspective through a combination of its existing internal working capital and financial support offered by the DH, linked to an agreed recovery plan.

The Trust is working with commissioners to identify potential solutions to the issues faced in the emergency pathway, and in particular the Trust is taking an active leadership role in the development of the South Nottinghamshire Transformation Board which aims to bring a system wide approach.


57

The Trust’s financial strategy is based on improving our financial position across the following themes: • System change, including enacting the actions arising from the Emergency Pathway Review, undertaking collaboration opportunities with other Trusts and organisations and increasing our commercial capability by responding to commercial and tendering opportunities. For example, the Trust is preparing a joint bid with Nottingham Citicare for the future provision of community services which should create opportunities to improve the efficiency of patient pathways • Using our understanding of our business to improve the financial position, through undertaking a service reviews, using SLR and PLICS analysis to drive strategies that either improve margins or mitigate losses and developing

58

a coherent analysis of the causes of our deficit, that will help us explain our financial position externally and also help us respond to our financial challenge more effectively • Maximising internal efficiencies, through using our enhanced understanding of patient level costing to identify areas for efficiency improvement and to support changed behaviours at a local level, an increased focus on cross-cutting schemes and the importance of organisation wide improvement projects • The Trust is committed to maximising the effective use of technology to improve patient experience, clinical efficiency and value for money, including the implementation of digital health records to make well-informed treatment decisions quickly and safely, mobile technology to improve real time decision making,

tele-medicine (in collaboration with the CCGs), PLICS and financial reporting developments to provide the operational and clinical decision makers in the Trust with easy to use financial information and the roll out of the E-prescribing programme.

Rupert Egginton Director of Finance and Procurement Nottingham University Hospitals NHS Trust

Accounts and Remuneration Report Accounting policies The Annual Accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) and accounting policies. Their preparation has been guided by the 14/15 Group Manual for Accounts (MfA) issued by the Department of Health. They represent a ‘true and fair view’ of the Trust’s activities in 14/15 and are materially accurate and contain no misstatements or errors of such magnitude that they would cause a user to make an incorrect decision. The Accounts are presented for both the ‘Group’ and ‘Trust,’ reflecting that group accounts now have to be prepared in accordance with the new Group accounting standards which applied to the NHS for the first time in 14/15 (IFRS 10). The Group Accounts therefore include the consolidation of the Trust’s private Pharmacy Company subsidiary, including a restatement of prior year comparatives. The overall accounting policies were reviewed prior to submission and are compliant with the Manual for Accounts.

Pension liabilities Past and present employees are covered by the provisions of the NHS Pensions Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at www.nhsbsa. nhs.uk/pensions. The scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is

accounted for as if it were a defined contribution scheme: the cost to the NHS Body of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. The scheme is subject to a full actuarial valuation every four years (until 2004, every five years) and an accounting valuation every year.

Severance payments The Trust provided for additional termination costs of £344,158 in 14/15. Actual redundancy payments paid in year were £921,619 which were provided for in the 13/14 Accounts, in accordance with agreed workforce plans. All payments made in 14/15 were made in accordance with NHS terms and conditions. No special severance payments were made to any member of staff.

Sickness and absence The sickness performance of the Trust is summarised in the table below. 2014 NUMBER

2013 NUMBER

Total days lost

87,997

87,247

Total staff years

11,614

11,768

7.58

7.41

Average working days lost

External auditors The Trust employed the services of KPMG as the external auditor for the Trust. The Auditors perform their work in accordance with the Audit Commission’s Code of Practice. The Codes of Audit Practice define the scope, nature and extent of local audit work. The main areas of work included the audit of financial statements, Quality Account and review of the Trust arrangements for securing economy, efficiency and effectiveness in our use of resources (value for money). KPMG charged a fee of £156,750 (excluding VAT) for these services. The cost of the undertaking the Quality Account audit was £10,000 (excluding VAT). The Group has also received non audit services from KPMG in relation to VAT and taxation advice to support compilation of VAT returns and claims and HMRC compliance of £65,000 (excluding VAT).

Annual governance assurance statement The Annual Governance Assurance Statement is printed in full in the Trust’s 14/15 Annual Accounts.

Fraud awareness The Trust complies with the National Counter Fraud Initiative and has an accredited local counter fraud specialist.

The staff sickness absence data is stated for the calendar year as being the latest available data at the time of preparation of the annual report and accounts. The Department of Health considers these as a reasonable proxy for the financial year. Total days lost through sickness reduced marginally in 2014 compared with 2013, resulting in an average working days lost per whole time equivalent of 7.58 (7.41 in 2013).


59

Foreword to the Accounts These accounts for the year ended 31 March 2015 have been prepared by Nottingham University Hospitals NHS Trust under section 98(2) of the NHS Act 1977 (as amended by section 24(2) schedule 2 of the NHS and Community Care Act 1990) in the form which the Secretary of State has, with the approval of the Treasury, directed.

STATEMENT OF THE CHIEF EXECUTIVE’S RESPONSIBILITIES AS THE ACCOUNTABLE OFFICER OF THE TRUST

STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ACCOUNTS

The Chief Executive of the NHS Trust Development Authority has designated that the Chief Executive should be the Accountable Officer to the Trust. The relevant responsibilities of Accountable Officers are set out in the Accountable Officers Memorandum issued by the Chief Executive of the NHS Trust Development Authority. These include ensuring that:

The Directors are required under the National Health Service Act 2006 to prepare accounts for each financial year. The Secretary of State, with the approval of the Treasury, directs that these accounts give a true and fair view of the state of affairs of the Trust and of the income and expenditure, recognised gains and losses and cash flows for the year. In preparing those Accounts, Directors are required to:

• There are effective management systems in place to safeguard public funds and assets and assist in the implementation of corporate governance

• Apply on a consistent basis accounting policies laid down by the Secretary of State with the approval of the Treasury

• Value for money is achieved from the resources available to the Trust

• Make judgements and estimates which are reasonable and prudent

• The expenditure and income of the Trust has been applied to the purposes intended by Parliament and conform to the authorities which govern them

• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the Accounts

• Effective and sound financial management systems are in place; and

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Trust and to enable them to ensure that the Accounts comply with requirements outlined in the above mentioned direction of the Secretary of State. They are also responsible for safeguarding the assets of the Trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

• Annual statutory accounts are prepared in a format directed by the Secretary of State with the approval of the Treasury to give a true and fair view of the state of affairs as at the end of the financial year and the income and expenditure, recognised gains and losses and cash flows for the year To the best of my knowledge and belief, I have properly discharged the responsibilities set out in my letter of appointment as an Accountable Officer.

The Directors confirm to the best of their knowledge and belief they have complied with the above requirements in preparing the accounts. By order of the Board

Chief Executive Chief Executive Date Date

Finance Director

Date

60

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF NOTTINGHAM UNIVERSITY HOSPITALS NHS TRUST We have audited the financial statements of Nottingham University Hospitals NHS Trust and Group for the year ended 31 March 2015 on pages 1 to 57. These financial statements have been prepared under applicable law and the accounting policies directed by the Secretary of State with the consent of the Treasury as relevant to NHS Trusts in England. We have also audited the information in the Remuneration Report that is subject to audit. This report is made solely to the Board of Directors of Nottingham University Hospitals NHS Trust, as a body, in accordance with Part II of the Audit Commission Act 19981. Our audit work has been undertaken so that we might state to the Board of the Trust, as a body, those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Board of the Trust, as a body, for our audit work, for this report or for the opinions we have formed.

Respective responsibilities of Directors and auditor As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of financial statements which give a true and fair view. Our responsibility is to audit, and express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Trust’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements.

1

In addition we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the financial position of the Group and the Trust as at 31 March 2015 and of the GRoup’s and the Trust’s expenditure and income for the year then ended; and • have been properly prepared in accordance with the accounting policies directed by the Secretary of State with the consent of the Treasury as relevant to NHS Trusts in England.

Opinion on other matters prescribed by the Code of Audit Practice 2010 for local NHS bodies In our opinion: • the part of the Remuneration Report subject to audit has been properly prepared in accordance with the accounting policies directed by the Secretary of State with the consent of the Treasury as relevant to NHS Trusts in England; and • the information given in the Strategic Report and Director’s Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Code of Audit Practice 2010 for local NHS bodies requires us to report to you if: • in our opinion, the Governance Statement does not reflect compliance with the NHS Trust Development Authority guidance; • any referrals to the Secretary of State have been made under section 19 of the Audit Commission Act 1998; or • any matters have been reported in the public interest under the Audit Commission Act 1998 in the course of, or at the end of the audit.

References in this report to the Audit Commission Act 1998 are saved transitionally for the purpose of the 2014/15 audit of accounts. Annual Report and Accounts 2014/15

61

Conclusion on the Trust’s arrangements for securing economy, efficiency and effectiveness in the use of resources

Basis for qualified conclusion

Respective responsibilities of the Trust and auditor

• The Group has delivered a small surplus of £0.750m in 2014/15. The Trust has received substantial nonrecurrent financial support during the year to support this position, including £11m from the Department of Health; and

The Trust is responsible for putting in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources, to ensure proper stewardship and governance, and to review regularly the adequacy and effectiveness of these arrangements. We are required under Section 5 of the Audit Commission Act 1998 to satisfy ourselves that the Trust has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources. The Code of Audit Practice 2010 for local NHS bodies issued by the Audit Commission requires us to report to you our conclusion relating to proper arrangements, having regard to relevant criteria specified by the Audit Commission. We report if significant matters have come to our attention which prevent us from concluding that the Trust has put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources. We are not required to consider, nor have we considered, whether all aspects of the Trust’s arrangements for securing economy, efficiency and effectiveness in its use of resources are operating effectively.

In considering the Trust’s arrangements for securing financial resilience, through financial planning we identified that:

• The Trust has set a £49.2m deficit budget for 2015/16, which includes a £44m financial efficiency programme.

Conclusion On the basis of our work, having regard to the guidance on the specified criteria published by the Audit Commission in October 2014, with the exception of the matters reported in the basis for qualified conclusion paragraph above we are satisfied that, in all material respects, Nottingham University Hospitals NHS Trust has put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources for the year ending 31 March 2015.

Certificate We certify that we have completed the audit of the accounts of Nottingham University Hospitals NHS Trust in accordance with the requirements of the Audit Commission Act 1998 and the Code of Audit Practice 2010 for local NHS bodies issued by the Audit Commission.

Scope of the review of arrangements for securing economy, efficiency and effectiveness in the use of resources We have undertaken our work in accordance with the Code of Audit Practice 2010 for local NHS bodies, having regard to the guidance on the specified criteria, published by the Audit Commission in October 2014, as to whether the Trust has proper arrangements for: • securing financial resilience; and • challenging how it secures economy, efficiency and effectiveness. The Audit Commission has determined these two criteria as those necessary for us to consider under the Code of Audit Practice 2010 for local NHS bodies in satisfying ourselves whether the Trust put in place proper arrangements for securing economy, efficiency and effectiveness in its use of resources for the year ended 31 March 2015. We planned and performed our work in accordance with the Code of Audit Practice 2010 for local NHS bodies. Based on our risk assessment, we undertook such work as we considered necessary to form a view on whether, in all material respects, the Trust had put in place proper arrangements to secure economy, efficiency and effectiveness in its use of resources.

62

John Cornett for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants St Nicholas House Park Row Nottingham NG1 6FQ 4 June 2015

Remuneration report

it was established that only the Executive Directors (EDs) and NonExecutive Directors (NEDs) and not Board Advisors should be disclosed in the Remuneration Report. This approach was also agreed with KPMG.

Salary and pension entitlements of senior managers The definition of “Senior Managers” is ‘those persons in senior positions having authority or responsibility for directing or controlling the major activities of the NHS body. This means those who influence the decisions of the entity as a whole rather than the decisions of individual directorates or departments.’ Following discussion with the Trust Secretary and Chief Executive and a review of peer acute teaching Trusts,

Director are presented to the Remuneration Committee for their assessment in each year. There are no performance related or bonus schemes in place for the Executive Team. The Trust uses permanent appointments with three month notice periods for Directors, with a longer notice period for the Chief Executive.

Their 14/15 remuneration and pension entitlement are disclosed in the tables below. Remuneration levels are set by the Board’s Remuneration Committee, based on benchmarked information obtained via the Association of UK University Hospitals salary surveys, supplemented by advice where appropriate from external agencies. All Non-Executive Directors are members of the Committee. Reviews of the performance of each Executive

There is no entitlement to any payment on termination or resignation outside of these payments, other than in the case of redundancy or ill health retirement when standard NHS terms apply. No awards have been made to previous members of the Executive team in the financial year in question.

Remuneration 2014/15 NAME AND TITLE

2013/14

SALARY (BANDS OF £5,000) £000

EXPENSE PATMENTS (TAXABLE) TOTAL TO NEAREST £100 £00

ALL PENSION RELATED BENEFITS (BANDS OF £2,500) £000*

TOTAL (BANDS OF £5,000) £000

SALARY (BANDS OF £5,000) £000

EXPENSE PATMENTS (TAXABLE) TOTAL TO NEAREST £100 £00

ALL PENSION RELATED BENEFITS (BANDS OF £2,500) £000*

TOTAL (BANDS OF £5,000) £000

Dr P Homa, Chief Executive

215-220

0

0

215-220

195-200

0

7.5-10.0

205-210

Miss JL Leggott, Director of Nursing, Midwifery, Operations and Service Improvement

95-100

0

0

95-100

150-155

0

82.5-85.0

230-235

Mrs D Athwal, Acting Director of Nursing and Midwifery

25-30

0

17.5-20

45-50

0

0

0

0

Ms Sunderland, Director of Nursing and Midwifery

25-30

0

0

25-30

0

0

0

0

Dr S Fowlie, Medical Director

200-205

0

0

200-205

205-210

0

2.5-5.0

205-210

Mr R Eggington, Director of Finance and Procurement

170-175

0

0

170-175

170-175

0

10.0-12.5

180-185

Mr D Mortimer, Director of Workforce and Strategy

75-80

0

0

75-80

120-125

0

10.0-12.5

130-135

Mr T Guyler, Acting Chief Operating Officer

35-40

0

15.0-17.5

50-55

0

0

0

0

Ms L Scull (Chair)

20-25

0

0

20-25

15-20

0

0

15-20

Mr FA McKee

5-10

0

0

5-10

5-10

0

0

5-10

Mrs J Pomeroy

5-10

0

0

5-10

5-10

0

0

5-10

Mrs J Tabreham

5-10

0

0

5-10

5-10

0

0

5-10

Mr H Sewell

5-10

0

0

5-10

5-10

0

0

5-10

Mr S Thomas

5-10

0

0

5-10

0

0

0

0

Executives

Non-Executives

* All pension related benefits was a new disclosure item required by the NHS Manual for Accounts 2013-14 Chapter 5 Annex 1


63

Pension entitlements Salary and pension entitlements of senior managers pensions benefits NAME AND TITLE

REAL INCREASES IN PENSION AT AGE 60 (BANDS OF £2,500) £000

Dr P Homa, Chief Executive

REAL INCREASES IN PENSION LUMP SUM AT AGE 60 (BANDS OF £2,500) £000

TOTAL ACCRUED PENSION AT AGE 60 AT 31 MARCH 2015 (BANDS OF £5,000) £000

LUMP SUM AT AGE 60 RELATED TO ACCRUED PENSION AT 31 MARCH 2015

CASH EQUIVALENT TRANSFER VALUE AT 1 APRIL 2014 £000

CASH EQUIVALENT TRANSFER VALUE AT 31 MARCH 2015

REAL INCREASES IN CASH EQUIVALENT TRANSFER VALUE

£000

£000

(BANDS OF £5,000) £000

0.0-2.5

0.0-2.5

80-85

245-250

1,755

1,862

59

0

0

60-65

205-210

1,420

0

N/A

0.0-2.5

2.5-5.0

30-35

95-100

472

569

21

Ms Sunderland, Director of Nursing and Midwifery

0

0

45-50

140-145

873

872

0

Dr S Fowlie, Medical Director

0

0

70-75

220-225

1,599

1,690

48

Mr R Eggington, Director of Finance and Procurement

0.0-2.5

0.0-2.5

55-60

175-180

1,000

1,066

39

Mr D Mortimer, Director of Workforce and Strategy

0.0-2.5

0.0-2.5

30-35

95-100

449

483

13

Mr T Guyler, Acting Chief Operating Officer

0.0-2.5

2.5-5.0

20-25

70-75

268

318

14

Miss JL Leggott, Director of Nursing, Midwifery, Operations and Service Improvement Mrs D Athwal, Acting Director of Nursing and Midwifery

NOTES: The Pension Inflation Rate for 14/15 of 2.7% confirmed by the DH. The Trust has no employer contributions for Partnership pension accounts.

Cash equivalent transfer values A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies. The CETV figures and the other pension details include the

64

value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries.

Real increase in CETV The Chief Secretary to the Treasury made a written statement on 7 February 12 that public service pensions would be increased by 5.2% from 9 April 12, in line with the consumer prices index. The opening CETV value for 31 March 12 has therefore been adjusted by this inflation factor to arrive at the real terms change in pension value to 31 March 13, presented in the table above.

Pay multiples Reporting bodies are required to disclose the relationship between the remuneration of the highest paid director in their organisation and the median remuneration of the organisation’s workforce. The mid point of the banded remuneration of the highest paid director at NUH in the financial year 2014/15 was £217,500 (13/14, £200,000-£202,500). This was 7.9 times (13/14, 7.4 times) the median remuneration of the workforce, which was £27,870 (13/14, £27,065). In 14/15, five (13/14, 6) employees received remuneration in excess of the highest paid Director. Remuneration ranged from £42,000 to £323,884 (13/14 £70-£223,775).

Total remuneration includes salary, non-consolidated performancerelated pay, benefits-in-kind as well as severance payments. It does not include employer pension contributions and the cash equivalent transfer value of pensions. It can be seen that the ratio has increased in 14/15. The median rate of pay increased by 3%.

Reporting related to the Review of Tax Arrangements of Public Sector Appointees HM Treasury requires public sector bodies to report arrangements where individuals are paid through their own companies (and so are responsible for their own tax and NI arrangements, not being classed as employees). The Trust is required to disclose: • All off-payroll engagements as of 31 March 15, of more than £220 per day and lasting longer than six months (see Table 1) • All new off-payroll engagements between 1 April 14 and 31 March 15, for more than £220 per day and lasting longer than six months (see Table 2) It is current Trust policy that assurance that individuals are paying the right amount of tax is not specifically sought for those individuals who are contracted through an employment agency on the basis that these organisations will have existing arrangements in place for ensuring appropriate deductions are made and therefore there is low risk associated with these individuals. The Trust does not have any cases where assurances have not been received or terminations have taken place as a result of assurances not being received. All existing off-payroll engagements have been subject to a risk based assessment as to whether assurance is required that the individual is paying the right amount of tax and, where necessary, that assurance has been sought.

Off-payroll engagements TABLE 1: For all off-payroll engagements as of 31 March 15, for more than £220 per day and that last for longer than six months

DCS

EFM

TOTALS

12

1

13

No. that have existed for between one and two years at time of reporting

7

1

8

No. that have existed for between two and three years at time of reporting

2

0

2

No. that have existed for between three and four years at time of reporting

0

0

0

No. that have existed for four or more years at time of reporting

0

0

0

TABLE 2: For all new off-payroll engagements between 1 April 14 and 31 March 15, for more than £220 per day and that last for longer than six months

DCS

EFM

TOTALS

The number of new engagements

3

3

6

The number of new engagements which include contractual clauses giving the department the right to request assurance in relation to income tax and National Insurance obligations

3

3

6

The number for whom assurance has been requested

0

0

0

The number for whom assurance has been requested and received

0

0

0

The number for whom assurance has been requested but not received

0

0

0

The number that have been terminated as a result of assurance not being received

0

0

0

No. of existing engagements as of 31 March 15 Of which...


65

Exit packages Exit packages agreed by the Trust during the year are disclosed in the table below. Redundancy and other departure costs have been paid in accordance with the provisions of the NHS Scheme. Exit costs in this note are accounted for in full in the year of departure. Where the Trust has agreed early retirements, the additional costs are met by the Trust and not by the NHS pension’s scheme. Ill-health retirement costs are met by the NHS pension’s scheme and are not included in the table. 2014/15 EXIT PACKAGE COST BAND (INCLUDING ANY SPECIAL PAYMENT ELEMENT)

2013/14

*NUMBER OF COMPULSORY REDUNDANCIES

*NUMBER OF OTHER DEPARTURES AGREED

TOTAL NUMBER OF EXIT PACKAGES BY COST BAND




NUMBER

NUMBER

NUMBER

NUMBER

NUMBER

NUMBER

Less than £10,000

1

0

1

3

0

3

£10,000-£25,000

2

0

2

4

0

4

£25,001-£50,000

3

3

6

3

0

3

£50,001-£100,000

6

0

6

0

0

0

£100,001-£150,000

0

0

0

0

0

0

£150,001-£200,00

1

0

1

0

0

0

>£200,000

0

0

0

0

0

0

13

3

16

10

0

10

Total resource cost (£s)

793,413

128,206

921,619

198,748

0

198,748

EXIT PACKAGE COST BAND (INCLUDING ANY SPECIAL PAYMENT ELEMENT)



£’000S

£’000S

Less than £10,000

2

9

£10,000-£25,000

46

70

£25,001-£50,000

97

120

£50,001-£100,000

485

0

£100,001-£150,000

0

0

£150,001-£200,00

164

0

793

199

Total number of exit packages by type (total cost)

>£200,000


66

2014/15 EXIT PACKAGE – OTHER DEPARTURES ANALYSIS

2013/14

AGREEMENTS

TOTAL VALUE OF AGREEMENTS

AGREEMENTS


NUMBER

£000S

NUMBER

£000S

Voluntary redundancies including early retirement contractual costs

0

0

0

0

Mutually agreed resignations (MARS) contractual costs

3

128

0

0

Early retirements in the efficiency of the serivice contractual costs

0

0

0

0

Contractual payments in lieu of notice

0

0

0

0

Exit payments following Employment Tribunals or court orders

0

0

0

0

Non-contractual payments requiring HMT approval*

0

0

0

0


3

128

0

0

Non-contractual payments made to individuals where the payment value was more than 12 months of their annual salary

0

0

0

0

This disclosure reports the number and value of exit packages agreed in the year. Note: the expense associated with these departures may have been recognised in part or in full in a previous period. As a single exit package can be made up of several components each of which will be counted separately in this Note, the total number above will not necessarily match the total numbers in Note 10.4 which will be the number of individuals.


67

Nottingham University Hospitals NHS Trust – Annual Accounts 14-15

Consolidated Statement of Comprehensive Income for year ended 31 March 15 2014-15

2013-14

NOTE

£000s

£000s

10.1

(523,229)

(520,788)

Other operating costs

8

(328,758)

(303,977)

Revenue from patient care activities

5

745,395

695,123

Other operating revenue

6

128,695

138,965

22,103

9,323

Gross employee benefits

Operating surplus Investment revenue

12

214

262

Other gains and (losses)

13

(121)

(182)

Finance costs

14

(2,745)

(2,786)

19,451

6,617

(199)

(127)

Surplus for the financial year after taxation

19,252

6,490

Public dividend capital dividends payable

(12,071)

(11,652)

7,181

(5,162)

Surplus for the financial year before taxation Taxation

Retained surplus/(deficit) for the year

68

45

2014-15

2013-14

NOTE

£000s

£000s

Impairments and reversals taken to the revaluation reserve

15

(5,333)

(15,634)

Net gain on revaluation of property, plant & equipment

15

6,400

5,704

8,248

(15,092)

OTHER COMPREHENSIVE INCOME

Total comprehensive income for the year Financial performance for the year: Retained surplus/(deficit) for the year

43

7,181

(5,162)

IFRIC 12 adjustment (including IFRIC 12 impairments)

17 & 38

(227)

(28)

17

(3,456)

8,763

(2,748)

(2,640)

750

933

Impairments (excluding IFRIC 12 impairments) Adjustments in respect of donated government grant asset reserve elimination Adjusted retained surplus

A Trust’s Reported NHS financial performance position is derived from its Retained Surplus/(Deficit), but adjusted for the following: a) Impairments to Fixed Assets 09/10 was the final year for organisations to revalue their assets to a Modern Equivalent Asset (MEA) basis of valuation. An impairment charge is not considered part of the organisation’s operating position. b) The revenue cost of bringing PFI assets onto the balance sheet (due to the introduction of International Financial Reporting Standards (IFRS) accounting in 09/10). c) The reduction in revenue as a result of the removal of Donated Asset reserve and the associated release of income to offset in year depreciation of donated assets. d) The increase in revenue as a result of the release of income to the value of capital donations in year. The notes on pages 80 to 147 form part of this Account.


69

Consolidated statement of financial position as at 31 March 15 GROUP

TRUST

31 MARCH 2015

31 MARCH 2014

31 MARCH 2015

31 MARCH 2014

NOTE

£000s

£000s

£000s

£000s

Property, plant and equipment

15

443,707

421,171

443,707

421,171

Intangible assets

16

8,536

9,529

8,536

9,529

Investment property

18

0

0

0

0

Other financial assets

24

0

0

0

0

22.1

1,853

2,138

1,853

2,138

454,096

432,838

454,096

432,838

21

19,343

18,252

18,296

17,403

22.1

45,435

46,706

47,830

48,487

Other financial assets

24

0

0

0

0

Other current assets

25

811

0

811

0

Cash and cash equivalents

26

40,806

68,185

39,848

68,142

106,395

133,143

106,785

134,032

0

0

0

0

Total current assets

106,395

133,143

106,785

134,032

Total assets

560,491

565,981

560,881

566,870

Non-current assets:

Trade and other receivables Total non-current assets Current assets: Inventories Trade and other receivables

Sub-total current assets Non-current assets held for sale

27

Current liabilities:

70

Trade and other payables

28

(81,557)

(101,998)

(83,226)

(103,431)

Other liabilities

29

0

0

0

0

Provisions

35

(8,260)

(9,816)

(8,260)

(9,816)

Borrowings

30

(4,348)

(2,023)

(4,348)

(2,023)

Consolidated statement of financial position as at 31 March 15 (continued) GROUP

TRUST

31 MARCH 2015

31 MARCH 2014

31 MARCH 2015

31 MARCH 2014

NOTE

£000s

£000s

£000s

£000s

Other financial liabilities

31

0

0

0

0

DH revenue support loan

30

0

0

0

0

DH capital loan

30

(1,252)

(1,252)

(1,252)

(1,252)

(95,417)

(115,089)

(97,086)

(116,522)

Net current assets/(liabilities)

10,978

18,054

9,699

17,510

Total assets less current liablilities

465,074

450,892

463,795

450,348

Total current liabilities

Non-current liabilities Trade and other payables

28

0

0

0

0

Other liabilities

31

0

0

0

0

Provisions

35

(2,819)

(2,823)

(2,819)

(2,823)

Borrowings

30

(13,762)

(14,317)

(13,762)

(14,317)


31

0

0

0

0

DH revenue support loan

30

0

0

0

0

DH capital loan

30

(15,473)

(16,725)

(15,473)

(16,725)

Total non-current liabilities

(32,054)

(33,865)

(32,054)

(33,865)

Total assets employed:

433,020

417,027

431,741

416,483

Public Dividend Capital

407,896

400,151

407,896

400,151

Retained earnings

(24,667)

(34,337)

(25,946)

(34,881)

49,791

51,213

49,791

51,213

0

0

0

0

433,020

417,027

431,741

416,483

FINANCED BY:

Revaluation reserve Other reserves Total Taxpayers' Equity:

15

The notes on pages 80 to 147 form part of this account. The financial statements on pages 68 to 79 were approved by the Board on 3rd June 2015 and signed on its behalf by Chief Executive:

Date: 3 June 2015


71

Consolidated statement of changes in taxpayers’ equity for the year ending 31 March 15 PUBLIC DIVIDEND CAPITAL

RETAINED EARNINGS

REVALUATION RESERVE

TOTAL RESERVES

£000s

£000s

£000s

£000s

400,151

(34,337)

51,213

417,027

Retained surplus for the year

–

7,181

–

7,181

Net gain on revaluation of property, plant, equipment

–

–

6,400

6,400

Impairments and reversals

–

–

(5,333)

(5,333)

Transfers between reserves

–

2,489

(2,489)

0

New temporary and permanent PDC received - cash

7,745

–

–

7,745

Net recognised revenue/(expense) for the year

7,745

9,670

(1,422)

15,993

Balance at 31 March 2015

407,896

(24,667)

49,791

433,020

Balance at 1 April 2013

399,471

(34,047)

66,015

431,439

Balance at 1 April 2014 Changes in taxpayers’ equity for 2014-15:

Changes in taxpayers’ equity for the year ended 31 March 2014: Retained surplus/(deficit) for the year

(5,162)

Net gain on revaluation of property, plant, equipment Impairments and reversals Transfers between reserves

5,704

5,704

(15,634)

(15,634)

(4,872)

0


680


680

(290)

(14,802)

(14,412)

400,151

(34,337)

51,213

417,027


72

4,872

(5,162)

680

Trust statement of changes in taxpayers’ equity for the year ending 31 March 15


PUBLIC DIVIDEND CAPITAL

RETAINED EARNINGS

REVALUATION RESERVE

TOTAL RESERVES

£000s

£000s

£000s

£000s

400,151

(34,881)

51,213

416,483

Changes in taxpayers’ equity for 2014-15: Retained surplus for the year

6,446

6,446

Net gain on revaluation of property, plant, equipment

6,400

6,400


(5,333)

(5,333)

(2,489)

0

Transfers between reserves

2,489


7,745


7,745

8,935

(1,422)

15,258


407,896

(25,946)

49,791

431,741


399,471

(34,359)

66,015

431,127

7,745

Changes in taxpayers’ equity for the year ended 31 March 2014: Retained surplus/(deficit) for the year

(5,394)

Net gain revaluation of property, plant, equipment Impairments and reversals Transfers between reserves

4,872

(5,394) 5,704

5,704

(15,634)

(15,634)

(4,872)

0

New temporary and permanent PDC repaid in year

680


680

(522)

(14,802)

(14,644)

400,151

(34,881)

51,213

416,483


680


73

Consolidated statement of cash flows for the year ended 31 March 15

NOTE

2014-15

2013-14

£000s

£000s

22,030

9,323

Cash Flows from Operating Activities: Operating surplus/(deficit) Depreciation and amortisation

15

25,943

25,977


17

(3,683)

8,674

Donated Assets received credited to revenue but non-cash

(1,889)

(973)

Interest paid

(2,745)

(2,786)

Dividend paid

(12,112)

(11,259)

(Increase)/Decrease in Inventories

21

(1,091)

(3,156)

(Increase)/Decrease in Trade and Other Receivables

22

1,556

(18,997)

(Increase)/Decrease in Other Current Assets

25

(811)

0

Increase/(Decrease) in Trade and Other Payables

28

(18,286)

14,753

(127)

(87)

Tax paid Provisions utilised

35

(2,259)

(3,913)

Increase/(Decrease) in movement in non cash provisions

35

699

1,052

7,225

18,608

214

262

Net Cash Inflow/(Outflow) from Operating Activities Cash Flows from Investing Activities: Interest Received (Payments) for Property, Plant and Equipment

15

(41,685)

(21,610)

(Payments) for Intangible Assets

16

(1,475)

(7,466)

79

0

Net Cash Inflow/(Outflow) from Investing Activities

(42,867)

(28,814)

Net Cash Inform/(Outflow) before Financing

(35,642)

(10,206)

Proceeds of disposal of assets held for sale (PPE)

74

Consolidated statement of cash flows for the year ended 31 March 15 (continued)

NOTE

2014-15

2013-14

£000s

£000s

7,745

680

Cash Flows from Financing Activities: Gross Temporary and Permanent PDC Received Loans repaid to DH - Capital Investment Loans Repayment of Principal

30

(1,252)

(1,252)

Capital Element of Payments in Respect of Finance Leases and On-SoFP PFI and LIFT

30

(1,530)

(655)

4,963

(1,227)

(30,679)

(11,433)

67,685

79,118

0

0

37,006

67,685

Net Cash Inflow/(Outflow) from Financing Activities NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and Cash Equivalents (and Bank Overdraft) at Beginning of the Period

26

Effect of exchange rate changes in the balance of cash held in foreign currencies Cash and Cash Equivalents (and Bank Overdraft) at year end

26


75

Consolidated statement of comprehensive income for year ended 31 March 15 NUH

HPSN LTD

INTER-GROUP ELIMINATIONS

TOTAL

14-15

14-15

14-15

14-15

NOTE

£000s

£000s

£000s

£000s

10.1

(522,451)

(778)

Other operating costs

8

(349,259)

(19,490)

Revenue from patient care activities

5

745,395

0

Other Operating revenue

6

147,486

21,200

(39,991)

128,695

21,171

932

0

22,103

Gross employee benefits

Operating surplus/(deficit)

39,991

(328,758) 745,395

Investment revenue

12

214

0

214

Other gains and (losses)

13

(121)

0

(121)

Finance costs

14

(2,747)

2

(2,745)

18,517

934

0

(199)

Surplus/(deficit) after taxation for the financial year

18,517

735

Public dividend capital dividends payable

(12,071)

0

6,446

735

Surplus/(deficit) before taxation for the financial year Taxation


76

(523,229)

45

0

19,451 (199)

0

19,252 (12,071)

0

7,181

Other comprehensive income NUH

HPSN LTD


TOTAL

14-15

14-15

14-15

14-15

Impairments and reversals taken to the Revaluation Reserve

(5,333)

0

0

(5,333)

Net gain/(loss) on revaluation of property, plant & equipment

6,400

0

0

6,400

Total Comprehensive Income for the year

7,513

735

0

8,248


6,446

735

0

7,181

IFRIC 12 adjustment (including IFRIC 12 impairments)

(227)

0

(227)

Impairments (excluding IFRIC 12 impairments)

(3,456)

0

(3,456)

Adjustments in respect of donated gov’t grant asset reserve elimination

(2,748)

0

(2,748)

15

735

Financial performance for the year:

Adjusted retained surplus/(deficit)

0

750


77

Consolidated statement of financial position as at 31 March 15 NUH

HPSN LTD


TOTAL

14-15

14-15

14-15

14-15

NOTE

£000s

£000s

£000s

£000s

Property, plant and equipment

15

443,707

0

0

443,707

Intangible assets

16

8,536

0

0

8,536

22.1

1,853

0

0

1,853

454,096

0

0

454,096

21

18,296

1,047

0

19,343

Trade and other receivables

22.1

47,596

3,097

(5,492)

45,201

Cash and cash equivalents

26

39,848

958

0

40,806


106,551

5,102

(5,492)

106,161


106,551

5,102

(5,492)

106,161

Total assets

560,647

5,102

(5,492)

560,257

Non-current assets:

Trade and other receivables Total non-current assets Current assets: Inventories

Current liabilities: Trade and other payables

28

(82,992)

(3,823)

5,492

(81,323)

Provisions

35

(8,260)

0

0

(8,260)

Borrowings

30

(4,348)

0

0

(4,348)

Capital loan from Department

30

(1,252)

0

0

(1,252)

(96,852)

(3,823)

5,492

(95,183)

9,699

1,279

0

10,978

463,795

1,279

0

465,074

Total current liabilities Net current assets/(liabilities) Non-current assets plus/less net current assets/liabilities

78

Consolidated statement of financial position as at 31 March 15 (continued) NUH

HPSN LTD


TOTAL

14-15

14-15

14-15

14-15

NOTE

£000s

£000s

£000s

£000s

Provisions

35

(2,819)

0

0

(2,819)

Borrowings

30

(13,762)

0

0

(13,762)

Capital loan from Department

30

(15,473)

0

0

(15,473)

Total non-current liabilities

(32,054)

0

0

(32,054)

Total Assets Employed:

431,741

1,279

0

433,020

Non-current liabilities:

FINANCED BY: TAXPAYERS' EQUITY Public Dividend Capital

407,896

Retained earnings

(25,946)

Revaluation reserve

49,791

Total Taxpayers' Equity:

431,741

407,896 1,279

(24,667) 49,791

1,279

0

433,020


79

NOTES TO THE ACCOUNTS 1. Accounting Policies The Secretary of State for Health has directed that the financial statements of NHS trusts shall meet the accounting requirements of the Department of Health Group Manual for Accounts, which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the DH Group Manual for Accounts 2014-15 issued by the Department of Health. The accounting policies contained in that manual follow International Financial Reporting Standards to the extent that they are meaningful and appropriate to the NHS, as determined by HM Treasury, which is advised by the Financial Reporting Advisory Board. Where the Manual for Accounts permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the trust for the purpose of giving a true and fair view has been selected. The particular policies adopted by the trust are described below. They have been applied consistently in dealing with items considered material in relation to the accounts.

1.1 Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment, intangible assets, inventories and certain financial assets and financial liabilities.

1.2 Acquisitions and discontinued operations Activities are considered to be ‘acquired’ only if they are taken on from outside the public sector. Activities are considered to be ‘discontinued’ only if they cease entirely. They are not considered to be ‘discontinued’ if they transfer from one public sector body to another.

80

1.3 Movement of assets within the DH Group “Transfers as part of reorganisation fall to be accounted for by use of absorption accounting in line with the Treasury FReM. The FReM does not require retrospective adoption, so prior year transactions (which have been accounted for under merger accounting) have not been restated. Absorption accounting requires that entities account for their transactions in the period in which they took place, with no restatement of performance required when functions transfer within the public sector. Where assets and liabilities transfer, the gain or loss resulting is recognised in the SOCNE/SOCNI, and is disclosed separately from operating costs. Other transfers of assets and liabilities within the Group are accounted for in line with IAS20 and similarly give rise to income and expenditure entries. For transfers of assets and liabilities from those NHS bodies that closed on 1 April 2013, Treasury agreed that a modified absorption approach should be applied. For these transactions and only in the prior-period, gains and losses are recognised in reserves rather than the SOCNE/SOCNI.”

1.4 Charitable Funds Under the provisions of IAS 27 Consolidated and Separate Financial Statements, those Charitable Funds that fall under common control with NHS bodies are consolidated within the entity’s financial statements. In accordance with IAS 1 Presentation of Financial Statements, restated prior period accounts are presented where the adoption of the new policy has a material impact. The Nottingham University Hospitals Charity (NUH Charity) is an independent Section 11 Charity with its own Trustees. The Trust does not exercise of control or influence over the NUH Charity. The balances in the NUH Charity are also immaterial to the NUH Trust. NUH have therefore chosen not to consolidate the NUH Charity accounts with the Trust Accounts.

1.5 Pooled Budgets Nottingham University Hospitals NHS Trust does not operate any pooled budgets and has no arrangements where funds are pooled under S75 of the NHS Act 2006.

1.6 Critical accounting judgements and key sources of estimation uncertainty In the application of the Trust’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates and the estimates and underlying assumptions are continually reviewed. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

1.6.1 Critical judgements in applying accounting policies The following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the Trust’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements. The assessment of PFI scheme arrangements; whether they fall within the scope of IFRIC 12 and if so the determination of control over the related assets to determine whether they are included or excluded from the Trust’s statement of financial position. The assessment as to the probability of the settlement of obligations arising as a result of a past event such that the Trust must establish a provision for payment of said obligations.

Where income is received for a specific activity that is to be delivered in the following year, that income is deferred. The Department of Health requires all NHS bodies to agree back-to-back any debtors and creditors in the SoFP meaning that only agreed NHS funding for future years can be carried forwarded in the SoFP. Consequently, any unagreed amounts are provided for by the NUH, in accordance with the contractual obligations agreed by the counterparties, as the amounts would be repayable to the funding provider, in the event that they are not applied for their agreed purpose.

1.10 Property, plant and equipment

• the cost of the item can be measured reliably; and

Due to the nature of the obligations to make provisions amounts are uncertain and hence final settlement figures may vary from those provided in the accounts.

The Trust receives income under the NHS Injury Cost Recovery Scheme, designed to reclaim the cost of treating injured individuals to whom personal injury compensation has subsequently been paid e.g. by an insurer. The Trust recognises the income when it receives notification from the Department of Work and Pension’s Compensation Recovery Unit that the individual has lodged a compensation claim. The income is measured at the agreed tariff for the treatments provided to the injured individual, less a provision for unsuccessful compensation claims and doubtful debts.

1.7 Revenue

1.8 Employee Benefits

Revenue in respect of services provided is recognised when, and to the extent that, performance occurs, and is measured at the fair value of the consideration receivable. The main source of revenue for the trust is from commissioners for healthcare services. Revenue relating to patient care spells that are part-completed at the year end are apportioned across the financial years on the basis of *length of stay at the end of the reporting period compared to expected total length of stay/costs incurred to date compared to total expected costs.

Short-term employee benefits

The assessment of the risks and rewards of ownership and control of assets in lease and similar arrangements under IAS 17 and IFRIC 4 to determine whether arrangements should be treated as finance or operating leases.

1.6.2 Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year The estimate of the required level of provisions is performed by the Trust on a case by case basis using the best information available at the time. The liability provided for at the 31st March 2014 was £12,639,000. The liability provided for at the 31st March 2015 was £11,079,000.

Salaries, wages and employmentrelated payments are recognised in the period in which the service is received from employees. The cost of leave earned but not taken by employees at the end of the period is recognised in the financial statements to the extent that employees are permitted to carry forward leave into the following period.

1.9 Other expenses Other operating expenses are recognised when, and to the extent that, the goods or services have been received. They are measured at the fair value of the consideration payable.

Recognition Property, plant and equipment is capitalised if: • it is held for use in delivering services or for administrative purposes • it is probable that future economic benefits will flow to, or service potential will be supplied to the Trust • it is expected to be used for more than one financial year

• the item has cost of at least £5,000; or • Collectively, a number of items have a cost of at least £5,000 and individually have a cost of more than £250, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; or • Items form part of the initial equipping and setting-up cost of a new building, ward or unit, irrespective of their individual or collective cost Where a large asset, for example a building, includes a number of components with significantly different asset lives, the components are treated as separate assets and depreciated over their own useful economic lives.

Valuation All property, plant and equipment are measured initially at cost, representing the cost directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets are measured subsequently at fair value.


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Land and buildings used for the Trust’s services or for administrative purposes are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation less any impairment. Revaluations are performed with sufficient regularity to ensure that carrying amounts are not materially different from those that would be determined at the end of the reporting period. Fair values are determined as follows: • Land and non-specialised buildings – market value for existing use • Specialised buildings – depreciated replacement cost HM Treasury has adopted a standard approach to depreciated replacement cost valuations based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued. Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees but not borrowing costs, which are recognised as expenses immediately, as allowed by IAS 23 for assets held at fair value. Assets are revalued and depreciation commences when they are brought into use. Until 31 March 2008, fixtures and equipment were carried at replacement cost, as assessed by indexation and depreciation of historic cost. From 1 April 2008 indexation has ceased. The carrying value of existing assets at that date will be written off over their remaining useful lives and new fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from fair value. An increase arising on revaluation is taken to the revaluation reserve except when it reverses an impairment for the same asset previously recognised in expenditure, in which case it is credited to

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expenditure to the extent of the decrease previously charged there. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit should be taken to expenditure. Gains and losses recognised in the revaluation reserve are reported as other comprehensive income in the Statement of Comprehensive Income.

Subsequent expenditure

on research is not capitalised: it is recognised as an operating expense in the period in which it is incurred. Internally-generated assets are recognised if, and only if, all of the following have been demonstrated: • the technical feasibility of completing the intangible asset so that it will be available for use • the intention to complete the intangible asset and use it • the ability to sell or use the intangible asset • how the intangible asset will generate probable future economic benefits or service potential

Where subsequent expenditure enhances an asset beyond its original specification, the directly attributable cost is capitalised. Where subsequent expenditure restores the asset to its original specification, the expenditure is capitalised and any existing carrying value of the item replaced is written-out and charged to operating expenses.

• the availability of adequate technical, financial and other resources to complete the intangible asset and sell or use it

1.11 Intangible assets

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the criteria above are initially met. Where no internally-generated intangible asset can be recognised, the expenditure is recognised in the period in which it is incurred.

Recognition Intangible assets are non-monetary assets without physical substance, which are capable of sale separately from the rest of the trust’s business or which arise from contractual or other legal rights. They are recognised only when it is probable that future economic benefits will flow to, or service potential be provided to, the trust; where the cost of the asset can be measured reliably, and where the cost is at least £5,000. Intangible assets acquired separately are initially recognised at fair value. Software that is integral to the operating of hardware, for example an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software that is not integral to the operation of hardware, for example application software, is capitalised as an intangible asset. Expenditure

• the ability to measure reliably the expenditure attributable to the intangible asset during its development

Measurement

Following initial recognition, intangible assets are carried at fair value by reference to an active market, or, where no active market exists, at amortised replacement cost (modern equivalent assets basis), indexed for relevant price increases, as a proxy for fair value. Internallydeveloped software is held at historic cost to reflect the opposing effects of increases in development costs and technological advances.

1.12 Depreciation, amortisation and impairments Freehold land, properties under construction, and assets held for sale are not depreciated. Otherwise, depreciation and amortisation are charged to write off the costs or valuation of property, plant and equipment and intangible non-current assets, less any residual value, over their estimated useful lives, in a manner that reflects the consumption of economic benefits or service potential of the assets. The estimated useful life of an asset is the period over which the NHS trust expects to obtain economic benefits or service potential from the asset. This is specific to the NHS trust and may be shorter than the physical life of the asset itself. Estimated useful lives and residual values are reviewed each year end, with the effect of any changes recognised on a prospective basis. Assets held under finance leases are depreciated over their estimated useful lives At each reporting period end, the NHS trust checks whether there is any indication that any of its tangible or intangible non-current assets have suffered an impairment loss. If there is indication of an impairment loss, the recoverable amount of the asset is estimated to determine whether there has been a loss and, if so, its amount. Intangible assets not yet available for use are tested for impairment annually. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the revaluation reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit should be taken to expenditure. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of the recoverable amount but capped at the amount that would have been determined had there been no initial impairment loss. The reversal of the impairment loss is credited to expenditure to the extent of the decrease previously charged there and thereafter to the revaluation reserve.

“Impairments are analysed between Departmental Expenditure Limits (DEL) and Annually Managed Expenditure (AME). This is necessary to comply with Treasury’s budgeting guidance. DEL limits are set in the Spending Review and Departments may not exceed the limits that they have been set. AME budgets are set by the Treasury and may be reviewed with departments in the run-up to the Budget. Departments need to monitor AME closely and inform Treasury if they expect AME spending to rise above forecast. Whilst Treasury accepts that in some areas of AME inherent volatility may mean departments do not have the ability to manage the spending within budgets in that financial year, any expected increases in AME require Treasury approval.”

1.13 Donated assets Donated non-current assets are capitalised at their fair value on receipt, with a matching credit to Income. They are valued, depreciated and impaired as described above for purchased assets. Gains and losses on revaluations, impairments and sales are as described above for purchased assets. Deferred income is recognised only where conditions attached to the donation preclude immediate recognition of the gain.

1.14 Government grants The value of assets received by means of a government grant are credited directly to income. Deferred income is recognised only where conditions attached to the grant preclude immediate recognition of the gain.

1.15 Non-current assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met when the sale is highly probable, the asset is available for immediate sale in its present condition and management is committed to the sale, which is expected to qualify for recognition

as a completed sale within one year from the date of classification. Non-current assets held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Fair value is open market value including alternative uses. The profit or loss arising on disposal of an asset is the difference between the sale proceeds and the carrying amount and is recognised in the Statement of Comprehensive Income. On disposal, the balance for the asset on the revaluation reserve is transferred to retained earnings. Property, plant and equipment that is to be scrapped or demolished does not qualify for recognition as held for sale. Instead, it is retained as an operational asset and its economic life is adjusted. The asset is de-recognised when it is scrapped or demolished.

1.16 Leases Leases are classified as finance leases when substantially all the risks and rewards of ownership are transferred to the lessee. All other leases are classified as operating leases.

The Trust as Lessee Property, plant and equipment held under finance leases are initially recognised, at the inception of the lease, at fair value or, if lower, at the present value of the minimum lease payments, with a matching liability for the lease obligation to the lessor. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate on interest on the remaining balance of the liability. Finance charges are recognised in calculating the trust’s surplus/deficit. Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Lease incentives are recognised initially as a liability and subsequently as a reduction of rentals on a straight-line basis over the lease term. Contingent rentals are recognised as an expense in the period in which they are incurred.


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Where a lease is for land and buildings, the land and building components are separated and individually assessed as to whether they are operating or finance leases.

The Trust as Lessor Amounts due from lessees under finance leases are recorded as receivables at the amount of the NHS trust’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the trust’s net investment outstanding in respect of the leases. Rental income from operating leases is recognised on a straight-line basis over the term of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

1.17 Private Finance Initiative (PFI) transactions HM Treasury has determined that government bodies shall account for infrastructure PFI schemes where the government body controls the use of the infrastructure and the residual interest in the infrastructure at the end of the arrangement as service concession arrangements, following the principles of the requirements of IFRIC 12. The Trust therefore recognises the PFI asset as an item of property, plant and equipment together with a liability to pay for it. The services received under the contract are recorded as operating expenses. The annual unitary payment is separated into the following component parts, using appropriate estimation techniques where necessary: a) Payment for the fair value of services received; b) Payment for the PFI asset, including finance costs; and c) Payment for the replacement of components of the asset during the contract ‘lifecycle replacement’.

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Services received

Lifecycle replacement

The fair value of services received in the year is recorded under the relevant expenditure headings within ‘operating expenses’.

Components of the asset replaced by the operator during the contract (‘lifecycle replacement’) are capitalised where they meet the Trust’s criteria for capital expenditure. They are capitalised at the time they are provided by the operator and are measured initially at their fair value.

PFI Asset The PFI assets are recognised as property, plant and equipment, when they come into use. The assets are measured initially at fair value in accordance with the principles of IAS 17. Subsequently, the assets are measured at fair value, which is kept up to date in accordance with the Trust’s approach for each relevant class of asset in accordance with the principles of IAS 16.

PFI liability A PFI liability is recognised at the same time as the PFI assets are recognised. It is measured initially at the same amount as the fair value of the PFI assets and is subsequently measured as a finance lease liability in accordance with IAS 17. An annual finance cost is calculated by applying the implicit interest rate in the lease to the opening lease liability for the period, and is charged to ‘Finance Costs’ within the Statement of Comprehensive Income. The element of the annual unitary payment that is allocated as a finance lease rental is applied to meet the annual finance cost and to repay the lease liability over the contract term. An element of the annual unitary payment increase due to cumulative indexation is allocated to the finance lease. In accordance with IAS 17, this amount is not included in the minimum lease payments, but is instead treated as contingent rent and is expensed as incurred. In substance, this amount is a finance cost in respect of the liability and the expense is presented as a contingent finance cost in the Statement of Comprehensive Income.

The element of the annual unitary payment allocated to lifecycle replacement is pre-determined for each year of the contract from the operator’s planned programme of lifecycle replacement. Where the lifecycle component is provided earlier or later than expected, a short-term finance lease liability or prepayment is recognised respectively. Where the fair value of the lifecycle component is less than the amount determined in the contract, the difference is recognised as an expense when the replacement is provided. If the fair value is greater than the amount determined in the contract, the difference is treated as a ‘free’ asset and a deferred income balance is recognised. The deferred income is released to the operating income over the shorter of the remaining contract period or the useful economic life of the replacement component.

Assets contributed by the NHS trust to the operator for use in the scheme Assets contributed for use in the scheme continue to be recognised as items of property, plant and equipment in the NHS trust’s Statement of Financial Position.

Other assets contributed by the Trust to the operator

1.19 Cash and cash equivalents

Assets contributed (e.g. cash payments, surplus property) by the trust to the operator before the asset is brought into use, which are intended to defray the operator’s capital costs, are recognised initially as prepayments during the construction phase of the contract. Subsequently, when the asset is made available to the Trust, the prepayment is treated as an initial payment towards the finance lease liability and is set against the carrying value of the liability.

Cash is cash in hand and deposits with any financial institution repayable without penalty on notice of not more than 24 hours. Cash equivalents are investments that mature in 3 months or less from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

Off-statement of financial position PFI schemes Where the Trust has a PFI scheme that is judged to fall outside IFRIC 12 the scheme is accounted for as a lease under IFRIC 4 and IAS 17. Any assets of the Trust transferred to the operator continue to be recognised as items of property, plant and equipment in the Trust’s Statement of Financial Position. Where the scheme is adjudged to take the nature of an operating lease the full charge from the operator is charged to the relevant expense category within the Statement of Comprehensive Income. Any assets constructed or purchased by the operator as part of the scheme remain the property of the operator.

1.18 Inventories In accordance with IAS 2, inventories are generally valued at the lower of cost and net realisable value using the first-in first-out cost formula. This is considered to be a reasonable approximation to fair value due to the high turnover of stocks. However, with relation to both Theatre and Pharmacy stocks, a weighted average costing method is used to value inventory as allowed by IAS 2 Inventories.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and that form an integral part of the NHS trust’s cash management.

1.20 Provisions Provisions are recognised when the NHS trust has a present legal or constructive obligation as a result of a past event, it is probable that the NHS trust will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the expenditure required to settle the obligation at the end of the reporting period, taking into account the risks and uncertainties. Where a provision is measured using the cash flows estimated to settle the obligation, its carrying amount is the present value of those cash flows using HM Treasury’s discount rate of 2.2% in real terms 2.8% for employee early departure obligations). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursements will be received and the amount of the receivable can be measured reliably. A restructuring provision is recognised when the Trust has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those

affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with ongoing activities of the entity.

1.21 Clinical negligence costs The NHS Litigation Authority (NHSLA) operates a risk pooling scheme under which the trust pays an annual contribution to the NHSLA which in return settles all clinical negligence claims. The contribution is charged to expenditure. Although the NHSLA is administratively responsible for all clinical negligence cases the legal liability remains with the NHS trust’. The total value of clinical negligence provisions carried by the NHSLA on behalf of the trust is disclosed at note 35.

1.22 Non-clinical risk pooling The NHS trust participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the NHS trust pays an annual contribution to the NHS Litigation Authority and, in return, receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses as and when they become due.

1.23 Carbon Reduction Commitment Scheme (CRC) CRC and similar allowances are accounted for as government grant funded intangible assets if they are not expected to be realised within twelve months, and otherwise as other current assets. They are valued at open market value. As the NHS body makes emissions, a provision is recognised with an offsetting transfer from deferred income. The provision is settled on surrender of the allowances. The asset, provision and deferred income amounts are valued at fair value at the end of the reporting period.


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1.24 Contingencies A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the NHS trust, or a present obligation that is not recognised because it is not probable that a payment will be required to settle the obligation or the amount of the obligation cannot be measured sufficiently reliably. A contingent liability is disclosed unless the possibility of a payment is remote. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the trust. A contingent asset is disclosed where an inflow of economic benefits is probable. Where the time value of money is material, contingencies are disclosed at their present value.

1.25 Financial assets Financial assets are recognised when the Trust becomes party to the financial instrument contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the contractual rights have expired or the asset has been transferred. Financial assets are initially recognised at fair value. Financial assets are classified into the following categories: financial assets at fair value through profit and loss; held to maturity investments; available for sale financial assets, and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Financial assets at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial assets at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in calculating the trust’s surplus or deficit for the year. The net gain or loss incorporates any interest earned on the financial asset.

Held to maturity investments Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, and there is a positive intention and ability to hold to maturity. After initial recognition, they are held at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method.

Available for sale financial assets Available for sale financial assets are non-derivative financial assets that are designated as available for sale or that do not fall within any of the other three financial asset classifications. They are measured at fair value with changes in value taken to the revaluation reserve, with the exception of impairment losses. Accumulated gains or losses are recycled to surplus/deficit on derecognition.

Loans and receivables Loans and receivables are nonderivative financial assets with fixed or determinable payments which are not quoted in an active market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. Fair value is determined by reference to quoted market prices where possible, otherwise by valuation techniques.

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The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, to the initial fair value of the financial asset. At the end of the reporting period, the trust assesses whether any financial assets, other than those held at ‘fair value through profit and loss’ are impaired. Financial assets are impaired and impairment losses recognised if there is objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset. For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the revised future cash flows discounted at the asset’s original effective interest rate. The loss is recognised in expenditure and the carrying amount of the asset is reduced directly/through a provision for impairment of receivables. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through expenditure to the extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

1.26 Financial liabilities Financial liabilities are recognised on the statement of financial position when the trust becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the goods or services have been received. Financial liabilities are de-recognised when the liability has been discharged, that is, the liability has been paid or has expired.

Loans from the Department of Health are recognised at historical cost. Otherwise, financial liabilities are initially recognised at fair value.

Financial guarantee contract liabilities Nottingham University Hospitals NHS Trust had no financial contract liabilities during the accounting period.

Financial liabilities at fair value through profit and loss Embedded derivatives that have different risks and characteristics to their host contracts, and contracts with embedded derivatives whose separate value cannot be ascertained, are treated as financial liabilities at fair value through profit and loss. They are held at fair value, with any resultant gain or loss recognised in the trust’s surplus/deficit. The net gain or loss incorporates any interest payable on the financial liability.

Other financial liabilities After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method, except for loans from Department of Health, which are carried at historic cost. The effective interest rate is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest is recognised using the effective interest method.

1.27 Value Added Tax Most of the activities of the trust are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT.

1.28 Foreign currencies The Trust’s functional currency and presentational currency is sterling. Transactions denominated in a foreign currency are translated into sterling at the exchange rate ruling on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the spot exchange rate on 31 March. Resulting exchange gains and losses for either of these are recognised in the trust’s surplus/deficit in the period in which they arise.

1.29 Third party assets Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the trust has no beneficial interest in them. Details of third party assets are given in Note 44 to the accounts.

1.30 Public Dividend Capital (PDC) and PDC dividend Public dividend capital represents taxpayers’ equity in the NHS trust. At any time the Secretary of State can issue new PDC to, and require repayments of PDC from, the trust. PDC is recorded at the value received. As PDC is issued under legislation rather than under contract, it is not treated as an equity financial instrument. An annual charge, reflecting the cost of capital utilised by the trust, is payable to the Department of Health as public dividend capital dividend. The charge is calculated at the real rate set by HM Treasury (currently 3.5%) on the average carrying amount of all assets less liabilities, except for donated assets and cash balances with the Office of the Paymaster General. The average carrying amount of assets is calculated as a simple average of opening and closing relevant net assets.

1.31 Losses and Special Payments Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled. Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis, including losses which would have been made good through insurance cover had NHS trusts not been bearing their own risks (with insurance premiums then being included as normal revenue expenditure).

1.32 Subsidiaries Material entities over which the Trust has the power to exercise control so as to obtain economic or other benefits are classified as subsidiaries and are consolidated. Their income and expenses; gains and losses; assets, liabilities and reserves; and cash flows are consolidated in full into the appropriate financial statement lines. Appropriate adjustments are made on consolidation where the subsidiary’s accounting policies are not aligned with the Trust’s or where the subsidiary’s accounting date is before 1 January or after 30 June. Subsidiaries that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair value less costs to sell’ Hospital Pharmacy Services (Nottingham) Limited, trading as Trust Pharmacy, is a wholly owned by the Nottingham University Hospitals NHS Trust and was incorporated on 4th April 2012.


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This is a private company limited by shares and it will deliver outpatient pharmacy dispensing services from Queen’s Medical Centre and Nottingham City Hospital. In separating outpatient from inpatient pharmacy services both the Trust and the company can focus their pharmacy teams on one core activity whilst benefiting from a sharing of skills and knowledge across the two organisations. The company will strive to secure optimum value for money and continued quality and safety for its services. The model seeks to provide cost improvements by taking the best from the NHS in high quality clinical skills and practices and a deep knowledge base, but also from the commercial sector in driving through efficiency savings, seeking new revenue opportunities, focussing on the customer and exploiting innovative ideas. The results of the subsidiary are included in the consolidated results of the NUH group including the restated prior year comparatives due to the adoption in the NHS Group Manaual for Accounts for 2014-15 of IFRS 10, 11 and 12.

1.33 Associates Material entities over which the NHS trust has the power to exercise significant influence so as to obtain economic or other benefits are classified as associates and are recognised in the NHS trust’s accounts using the equity method. The investment is recognised initially at cost and is adjusted subsequently to reflect the NHS trust share of the entity’s profit/loss and other gains/ losses. It is also reduced when any distribution is received by the NHS trust from the entity. Associates that are classified as ‘held for sale’ are measured at the lower of their carrying amount or ‘fair value less costs to sell’

88

1.34 Joint arrangements Material entities over which the NHS trust has joint control with one or more other entities are classified as joint arrangements. Joint control is the contractually agreed sharing of control of an arrangement. A joint arrangement is either a joint operation or a joint venture. A joint operation exists where the parties that have joint control have rights to the assets and obligations for the liabilities relating to the arrangement. Where the NHS body is a joint operator it recognises its share of, assets, liabilities, income and expenses in its own accounts. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint ventures are recognised as an investment and accounted for using the equity method.

1.35 Research and Development Research and development expenditure is charged against income in the year in which it is incurred, except insofar as development expenditure relates to a clearly defined project and the benefits of it can reasonably be regarded as assured. Expenditure so deferred is limited to the value of future benefits expected and is amortised through the SOCNE/SOCI on a systematic basis over the period expected to benefit from the project. It should be revalued on the basis of current cost. The amortisation is calculated on the same basis as depreciation, on a quarterly basis.

1.36 Accounting Standards that have been issued but have not yet been adopted The Treasury FReM does not require the following Standards and Interpretations to be applied in 201415. The application of the Standards as revised would not have a material impact on the accounts for 2014-15, were they applied in that year [detail if not the case]: IFRS 9 Financial Instruments subject to consultation - subject to consultation IFRS 13 Fair Value Measurement subject to consultation IFRS 15 Revenue from Contracts with Customers

The Group and Trust 2. Pooled budgets Nottingham University Hospitals NHS Trust does not operate any pooled budgets and has no arrangements where funds are pooled under S75 of the NHS Act 2006

3. Operating segments Nottingham University Hospitals NHS Trust provides acute and specialist Healthcare services to patients commissioned by NHS clinical commissioning groups and NHS England within the geographical area of the East Midlands. The Trust reports a single operating segment of Healthcare, therefore there are no separate reportable operating segments under IFRS 8.

4. Income generation activities The Group and Trust undertakes income generation activities with an aim of achieving profit, which is then used in patient care. The following provides details of income generation activities whose full cost exceeded £1m or was otherwise material.

GROUP SUMMARY TABLE - AGGREGATE OF ALL SCHEMES

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Income

5,173

6,664

5,173

6,664

Full cost

2,782

5,596

2,782

5,596

Surplus/(deficit)

2,391

1,068

2,391

1,068

GROUP CAR PARKING

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Income

3,795

3,277

3,795

3,277

Full cost

2,027

2,254

2,027

2,254

Surplus/(deficit)

1,768

1,023

1,768

1,023

The objective is to generate a surplus for use by the Trust in funding patient care. This was achieved in both years.

GROUP CATERING

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Income

1,379

3,387

1,379

3,387

Full cost

756

3,342

756

3,342

Surplus/(deficit)

623

45

623

45


89

5. Revenue from patient care activities


TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

1,387

1,299

1,387

1,299

NHS England

284,295

261,935

284,295

261,935

Clinical Commissioning Groups

432,886

414,099

432,886

414,099

1,421

1,494

1,421

1,494

0

0

0

0

369

2,455

369

2,455

11,000

0

11,000

0

Local Authorities

6,847

7,516

6,847

7,516

Private patients

1,511

1,520

1,511

1,520

340

375

340

375

Injury costs recovery

3,331

3,370

3,331

3,370

Other

2,008

1,060

2,008

1,060

745,395

695,123

745,395

695,123

NHS Trusts

Foundation Trusts Department of Health NHS Other (including Public Health England and Prop Co) Additional income for delivery of healthcare services Non-NHS:

Overseas patients (non-reciprocal)

Total Revenue from patient care activities

90

6. Other operating revenue GROUP SUMMARY TABLE - AGGREGATE OF ALL SCHEMES

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Recoveries in respect of employee benefits

5,319

4,904

5,319

5,172

Education, training and research

74,713

78,622

74,713

78,622

Charitable and other contributions to revenue expenditure - NHS

3,552

2,821

3,552

2,821

Charitable and other contributions to revenue expenditure -non- NHS

398

394

398

394

Receipt of donations for capital acquisitions - Charity

3,781

3,580

3,781

3,580

Non-patient care services to other bodies

29,628

34,706

48,052

47,935

Income generation

5,173

6,664

5,173

6,664

Rental revenue from finance leases

1,297

862

1,297

862

462

703

829

1,056

4,372

5,709

4,372

5,709

Total Other Operating Revenue

128,695

138,965

147,486

152,815

Total operating revenue

874,090

834,088

892,881

847,938

Rental revenue from operating leases Other revenue


91

7. Overseas visitors disclosure SUMMARY TABLE - AGGREGATE OF ALL SCHEMES

92

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Income recognised during 2014-15 (invoiced amounts and accruals)

340

375

340

375

Cash payments received in-year (re receivables at 31 March 2014)

101

145

101

145

Cash payments received in-year (iro invoices issued 2014-15)

80

208

80

208

Amounts added to provision for impairment of receivables (re receivables at 31 March 2014)

12

4

12

4

Amounts added to provision for impairment of receivables (iro invoices issued 2014-15)

34

37

34

37

Amounts written off in-year (irrespective of year of recognition)

30

72

30

72

8. Operating expenses GROUP SUMMARY TABLE - AGGREGATE OF ALL SCHEMES

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

565

949

565

949

Services from CCGs/NHS England

0

49

0

49

Services from other NHS bodies

3

0

3

0

Services from NHS Foundation Trusts

1,816

1,411

1,816

1,411

Total Services from NHS bodies*

2,384

2,409

2,384

2,409

Purchase of healthcare from non-NHS bodies

1,122

1,214

1,122

1,214

Trust Chair and Non-executive Directors

56

50

56

50

Supplies and services - clinical

190,271

169,239

210,954

184,376

Supplies and services - general

27,187

13,189

27,187

13,189

Consultancy services

2,915

3,127

2,915

3,127

Establishment

8,219

8,538

8,219

8,538

Transport

3,400

2,922

3,400

2,922

Service charges - ON-SOFP PFIs and other service concession arrangements

3,241

2,807

3,241

2,807

Total charges - Off-SOFP PFIs and other service concession arrangements

6,623

7,312

6,623

7,312

Business rates paid to local authorities

3,329

3,264

3,329

3,264

Premises

22,217

19,312

22,217

19,312

Hospitality

25

29

25

29

Insurance

768

1,079

768

1,079

Legal Fees

604

744

604

744

1,851

1,096

1,851

1,096

280

0

280

0

Services from other NHS Trusts

Impairments and Reversals of Receivables Inventories write down


93


TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Depreciation

23,475

24,720

23,475

24,720

Amortisation

2,468

1,257

2,468

1,257

Impairments and reversals of property, plant and equipment

(3,683)

8,674

(3,683)

8,674

Auditor services - statutory audit

203

214

190

201

Other auditor's remuneration (taxation services)

65

110

57

79

Other auditor's remuneration (all other services)

10

0

10

0

Clinical negligence

16,978

16,318

16,978

16,318

Research and development (excluding staff costs)

10,853

11,913

10,853

11,913

Education and training

2,103

2,848

2,103

2,848

Change in discount rate

140

163

140

163

1,654

1,429

1,493

1,340

328,758

303,977

349,259

318,981

522,123

519,416

521,345

518,822

1,106

1,372

1,106

1,372

Total Employee Benefits

523,229

520,788

522,451

520,194

Total Operating Expenses

851,987

824,765

871,710

839,175

Other Total Operating expenses (excluding employee benefits) Employee Benefits: Employee benefits excluding Board members Board members

*Services from NHS bodies does not include expenditure which falls into a category below

94

9. Operating leases The majority of the Trust’s leasing arrangements are for plant and equipment supplied under normal commercial terms by non-NHS suppliers. There is no contingent rent associated with the arrangements In addition the Trust leases two satellite dialysis facilities from neighbouring NHS bodies under typical intra-NHS arrangements. There are no contingent rents associated with the arrangements.

9.1 The Trust as lessee GROUP

2014-15 LAND

BUILDINGS

OTHER

TOTAL

2013-14

£000s

£000s

£000s

£000s

£000s

1,132

1,255

Contingent rents

0

0

Sub-lease payments

0

0

1,132

1,255

Payments recognised as an expense: Minimum lease payments

Total

Payable: No later than one year

0

324

369

693

764

Between one and five years

0

1,298

731

2,029

2,148

After five years

0

627

7

634

967

Total

0

2,249

1,107

3,356

3,879

0

0

Total future sublease payments expected to be received:


95

TRUST

2014-15 LAND

BUILDINGS

OTHER

TOTAL

2013-14

£000s

£000s

£000s

£000s

£000s

1,132

1,255

Contingent rents

0

0

Sub-lease payments

0

0

1,132

1,255

Payments recognised as an expense: Minimum lease payments

Total

Payable: No later than one year

0

324

369

693

764


0

1,298

731

2,029

2,148

After five years

0

627

7

634

967

Total

0

2,249

1,107

3,356

3,879

0

0

Total future sublease payments expected to be received:

96

9.2 The Trust as lessor The Trust leases areas of it’s hospital premises to both NHS and non-NHS bodies primarily for the provision of services to patients and medical training and research. The areas occupied by third parties are diverse and are not a significant proportion of the Trust’s facilities.

GROUP

2014-15

2013-14

£000s

£000s

Rental revenue

413

663

Contingent rents

49

40

Total

462

703

No later than one year

413

684


849

626

After five years

1,571

1,741

Total

2,833

3,051

2014-15

2013-14

£000s

£000s

Rental revenue

766

1,016

Contingent rents

63

40

Total

829

1,056

780

1,037


1,247

1,361

After five years

1,571

1,741

Total

3,598

4,139

Recognised as revenue:

Receivable:

TRUST

Recognised as revenue:

Receivable: No later than one year


97

10 Employee benefits and staff numbers 10.1 Employee benefits GROUP

2014-15 TOTAL

PERMANENTLY EMPLOYED

OTHER

£000s

£000s

£000s

Salaries and wages

446,183

403,077

43,106

Social security costs

30,012

30,012

0

Employer Contributions to NHS BSA Pensions Division

47,279

47,279

0

Other pension costs

35

35

0

Termination benefits

344

344

0

523,853

480,747

43,106

624

624

0

523,229

480,123

43,106

Employee Benefits - Gross Expenditure

Total employee benefits Employee costs capitalised Gross Employee Benefits excluding capitalised costs

TRUST

2014-15 TOTAL


OTHER

£000s

£000s

£000s

Salaries and wages

445,495

402,389

43,106


29,957

29,957

0


47,279

47,279

0

Other pension costs

0

0

0

Termination benefits

344

344

0

523,075

479,969

43,106

624

624

0

522,451

479,345

43,106

Employee Benefits - Gross Expenditure

Total employee benefits Employee costs capitalised Gross Employee Benefits excluding capitalised costs

98

GROUP

2014-15 TOTAL


OTHER

£000s

£000s

£000s

Salaries and wages

443,164

409,316

33,848


30,554

30,554

0


47,788

47,788

0

34

34

0

521,540

487,692

33,848

752

752

0

520,788

486,940

33,848

Employee benefits - gross expenditure 2013-14:

Termination benefits TOTAL - including capitalised costs

Employee costs capitalised Gross Employee Benefits excluding capitalised costs

TRUST

2014-15 TOTAL


OTHER

£000s

£000s

£000s

Salaries and wages

442,570

408,722

33,848


30,554

30,554

0


47,788

47,788

0

34

34

0

520,946

487,098

33,848

752

752

0

520,194

486,346

33,848

Employee benefits - gross expenditure 2013-14:

Termination benefits TOTAL - including capitalised costs

Employee costs capitalised Gross Employee Benefits excluding capitalised costs


99

10.2 Staff Numbers GROUP

2014-15

2013-14

TOTAL


OTHER

TOTAL

NUMBER

NUMBER

NUMBER

NUMBER

Medical and dental

1,756

1,557

199

1,687

Administration and estates

2,397

2,366

31

2,447

Healthcare assistants and other support staff

785

785

0

1,528

Nursing, midwifery and health visiting staff

5,618

5,124

494

5,270

Scientific, therapeutic and technical staff

1,613

1,538

75

1,591

Other

23

16

7

23

TOTAL

12,192

11,386

806

12,546

10

10

0

12

Average staff numbers:

Of the above - staff engaged on capital projects

TRUST

2014-15

2013-14

TOTAL


OTHER

TOTAL

NUMBER

NUMBER

NUMBER

NUMBER

Medical and dental

1,756

1,557

199

1,687

Administration and estates

2,397

2,366

31

2,447

Healthcare assistants and other support staff

785

785

0

1,528

Nursing, midwifery and health visiting staff

5,618

5,124

494

5,270

Scientific, therapeutic and technical staff

1,584

1,509

75

1,561

Other

23

16

7

23

TOTAL

12,163

11,357

806

12,516

10

10

0

12

Average staff numbers:

Of the above - staff engaged on capital projects

100

10.3 Staff sickness absence and ill health retirements 2014-15

2013-14

NUMBER

NUMBER

Total Days Lost

87,997

87,247

Total Staff Years

11,614

11,768

7.58

7.41

NUMBER

NUMBER

10

22

£000S

£000S

520

1,416

Average working Days Lost

Number of persons retired early on ill health grounds

Total additional pensions liabilities accrued in the year

10.4 Exit packages agreed in 14/15 2014-15 EXIT PACKAGE COST BAND (INCLUDING ANY SPECIAL PAYMENT ELEMENT)




NUMBER

NUMBER

NUMBER

Less than £10,000

1

0

1

£10,000-£25,000

2

0

2

£25,001-£50,000

3

3

6

£50,001-£100,000

6

0

6

£100,001 - £150,000

0

0

0

£150,001 - £200,000

1

0

1

>£200,000

0

0

0


13

3

16

793,413

128,206

921,619



101

2013-14 EXIT PACKAGE COST BAND (INCLUDING ANY SPECIAL PAYMENT ELEMENT)




NUMBER

NUMBER

NUMBER

Less than £10,000

3

0

3

£10,000-£25,000

4

0

4

£25,001-£50,000

3

0

3

£50,001-£100,000

0

0

0

£100,001 - £150,000

0

0

0

£150,001 - £200,000

0

0

0

>£200,000

0

0

0


10

0

10

198,748

0

198,748


2014-15

2013-14



£’000S

£’000S

Less than £10,000

2

9

£10,000-£25,000

46

70

£25,001-£50,000

97

120

£50,001-£100,000

485

0

£100,001 - £150,000

0

0

£150,001 - £200,000

164

0

793

199

EXIT PACKAGE COST BAND (INCLUDING ANY SPECIAL PAYMENT ELEMENT)

>£200,000 Total number of exit packages by type (total cost

Redundancy and other departure costs have been paid in accordance with the provisions of the NHS Scheme. Exit costs in this note are accounted for in full in the year of departure. Where the Trust has agreed early retirements, the additional costs are met by the Trust and not by the NHS pensions scheme. Ill-health retirement costs are met by the NHS pensions scheme and are not included in the table. This disclosure reports the number and value of exit packages agreed in the year. Note: The expense associated with these departures may have been recognised in part or in full in a previous period.

102

10.5 Exit packages - other departures analysis TRUST

2014-15

2013-14

AGREEMENTS


AGREEMENTS


NUMBER

£000S

NUMBER

£000S

Voluntary redundancies including early retirement contractual costs

0

0

0

0

Mutually agreed resignations (MARS) contractual costs

3

128

0

0

Early retirements in the efficiency of the service contractual costs

0

0

0

0

Contractual payments in lieu of notice

0

0

0

0

Exit payments following Employment Tribunals or court orders

0

0

0

0

Non-contractual payments requiring HMT approval*

0

0

0

0

Total

3

128

0

0

Non-contractual payments made to individuals where the payment value was more than 12 months of their annual salary

0

0

0

0

This disclosure reports the number and value of exit packages agreed in the year. Note: the expense associated with these departures may have been recognised in part or in full in a previous period. As a single exit packages can be made up of several components each of which will be counted separately in this Note, the total number above will not necessarily match the total numbers in Note 10.4 which will be the number of individuals.


103

10.6 Pension costs Past and present employees are covered by the provisions of the NHS Pensions Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at www.nhsbsa. nhs.uk/pensions. The scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS Body of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. In order that the defined benefit obligations recognised in the financial statements do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that “the period between formal valuations shall be four years, with approximate assessments in intervening years”. An outline of these follows:

a) Accounting valuation A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period, and are accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2015, is based on valuation data as 31 March 2014, updated to 31 March 2015 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been used.

104

The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Pension Accounts, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office.

b) Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the scheme (taking into account its recent demographic experience), and to recommend the contribution rates. The last published actuarial valuation undertaken for the NHS Pension Scheme was completed for the year ending 31 March 2012. The Scheme Regulations allow contribution rates to be set by the Secretary of State for Health, with the consent of HM Treasury, and consideration of the advice of the Scheme Actuary and appropriate employee and employer representatives as deemed appropriate.

c) Scheme provisions The NHS Pension Scheme provided defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the Scheme or the specific conditions that must be met before these benefits can be obtained: The Scheme is a “final salary” scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last three years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service.

With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as “pension commutation”. Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. From 2011-12 the Consumer Price Index (CPI) has been used and replaced the Retail Prices Index (RPI). Early payment of a pension, with enhancement, is available to members of the scheme who are permanently incapable of fulfilling their duties effectively through illness or infirmity. A death gratuity of twice final year’s pensionable pay for death in service, and five times their annual pension for death after retirement is payable. For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to the employer. Members can purchase additional service in the NHS Scheme and contribute to money purchase AVC’s run by the Scheme’s approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers. With effect from 1 April 2013 an automatic enrolment contributory pension scheme is in operation for all eligible staff. This scheme is operated by NEST (the National Employment Savings Trust).

11. Better Payment Practice Code 11.1 Measure of compliance 2014-15

2014-15

2013-14

2013-14

NUMBER

£000S

NUMBER

£000S

Total Non-NHS Trade Invoices Paid in the Year

154,536

411,649

155,668

309,283

Total Non-NHS Trade Invoices Paid Within Target

142,800

381,260

149,843

295,768

Percentage of NHS Trade Invoices Paid Within Target

92.41%

92.62%

96.26%

95.63%

Total NHS Trade Invoices Paid in the Year

4,776

74,393

4,421

70,349

Total NHS Trade Invoices Paid Within Target

3,854

68,841

4,334

69,671

80.70%

92.54%

98.03%

99.04%

Non-NHS Payables:

NHS Payables:

Percentage of NHS Trade Invoices Paid Within Target

The Better Payment Practice Code requires the NHS body to aim to pay all valid invoices by the due date or within 30 days of receipt of a valid invoice, whichever is later.

11.2 The Late Payment of Commercial Debts (Interest) Act 1998 2014-15

2013-14

NUMBER

£000S

Amounts included in finance costs from claims made under this legislation

0

0

Compensation paid to cover debt recovery costs under this legislation

0

0

Total

0

0


105

12. Investment revenue GROUP

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Other finance lease revenue

0

0

0

0

Subtotal

0

0

0

0

214

262

214

262

0

0

0

200

Subtotal

214

262

214

462

Total investment revenue

214

262

214

462

Rental revenue:

Interest revenue: Bank interest Other financial assets

13. Other gains and losses GROUP

106

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Gain/(Loss) on disposal of assets other than by sale (PPE)

(121)

(182)

(121)

(182)

Total

(121)

(182)

(121)

(182)

14. Finance costs GROUP

TRUST

2014-15

2013-14

2014-15

2013-14

£000s

£000s

£000s

£000s

Interest on loans and overdrafts

583

617

583

616

Interest on obligations under finance leases

66

45

66

45

1,129

1,168

1,129

1,168

778

725

778

725

0

0

0

0

2,556

2,555

2,556

2,554

Other finance costs

144

169

144

169

Provisions - unwinding of discount

45

62

45

62

2,745

2,786

2,745

2,785

Interest:

Interest on obligations under PFI contracts: - main finance cost - contingent finance cost Interest on late payment of commercial debt Total interest expense

Total


107

15.1 Property, plant and equipment 2014-15

Land

Buildings excluding dwellings

Dwellings

Assets under construction & payments on account

£000s

£000s

£000s

£000s

42,897

344,603

2,332

27,472

Cost or valuation: At 1 April 2014 Additions of Assets Under Construction

37,681

Additions - Non Cash Donations (i.e. physical assets)

0

0

0

1,889

Additions - Purchases from Cash Donations

0

0

0

1,892

Reclassifications

0

25,183

0

(46,139)

Disposals other than for sale

0

0

0

0

Upward revaluation

0

6,400

0

0

Impairments

0

(5,333)

0

0

Reversal of Impairments

0

0

0

0

42,897

370,853

2,332

22,795

At 31 March 2015

2014-15

Plant & machinery

Transport equipment

Information technology

Furniture & fittings

£000s

£000s

£000s

£000s

113,550

923

23,623

2,722

Total


37,681

Additions - Non Cash Donations (i.e. physical assets)

0

0

0

0

1,889


0

0

0

0

1,892

Reclassifications

9,927

28

10,693

308

0


(8,027)

(122)

(208)

0

(8,357)

Upward revaluation

0

0

0

0

6,400

Impairments

0

0

0

0

(5,333)


0

0

0

0

0

115,450

829

34,108

3,030

592,294

At 31 March 2015

108

558,122

Land


Dwellings


£000s

£000s

£000s

£000s

10,171

23,106

2,332

0


0

0

0

Impairments

20

2,444

0

0


0

(6,147)

0

0

Charged During the Year

0

11,685

0

At 31 March 2014

10,191

31,088

2,332

0

Net Book Value at 31 March 2014

32,706

339,765

0

22,795

2014-15

Depreciation: At 1 April 2014

Plant & machinery

Transport equipment



£000s

£000s

£000s

£000s

At 1 April 2014

83,354

661

16,137

1,190

136,951


(7,841)

(108)

(207)

0

(8,156)

Impairments

0

0

0

0

2,464


0

0

0

0

(6,147)


8,769

163

2,616

242

23,475

At 31 March 2015

84,282

716

18,546

1,432

148,587


31,168

113

15,562

1,598

443,707

2014-15

Total

Depreciation:


109

Land


Dwellings


£000s

£000s

£000s

£000s

32,706

309,825

0

20,917

Owned - Donated

0

19,918

0

1,878

Held on finance lease

0

0

0

0

On-SOFP PFI contracts

0

10,022

0

0

Total at 31 March 2015

32,706

339,765

0

22,795

2014-15

Asset financing: Owned - Purchased

Plant & machinery

Transport equipment



£000s

£000s

£000s

£000s

Owned - Purchased

27,973

69

15,540

836

407,866

Owned - Donated

3,195

44

22

253

25,310


0

0

0

509

509


0

0

0

0

10,022


31,168

113

15,562

1,598

443,707

2014-15

Total

Asset financing:

110

REVALUATION RESERVE BALANCE FOR PROPERTY, PLANT & EQUIPMENT

At 1 April 2014 Movements At 31 March 2015

REVALUATION RESERVE BALANCE FOR PROPERTY, PLANT & EQUIPMENT

Land


Dwellings


£000s

£000s

£000s

£000s

362

50,262

(39)

0

0

(1,373)

0

0

362

48,889

(39)

0

Plant & machinery

Transport equipment



£000s

£000s

£000s

£000s

At 1 April 2014

537

2

2

87

51,213

Movements

(46)

0

0

(3)

(1,422)

At 31 March 2015

491

2

2

84

49,791

ADDITIONS TO ASSETS UNDER CONSTRUCTION IN 2014-15

£000’s

Buildings excl Dwellings

21,501

Plant & Machinery

16,180

Balance as at YTD

37,681

Total


111

15.2 Property, plant and equipment prior-year 2013-14

Land


Dwellings


£000s

£000s

£000s

£000s

46,644

333,391

2,342

29,385


23,033

Additions - Non Cash Donations (i.e. Physical Assets)

0

0

0

471


0

0

0

2,500

Reclassifications

0

17,397

(10)

(27,917)


0

0

0

0

363

5,341

0

0

(4,110)

(11,526)

0

0

0

0

0

0

42,897

344,603

2,332

27,472

Revaluation Impairments/negative indexation charged to reserves Reversal of Impairments charged to reserves At 31 March 2014

2013-14

Plant & machinery

Transport equipment



£000s

£000s

£000s

£000s

111,441

881

21,685

1,943

Total


23,033

Additions - Non Cash Donations (i.e. Physical Assets)

433

20

0

0

924


107

0

0

0

2,607

Reclassifications

7,514

200

2,031

785

0


(5,945)

(178)

(93)

(6)

(6,222)

Revaluation

0

0

0

0

5,704

Impairments/negative indexation charged to reserves

0

0

0

0

(15,636)

Reversal of Impairments charged to reserves

0

0

0

0

0

113,550

923

23,623

2,722

558,122

At 31 March 2014

112

547,712

Land


Dwellings


£000s

£000s

£000s

£000s

At 1 April 2013

0

15,484

9

0


0

0

0

10,171

9,632

2,277

0

Reversal of Impairments charged to operating expenses

0

(13,406)

0

0


0

11,396

46

At 31 March 2014

10,171

23,106

2,332

0


32,726

321,497

0

27,472

2013-14

Depreciation:

Impairments/negative indexation charged to operating expenses

Plant & machinery

Transport equipment



£000s

£000s

£000s

£000s

At 1 April 2013

79,065

682

13,377

980

109,597


(5,772)

(169)

(93)

(6)

(6,040)

Impairments/negative indexation charged to operating expenses

0

0

0

0

22,080

Reversal of Impairments charged to operating expenses

0

0

0

0

(13,406)


10,061

148

2,853

216

24,720

At 31 March 2014

83,354

661

16,137

1,190

136,951


30,196

262

7,486

1,532

421,171

2013-14

Total

Depreciation:


113

Land


Dwellings


£000s

£000s

£000s

£000s

32,726

294,803

0

24,501

Owned - Donated

0

16,576

0

2,971


0

0

0

0


0

10,118

0

0


32,726

321,497

0

27,472

2013-14

Asset financing: Owned - Purchased

Plant & machinery

Transport equipment



£000s

£000s

£000s

£000s

Owned - Purchased

28,519

242

7,478

684

388,953

Owned - Donated

1,677

20

8

232

21,484


0

0

0

616

616


0

0

0

0

10,118


30,196

262

7,486

1,532

421,171

2013-14

Total

Asset financing:

114

15.3 (cont). Property, plant and equipment The majority of assets donated in the year were donated by Nottingham University Hospitals Charity.

Revalued assets Property was revalued as at 31st March 2015 as a Full Valuation by a qualified independent valuer to reflect the change made to value specialised buildings on a depreciated replacement cost modern equivalent asset basis as described in the Trust’s accounting policies. Land and non-specialised buildings are valued at market value for existing use.

ECONOMIC LIVES OF PROPERTY, PLANT AND EQUIPMENT

Min life

Max life

Years

Years

Buildings exc dwellings

2

96

Dwellings

9

90

Plant & Machinery

1

15

Transport Equipment

2

7

Information Technology

5

8

Furniture and Fittings

1

10

The Trust do not consider that the value of assets held at existing use value is materially different from open market value.


115

16.1 Intangible non-current assets Computer Licenses

Development Expenditure Internally Generated

Total

£000s

£000s

£000s

11,483

2,595

14,078

0

0

0

12,958

2,595

15,553

At 1 April 2014

4,549

0

4,549

Reclassifications

0

0

0

Charged during the year

2,468

0

2,468

At 31 March 2015

7,017

0

7,017


5,941

2,595

8,536

5,941

2,528

8,469

0

67

67

5,941

2,595

8,536

2013-14

At 1 April 2014 Additions - Purchases from Cash Donations At 31 March 2015

Amortisation:

Asset Financing: Net book value at 31 March 2015 comprises: Purchased Donated Total at 31 March 2015

Revaluation reserve balance for intangible non-current assets

116

At 1 April 2014

0

0

0

Movements

0

0

0

At 31 March 2015

0

0

0

16.2 Intangible non-current assets prior year Computer Licenses

Development Expenditure Internally Generated

Total

£000s

£000s

£000s

At 1 April 2013

5,790

0

5,790

Additions - purchased

4,822

2,595

7,417

Additions - donated

49

0

49

Additions Leased

822

0

822

At 31 March 2014

11,483

2,595

14,078

At 1 April 2013

3,292

0

3,292

Charged during the year

1,257

0

1,257

At 31 March 2014

4,549

0

4,549

Net book value at 31 March 2014

6,934

2,595

9,529

6,112

2,595

8,707

822

0

822

2013-14

Cost or valuation:

Amortisation:

Net book value at 31 March 2014 comprises: Purchased Finance Lease Government Granted Total at 31 March 2014

0 6,934

2,595

9,529

16.3 Intangible non-current assets All intangible assets relate to purchased computer software and have an economic useful life of 5 years. All intangible assets are stated at cost less amortisation as the Trust considers that based upon the values involved, the economic lives and the current purchase costs this is materially equivalent to fair value.


117

17. Analysis of impairments and reversals recognised in 14/15 PROPERTY, PLANT AND EQUIPMENT IMPAIRMENTS AND REVERSALS TAKEN TO SOCI

2014-15 Total £000s

Loss or damage resulting from normal operations

0

Over-specification of assets

0

Abandonment of assets in the course of construction

0

Total charged to Departmental Expenditure Limit

0

Unforeseen obsolescence

0

Loss as a result of catastrophe

0

Other

0

Changes in market price

(3,683)

Total charged to Annually Managed Expenditure

(3,683)

Total Impairments of Property, Plant and Equipment changed to SoCI

(3,683)

INTANGIBLE ASSETS IMPAIRMENTS AND REVERSALS CHARGED TO SOCI

2014-15 Total £000s

118


0


0


0


0


0


0

Other

0


0


0

Total Impairments of Intangibles charged to SoCI

0

FINANCIAL ASSETS CHARGED TO SOCI

2014-15 Total £000s


0


0


0

Other

0


0

Total Impairments of Financial Assets charged to SoCI

0

NON-CURRENT ASSETS HELD FOR SALE - IMPAIRMENTS AND REVERSALS CHARGED TO SOCI.

2014-15 Total £000s


0


0


0


0


0

Other

0


0


0

Total impairments of non-current assets held for sale charged to SoCI

0

Total Impairments charged to SoCI - DEL

0

Total Impairments charged to SoCI - AME

(3,683)

Overall Total Impairments

(3,683)

DONATED AND GOV GRANTED ASSETS, INCLUDED ABOVE

2014-15 Total £000s

PPE - Donated and Government Granted Asset Impairments: amount charged to SOCI - DEL

0

Intangibles - Donated and Government Granted Asset Impairments: amount charged to SOCI - DEL

0


119

17. Analysis of impairments and reversals recognised in 14/15 GROUP AND TRUST

Total

Property Plant and Equipment

Intangible Assets

Financial Assets

£000s

£000s

£000s

£000s

0

Non-Current Assets Held for Sale

Impairments and reversals taken to SoCI: Loss or damage resulting from normal operations

0

0

0


0

0

0


0

0

0


0

0

0


0

0

0


0

0

0

0

0

Other

0

0

0

0

0


(3,683)

(3,683)

0


(3,683)

(3,683)

0

0

0

Total Impairments of Property, Plant and Equipment changed to SoCI

(3,683)

(3,683)

0

0

0

0

0 0

0 0

0

Donated and Gov Granted Assets, included above: PPE - Donated and Government Granted Asset Impairments: amount charged to SOCI - DEL

0

Intangibles - Donated and Government Granted Asset Impairments: amount charged to SOCI - DEL

0

Summary explanation of impairment losses Assets are no longer routinely subject to annual indexation. Property is valued at fair value based on a modern equivalent basis (MEAV) basis as required by HM Treasury. As a minimum, a full revaluation is required to be undertaken every five years with an interim valuation every three years, with an assessment of changes in property values undertaken during the intervening years. The Trust engaged an independent firm of professional valuers to undertake its 2014/15 Full Valuation and assess the change in property values of the NUH Estate. The 2014/15 valuation resulted in an impairment on some Trust properties and upward revaluations on other buildings, with an overall net increase of £4.8m in the value of the Trust asset base (including in year 2014/15 capital additions). This impairment reflects changes in value of the Trust’s property arising both from economic use and market conditions during the course of the year.

120

The financial impact of the revaluation on each campus, including the impairment is summarised below: £000s

£000s

Upward Valuation

6,400

Downward Valuation / Impairment transferred to revaluation reserve

(5,332)

Downward Valuation / Impairment transferred to SoCI

(2,464)

Reversal of Previous Impairments

6,147

(1,649)

Total Impact of Valuation

4,751

18. Investment property 31 March 2015

31 March 2014

£000s

£000s


0

0


0

0

At fair value

The Group and Trust have no investment properties.

19. Commitments 19.1 Capital commitments Contracted capital commitments at 31 March not otherwise included in these financial statements:

Property, plant and equipment Intangible assets Total

31 March 2015

31 March 2014

£000s

£000s

1,827

1,429

0

0

1,827

1,429

19.2 Other financial commitments The trust has entered into non-cancellable contracts (which are not leases or PFI contracts or other service concession 31 March 2015

31 March 2014

£000s

£000s

Not later than one year

0

0

Later than one year and not later than five year

0

0

Later than five years

0

0

Total

0

0


121

20. Intra-Government and other balances Current receivables

Non-current receivables

Current payables

Non-current payables

£000s

£000s

£000s

£000s

Balances with Other Central Government Bodies

3,271

0

11,830

0

Balances with Local Authorities

1,153

0

0

0

38

0

109

0

18,731

1,495

8,226

15,473

0

0

0

0

Balances with Bodies External to Government

23,053

358

66,992

13,762

At 31 March 2015

46,246

1,853

87,157

29,235

24,153

0

22,124

0


0

0

0

0

Balances with NHS bodies outside the Departmental Group

7

0

9

0

3,894

1,755

4,378

0

0

0

0

0


18,652

383

75,487

0

At 31 March 2014

46,706

2,138

101,998

0

GROUP

Balances with NHS bodies outside the Departmental Group Balances with NHS bodies inside the Departmental Group Balances with Public Corporations and Trading Funds

Prior period: Balances with Other Central Government Bodies

Balances with NHS Trusts and FTs Balances with Public Corporations and Trading Funds

122

Current receivables

Non-current receivables

Current payables

Non-current payables

£000s

£000s

£000s

£000s


2,194

0

11,603

0


1,153

0

0

0

38

0

109

0

18,701

1,495

8,226

15,473

0

0

0

0


26,553

358

68,888

13,762

At 31 March 2015

48,639

1,853

88,826

29,235

£000s

£000s

£000s

£000s

24,153

0

22,124

0


0

0

0

0

Balances with NHS bodies outside the Departmental Group

7

0

9

0

3,894

1,755

4,378

0

0

0

0

0


20,433

383

76,920

0

At 31 March 2014

48,487

2,138

103,431

0

TRUST

Balances with NHS bodies outside the Departmental Group Balances with NHS bodies inside the Departmental Group Balances with Public Corporations and Trading Funds

Prior period:


Balances with NHS Trusts and FTs Balances with Public Corporations and Trading Funds


123

21. Inventories GROUP

Drugs

Consumables

Energy

£000s

£000s

£000s

5,126

12,643

454

Additions

110,559

41,071

1,432

Inventories recognised as an expense in the period

(109,063)

(41,132)

(1,467)

Write-down of inventories (including losses)

(280)

0

0


6,342

12,582

419

GROUP

Other

Total

Of which held at NRV

£000s

£000s

£000s


29

18,252

0

Additions

279

153,341

0


(308)

(151,970)

0


0

(280)

0


0

19,343

0

Drugs

Consumables

Energy

£000s

£000s

£000s

4,277

12,643

454

Additions

110,361

41,071

1,432


(109,063)

(41,132)

(1,467)


(280)

0

0


5,295

12,582

419

TRUST

Other

Total

Of which held at NRV

£000s

£000s

£000s


29

17,403

0

Additions

279

153,143

0


(308)

(151,970)

0


0

(280)

0


0

18,296

0


TRUST


124

22.1 Trade and other receivables GROUP

Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

17,871

22,548

0

0

862

630

1,495

1,755

Non-NHS receivables - revenue

6,440

3,668

0

0

Non-NHS prepayments and accrued income

11,445

8,042

0

0

Provision for the impairment of receivables

(4,750)

(3,965)

0

0

VAT

2,178

5,545

0

0

Current/non-current part of PFI and other PPP arrangements Prepayments and Accrued income

694

681

0

0

Finance lease receivables

525

590

358

383

Other receivables

10,170

8,967

0

0

Total

45,435

46,706

1,853

2,138

Total current and non current

47,288

48,844

NHS receivables - revenue NHS prepayments and accrued income

Included in NHS receivables are prepaid pension contributions:

0


125

TRUST

Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

17,841

22,548

0

0

862

630

1,495

1,755

Non-NHS receivables - revenue

8,157

4,864

0

0

Non-NHS prepayments and accrued income

13,231

9,296

0

0

Provision for the impairment of receivables

(4,750)

(3,965)

0

0

VAT

1,100

4,876

0

0

Current/non-current part of PFI and other PPP arrangements Prepayments and Accrued income

694

681

0

0

Finance lease receivables

525

590

358

383

Other receivables

10,170

8,967

0

0

Total

47,830

48,487

1,853

2,138

Total current and non current

49,683

50,625

NHS receivables - revenue NHS prepayments and accrued income

Included in NHS receivables are prepaid pension contributions:

0

The great majority of trade is with commissioining bodies (Clinical Commissioning Groups and NHS England), who are funded by Government to buy NHS patient care services, no credit scoring of them is considered necessary.

126

22.2 Receivables past their due date but not impaired 31 March 2015

31 March 2014

£000s

£000s

By up to three months

3,097

5,181

By three to six months

747

694

By more than six months

275

880

4,119

6,755

2014-15

2013-14

£000s

£000s


(3,965)

(3,546)

Amount written off during the year

1,066

677

Amount recovered during the year

275

436

(Increase)/decrease in receivables impaired

(2,126)

(1,532)


(4,750)

(3,965)

Group

Trust

Total

22.3 Provision for impairment of receivables

23. NHS LIFT investments The Group and Trust have no lift investments.

24.1 Other financial assets - current The Group and Trust have no current other financial assets.

24.2 Other financial assets - non current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Investment in Pharmacy Hospital Services Nottingham : Limited at £1

0

0

0

0

Total Other Financial Assets - Non Current

0

0

0

0


127

25. Other current assets Group

EU Emissions Trading Scheme Allowance Other Assets Total

Trust

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

811

0

811

0

0

0

0

0

811

0

811

0

26. Cash and cash equivalents Group

Trust

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Opening balance

68,185

78,471

68,142

83,403

Net change in year

(27,379)

(10,286)

(28,294)

(15,261)

Closing balance

40,806

68,185

39,848

68,142

39,821

68,102

39,820

68,102

Commercial banks

957

42

0

0

Cash in hand

28

41

28

40

Current investments

0

0

0

0

Cash and cash equivalents as in statement of financial position

40,806

68,185

39,848

68,142

Bank overdraft - Government Banking Service

0

0

0

0

(3,800)

(500)

(3,800)

(500)

37,006

67,685

36,048

67,642

2

2

2

2

Made up of: Cash with Government Banking Service

Bank overdraft - Commercial banks Cash and cash equivalents as in statement of cash flows Patients’ money held by the Trust, not included above

128

27. Non-current assets held for sale The Group and Trust has no non-current assets held for resale

28. Trade and other payables GROUP

Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

NHS payables - revenue

3,486

9,698

0

0

NHS accruals and deferred income

5,625

7,125

0

0

Non-NHS payables - revenue

8,448

17,402

0

0

Non-NHS payables - capital

5,404

7,519

0

0

Non-NHS accruals and deferred income

48,636

49,883

0

0


9,436

9,707

0

0

PDC Dividend payable to DH

129

0

0

0

Corporation Tax

195

127

0

0

Payments received on account

47

338

0

0

Other

151

199

0

0

Total

81,557

101,998

0

0

Total payables (current and non-current)

81,557

101,998

2,212

6,481

Included above: Outstanding Pension Contributions at the year end


129

TRUST

Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

NHS payables - revenue

3,486

9,698

0

0

NHS accruals and deferred income

5,625

7,125

0

0

Non-NHS payables - revenue

10,312

18,980

0

0

Non-NHS payables - capital

5,404

7,519

0

0

Non-NHS accruals and deferred income

48,636

49,883

0

0


9,436

9,689

0

0

129

0

0

0

Corporation Tax

0

0

0

0

Payments received on account

47

338

0

0

Other

151

199

0

0

Total

83,226

103,431

0

0

Total payables (current and non-current)

83,226

103,431

2,212

6,481

PDC Dividend payable to DH

Included above: Outstanding Pension Contributions at the year end

29. Other liabilities The Trust has no other liabilities.

130

30. Borrowings Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Bank overdraft - commercial banks

3,800

500

0

0

Loans from Department of Health

1,252

1,252

15,473

16,725

422

583

13,333

13,762

126

940

429

555

Total

5,600

3,275

29,235

31,042

Total other liabilities (current and non-current)

34,835

34,317

PFI liabilities: Main liability Finance lease liabilities

BORROWINGS / LOANS REPAYMENT OF PRINCIPAL FALLING DUE IN:

31 March 2015 DH

Other

Total

£000s

£000s

£000s

0-1 Years

1,252

4,349

5,601

1 - 2 Years

1,252

586

1,838

2 - 5 Years

3,756

1,849

5,605

Over 5 Years

10,465

11,326

21,791

Total

16,725

18,110

34,835

31. Other financial liabilities Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Embedded derivatives at fair value through SoCI

0

0

0

0

Financial liabilities carried at fair value through profit and loss

0

0

0

0

Amortised cost

0

0

0

0

Total

0

0

0

0

Total other financial liabilities (current and non-current)

0

0

The Group and Trust has no other financial liabilities. Annual Report and Accounts 2014/15

131

32. Deferred revenue Current

Non-current

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Opening balance at 1 April 2014

13,858

9,202

0

0

Deferred revenue addition

10,716

12,055

0

0

Transfer of deferred revenue

(10,845)

(7,399)

0

0

Current deferred Income at 31 March 2015

13,729

13,858

0

0

Total deferred income (current and non-current)

13,729

13,858

33. Finance lease obligations as lessee The Trust has one finance lease disclosed as follows: • Existing lease for hospital beds, which entered its secondary lease term of seven years in 12/13 There are no finance leases for Buildings or Land.

AMOUNTS PAYABLE UNDER FINANCE LEASES (OTHER)

Minimum lease payments

Present value of minimum lease

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Within one year

162

995

126

940


484

646

429

555

0

0

0

0

Less future finance charges

(91)

(146)

Minimum Lease Payments / Present value of minimum lease payments

555

1,495

555

1,495

Current borrowings

126

940

Non-current borrowings

429

555

555

1,495

After five years

Included in:

Total

132

FINANCE LEASES AS LESSEE

Present value of minimum lease payments 31 March 2015

31 March 2014

£000s

£000s

Future Sublease Payments Expected to be received

0

0

Contingent Rents Recognised as an Expense

0

0

34. Finance lease receivables as lessor AMOUNTS RECEIVABLE UNDER FINANCE LEASES (BUILDINGS)

Gross investments in leases

Present value of minimum lease payments

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Within one year

0

0

0

0


0

0

0

0

After five years

0

0

0

0


0

0

0

0

Gross Investment in Leases/ Present Value of Minimum Lease Payments

0

0

0

0

Less allowance for uncollectible lease payments

0

0

0

0

Total finance lease receivable recognised in the statement of financial position

0

0

0

0

Current finance lease receivables

0

0

Non-current finance lease receivables

0

0

Total

0

0

Of minimum lease payments:

Included in:


133

AMOUNTS RECEIVABLE UNDER FINANCE LEASES (OTHER)

Gross investments in leases

Present value of minimum lease payments

31 March 2015

31 March 2014

31 March 2015

31 March 2014

£000s

£000s

£000s

£000s

Within one year

525

590

525

590


358

383

358

383

After five years

0

0

0

0


0

0

883

973

883

973

0

0

0

0

883

973

883

973

Current finance lease receivables

525

590

Non-current finance lease receivables

358

383

Total

883

973

Of minimum lease payments:

Gross Investment in Leases / Present Value of Minimum Lease Payments Less allowance for uncollectible lease payments: Total finance lease receivable recognised in the statement of financial position Included in:

Gross investments in leases 31 March 2015

31 March 2014

£000s

£000s

The unguaranteed residual value accruing to the Trust

0

0

Accumulated allowance for uncollectible minimum lease payments receivable

0

0

0

0

Other

1297

862

Total rental revenue

1,297

862

Rental revenue: Contingent rent

134

35. Provisions Total

Early Departure Costs

Legal Claims

Other

Redundancy

£000s

£000s

£000s

£000s

£000s


12,639

1,152

477

6,730

4,280

Arising during the year

6,170

0

0

2,718

3,452

Utilised during the year

(2,259)

(66)

(2)

(1,355)

(836)

Reversed unused

(5,656)

(52)

0

(2,496)

(3,108)

Unwinding of discount

45

19

0

26

0

Change in discount rate

140

47

0

93

0

11,079

1,100

475

5,716

3,788

8,260

67

475

3,930

3,788

550

260

0

290

0

2,269

773

0

1,496

0

Comprising:


Expected Timing of Cash Flows: No Later than One Year Later than One Year and not later than Five Years Later than Five Years

AMOUNT INCLUDED IN THE PROVISIONS OF THE NHS LITIGATION AUTHORITY IN RESPECT OF CLINICAL NEGLIGENCE LIABILITIES:

Total £000s

As at 31 March 2015

182,698

As at 31 March 2014

159,882


135

36. Contingencies CONTINGENT LIABILITIES

31 March 2014

£000s

£000s

NHS Litigation Authority legal claims

0

Employment Tribunal and other employee related litigation

0

Redundancy

0

(847)

Other

0

0

Amounts recoverable against contingent liabilities

0

0

(847)

0

31 March 2015

31 March 2014

£000s

£000s

Contingent assets

0

0

Net value of contingent assets

0

0

Net value of contingent liabilities

CONTINGENT ASSETS

37. PFI and LIFT additional information 37.1 PFI schemes off statement of financial position The Combined Heat and Power (CHP) scheme provides CHP plant at the Queens Medical Centre and has an estimated capital value of £7,300,000. The asset is not an asset of the Trust and the Trust has no residual interest in the scheme. The scheme commenced on 20/12/2013 for 15 years.

37.2 PFI schemes on statement of financial position The ENT/Opthalmology scheme provides ENT and Opthalmology facilities at the QMC and had an estimated capital cost of £16,321,000. The scheme was

136

31 March 2015

contracted to start on 01/12/2000 and contracted to end on 31/01/2036. The Trust has granted the operator a 125 year headlease on the site with the operator responsible for design and construction of the facility. The operator leases back the facility to the Trust on a 35 year lease and is responsible for providing some non-clinical services, insuring and maintaining the facility. The unitary payment is adjusted for RPI. The Trust has no obligations with regard to the assets at the end of the contract but does have the option to purchase the leasehold interest in the facility from the operator at open market value. Under IFRIC 12 the assets of the scheme are treated as assets of the Trust as the substance of the scheme is that the trust has a finance lease and payments comprise two elements – imputed finance lease charges and service charges.

The Trust is party to a managed service arrangement whereby a third party designed and constructed a PET scanner on Trust property and now manages the facility to provide PET scans to Trust NHS patients. The scheme has been assessed as falling within IFRIC 12 - Service Concession Arrangements and thus is accounted for in the same manner as a PFI scheme. The estimated capital cost of the scheme was £3,600,000 and commenced on 2 December 2004 for a term of 15 years.

The information below is required by the Department of Heath for inclusion in national statutory accounts: 2014-15

2013-14

£000s

£000s

Charges to operating expenditure and future commitments in respect of ON and OFF SOFP PFI: Total charge to operating expenses in year - Off SoFP PFI

6,623

7,312

Service element of on SOFP PFI charged to operating expenses in year

3,241

2,806

Total

9,864

10,118

Payments committed to in respect of off SOFP PFI and the service element of on SOFP PFI: No Later than One Year

9,864

9,764

Later than One Year, No Later than Five Years

39,288

40,673

Later than Five Years

82,882

99,000

Total

132,034

149,437

The estimated annual payments in future years are expected to be materially different from those which the Trust is committed to make materially different from those which the Trust is committed to make during the next year. The likely financial effect of this is: 2014-15

2013-14

£000s

£000s

7,300

7,300

Value of Deferred Assets - off SOFP PFI

0

0

Value of Reversionary Interest - off SOFP PFI

0

0

2014-15

2013-14

£000s

£000s

No Later than One Year

1,511

1,711


6,045

6,045


20,429

21,947

Subtotal

27,985

29,703

Less: Interest Element

(14,231)

(15,359)

13,754

14,344

Estimated Capital Value of Project - off SOFP PFI

IMPUTED “FINANCE LEASE” OBLIGATIONS FOR ON SOFP PFI CONTRACTS DUE

Total


137

PRESENT VALUE IMPUTED “FINANCE LEASE” OBLIGATIONS FOR ON SOFP PFI CONTRACTS DUE

2014-15

2013-14

£000s

£000s

422

583


2,006

1,875


11,326

11,886

Total

13,754

14,344

Analysed by when PFI payments are due No Later than One Year

NUMBER OF ON SOFP PFI CONTRACTS

2014-15 £000s

Total Number of on PFI contracts

2

Number of on PFI contracts which individually have a total commitments value in excess of £500m

0

PRESENT VALUE IMPUTED “FINANCE LEASE” OBLIGATIONS FOR OFF SOFP PFI CONTRACTS DUE

2014-15

2013-14

£000s

£000s

No Later than One Year

0

0


0

0


0

0

Total

0

0

Analysed by when PFI payments are due

NUMBER OF ON SOFP PFI CONTRACTS

2014-15 £000s

138

Total Number of off PFI contracts

0

Number of off PFI contracts which individually have a total commitments value in excess of £500m

0

38. Impact of IFRS treatment - current year The information below is required by the Department of Heath for budget reconciliation purposes.

2014-15

2013-14

£000s

£000s

Revenue costs of IFRS: Arrangements reported on SoFP under IFRIC12 (e.g PFI / LIFT): Depreciation charges

326

309

Interest Expense

1,918

1,907

Impairment charge - AME

(227)

(89)

Impairment charge - DEL

0

0

3,241

2,806

0

0

Impact on PDC dividend payable

(115)

(62)

Total IFRS Expenditure (IFRIC12)

5,143

4,871

Revenue consequences of PFI / LIFT schemes under UK GAAP / ESA95 (net of any sublease revenue)

(5,474)

(4,899)

(331)

(28)

Other Expenditure Revenue Receivable from subleasing

Net IFRS change (IFRIC12)

Capital Consequences of IFRS : LIFT/PFI and other items under IFRIC12: Capital expenditure 2014-15

0

0

UK GAAP capital expenditure 2014-15 (Reversionary Interest)

16

17


139

39. Financial Instruments 39.1 Financial risk management Financial reporting standard IFRS 7 requires disclosure of the role that financial instruments have had during the period in creating or changing the risks a body faces in undertaking its activities. Because of the continuing service provider relationship that Nottingham University NHS Trust has with commissioners and the way those commissioners are financed, the Trust is not exposed to the degree of financial risk faced by business entities. Also financial instruments play a much more limited role in creating or changing risk than would be typical of listed companies, to which the financial reporting standards mainly apply. The Trust has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day-today operational activities rather than being held to change the risks facing the Trust in undertaking its activities.

140

The Trust’s treasury management operations are carried out by the Finance Department, within parameters defined formally within the Trust’s standing financial instructions and policies agreed by the board of directors. The Trust’s treasury activity is subject to review by the Trusts’s internal auditors.

Currency risk Nottingham University Hospitals NHS Trust is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and sterling based. The Trust has no overseas operations. The Trusts therefore has low exposure to currency rate fluctuations.

Interest rate risk Nottingham University Hospitals NHS Trust borrows from government for capital expenditure, subject to affordability as confirmed by the strategic health authority. The borrowings are for 1 – 25 years, in line with the life of the associated assets, and interest is charged at the National Loans Fund rate, fixed for the life of the loan. The Trust therefore has low exposure to interest rate fluctuations.

Credit risk Because the majority of Nottingham University Hospital’s revenue comes from contracts with other public sector bodies, the Trust has low exposure to credit risk. The maximum exposures as at 31 March 2014 are in receivables from customers, as disclosed in the trade and other receivables note.

Liquidity risk Nottingham University Hospital’s NHS Trust’s operating costs are incurred under contracts with clinical commissioning groups and NHS England, which are financed from resources voted annually by Parliament. The Trust funds its capital expenditure from funds obtained within its prudential borrowing limit. The Trust is not, therefore, exposed to significant liquidity risks.

39.1 Financial risk management

39.2 Financial assets GROUP

At ‘fair value through profit and loss’

Loans and receivables

Available for sale

Total

£000s

£000s

£000s

£000s

Receivables - NHS

28,408

28,408

Receivables - non-NHS

9,942

9,942

Cash at bank and in hand

40,807

40,807


0

79,967

0

79,967

Receivables - NHS

24,923

24,923


8,097

8,097


68,185

68,185


TRUST

0

101,205

0

101,205


Loans and receivables

Available for sale

Total

£000s

£000s

£000s

£000s

Receivables - NHS

26,444

26,444


13,469

13,469


38,849

38,849


0

78,762

0

78,762

Receivables - NHS

24,923

24,923


9,878

9,878


68,142

68,142


0

102,943

0

102,943


141

39.3 Financial liabilities At ‘fair value through profit and loss’

Other

Total

£000s

£000s

£000s

NHS payables

4,927

4,927

Non-NHS payables

88,256

88,256

Other borrowings

17,280

17,280

PFI & finance lease obligations

13,755

13,755

GROUP


0

0

0


0

124,218

124,218

NHS payables

7,178

7,178

Non-NHS payables

76,498

76,498

Other borrowings

17,977

17,977


15,840

15,840


0

0

0


0

117,493

117,493


Other

Total

£000s

£000s

£000s

NHS payables

10,419

10,419

Non-NHS payables

88,256

88,256

Other borrowings

17,280

17,280


13,755

13,755

TRUST

142


0

0

0


0

129,710

129,710

NHS payables

8,790

8,790

Non-NHS payables

76,446

76,446

Other borrowings

17,977

17,977


15,840

15,840


0

0

0


0

119,053

119,053

40. Events after the end of the reporting period There are no events arising after the reporting period of significance to note.

41. Related party transactions During the year, no Department of Health Ministers, Trust Board members or members of the senior Trust management team, or parties related to them, have undertaken any material transactions with Nottingham University Hospitals NHS Trust. The Department of Health is regarded as a related party. During the year Nottingham University Hospital NHS Trust has had a significant number of material transactions with the DH and with entities for which the DH is regarded as Parent Department. These Included: Name of Counter Party

Nature of Relationship/Service

Nottinghamshire Healthcare NHS Trusts Incoming Resources

Comprised of: Staffing and non pay recharges and a range of services provided by the Trust, including building occupation lease and associated service level agreements (including space provided for delivery of mental health services and the Childrens Development Centre), provision of Occupational Health, Pathology and Community Dental Services.

Derby Hospitals Foundation Trust Outgoing Expenditure

Various service charges, predominantly neonatal service charges

Derby Hospitals Foundation Trust Incoming Resources

Comprised of: Staffing and non pay recharges and a range of services provided by the Trust; cross town maternity pathway charges.

University Hospitals of Leicester NHS Trust Outgoing Expenditure

Various service charges

University Hospitals of Leicester NHS Trust Incoming Resources

Comprised of: Staffing and non pay recharges and a range of services provided by the Trust; cross town maternity pathway charges.

NHS Litigation Authority

Payment of insurance premium for clinical negligence and public and occupiers liability insurance.

NHS Blood and Transplant Authority

Provision of blood and blood products in treatment of patients.

University of Nottingham Incoming Resources

Occupation charges for School of Nursing; Clinical Sciences; Medical School; Occupational Health and Pharmacy

University of Nottingham Outgoing Resources

Various Pay and non pay recharges for services provided, including Consultants - and Bio-medical Research expenditure recharges.

Nottingham City Council

Annual Business Rates and Council Tax Charges

The Trust also received income (£2.4m) from the Nottingham University Hospital Charity for a range of capital schemes (including Paediatric Oncology £0.8m) and to fund specific revenue commitments during 2014/15. One the Trust’s Non Executive Directors (Mr Alec McKee) is also a Trustee of the Nottingham University Hospitals Charity, which is established as an independent Charity. The Hospitals Pharmacy Services Nottingham Ltd (trading has Trust Pharmacy) is a wholly owned private subsidiary of Nottingham University Hospital NHS Trust Members of the HPSN Board are also paid and senior employees of NUH (Mr Peter Homa, Mr Rupert Egginton and Mr Malcolm Partridge). The income and expenditure for NUH in relation to HPSN activity was £19.0 m (£14.1m in 2013/14 restated) and £21.0m (£15.4m in 2013/14 restated) respectively in 2014/15.


143

42. Losses and special payments

Total Value of Cases

Total Number of Cases

£s The total number of losses cases in 2014-15 and their total value was as follows: Losses

355,197

2,409

Special payments

283,923

121

Total losses and special payments

639,120

2,530

The total number of losses cases in 2013-14 and their total value was as follows: Losses

287,373

2,339

Special payments

337,100

115

Total losses and special payments

624,473

2,454

43. Financial performance targets The figures given for periods prior to 2009-10 are on a UK GAAP basis as that is the basis on which the targets were set for those years.

43.1 Breakeven performance 2006-07

2007-08

2008-09

2009-10

£000s

£000s

£000s

£000s

Turnover

583,794

632,375

681,863

722,169


(6,803)

7,069

5,557

(5,622)

0

0

0

0

16,382

12,716

Adjustment for: Timing/non-cash impacting distortions: Pre FDL(97)24 agreements 2006/07 PPA (relating to 1997/98 to 2005/06) 2007/08 PPA (relating to 1997/98 to 2006/07)

4,083

2008/09 PPA (relating to 1997/98 to 2007/08)

0

0

Adjustments for impairments Adjustments for impact of policy change re donated/government grants assets Consolidated Budgetary Guidance - adjustment for dual accounting under IFRIC12* Other agreed adjustments

144

162 0

0

0

0

Break-even in-year position

(2,720)

7,069

21,939

7,256

Break-even cumulative position

(2,720)

4,349

26,288

33,544

2010-11

2011-12

2012-13

2013-14

2014-15

£000s

£000s

£000s

£000s

£000s

Turnover

742,215

784,605

812,969

833,271

874,090


(4,596)

(49,538)

1,862

(5,162)

7,181

0

0

0

0

0

9,738

55,807

4,090

8,674

(3,683)

(1,703)

541

(2,640)

(2,748)

(132)

198

0

61

0

0

0

2,640

0

0

Break-even in-year position

5,010

4,764

9,133

933

750

Break-even cumulative position

38,554

43,318

52,451

53,384

54,134

Adjustment for: Timing/non-cash impacting distortions: Pre FDL(97)24 agreements 2006/07 PPA (relating to 1997/98 to 2005/06) 2007/08 PPA (relating to 1997/98 to 2006/07) 2008/09 PPA (relating to 1997/98 to 2007/08) Adjustments for impairments Adjustments for impact of policy change re donated/government grants assets Consolidated Budgetary Guidance - adjustment for dual accounting under IFRIC12* Other agreed adjustments

* Due to the introduction of International Financial Reporting Standards (IFRS) accounting in 2009-10, NHS Trust’s financial performance measurement needs to be aligned with the guidance issued by HM Treasury measuring Departmental expenditure. Therefore, the incremental revenue expenditure resulting from the application of IFRS to IFRIC 12 schemes (which would include PFI schemes), which has no cash impact and is not chargeable for overall budgeting purposes, is excluded when measuring Breakeven performance. Other adjustments are made in respect of accounting policy changes (impairments and the removal of the donated asset and government grant reserves) to maintain comparability year to year.


145

2006-07

2007-08

2008-09

2009-10

%

%

%

%

Break-even in-year position as a percentage of turnover

-0.47

1.12

3.22

1.00

Break-even cumulative position as a percentage of turnover

-0.47

0.69

3.86

4.64

Materiality test (i.e. is it equal to or less than 0.5%):

2010-11

2011-12

2012-13

2013-14

2014-15

%

%

%

%

%

Break-even in-year position as a percentage of turnover

0.68

0.61

1.12

0.11

0.09

Break-even cumulative position as a percentage of turnover

5.19

5.52

6.45

6.41

6.17

Materiality test (i.e. is it equal to or less than 0.5%):

The amounts in the above tables in respect of financial years 2005/06 to 2008/09 inclusive have not been restated to IFRS and remain on a UK GAAP basis.

43.2 Capital cost absorption rate The dividend payable on public dividend capital is based on the actual (rather than forecast) average relevant net assets and therefore the actual capital cost absorption rate is automatically 3.5%.

43.3 External financing The Trust is given an external financing limit which it is permitted to undershoot. 2014-15

2013-14

£000s

£000s

External financing limit (EFL)

35,959

11,509

Cash flow financing

35,642

9,059

Unwinding of Discount Adjustment

0

62

Finance leases taken out in the year

0

822

Other capital receipts

0

0

35,642

9,943

317

1,566

External financing requirement Underspend against EFL

146

43.4 Capital resource limit The Trust is given a capital resource limit which it is not permitted to exceed. 2014-15

2013-14

£000s

£000s

42,937

34,852

(201)

(182)

Less: donations towards the acquisition of non‑current assets

(3,781)

(3,580)

Charge against the capital resource limit

38,955

31,090

Capital resource limit

41,920

32,673

Underspend against the capital resource limit

2,965

1,583

Gross capital expenditure Less: book value of assets disposed of

44. Third party assets The Trust held cash and cash equivalents which relate to monies held by the Nottingham University Hospitals NHS Trust on behalf of patients or other parties. This has been excluded from the cash and cash equivalents figure reported in the accounts. 31 March 2015

31 March 2014

£000s

£000s

2

2

2014-15

2013-14

£000s

£000s

195

127

Adjustments in respect of prior years

4

0

Deferred Tax expense

0

0

199

127

Third party assets held by the Nottingham University Hospitals NHS Trust

45. Tax recognised in SOCI RECOGNISED IN THE INCOME STATEMENT Current tax expenses Tax at the standard rate of corporation tax in the UK of 21%(2013/14 23%)

Total tax expense recognised in SOCI


147

Appendix 1

Sustainability Report 14/15

A detailed performance review on the Trust’s greenhouse gas emissions, waste production and water consumption is presented in Tables 1, 2 and 3.

Table 1 Greenhouse Gas Emissions GREENHOUSE GAS EMISSIONS Non-Financial Indictors (tCO2e)

2011-12

2012-13

2013-14

2014-15

Total Emissions Scopes 1&2

66,630

71,643

66,171

70,393

Emissions Scope 1

51,414

55,602

50,404

44,532

Emissions Scope 2

15,216

16,041

15,767

25,861

Total Emissions Scope 3

165,346

168,322

238,620

252,415

Business travel

93

225

146

59

Waste

205

188

203

241

Water

75

64

70

63

1,315

1,363

1,365

2,261

163,658

166,481

236,836

249,791

65,540

65,945

64,672

65,854

Imported

33,660

34,870

35,393

52,322

Produced

31,880

31,075

29,279

13,532

Natural Gas

177,589

189,299

175,630

145,358

Coal

56,474

61,927

54,711

54,338

Electricity grid losses Procurement Related Energy Consumption (MWh)

148

Electricity

GREENHOUSE GAS EMISSIONS Financial Indicators

2011-12

2012-13

2013-14

2014-15

Expenditure on Energy (£m)

£10.019

£11.275

£11.563

£11,227

CRC Carbon Allowances

35,328

34,959

34,516

N/A

EU ETS Allowances (tCO2)

23,242

20,649

N/A

N/A

Performance commentary During 14/15 the Trust increased its Scope 1 and 2 carbon emissions by 4,222 tCO2 compared with the previous year. This was primarily due to the scheduled switch off of QMC’s Combined Heat and Power Unit required for upgrade. The increase in the scope 3 carbon emissions was due to an increase in procurement expenditure. Controllable impacts commentary The increase in scopes 1 and 2 footprint are in line with the mobilisation works aiming to reduce energy consumption at QMC and increase energy generation efficiency via the Combined Heat and Power Unit. The impact of the higher emissions was partially mitigated by a mild weather during the year. Trust produced an strategic outline case for the replacement of its coal-fired boiler house at City Hospital. Further works will take place in 15/16 in what will be the biggest impact project. Overview of influenced impacts Carbon emission embedded in procurement increased as a result of different factors that include the Trust’s increase in activity.

Greenhouse Gases Emissions (tCO2) 250,000

200,000

Natural Gas

150,000

Coal

100,000

Electricity

Procurement 50,000

0

2011/12

2012/13

2013/14

2014/15


149

Table 2 Waste WASTE PRODUCTION Non-financial Indicators (tonnes)

2011-12

2012-13

2013-14

2014-15

5,305

5,232

5,112

5,315

1,040

1,125

1,073

1,278

Alternative Treatment

484

373

344

107

Landfill

649

635

842

831

3,132

3,100

2,853

3,098

1,295.13

1,359.72

1,456.71

1,314.30

Healthcare Waste

817.17

938.51

948.18

833.68

Non healthcare waste

477.96

421.21

508.53

480.62

Total Waste

Healthcare waste

Non healthcare waste Financial Indicators (£k)

Incinerated with energy recovery

Reused and Recycled

Total Disposal Cost

Performance commentary The Trust increased its total waste production by 197 tonnes. This, however is primarily linked to a higher production of ashes from the combustion of coal. This material is recycled. A large proportion of the Trust’s healthcare waste is incinerated with energy recovery which is recognised as good practice by the waste hierarchy. In 14/15 the Trust further increased disposal via incineration. Non-healthcare waste is primarily recycled in the form of “off-site” waste recovery and secondarily by “on-site” waste separation. Waste disposed via landfill is maintained at a level slightly lower than the one reported in the 13/14 year. Controllable impacts commentary In 14/15, the Trust achieved efficiencies via its work with its partner facilities management organisation Carillion. Carillion is committed to increase the sustainability of the Trust’s operation and aims to gradually introduce better systems to improve waste segregation and minimise disposal via landfill. Overview of influenced impacts Increase awareness of staff on the new waste streams.

Waste Production NUH 5,000

Tonnes

4,000

3,000

Clinical Alternative Trmt

2,000

Recycled

1,000

Landfilled

0

150

Incinerated + Energy Recovery

2011/12

2012/13

2013/14

2014/15

Table 3 Water WASTE PRODUCTION Non-Financial Indictors (m3)

Financial Indicators (£)

2011-12

2012-13

2013-14

2014-15

Total

595,135

631,871

671,195

775,859

Supplied

217,522

186,088

203,453

210,902

Abstracted

377,613

445,783

467,742

564,957

Water Supply Cost

802,874

813,837

887,959

874,201

Performance commentary Water demand in the Trust has increased by 15% compared to the previous year. The increase is related to different factors, including new infrastructure developments (Cystic Fibrosis Unit and New Theatres at City Hospital), increase in activity and low efficiency of the aged steam production and distribution system at City Hospital. Controllable impacts commentary The Trust is mitigating the need to import water by increasing water abstraction, hence reducing pressure to the water supply companies. During 15/16 the Trust will implement a water saving scheme aiming to reduce demand. Overview of influenced impacts Gradual improvements to the Estates infrastructure will gradually reduce inefficiencies.

Total Water Used 900

Thousands m3

700

500

Abstracted

Supplied

300

100

0

2011/12

2012/13

2013/14

2014/15


151

Appendix 2

Annual Governance Statement 14/15

Scope of responsibility It is my role to provide leadership to the Trust and to ensure that the Trust provides safe, effective, high quality and patient-centred care. The Trust Board is accountable for internal control. As Accountable Officer, and Chief Executive of this Board, I have responsibility for maintaining a sound system of internal control that supports the achievement of the organisation’s policies, aims and objectives. I also have responsibility for safeguarding the public funds and the organisation’s assets for which I am personally responsible, as set out in the Accountable Officer Memorandum. I work in partnership with the local health and social care community, and particularly with NHS England and the National Trust Development Agency (Midlands and East), NHS Nottingham City and NHS Nottinghamshire County Clinical Commissioning Groups. I do this formally through: • The Nottingham and Nottinghamshire Safeguarding Boards (for children and vulnerable adults) which involves joint agency working in the area of child protection and protection of vulnerable adults

152

• The Local Authority Overview and Scrutiny Committee (Joint Health Scrutiny Committee) • Local Healthwatch Boards • The South Nottingham Strategy Board • Local Health and Wellbeing Boards I am also responsible for developing and maintaining strong working relationships with the University of Nottingham and its health-related schools to help ensure that we provide integrated patient care, teaching and research. NUH is lead sponsor for the East Midlands intellectual property hub.

The governance framework of the organisation The Board and its committees The Trust Board is responsible for determining the strategic direction of the Trust, agreeing its policy framework, and monitoring its performance. Its statutory duties are set out in the codes of conduct and accountability, published by the Department of Health. The Trust Board discharges its responsibilities through monthly Board meetings, an annual public meeting, and a number of formal committees.

Board membership The Board comprises a Chair and five non-executive directors and five executive directors. Changes to Board membership during the year include: • Mr Stephen Thomas started as a non-executive director from 7 April 2014 • Miss Jenny Leggott ceased her appointment as Director of Nursing & Midwifery, Service Improvement and Operations on 31 October 14 • Mrs Daljit Athwal acted as Director of Nursing & Midwifery between1 November 14 – 1 February 15 • Ms Mandie Sunderland commenced post as Chief Nurse on 2 February 15 • Mr Daniel Mortimer, Director of Workforce and Strategy, ceased his appointment on 14 November 14 • Mr Tim Guyler, Acting Chief Operating Officer, commenced post on 27 November 14. This post replaced the Director of Workforce post as the fifth executive director

Board Meetings The Board meets each month. Meetings are open to the public (except for those matters which the Board resolves to consider in private). Information about Board meetings, including agendas and papers, is posted on the Trust’s website www.nuh.nhs.uk.

Cumulative Record of Board Directors’ Attendance (14/15) NAME

POSSIBLE

ACTUAL

L. Scull

12

12

A. McKee

12

J. Pomeroy

NAME

POSSIBLE

ACTUAL

R. Egginton

12

11

10

S. Fowlie

12

12

12

12

P. Homa

12

11

H. Sewell

12

10

J. Leggott

8

6

J. Tabreham

12

9

D. Mortimer

8

8

S. Thomas

12

8

D. Athwal

3

3

T. Guyler

3

2

M. Sunderland

1

1

Audit Committee The committee meets about six times a year. It reviews systems of integrated governance, risk management and internal control, ensures that there is an effective internal audit function, reviews the findings of the external auditor, reviews the findings of other significant assurance functions, and considers the draft annual report and financial statements before their submission to the Board.

Cumulative Record of Audit Committee Members’ Attendance (14/15) NAME

POSSIBLE

ACTUAL

Mr A. McKee

5

5

Dr J. Tabreham

5

4

Mrs J Pomeroy

5

5


153

Remuneration and Terms of Service Committee The committee meets as and when required. In relation to the Chief Executive, other Executive Directors and other senior employees, it advises the Board about appropriate remuneration and terms of service, all aspects of salary, provisions of other benefits and arrangements for termination of employment and other contractual terms. It receives an annual report, from the Trust Chairman, on the performance of the Chief Executive and an annual report on each of the Executive Directors from the Chief Executive.


POSSIBLE

ACTUAL

Mr A. McKee

9

7

Mrs J. Pomeroy

9

9

Ms L. Scull

9

9

Professor H. Sewell

9

7

Dr J. Tabreham

9

6

Mr. S. Thomas

9

5

Finance & Investment Committee The Finance and Investment Committee meets monthly. It monitors, on behalf of the Board, the Trust’s financial position with particular regard to the achievement of its statutory breakeven duty and the continuing progress being made with regard to its service efficiency plans.


154

POSSIBLE

ACTUAL

Mr R. Egginton

11

9

Dr S. Fowlie

11

4

Dr P. Homa

11

6

Miss J. Leggott

7

5

Mr A. McKee

11

10

Mr D. Mortimer

7

2

Mrs J. Pomeroy

11

10

Mr S. Thomas

10

7

Mrs D. Athwal

2

1

Ms M. Sunderland

2

1

Quality Assurance Committee The Quality Assurance Committee meets monthly. It monitors, reviews and reports on the quality of services provided by the Trust in each of the quality domains: safety, outcome and experience, and on the quality of the Trust’s risk management processes and arrangements.


POSSIBLE

ACTUAL

Ms L Scull

12

10

Prof H Sewell

12

11

Dr J Tabreham

12

10

Dr P. Homa

12

10

Miss J Leggott/Mrs D Athwal

10

8

Ms M Sunderland/Mrs D Athwal

2

2

Dr S Fowlie/Dr K Girling

12

12

Mr D. Mortimer/Ms B Rowe

2

2

Board Performance – including assessment of its own effectiveness and that the required standards are achieved When the CQC inspected the Trust at the end of 2013, they found that the Trust was well-led. They commented that the Trust’s Board showed a good understanding of the key issues facing the Trust, that the executive team was well respected by staff, that there were clear organisational, governance and risk management structures in place and that staff said they generally felt very well supported and could raise any concerns. Many staff told the CQC that they thought NUH was a good trust to work for and student nurses, allied health professionals and doctors in training all told the CQC they would want to work at the Trust upon qualifying. The Trust Board has continued to focus on visibility (through patient safety conversations, ward visits, 15 steps challenge and In Your Shoes events) and staff support and engagement (through the Better for You and We Are Here for You programmes and the ‘Events in the Tents’).

Baker Tilly continued to work with the Board for the first six months of this year to provide feedback and to facilitate individual and team development to ensure effective governance. In the autumn, a decision was taken to put external support for Board development on hold pending a number of planned changes to Board membership and Board Advisor roles. Since then, a new Chief Nurse, Director of Workforce, Director of Estates and two Associate Non-Executive Directors have been appointed, with campaigns well advanced to appoint a Director of Strategy and a Chief Operating Officer. Board seminars have continued (without external support) on a bi-monthly basis covering issues of strategic importance to the Board. The Board and its Committees continue to review effectiveness at every meeting, with a formal review by each Committee annually. Revised appraisal processes have been put in place this year for both Executive and Non-Executive Board members.

Performance Delivery of National Priorities set out in the NHS TDA Accountability Framework Delivery of the indicators outlined across the 6 NHS TDA Accountability domains of Caring, Well-led, Effective, Safe, Responsive and Finance are governed through the Trust Board and its committees. Some of the patient safety, experience and operational performance measures are reported monthly to the full Trust Board. These are outlined in the table below. The remaining measures are overseen through committees of the Trust Board. Each committee formally reports any areas of note or exception to the Trust Board meeting each month. Visibility of progress is made publically available through the monthly Trust Board Integrated Performance Report, in conjunction with NUH’s published Safety Account, Annual Report, Annual Financial Statement and Patient Safety Annual Report.


155

STANDARD

2014-15 PERFORMANCE

Fewer than 98 cases

113

No cases of MRSA bacteraemia

5

Mixed sex accommodation breaches – total number of patients affected

0

73

Urgent Operations cancelled for more than once

0

0

Proportion of patients not treated within 28 days of last minute cancellation due to non-clinical reasons